Ohio Gaming Law: News

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May

VLT Appeal
May 17, 2013

Last year a Franklin County Common Pleas judge found that Ohio Roundtable had no legal standing to challenge the constitutionality of VLT’s at Ohio’s horse racing tracks. In March of this year, the 10th District Court of Appeals upheld that decision. Now Ohio Roundtable is taking their argument to the state’s highest court, filing an appeal on April 26th with the Ohio Supreme Court.

HB7
May 17, 2013

The Senate is expected to vote next Wednesday on HB 7, a bill which would all but shut down the state’s Internet cafes. There has been much discussion about whether the bill will pass as introduced or with amendments.

It now appears the following will not be included in HB 7:

The inclusion of an emergency clause, which would make the legislation effective immediately upon signature by the Governor. Normally a bill becomes effective 90 days after signed by the Governor. With HB 7, an emergency clause
would also prevent advocates of Internet cafes from overturning the law with a ballot referendum because of a lack of time;
Language that would permit fraternal and veterans organizations to legally operate ‘video raffle terminals’ which act like slot machines but have winners determined like instant bingo games. Such organizations have been given until
August 1 to have their gaming machines legalized or face enforcement action by the state’s attorney general’s office.

The following may still be included:

Replace the $10 prize limit with a 3-5% limit on gross receipts of a business that can be paid out in sweepstakes;
Add language relating to ‘skilled games’. Tic Tac Fruit is an example of this type of game. Most of these businesses have either ceased operation or switched to an Internet café. There is some concern that if HB 7 passes as introduced that
Internet café owners will switch to skilled gaming parlors.

Bill to Regulate Internet Cafes Introduced
May 17, 2013

HB 101 has been introduced. This proposed legislation calls for regulation rather than an outright ban of Internet cafes. Among its provisions:

Establishment of a state lottery commission office of sweepstakes compliance which would license and oversee operation of sweepstakes parlors;
Allow municipalities and townships to govern Internet cafes in their jurisdiction. They could either outright ban such establishments or subject them to local zoning regulations;
Require third-party lab analysis of sweepstakes software that would verify games as sweepstakes and not slot machines or illegal gambling;
Criminal background checks of software vendors and store owners;
Prohibit the sale of alcohol at Internet cafes;
Prohibit a single prize payout of greater than $5,000 and permit only cash payouts;
Prominent display of operator’s license and sweepstakes software certification.

National Park Service Nixes Cleveland Casino Skywalk
May 17, 2013

The National Park Service has rejected plans by Rock Ohio to build a skywalk to connect the casino parking garage to the casino, claiming that the bridge would “negatively impact the historic character” of the Higbee Building and the Tower City Center, which are on the National Register of Historic Places.

This doesn’t prevent the skywalk from being built. But the investors who purchased historic renovation tax credits must be repaid by the property owner. Rock Ohio Caesars says it will buy the Higbee Building from Forest City Enterprises.

Casino Revenues Drop Sharply in April
May 8, 2013

Ohio’s four casinos and one established racino all experienced deep declines in revenue for the month of April.

Horseshoe Cleveland experienced the steepest decline, dropping 18.8% to $19.89 million, from March. Part of that decline may be due to the opening of the state’s second racino at Thistledown, which took in $7.96 million from slots in its first month of operation.

Next was Horseshoe Cincinnati, where revenues dropped 15.2% to $17.82 million from March. Hollywood Columbus had revenues of $18.08 million, a 13.7% decline from March and Hollywood Toledo had revenues of $16.39 million, an 8.2% decrease from March. Overall, revenues from the four casinos dropped 14.4% from March.

The racino at Scioto Downs also experienced a decline in revenue, down 9.9% to $11.36 million from March.

Owners are not overly concerned. April is typically a slower month for casinos. And this April had one less weekend than March. Weekends are usually significantly better business days.

Senate Passes SB115
May 7, 2013

SB115, which extends the moratorium on Internet cafes to June 30, 2014, passed in the Ohio Senate unanimously. The bill will now go to the Ohio House for consideration. If passed, it becomes effective immediately upon signature by the Governor because of an emergency clause. The emergency clause was needed to cover the gap between the expiration of the current moratorium (June 30, 2013) and the date any legislation banning or regulating Internet cafes would take place (90 days after being signed by the Governor).

