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ELGIN, IL-The biggest cash cow among Illinois’ riverboats has become much less profitable as a result of the state’s higher tax on casinos. The Grand Victoria posted second-quarter operating cash flow of $20.6 million, down $8 million from the same three months ending July 31, 2002.

The tax increase was done in two steps–July 1, 2002 and July 1, 2003. The first measure set the tax rate at 50% on revenues exceeding $200 million. This year’s increase sets the rate at 70% on revenues exceeding $250 million.

Las Vegas-based Mandalay Resort Group claims the higher taxes on casinos cost the company $0.05 per share in the most recent quarter. The company owns 50% of the Grand Victoria.

Operating cash flow for the first six months of the company’s year are off more than 25%, to $44.4 million, according to Mandalay Resort Group’s earnings report.

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