06/08/2009 12:00AM

Supreme Court won't hear Illinois casino case

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CHICAGO - The U.S. Supreme Court has declined to hear an appeal of a 2008 Illinois Supreme Court ruling that upheld legislation directing four casinos in the northern part of the state to pay an impact fee to the horse racing industry. The decision not to hear the appeal will free up some $80 million to be distributed to the racing industry this summer.

The Illinois Racing Board will administer the money but is still working through the details of its distribution. The full board must certify the distribution of the money, and unless an emergency meeting is called, that won't happen until early July.

The four affected casinos filed a lawsuit against the legislation in June 2006 and won at trial in a county circuit court. However, the Illinois Supreme Court overruled that decision last summer, and Monday's list of U.S. Supreme Court orders included a decision not to hear the appeal of the state court's ruling.

Until the law expired two years after its enactment, the casinos deposited 3 percent of adjusted gross receipts into an escrow fund about every 10 days. The Illinois attorney general now will ask the Illinois Supreme Court to dissolve the stay issued when the casinos filed their federal appeal. Then, working through the circuit court, the escrowed money will be moved into the Horseracing Equity Trust Fund, where it will be divided between harness (43 percent) and Thoroughbred (57 percent) racing and divided again between track operators (40 percent) and purses (60 percent). At the time the law was passed, it was estimated that Thoroughbred purses could increase by $10 million per year.

Last fall, the state legislature renewed the impact-fee legislation, but a lawsuit filed by the casinos remains in effect despite the Supreme Court decision. Between $10 million and $11 million has been deposited in another escrow account since last November, and it is expected that the current lawsuit will fail based on the outcome of the 2006 case.