The Institute for Justice, a leading libertarian public interest law firm that has litigated numerous property rights cases, reports that the Illinois state senate has passed a bill authorizing the use of eminent domain for the benefit of casinos:
The bill passed 32-20 in the state Senate on May 1 and is now being considered by the House Executive Committee. Gov. Pat Quinn has previously vetoed two Chicago casino bills in the past. However, while the governor still has concerns about this new casino bill, he has indicated he could sign, so long as gambling revenue funds education and ethics standards are tightened. (After all, four of Illinois’ last seven governors have gone to prison.) Yet casinos abusing eminent domain apparently hasn’t crossed Quinn’s mind.
As the IJ post notes, takings for the benefit of casino interests have occurred in other states, and often lead to the same sorts of abuses as other “economic development” condemnations of the type upheld by the federal Supreme Court in Kelo v. City of New London. Such takings are routinely used by politically powerful firms to acquire property from the politically weak. They also often destroy more economic value than they create. I discuss these problems in much more detail in this article.
In the aftermath of Kelo, some 44 states passed eminent domain reform laws intended to curb such abuses. But Illinois’ law is one of many that contain major loopholes that prevent them from providing much in the way of meaningful protection for property owners. The IJ post notes that Illinois’ 2006 law rates only a D+ under their grading scale.
Hopefully, the Illinois House of Representatives will reject the Senate bill. The legislation is currently before the House Executive Committee. If the House does not reject the bill, it is possible that state courts would strike it down. In a 2002 decision, the Illinois Supreme Court ruled that the potential economic benefits of expanding the operations of a private business is not a “public use” justifying the use of eminent domain under the state Constitution. As the Court put it (quoting a lower-court dissenting opinion), “the economic by-products of a private capitalist’s ability to develop land cannot justify a surrender of ownership to eminent domain.” At least some takings for the benefit of casino interests could run afoul of this ruling, although the state supreme court did not categorically ban all takings that transfer land to private parties for economic development purposes.
UPDATE: I have made a few stylistic revisions to this post.