Meanwhile, Senator Schiavoni has introduced Senate Joint Resolution 3, which would put the issue of Internet cafes before the voters. To get on the November ballot, SJR 3 requires a three-fifths majority vote by the House and Senate. If SJR 3 is placed on the ballot and passed by voters, Article 15 of the Ohio Constitution would be amended to either allow or ban Internet cafes, depending on what voters chose.

Racinos are a Go Again
May 7, 2013

The Ohio State Racing Commission has approved the license transfers for Penn National Gaming to relocate its horse racing tracks at Beulah Park in Grove City to Austintown and Raceway Park in Toledo to Dayton.

The issue over seating was resolved when the racing commission accepted Penn National Gaming’s latest proposal. For the Austintown track, there will be two phases. Phase 1 will have 513 enclosed seats with a track view and phase 2 will add 488 enclosed seats with a track view. There will be no outdoor seating. Both phases must be completed before the racing season begins. For the Dayton site, the track will have 1,037 indoor seats with a view of the track.

Penn National Gaming has until June 15 to certify to the racing commission that each track will open with at least 1,000 seats.

Cleveland Casino Second Phase
May 6, 2013

As expected, Rock Ohio Caesars, owners of Horseshoe Cleveland, plan to buy the Higbee Building, current home of the Cleveland casino. If the sale is approved, the owners plan to build a skywalk between the Higbee Building and the casino parking garage.

Dan Gilbert, owner of Rock Ohio Caesars, tweeted that yes, there will be a second phase, which calls for a casino on the riverfront. The constitutional amendment that brought casinos to Ohio permits only a single casino in Cleveland. However, an agreement with the Governor allows for two sections as long as they are physically connected. Tower City is expected to be that link.

New Propoal for Austintown Racino
May 1, 2013

Penn National Gaming presented their fourth plan for the Austintown Racino to the Ohio State Racing Commission. Construction has been stopped over seating concerns.

The latest proposal is in two phases with an option for a possible third phase. The first phase would have 513 indoor seats with table service and a view of the track. A second phase would take place only if demand warranted it. It calls for the enclosure of the existing lower level, which adds 488 indoor seats with table service and a view of the track. This would raise the total number of indoor seats to 1,001. All outdoor seating would be eliminated, because of the racing season which would be October to March. This plan would allow Penn National Gaming to stay within the original footprint for the building.

A third phase could add 466 stadium style seats, but would require an expansion of the original building.

A spokesman for Penn National Gaming has indicated that if an agreement can’t be reached with the state racing commission, they will consider adding VLT’s to Beulah Park and not relocating to Austintown.

The racing commission may vote on the latest proposal at their next meeting. Penn National Gaming has stated that if this most recent proposal is accepted at the next meeting, construction could resume immediately and the racino could still open Spring 2014.

Penn National Gaming is closer to an agreement with the Ohio Horseman’s Benevolent and Protective Association over the number of stalls. The original plan called for 500 stalls. The horseman’s association wanted over 1,000. It is believed there is a compromise of 818 stalls in 11 barns.

HB7 Now on the Fast Track
May 1, 2013

Last month, it appeared HB 7 might not see action until 2014. Now Ohio Senate President Keith Faber is saying action will be taken by the end of May.

Originally the Senate was believed to have been favoring regulation over an outright ban of sweepstakes cafes. That apparently changed after a meeting with Ohio Attorney General Mike DeWine, Public Safety Director Tom Charles and Franklin County Prosecutor Ron O’Brien. Faber now says that the inability to differentiate legal from illegal operations and the fact that Internet cafes serve no public purpose were the decisive reasons for a change of heart and the catalyst to fast track the bill was an 8th District Court of Appeals decision that ruled Internet cafes were illegal gambling.

