Official sides with taxpayer in challenge to gambling law

Maura Kelly Lannan

Wednesday, Feb. 9, 2005 | 9:08 a.m.

CHICAGO -- Attorney General Lisa Madigan reversed her position Tuesday and said a law that let a defunct riverboat casino license move to the Chicago suburb of Rosemont was unconstitutional special legislation.

Madigan's new position, disclosed in a legal brief filed with the Illinois Supreme Court, essentially puts her on the side of a taxpayer who sued the Illinois Gaming Board, which Madigan represents, over the matter.

The state's high court now must decide the lawsuit filed in 2002 by taxpayer Philip Crusius. If the court rules the 1999 law was special legislation designed to benefit only that license, it could mean that the license now held by bankrupt Emerald Casino must go back to East Dubuque on the Mississippi River, Chief Deputy Attorney General Barry Gross said.

That could throw into question plans by Emerald to sell its license to Isle of Capri Casinos Inc., which wanted to open its casino in Rosemont.

"At this point, the playing field for determining the location of the 10th license is now the Illinois Supreme Court," Gross said.

The lawsuit, which Crusius filed with the backing of the Better Government Association, was appealed to the state's high court after two lower courts rejected it and upheld the 1999 law. In Illinois, casino licenses are awarded to investors but are tied to specific locations.

Madigan previously had argued that the law allowing the casino license's move was not special legislation. But she changed her position because of a 2003 Illinois Appellate Court ruling on a different but similar case.

In that case, the court ruled on a lawsuit filed by Emerald that the Gaming Board went against the intent of lawmakers with its decision in January 2001 to deny a request by Emerald to renew the license and relocate it. The Supreme Court refused to consider the state's appeal of that decision.

Gross said Madigan had argued the 1999 law was not special legislation because she believed the law gave the Gaming Board the right to deny Emerald's application to renew or relocate its license. But the Appellate Court ruled that the Gaming Board had no discretion to decide the issue, which Gross said makes the law unconstitutional.

"Historically, we thought when the Gaming Board was given latitude, this was not special legislation. But once it became mandatory (that the board renew the license), it was," Gross said.

Jay Stewart, executive director of the Better Government Association, said he had not expected Madigan to change her position.

"This is a dramatic turn and we are certainly surprised," he said. "We've been arguing this law is unconstitutional, so we welcome their views on the matter."

The village of Rosemont and Emerald also are part of the case. Both intervened after the case was filed and both argue that the law was not special legislation.

"I haven't seen her brief but we'll continue to pursue our position in the litigation," Emerald attorney James Sprayregen said.

Rosemont attorney Robert Stephenson said the 1999 law has no bearing because Emerald is trying to sell its license under a plan of reorganization in U.S. Bankruptcy Court. That plan relies on a different law, passed in May 2003, which allows the state to auction off the license and relocate it, he said.

"The appeal before the Illinois Supreme Court, it is our position, is moot," he said.

Gross said that May 2003 law does not apply.

Isle of Capri representatives did not immediately return a call for comment.

Emerald holds the license but is trying to sell it to Mississippi-based Isle of Capri. The Gaming Board and its staff are investigating whether Isle of Capri is suitable to run an Illinois casino before the license sale is fully approved. But Madigan, who objects to Isle of Capri's plan to build in Rosemont, is trying to stop the deal and revoke the license.

The Gaming Board itself is also undergoing a significant change. With two members quitting in August and already another vacancy, the two remaining members are not enough for the legal requirements to meet or take action. Gov. Rod Blagojevich has not yet appointed replacements.