Fitzgerald v. Racing Association of Central Iowa, 539 U.S. 103, 3 (2003)

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Cite as: 539 U. S. 103 (2003)

Opinion of the Court

Justice Breyer delivered the opinion of the Court.

Iowa taxes adjusted revenues from slot machines on excursion riverboats at a maximum rate of 20 percent. Iowa Code 99F.11 (2003). Iowa law provides for a maximum tax rate of 36 percent on adjusted revenues from slot machines at racetracks. 99F.4A(6), 99F.11. The Iowa Supreme Court held that this 20 percent/36 percent difference in tax rates violates the Federal Constitution's Equal Protection Clause, Amdt. 14, 1. 648 N. W. 2d 555 (2002). We disagree and reverse the Iowa Supreme Court's determination.

I

Before 1989, Iowa permitted only one form of gambling— parimutuel betting at racetracks—the proceeds of which it taxed at a six percent rate. Iowa Code 99D.15 (1984). In 1989, it authorized other forms of gambling, including slot machines and other gambling games on riverboats, though it limited bets to $5 and losses to $200 per excursion. 1989 Iowa Acts ch. 67, 3, 9(2); Iowa Code 99F.3 (1996). Iowa taxed adjusted revenues from slot machine gambling at graduated rates, with a top rate of 20 percent. 1989 Iowa Acts ch. 67, 11; Iowa Code 99F.11 (1996).

In 1994, Iowa enacted a law that, among other things, removed the riverboat gambling $5/$200 bet/loss limits, 1994 Iowa Acts ch. 1021, 19, authorized racetracks to operate slot machines, 13; Iowa Code 99F.1(9), 99F.4A (1996), and imposed a graduated tax upon racetrack slot machine adjusted revenues with a top rate that started at 20 percent and would automatically rise over time to 36 percent, 1994 Iowa Acts ch. 1021, 25; Iowa Code 99F.11 (1996). The Act did not alter the tax rate on riverboat slot machine adjusted revenues, thereby leaving the existing 20 percent rate in place. Ibid.

Respondents, a group of racetracks and an association of dog owners, brought this lawsuit in state court challenging the 1994 legislation on the ground that the 20 percent/36 per-

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