In a related note, Faber has requested all campaign contributions, made to fellow legislators, from industry lobbyists be returned. In a raid of VS2 Worldwide Communications offices in New Jersey, an email was discovered where company officials told owners of these sweepstakes cafes to make contributions to lawmakers and legislative committee members. Most of the targeted lawmakers were Senators. HB 7 is pending in the Ohio Senate.

Meanwhile SB 115 was introduced, a bill that extends the current moratorium on Internet cafes to June 30, 2014. SB 115 also contains an emergency clause, which will make it effective immediately upon signing by the Governor. This moratorium is more stringent than the one in place. All Internet café owners would be required to file new affidavits with the attorney general’s office. They must identify owners and employees of the establishment and indicate when the business began conducting sweepstakes games. Failure to file the affidavits could result in a fine of $1,000 a day.

The new moratorium was required because even if HB 7 passes, it would not take effect until after the current moratorium expires on June 30, 2013. SB 115 is expected to be heard and pass the Senate this week.

Fewer Internet Cafes
April 30, 2013

Turns out there aren’t as many Internet cafes as originally thought. After the existing moratorium went into effect in 2012, over 820 affidavits were filed with the attorney general's office. Appears that some were duplicative and others were for non-existent cafes. The real total is more like around 500 Internet cafes.

Lawsuit Filed to Stop DeWine Crackdown
April 30, 2013

Internet café owners in Lake County have filed a lawsuit in Franklin County to stop any raids in their county similar to the ones conducted in neighboring Cuyahoga County. A Franklin County Common Pleas judge denied their request for a temporary restraining order that would have prohibited the attorney general or local law enforcement from shutting down the cafes. However, the judge also urged local law enforcement not to raid the Lake County Internet cafes. Oral arguments are scheduled for June 7. The judge must also determine if Franklin County is the proper venue for the lawsuit.

Pennsylvania Casinos
April 30, 2013

Ohio’s casinos appear to also be having an impact on Pennsylvania gaming establishments. In 2011, PA was second only to Vegas as a gambling mecca with revenues just above $3 billion. In 2012, PA gambling revenues increased to $3.2 billion. So far in 2013, slot machine revenues have dropped three consecutive months. Presque Isle Downs & Casino, located in Erie, PA, has seen its revenues decline 18% since the opening of Horseshoe Cleveland. Another PA casino, Rivers Casino in the Pittsburgh area, saw its share of Ohio visitors drop from 8% to 5%.

Things may yet become more crowded in the area. Assuming Penn National Gaming gets its issues with the racing commission resolved, a new racino with a 1-mile thoroughbred racetrack and up to 1,500 VLT’s will be built in Austintown. Penn National Gaming is also looking into a proposed harness racetrack/casino in Lawrence County, PA, a mere 20 miles from the Austintown racino. The PA venture is also having problems – financing and licensing.

Sweepstakes Café Industry to Be Heavily Regulated After All
April 24, 2013

Pending house bill HB 7, which would severely restrict the economic incentives for sweepstakes café operators, recently stalled in the Ohio Senate. The bill faced challenges as some state senators questioned whether a more hospitable treatment for sweepstakes cafes was warranted. Ending speculation about the viability of ongoing operations, Ohio Senate President Keith Faber announced today that the Senate will pass HB 7 and seek to limit or eliminate the sweepstakes café industry in Ohio. The Senate is expected to pass HB 7 within 60 days, at which point the bill will go to Governor Kasich’s office for his signature.

Indiana Casinos
April 24, 2013

The opening of Horseshoe Cincinnati has had a negative impact on business at the three riverboat casinos in southeast Indiana for the month of March. Horseshoe Cincinnati had 441,000 visits in March, 20,000 less than the three Indiana casinos combined.

Compared to March, 2012, business at the Indiana casinos was down 21% and visits down nearly 19%. Statewide, revenue was down
4.4%. For 2013, revenue was down 7.5% statewide and visits down 13.8%. The largest of the Indiana casinos, Hollywood Lawrenceburg, saw its gambling market share drop to 42%, a 20% drop. Horseshoe Cincinnati had a market share of 31%.

