It has been a captivating few weeks for Illinois. First,
Illinois's governor-responsible for filling Barack Obama's
vacancy in the U.S. Senate-is accused of trying to sell the
seat. Then, the governor-in an audacious game of one-
upmanship-names an African American; demands that his
appointee-who would become the Senate's only Black-be seated,
with which demand the Senate complies; but is impeached and
removed from office anyway. Finally, the newly-minted
Senator states for the first time-reportedly because he had
never been asked-that he tried to raise money for the former
governor. As Will Rogers once said, "There is no trick to
being a humorist when you have the whole government working
for you."

There is nothing funny, however, about another Illinois
political shenanigan. Unlike the humorous high jinks of the
former governor-all of which illustrate why Chicago is a
clichéd pseudonym for corruption-but which affect few outside
Illinois, this new issue could affect all citizens.
Fortunately, it may be resolved, not contingent on political
exigencies by those running the U.S. Senate, but in
conformance with the Constitution by the U.S. Supreme Court.

In May 2006, Illinois's General Assembly passed a law
requiring nine riverboat casinos, operating pursuant to the
Riverboat Gambling Act of 1990, to contribute "3 percent of
their [daily] adjusted gross receipts" to a "Horse Racing
Equity Trust Fund." The General Assembly did so because on-
track betting revenues at the five Illinois tracks with live
horse racing had declined, purportedly due to the lure of
riverboat gambling. Although, in 1999, the General Assembly
had lowered the tracks' tax burden by two-thirds, that did
not satisfy them, hence the Trust Fund. Sixty percent of its
proceeds is distributed to the tracks as purses and forty
percent as an operating subsidy; ironically, the successful
tracks receive the largest subsidies.

Days after the 2006 Act became law, four Chicago area casinos
filed suit in Illinois state court asserting that the Act was
an unconstitutional taking because it forced them to
subsidize their competitors and did not serve a "public
use." Although the trial court struck down the Act on state
law grounds, it required the casinos to continue their daily
contribution to a protest fund which, by the time the
litigation is completed, may exceed $100 million. Illinois
and the casinos both appealed directly to the Illinois
Supreme Court.

In June 2008, the court ruled for Illinois declaring it "well
settled that the takings clause[] . . . appl[ies] only to
the state's exercise of eminent domain and not to the state's
power of taxation." The court explained that, because the
Act "is in no way tied to real property" or any
other "identifiable property interest," an analysis of the
Constitution's Takings Clause was not required. After the
Illinois Supreme Court refused, in September 2008, to rehear
the case, the casinos sought U.S. Supreme Court review in
January 2009.

The Court should hear the case and-given the clear meaning of
the Takings Clause of the Fifth Amendment ("[N]or shall
private property be taken for public use without just
compensation."), which applies to States through the
Fourteenth Amendment, and its own jurisprudence-hold for the
casinos. There is no basis for the Illinois court's rule
that "money" is beyond the Takings Clause. Money is
property; indeed, the Supreme Court has held that money
involves the same set of rights the Constitution attaches to
land or personal property, that is, the "right to possess,
use and dispose of it." Thus, a ruling reversing the
Illinois court's misreading of a 1998 Supreme Court decision
(in fact, a miscounting of the votes) and its mistaken view
that the Takings Clause does not apply to taxation (it does,
of course, to require that the tax support the government)
will be welcome news, not only in Illinois, but also
throughout the land as federal officials search for new
revenues.

William Perry Pendley
President and Chief Legal Officer
Mountain States Legal Foundation

Good Neighbor Committee
P.O. Box 155 - La Salle, CO  80645
info@goodneighborlaw.com

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