Other Casino News
January 24, 2012

The background checks are just one of several procedures that must be performed before any casino can open. The Cleveland casino is further along with their background checks, so they have begun the next process. The slot machines must be tested. The process begins with each casino selecting the machines. A certified lab then tests the machines, which are then shipped to the casino where the machines are inspected and tested again. Once that is complete, the gaming software is installed.

The Ohio Casino Control Commission is rumored to perhaps announce the new opening dates for the Toledo and Cleveland casinos by February 1. It is believed they will announce a date range, rather than an exact date.

The commission did give preliminary approval to 43 new rules dealing with game play at the casinos. Among the rules approved:

• A casino director, officer, employee, agent or vendor may not play table games at the casino they are associated with;
• Cheating, cheating devices and the use of electronics are all prohibited while playing. Interestingly, card counting is not banned. Each casino will decide how to handle card counting;
• Color and denomination of the chips are determined. A white chip is worth $1, red is worth $5, all the way up to a blue chip that is worth $25,000;
• Casino advertising and how to handle unclaimed winnings were also addressed.

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Toledo Casino
January 24, 2012

Construction is nearly complete, but quite a bit of regulatory work remains before an opening date will be determined. Penn National did, however, clear its biggest hurdle to date: background checks. In an agreement reached with the Ohio Casino Control Commission, the number of individuals from Fortress Investment Group that would be subject to background checks was decreased. As reported in earlier updates, Fortress is a holding company for Penn National whose board of directors refused to submit to the background checks required by Ohio law. Under the agreement with the commission, a limited liability corporation would be established whereby shareholders would be allowed to grant irrevocable proxies to two individuals to vote their Penn shares. This would eliminate the direct control element that is a trigger for a background check.

Penn National must also convince the commission that the former CEO of Fortress, David Mudd, no longer has a role with either company. Mudd, who is on an indefinite leave of absence, is accused by the SEC of misleading investors while he was head of Fannie Mae. Until the commission has such assurance, Mudd is on the background check list.

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Internet Cafes
January 23, 2012

Cincinnati is the latest city to propose a moratorium on Internet sweepstakes cafes. As with most other moratoriums that have been passed, no new Internet café would be allowed to open within the city for at least 180 days.

Meanwhile, the city of New Carlisle, located near Springfield, would like to extend their moratorium. Originally passed in February 2011 and extended in August. City officials would like another six months, in the hope that the state will decide something.

Ohio Attorney General Mike DeWine reiterated his stance that these cafes need to be regulated. HB 195, which would offer such regulation, was introduced in April, 2011, but remains in the State Government and Election Committee of the Ohio House of Representatives.

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Cleveland, Toledo Casino Openings Delayed
January 9, 2012

Because required background checks on gaming operators and vendors are behind schedule, the openings of casinos in Cleveland and Toledo will be delayed at least eight weeks. The Cleveland casino was scheduled to open March 26 and the Toledo casino April 2. But these were dates set by the casinos themselves, not by the Ohio Casino Control Commission, who has final say on the matter. May or June is now the earliest either casino will open. Columbus and Cincinnati casinos openings, in late 2012 and 2013, are not affected. The commission has also recommended the Cleveland and Toledo casinos open at least two weeks apart.

The holdup: background checks. Casino operators objected to some of the background checks. As a result, applications for the Cleveland casino weren’t complete until December. They were due in September. With the Toledo casino, it is even worse. The application for Fortress Investment Group, a holding company for Penn National, has yet to be submitted. Filings for inside directors and stakeholders are expected by the end of the month. Once the background checks are complete, then the licensing process, which will take several weeks, must take place.

The impact to the bottom line is potentially significant, perhaps as much as $1.4 million per day, according to a Plain Dealer analysis. Then there are the 2800 prospective employees who have been undergoing training at their own expense and now whose hiring is on indefinite hold. 

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Video Slots
January 9, 2012

MTR Gaming became the first company to submit a formal application for VLT’s at Scioto Downs in Columbus. The Ohio Lottery Commission has been accepting applications since November, but track owners have shied away because of the pending lawsuit filed by the Ohio Roundtable, challenging the constitutionality of VLT’s at horse racing tracks. The Lottery Commission will review the application in the next 30 days.

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