It appears Horseshoe Cincinnati draws a different type of gambler than the Indiana riverboat casinos. Gamblers at Horseshoe Cincinnati spend an average of $48 per visit, but come back more often. Riverboat gamblers in Indiana spend an average of $103 per visit.

Best Odds at Winning Slots
April 24, 2013

Scioto Downs is the place with the best odds for gamblers with a payout percentage of 91.6. Horseshoe Cincinnati is the lowest at 89.3%. Hollywood Columbus was 91.4%, Hollywood Toledo was 91.2% and Horseshoe Cleveland was 90.2%.

DeWine Begins Crackdown
April 24, 2013

Less than one week after announcing his intentions to take legal action against Internet cafes, Attorney General Mike DeWine sprang into action.

At a briefing for law enforcement officials, DeWine announced the formation of an Internet Gaming task force within his office that will assist local law enforcement agencies in prosecuting Internet cafes.

DeWine concluded the day by conducting raids on six Internet cafes in Cuyahoga County and the corporate offices of VS2 Worldwide Communications in New Jersey, a company that provides software for sweepstakes games. Bank accounts, records and video terminals were seized.

Indictments
April 24, 2013

A day after DeWine’s briefing, a Cuyahoga County grand jury issued a 146-page indictment against eight companies and eleven people connected to Internet cafes. The charges included money laundering, possession of criminal tools and engaging in a pattern of corrupt activity.

Cleveland Casino Fined
April 24, 2013

Horseshoe Cleveland was fined $180,000 by the Ohio Casino Control Commission for violations of state gambling rules. Among the violations were the mishandling of keys, failure to put problem gambling hotline information on advertisements, use of unapproved dice, substituting quarters for chips, allowing cocktail waitresses to enter restricted areas and improperly shipping slot machines.

This is the second time Horseshoe Cleveland has been fined. In January, the casino was fined $15,000 for using unapproved software. In that instance, the casino self-reported the problem. These latest violations were discovered by OCCC auditors and regulatory staff.

Cleveland Casino Second Phase on Hold
April 24, 2013

The current home of Horseshoe Cleveland, in the Higbee Building in downtown Cleveland, was supposed to be temporary until the Phase 2 casino was built on the riverfront.

Now there are rumors of Dan Gilbert, owner of Rock Ohio Caesars, that operates the Cleveland casino, looking to buy the Higbee Building as well as develop casinos in Baltimore and Toronto. And a deal between Rock Ohio and Governor Kasich that allows the existing Higbee Building site to remain permanent has people wondering if there will be a Phase 2. Rock Ohio and Cleveland city officials still insist Phase 2 will happen, but unsure of a timetable. Speculation is that if Phase 2 does happen, it will be several years from now.

Work Halted on the Racinos
April 24, 2013

Penn National Gaming has stopped work on racinos in Austintown and Dayton, as a result of the impasse with the state racing commission over additional indoor seating.

Penn National Gaming claims the racing commission’s insistence on an additional 1,200 seats between the two sites is not in line with today’s type facilities. To add more seats would delay opening by up to six months and add $5 million to Penn National Gaming’s $250 million investment, a cost they say they can’t afford. Penn National Gaming has stated their willingness to compromise. If the racing commission will allow them to proceed with the original plan, then if demand dictates it, more seats will be added at a later time.

Meanwhile, the racing commission approved new plans for the Lebanon Raceway, which also faced the threat of delays over additional seating. The new plans call for 200 more seats. The commission wanted 400.

Casino Revenues
April 16, 2013

Ohio’s three established casinos all posted double digit increases in revenue for March. Hollywood Columbus had adjusted gross revenue (AGR) of $20.9 million, a 13.3% increase over February. Hollywood Toledo saw revenues of $17.8 million, a 20.9% increase. Horseshoe Cleveland was up 11.1% to $24.5 million. The new Horseshoe Cincinnati casino, which opened March 4, brought in $21 million.

The racino at Scioto Downs also posted double digit gains, with an AGR of $12.6 million, a 14.8% increase over February.

Thistledown Racino
April 16, 2013

Ohio’s second racino opened on April 9. Opening day attracted more than 2,100 visitors. Thistledown offers 1,150 VLT’s, live entertainment, specialty restaurants and bars. Live horse racing returns April 19, although simulcast wagering is available year round. Thistledown will be open 24 hours and offers free parking.

