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- McEnery is affiliated with Empress Financial Group, which some Empress Casino investors formed after the $609 million sale of Empress Entertainment Inc., the holding company for casinos in Joliet.
- Franzen charges that a June 1995 agreement to sell his 25 shares of Empress Casino Joliet Corp. Stock at $266,666 per share wasn't implemented and that he never received reimbursement of about.
Imagine working at Empress Casino Joliet Corporation before you get there. Explore the company profile and learn everything from culture to benefits.
Rehearing Denied Sept. 22, 2008.
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Lisa Madigan, Attorney General, Springfield (Michael A. Scodro, Solicitor General, Jerald S. Post, Assistant Attorney General, Chicago, of counsel), for appellants.
Michelle Odorizzi, Hugh R. McCombs, Michael K. Forde, of Mayer Brown LLP, Chicago, for appellees.
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William J. McKenna, Jr., Martin J. Bishop, David A. Moore, of Foley & Lardner LLP, Edward M. White, Michael J. Murray, of Carey, Filter, White & Boland, Chicago, for intervenor-appellants.
[324 Ill.Dec. 496]OPINION
Justice BURKE.
In this case, we are asked to determine the constitutionality of Public Act 94-804 (the Act), which imposed, for a two-year period beginning on the effective date of the amendatory Act, a 3% surcharge on the four riverboat casinos in Illinois that had adjusted gross receipts (AGR) of over $200 million in the calendar year 2004. The remaining five riverboat casinos, all of which had AGRs below $200 million, were not subject to the surcharge. The Act provided that the proceeds of the surcharge were to be distributed to the five horse racing tracks in Illinois. For the reasons that follow, we hold that Public Act 94-804 withstands the constitutional challenges raised, in the circuit court of Will County, by the four casinos subject to the tax.
BACKGROUND
The Illinois legislature authorized riverboat casinos in 1990 under the Riverboat Gambling Act (230 ILCS 10/1 et seq. (West 2004)). There are 10 licenses available for riverboats in Illinois: nine are in use, the tenth is in litigation. The nine riverboat casinos are located in Alton, Aurora, East Dubuque, East St. Louis, Elgin, Joliet, Metropolis, Peoria, and Rock Island. Four casinos have AGRS over $200 million-Empress Casino Joliet, Harrah's Casino Cruises Joliet, Hollywood Casino-Aurora, and Elgin Riverboat Resort-Riverboat Casino. There are five horse racing tracks with live racing in Illinois, located in Arlington Heights, Crete, Collinsville, Stickney/Cicero, and Melrose Park.
Empress Casino Joliet Il
In May 2006, the General Assembly passed Public Act 94-804. The Act requires those casinos with AGRs over $200 million to daily contribute 3% of their AGR into the Horse Racing Equity Trust Fund. The Act provides that the monies (along with interest) shall be distributed, within 10 days of deposit into the Fund, as follows: 60% to organization licensees to be distributed at their race meetings as purses and 40% to racetracks ' to improve, maintain, market, and otherwise operate [their] racing facilities to conduct live racing, which shall include backstretch services and capital improvements related to live racing and the backstretch.' Distribution of the above-described 40% takes place as follows: 11% to Fairmount Park Racetrack and 89% to the other four tracks pro rata based on the aggregate proportion of total handle 1 for calendar years 2004 and 2005 from wagering on live races conducted in Illinois.
In enacting Public Act 94-804, the legislature made the following findings:
' (1) That riverboat gaming has had a negative impact on horse racing. From 1992, the first full year of riverboat operations, through 2005, Illinois on-track wagering has deceased by 42% from $835 million to $482 million.
(2) That this decrease in wagering has negatively impacted purses for Illinois racing, which has hurt the State's breeding industry. Between 1991 and 2004 the number of foals registered with [324 Ill.Dec. 497]
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the Department of Agriculture has decreased by more th[a]n 46% from 3,529 to 1,891.
(3) That the decline of the Illinois horseracing and breeding program, a $2.5 billion industry, would be reversed if this amendatory Act of the 94th General Assembly was enacted. By requiring that riverboats agree to pay 3% of their gross revenue into the Horse Racing Equity Trust Fund, total purses in the State may increase by 50%, helping Illinois tracks to better compete with those in other states. Illinois currently ranks thirteenth nationally in terms of its purse size; the change would propel the State to second or third.
Empress Casino Joliet Corporate
(4) That Illinois agriculture and other businesses that support and supply the horse racing industry, already a sector that employs over 37,000 Illinoisans, also stand to substantially benefit and would be much more likely to create additional jobs should Illinois horse racing once again become competitive with other states.
(5) That the 3% of gross revenues this amendatory Act of the 94th General Assembly will contribute to the horse racing industry will benefit that important industry for Illinois farmers, breeders, and fans of horseracing and will begin to address the negative impact riverboat gaming has had on Illinois horseracing.' Pub. Act 94-804, § 1, eff. May 26, 2006.
Plaintiffs, Empress Casino Joliet Corporation, Des Plaines Development Limited Partnership d/b/a Harrah's Casino Cruises Joliet, Hollywood Casino-Aurora, Inc., and Elgin Riverboat Resort-Riverboat Casino d/b/a Grand Victoria Casino, filed a four-count complaint for declaratory judgment and injunctive relief against defendants, Alexi Giannoulias as the Treasurer of the State of Illinois 2 and the Illinois Racing Board.
