Riverboat casinos battling the racetrack industry lost an appeal Friday when the 7th Circuit Court of Appeals upheld a law signed by convicted former Gov. Rod Blagojevich, which siphoned money from casinos to support racetracks.
The law, dubbed the Racetrack Bill and referenced repeatedly in Blagojevich's trials, was passed by a majority of the state legislature in 2006 and 2008 and signed by Blagojevich both times. It aimed to correct a blow dealt by riverboat casinos perceived to be luring away gambling dollars, giving racetracks proceeds from a 3 percent tax on riverboats to reverse the damage.
Casinos with annual earnings less than $200 million were exempt from the tax, leaving four Illinois riverboat casinos suing five racetracks and Blagojevich, who they accused of setting up the tax in cahoots with racetrack executive John Johnston, who owns two tracks.
The Appellate Court noted in its 5-3 majority opinion that the tax was "possibly of corrupt origin," but did not rule on that aspect of the casinos' case and wrote it wasn't relevant to whether or not the tax was legal.
Blagojevich was convicted last week of trying to extort Johnston, who testified against the former governor, for campaign contributions in exchange for signing the 2008 racing bill. A jury pronounced Blagojevich guilty of a whopping 17 of 20 counts against him, including charges he tried to sell or trade President Barack Obama's U.S. Senate seat.