It remains to be seen if Thistledown will reside permanently in North Randall. Horseshoe Cleveland is nearby, although officials believe these two venues can co-exist. The bigger challenge comes in December when a Hard Rock Rocksino opens at Northfield Park, less than 10 miles away.

Owners of Thistledown have an option to move to the Akron-Canton area. They have until June 2014 to decide whether to stay or move.

Racino Delays
April 15, 2013

The Ohio Senate Committee on Workforce and Economic Development held informal meetings in Dayton and Austintown. The committee is looking at the financial impact that a delay in construction would have on the local economy.

In Dayton, city officials, business owners and members of construction trades voiced their concerns over lost dollars and jobs. Horse owners and breeders meanwhile expressed support for the racing commission’s insistence on more indoor seating for the horse racing track.

In Austintown, during a two hour meeting, the committee also heard from city officials, local business owners, members of construction trades and members of the horse industry. Both sides implored legislators to do whatever it takes to get the project going. The sentiment was that Penn National Gaming and the Ohio State Racing Commission need to come to some sort of compromise.

Penn National Gaming did indicate that they would be willing, as a condition of getting a license, to revisit the seating issue after the facilities open. If attendance warranted, they would increase the number of seats. Another issue, that of the number of stalls, seemed less confrontational. The original plans called for 500 stalls. The Ohio Horsemen’s Benevolent and Protective Association wants 1,500 stalls, but said that 1,100 would be reasonable. Penn National Gaming said this will get worked out.

The next opportunity for Penn National to plead their case may come at the Ohio State Racing Commission’s next meeting on April 16.

Dewine to Shut Down Internet Cafes
April 15, 2013

Tired of waiting on state legislators, Ohio Attorney General Mike DeWine has said he will work with local law enforcement to take legal action to shut down Internet cafes statewide. This comes after the chairman for the State Government Oversight & Reform Committee indicated he hopes to pass legislation by the end of 2014. DeWine is relying on a recent Ohio 8th District Court of Appeals decision where a three-judge panel ruled that three Cleveland Internet cafes were guilty of illegal gambling. No word on how or when DeWine would begin his crackdown.

Attorneys for VS2 Worldwide Communications, a company that sells software for sweepstakes games, say DeWine has no legal ground to stand on. They point to HB 386, signed by Governor Kasich in June 2012, which, among its provisions, placed a moratorium on all new Internet cafes through end of June 2013. They argue that HB 386 allows existing Internet cafes to remain open as long as they register with the attorney general’s office. Cuyahoga County Common Pleas Judge Nancy Russo agreed last year, when she issued a temporary restraining order, stating that HB 386 ‘legalized’ Internet cafes. In 2009, a Toledo judge also ruled in favor of Internet cafes. DeWine counters that HB 386 merely prevents new Internet cafes from opening and that there are no provisions that make something illegal legal.

Meanwhile members of the Permanent Joint Committee on Gaming and Wagering held their first meeting, at the Hollywood Columbus casino. The meeting was a fact finding mission on the bigger picture of gambling in Ohio. Committee members got a behind the scenes tour of the casino during their two hour visit.

Committee to Study Sweepstakes Cafes
April 4, 2013

The Permanent Joint Committee on Gaming and Wagering plans to take a closer look at all gaming operations in Ohio, including casinos, racetrack VLT’s, charitable gambling and Internet cafes to see how the sweepstakes cafes fit into the big picture of gambling in the state. They hope to make a recommendation before the summer recess.

The committee was created in 2010, but they will be having their first public meeting, possibly this month. The House has already passed HB7, which would in essence ban sweepstakes cafes by prohibiting cash prizes and removing the economic incentive from the operations. The Senate would like to reach a decision on sweepstakes cafes by the end of 2013.

Austintown Racino
April 4, 2013

The township trustee chairman is frustrated with the Ohio State Racing Commission and their insistence on more indoor seating at the Austintown racetrack. He has asked for an audience with Governor Kasich. The Governor’s spokesman has stated that Kasich will not get involved.