In count I, plaintiffs alleged that the Act violates the takings clause (article I, section 15) and the due process clause (article I, section 2) of the Illinois Constitution, as well as the due process clause of the United States Constitution, because the surcharge is used for a primarily private use. In count II, plaintiffs alleged that the Act violates article VIII, section 1 (the so-called public funds clause), of the Illinois Constitution because the surcharge was imposed for a private purpose only. In count III, plaintiffs alleged that the Act violates the uniformity clause (article IX, section 2) of the Illinois Constitution as well as the equal protection clauses of the Illinois and federal constitutions. Lastly, in count IV, plaintiffs alleged that the Act violates the special legislation provision (article IV, section 13) of the Illinois Constitution because the surcharge confers a benefit on a particular private group without a reasonable basis, rather than promoting the general welfare of the state. Plaintiffs sought a declaration that the Act is unconstitutional and a permanent injunction against the imposition or collection of the surcharge. Plaintiffs have paid the surcharge under protest pursuant to the State Officers and Employees Money Disposition Act (30 ILCS 230/2a (West 2006)).
Balmoral Park Racing Club, Inc., Hawthorne Race Course, Inc., Maywood Park Trotting Association, the National Jockey Club, and the Illinois Harness Horsemen's Association were granted leave to intervene on behalf of defendants.
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[324 Ill.Dec. 498] The parties eventually filed cross-motions for summary judgment. The circuit court granted summary judgment in favor of plaintiffs, holding that the Act is invalid because it violates the uniformity clause of the Illinois Constitution. The circuit court found there was no real and substantial difference between the four casinos taxed and the five casinos not taxed and that no reasonable relationship had been provided for the classification. In so finding, the circuit court rejected defendants' contention that the classification for the taxed casinos was reasonable since those casinos making over $200 million AGR were better able to absorb the surcharge. The court found that the ability-to-absorb justification was insufficient.
Because the circuit court invalidated an Illinois statute, defendants and intervenors appeal directly to this court. See 210 Ill.2d R. 302(a)(1).
ANALYSIS
Summary judgment is proper where ' the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' 735 ILCS 5/2-1005(c) (West 2000). We review the circuit court's grant of summary judgment de novo.Arangold Corp. v. Zehnder,204 Ill.2d 142, 146, 272 Ill.Dec. 600, 787 N.E.2d 786 (2003).
We also review the constitutionality of a statute de novo.Arangold Corp.,204 Ill.2d at 146, 272 Ill.Dec. 600, 787 N.E.2d 786. ' Statutes bear a presumption of constitutionality, and broad latitude is afforded to legislative classifications for taxing purposes.'Allegro Services, Ltd. v. Metropolitan Pier & Exposition Authority,172 Ill.2d 243, 250, 216 Ill.Dec. 689, 665 N.E.2d 1246 (1996). The party challenging a nonproperty tax classification carries the burden of rebutting that presumption and ' clearly establishing' the Act's unconstitutionality by showing that it ' is arbitrary or unreasonable.'Allegro Services, Ltd.,172 Ill.2d at 250-51, 216 Ill.Dec. 689, 665 N.E.2d 1246. We have a duty to uphold a statute as constitutional whenever reasonably possible.Arangold Corp.,204 Ill.2d at 146, 272 Ill.Dec. 600, 787 N.E.2d 786.
I. Uniformity Challenge
A. Standards for a Uniformity Challenge
Article IX, section 2, of the Illinois Constitution provides:
' In any law classifying the subjects or objects of non-property taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly. Exemptions, deductions, credits, refunds and other allowances shall be reasonable.' Ill...
Owners of Empress Casino Joliet Corp. hope to see long lines of recreational vehicles pouring into Joliet next spring.
With open arms and a new $1.2 million RV resort, they will welcome vacationing couples to the world of gaming on the Des Plaines River.
Magazine advertisements will announce the new lodging option and billboards will be erected along nearby interstates to lure travelers toward the Empress riverboat casino.
'We're basically at the crossroads of America, with travelers on (Interstates) 80 and 55. If we can get them to stop for a night or two or three . . . it will benefit the whole community,' said Pete Ferro Jr., Empress chief executive officer.
At a ground-breaking for the park Wednesday, officials laid out the plan: There will be 80 concrete sites with electric, water and cable television service. Each one will have room for a recreational vehicle plus a lighted patio area.
The 12-acre facility will stretch to within a few hundred feet of the existing 102-room Empress hotel, so RV guests can use the adjoining pool and recreation areas. A shuttle bus also will link the two sites.
Plans for the park also include a new 'oasis' building, featuring laundry facilities, restrooms, showers and a shop.
Ferro said the RV park design is 'upscale'--though prices for stays will likely range from $12 to $25 per night. He said the park will be the first facility of its kind in the Joliet area.
'It will be a great addition to the community,' said Ruth Fitzgerald, head of the Joliet-Will County Center for Economic Development. 'I think this is another great niche that (the Empress) is creating for itself.'
The locally owned casino company already has plans for a $7 million, 100-room addition to the existing hotel. The addition will include a coffee shop and a 4,000-square-foot conference center--another new idea for Joliet.
Ferro said he expects ground to be broken on the addition at the end of this year and for the facility to open by mid-1998.
The Empress complex sits on a 330-acre, partially wooded riverfront property that planners say is ripe for further development. Several suggestions have been tossed around, including proposals for upper-market condominiums, entertainment attractions and shopping centers.
'Right now, the moon is a possibility. We have so much acreage,' Ferro said. 'We are always looking to see what we're going to do next.'
His confidence in part comes from the apparent success of Empress riverboat gaming. It can be difficult to get a reservation to board the boats on weekend nights, Ferro noted.
He said he hopes the RV park will attract more midweek travelers. RV owners, he noted, 'aren't tied to a weekend. They have the time to travel during the week.'