05/06/2003 12:00AM

Prairie Meadows, state reach agreement

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TUCSON, Ariz. - I asked the United States Supreme Court to handicap the Derby last week, expecting a 5-4 decision for Empire Maker, but they declined to accept the case. Following Funny Cide's win, I doubt they will take the Preakness or Belmont, either.

They did accept a case involving racing, however, an interesting development for that august body. The case concerns Prairie Meadows Racetrack and Casino in Altoona, Iowa, and Iowa's two other racetracks.

The state of Iowa had been taxing them as high as 35 percent while the state's riverboats have been taxed at 20 percent. This, to a reasonable man - even one who bets on horses - might seem to be discriminatory.

Prairie Meadows officials thought so and went to court.

A district court ruled against them, saying in effect that Iowa, like the Lord, can both giveth and taketh away.

The Iowa Supreme Court disagreed, ruling 4-3 that the disparate tax rate was indeed discriminatory, and ordered the state to reimburse the tracks the $112 million they had paid in taxes under the higher scale.

Faced with that budget-busting refund, the state went back to court, this time to the United States Supreme Court. Last week, the court heard the matter, and the justices seemed to make it pretty clear with their questions that they didn't agree with Prairie Meadows.

About the only friendly question came from Justice Stephen Breyer, who wanted to know if Iowa would tax a screwdriver sold in Des Moines at a different rate than one sold in Cedar Rapids. Justice Ruth Bader Ginsburg, however, told the Prairie Meadows lawyers outright that the state "didn't have to give you anything."

So Prairie Meadows didn't hang around waiting for the decision, expected this summer. Both the track and the state wanted the $112 million issue resolved and seemingly settled it in the legislature last week with an agreement where the tracks will pay Iowa $36 million - the difference between the 20 percent they've been paying since last year and a new 30-percent rate all parties have now agreed to. The Prairie Meadows lawyers called it a win-win situation.

Tracks have inherent rights

Less certain is another major case headed to court in Delaware - the Michael Gill matter, where that phenomenally successful owner is challenging Delaware Park's right to bar him.

Gill and his lawyers might want to consider another Delaware exclusion case of a year or so ago, in which Dover Downs barred a trainer, relying on its right as a private racetrack to exclude people whom the track considers not acting in its best interests, or in the best interests of racing.

Dover lost before an appeals judge who handled the case, but then won a reversal before the full Third Circuit Court of Appeals. The Thoroughbred Racing Associations and Harness Tracks of America entered the case as friends of the court, arguing for Dover's right to exclude. So did Delaware Park, even though that case involved a harness trainer.

It was not a small victory because it affects racing from coast to coast.

Despite the passionate responses regarding Gill, including full-page ads run by his wife and cries of injustice from a number of racing writers, the right of private racetracks to decide whom they want racing with them is a keystone of integrity in the sport.

Harness Tracks of America, over the last 30 years, has commissioned three major legal studies on the subject. The first was by Chesterfield Oppenheim, a Washington jurist who had taught at the University of Michigan law school. The second was by Jewel Klein, former counsel of the Illinois Racing Board, and her husband, Steven, also an attorney. The most recent was by Bennett Liebman, now at the University of Albany law school and formerly one of the nation's brightest and most effective racing commissioners.

The findings of those three studies - that privately owned racetracks almost always are allowed to decide whom they want to race so long as they do not exclude for race, religion, creed, or color and so long as they do so as a policy decision by management - was upheld once again in Delaware last year. Michael Gill apparently plans to challenge this concept once more. This goes far beyond a severed leg or banned vets or winning races or the popularity, or lack thereof, of Michael Gill.

This goes to the heart of integrity in American racing.