The trustee chairman is upset with the whole process of the racing commission and has asked that the commission lay out precisely what Penn National Gaming needs to do to get the racino built. The chairman believes the community would be dealt a tremendous blow if the racino plans fell through.

Internet Cafe Legislation on Hold
March 28, 2013

HB 7, which would all but shut down sweepstakes cafes, could sit for months before the Ohio Senate reaches any sort of decision. It is possible that a legislative committee will be asked to take an in depth look at all forms of gaming including casino gambling, racinos and other charitable events as well as the sweepstakes cafes before taking any action on HB 7. There is also speculation that senators prefer regulation over elimination of sweepstakes cafes. The Senate has other priorities as well. The Senate President has stated that the focus over the next month will be on the state budget bill.

Cleveland Internet Cafes Ruled Illegal
March 28, 2013

The 8th District Court of Appeals has affirmed a 2012 Cleveland Municipal Court conviction of three Cleveland sweepstakes cafes accused of running illegal gambling operations. View the decision. The attorney for the cafes said he will appeal to the Ohio Supreme Court.

The three cafes used software from VS2 Worldwide Communications. VS2 is facing charges of racketeering, money laundering and gambling in the Cuyahoga County Court of Common Pleas.

Internet Cafes Face a New Opponent
March 28, 2013

Banks have joined the fight against sweepstakes cafes. At least five sweepstakes cafes in Cleveland have received notification from a major bank that their business checking accounts are being closed.

Café owners believe the banks are being pressured by prosecutors and the media. The Cuyahoga County prosecutor has denied these allegations.

Racinos Delayed
March 28, 2013

The Ohio State Racing Commission is still dissatisfied with seating at the proposed racinos in Austintown and Dayton, as well as the Lebanon Raceway in Warren County. As a result, they again delayed a vote to transfer licenses from Beulah Park in Grove City to Austintown and Raceway Park in Toledo to Dayton.

By a 4-0 vote, the commission adopted resolutions calling for at least 650 additional indoor seats at the Austintown track and 400 additional seats in the grandstand at Lebanon Raceway. Commissioners were also not impressed with the number of horse stalls. Original plans called for 460 stalls. The commission recommended 1,000. Although the presentation to the commission was on the Austintown track, the Dayton track is very similar. The developer, Penn National Gaming, stated that a re-design would delay the project at least six months.

Meanwhile, the commission approved a summer racing season for River Downs, located in Cincinnati, to be held at Beulah Park. The temporary move was needed because of construction of a racino at the Cincinnati site. Races at Beulah Park will take place in the afternoon Sundays through Wednesdays. The racing season will be May 19 to September 23. Only Wednesdays will overlap with racing at Scioto Downs, where races will take place in the evening Wednesdays through Saturdays. Scioto Downs racing season will be May 8 to September 14.

Thistledown
March 28, 2013

Ohio’s second racino is scheduled to open April 9. A “controlled demonstration” will take place April 2. The racino will have 1,100 VLT’s. The question is how long Thistledown will remain at its current location in North Royalton. Under an agreement with Governor Kasich, the developer, Rock Ohio Caesars, is permitted to move to the Akron-Canton area within 12 miles of the city of Green. While Green voters rejected the racino, there are other options in the area. By law, Rock Ohio has until June 2014 to decide whether to stay or move.

VLT Lawsuit
March 18, 2013

The 10th District Court of Appeals has upheld a Franklin County Court of Common Pleas decision that dismissed a lawsuit challenging VLT’s at Ohio’s horse racing tracks. Appellate judges agreed that Ohio Roundtable had no legal standing to sue. Ohio Roundtable is considering their next move.

Internet Sweepstakes Cafe Bill Passes House
March 15, 2013

After several days of testimony from supporters and opponents of internet sweepstakes cafes before a House committee, House Bill 7, passed the Ohio House of Representatives by a 66-29 margin. The bill, which virtually regulates sweepstakes cafes out of business, will now go to the Ohio Senate for consideration.

