MGM, Harrah’s casinos among those suing ex-Illinois governor

Staff and wire reports

Monday, June 15, 2009 | 9:51 a.m.

Casinos owned by Harrah's Entertainment Inc., MGM Mirage and Penn National Gaming are suing former Illinois Gov. Rod Blagojevich as they continue to fight an Illinois law that requires them to share their profits with the state's ailing horse racing tracks.

The racketeering suit was filed Friday in federal court in Chicago by Harrah's Casino-Joliet, Ill.; MGM Mirage's Grand Victoria Casino in Elgin, Ill.; along with Penn National's Empress and Hollywood casinos in Illinois.

The suit names Blagojevich, his campaign fund, race track owner John Johnston and several other race track operators.

Blagojevich's lead attorney could not be reached for comment.

Dan Reinberg, a lawyer for Johnston, told the Wall Street Journal the suit "wasn't unexpected. The reality is that this is desperation by the casinos."

The action comes after the U.S. Supreme Court decided last week to stay out of the casinos' fight. The high court let stand without comment a state Supreme Court decision that upheld the law last year.

The renewal of the law in 2008 figures in the federal corruption case against Blagojevich. FBI wiretaps showed an alleged effort by the then-governor to shake down Johnston for a sizable campaign contribution while the bill was pending.

Four secretly recorded conversations about the issue were played at Blagojevich's impeachment trial in the state Senate. Blagojevich was arrested in his home Dec. 9 and impeached and removed from office the next month.

Until Friday's lawsuit, the former governor's legal problems had played no role in the dispute over the law's constitutionality.

Now, the casinos claim they were "directly victimized" by Blagojevich's alleged criminal conduct. They want a constructive trust put in place over the $89.2 million they've paid into the fund for the horse racing owners. Their suit also seeks unspecified damages, attorney fees and costs.