Riverboat Casinos Loses in their Court Appeal Battle against Racetracks

Riverboat Casinos Loses in their Court Appeal Battle against Racetracks



An appeal filed by riverboat casinos against the racetrack industry was thrown out Friday when the law signed by convicted former Governor Rod Blagojevich, which funneled money from casinos to support the racetracks, was upheld by the 7th Circuit Court of Appeals.

The law, which was dubbed as the Racetrack Bill and repeatedly referenced in the trials of Blagojevich, was passed by the majority of the state legislature in the years 2006 and 2008. It was also signed by Blagojevich on both instances.

Its objective was to correct a blow that was dealt by riverboat casinos, who were seen to be luring away gambling dollars, and give racetracks the proceeds from a 3% tax on riverboats in order to reverse the damage.

Exempted from the tax provision of the law were casinos having annual earnings of less that $200 million, leaving four riverboat casinos in Illinois suing Blagojevich and five racetracks. The lawsuit alleged that the tax was set up by Blagojevich in cahoots with John Johnston, a racetrack executive who owns two tracks.

In its 5-3 majority ruling, the Appellate Court noted that the tax was “possibly of corrupt origin,” but did not render a decision on that aspect of the case and wrote that it was not relevant to whether the tax is legal or not.

The former governor was convicted last week of attempting to extort Johnston, who provided testimony against Blagojevich, for campaign donations in exchange for the 2008 racing bill’s signing. The jury declared Blagojevich guilty of the 17 out of 20 counts filed against him, including the case filed charging him for trying to trade or sell the U.S. Senate seat of President Barack Obama.