Among the provisions of HB7:

Sweepstakes parlors would have to register with the attorney general’s office and pay a $200 fee;
Cash or prize payouts would be capped at $10;
Café owners would provide a monthly report, at a cost of $50, which would be used in the enforcement of gambling laws;
Any violation would result in an illegal gambling charge which would be a first degree misdemeanor. When introduced, the bill called for a charge of felony.

HB7 is expected to meet more resistance in the Senate, where GOP leaders are more favorable to regulation, rather than elimination, of internet sweepstakes cafes. In fact, House Bill 101 has been introduced. HB101 is an updated version of HB195 that was introduced in the last legislative session and died in committee. HB101 calls for friendlier regulation of Internet cafes.

Among the provisions of HB101:

Local governments could enact bans or zoning restrictions on Internet cafes;
Background checks would be required for employees;
Independent labs would verify software, odds, and equipment;
Alcohol would be prohibited from being served;
Attorney general would create rules for how charities and fraternal organizations could use sweepstakes terminals. The alcohol ban would be waived for these organizations;
Internet sweepstakes cafes would have to disclose odds of winning.

Racinos
March 15, 2013

The Ohio State Racing Commission listened to Penn National Gaming’s request for transferring racetrack licenses from Beulah Park in Grove City to Austintown, and from Raceway Park in Toledo to Dayton. The commissioners were not impressed and have asked Penn to return next week with revised plans.

The Commission’s biggest concern was a perceived lack of emphasis on live horse racing. Commissioners felt that Penn was too focused on VLT’s and simulcast racing and that their plan didn’t do enough to promote the horse racing industry in Ohio. Seating was a major issue, as it has been for plans for the relocated Lebanon racetrack. Penn presented plans for the Austintown racino and indicated the Dayton racino was very similar. The plans for the Austintown racino called for less than 1,000 seats including 498 indoor seats. This was troublesome to the commission especially since the possibility of winter racing exists. Beulah Park racing is October to April. Penn officials argued that interest in thoroughbred racing has declined recently and the size of the track was proper for the market.

Preliminary work is under way at both sites. Penn National is hopeful to begin construction in April.

Casino Revenues
March 14, 2013

The casinos in Cleveland, Columbus and Toledo all experienced revenue increases in February. For Hollywood Columbus, revenues increased 1.2% over January to $18.5 million. Hollywood Toledo revenues were up 3.3% to $14.8 million. Horseshoe Cleveland saw the biggest increase, 7% to $22.1 million. Since its first full month of operation last June, this was only the 2nd time that Cleveland casino revenues had increased.

For the racino at Scioto Downs, the revenue increase was even bigger, up 8.1% to $11 million.

Casino Shortcomings
March 14, 2013

Ohio’s casino revenues are well below what was projected to voters in 2009. Gross revenues are expected to fall short some $904 million over the two-year state budget period. While there is no definitive answer for why, there are many who blame the Internet cafes. There is no data to support such a claim, but it is estimated that Internet cafes account for nearly $1 billion wagered in a year.

A more telling sign that sweepstakes cafes are impacting casino revenues can be found in an analysis done by the Ohio Casino Control Commission. The OCCC found that slots only account for 70% of the casino revenues in Ohio, compared to 85% in Indiana, Illinois, Kansas, Missouri and Pennsylvania.

The casinos are not just falling short in the revenue area. Jobs created total about 6,000, which is 1,500 less than 2009 projections. Penn National has actually reduced staff at the Columbus and Toledo casinos by not replacing employees who leave.

This does not seem to be of much concern to casino or government officials. They state projections are just that, a mere guesstimate as to how many employees will be needed. Cleveland officials point out that the number of employees will likely double or triple once the second phase of its casino is completed.

Cincinnati Casino Opens
March 14, 2013

Horseshoe Cincinnati became the fourth and final voter approved casino to open its doors. Opening night on March 4 saw an estimated crowd of 5,000 walk through the casino doors. Previously, officials had estimated 6,000 would show up. The Cincinnati casino has nearly 2,000 slots, 87 table games and 31 World Series of Poker tables. There are also three restaurants, five additional eating places and a 33,000 square foot space for meetings and events.

Cincinnati Casino Gets License
February 18, 2013

The Ohio Casino Control Commission has unanimously approved a gambling license for the Cincinnati Horseshoe Casino, the fourth and final casino approved by voters in 2009. The license was granted despite concerns about the financial condition of Caesars Entertainment, management company of the Cincinnati and Cleveland casinos. Caesars has $22 billion in debt and there is concern they may file for bankruptcy. As a result, the commission added stipulations. Caesars will be subject to an annual financial review and they will be required to notify the state if they intend to file for bankruptcy or make any other major financial move.

Casino Revenues
February 11, 2013

Adjusted gross revenue increased in January at the Columbus and Toledo casinos, but experienced a significant drop-off at the Cleveland casino.

For Hollywood Columbus, the AGI was up nearly 2%, to $18.26 million. The Hollywood Toledo AGI was up slightly to $14.2 million, a .7% increase. And the Horseshoe Cleveland AGI dropped to $20.66 million, a 16% plunge. Despite the dramatic drop, Horseshoe Cleveland still was the top revenue generating casino in the state.

Meanwhile, the racino at Scioto Downs had revenues of $10.2 million, a 2.9% increase.

The Cincinnati casino is still on schedule to open March 4 and all remaining racinos are expected to be operational by the end of 2014.

Perry Township Internet Cafes
February 11, 2013

Located in Stark County, Perry Township became the latest to enact fees against café owners in an attempt to curtail the number of establishments in their community. The Board of Trustees recommended amending the township zoning resolution. The amendment defines what is an Internet café and recommends café owners be charged $4,000 annually plus $100 per machine. But the law is far from in effect. The resolution will now go to the Stark County Regional Planning Commission where it could be approved, rejected or amended. The commission recommendation will then go to the Perry Township zoning commission for their review. If accepted, the resolution will go back to the trustees for final approval. The law would go into effect 30 days after approved by the Board of Trustees.

Following suit, the Village Council of Navarre, located in Perry Township, okayed their legal counsel to begin drafting an ordinance that would also charge café owners fees to do business in their community. As with the Perry Township resolution, café owners would be charged $4,000 annually and $100 per machine. Council hopes to vote on this emergency legislation on February 18.

HB7
February 8, 2013

Legislation that died on the Senate floor at the end of 2012 because lawmakers ran out of time to consider the bill has been reintroduced in this current legislative session. HB 7 is virtually the same bill that didn’t make it last year. HB 7 would virtually shut down these cafes because prize payouts would be limited to $10 a day.

Racino News
February 8, 2013

The Dayton City Commission unanimously approved Penn National’s development plans to build a racino at the site of a former Delphi plant. There will be a harness track, 600-seat grandstand and 1,500 VLT’s. Construction is expected to begin in the spring and open in the second quarter of 2014.

Hurdles still remain. Penn National’s application to relocate Raceway Park from Toledo to Dayton and their application to obtain a VLT operator’s license must still be approved. And a decision in the appeal of a Franklin County ruling that tossed a lawsuit challenging the legality of VLT’s at racetracks is still pending.

The Hard Rock racino at Northfield Park will be known as Rocksino. The name is a play on racino and a tribute to Cleveland being the birthplace of rock n roll. Rocksino is scheduled to open in December.

Columbus Casino Update
February 8, 2013

Due to customer demand, the Hollywood Casino will be removing 500 slot machines and adding 6 poker tables. Columbus becomes the second casino to reduce its slot machines. Recently Cleveland removed 230 slot machines.

This comes on the heels of lower than expected revenues. The average revenue in December per slot machine was $115 a day at the Columbus casino. This compared to $151 for Scioto Downs, $265 for the Cleveland casino and $175 for the Toledo casino.

Fines
January 21, 2013

Operators of Cleveland’s Horseshoe Casino were fined for violating Ohio Casino Control Commission regulations. This is the first time an operating company has been sanctioned. The casino will pay a $15,000 fine for using software not approved by the commission. The casino will also be required to have an employee with a state gaming license oversee the software. That employee could also be sanctioned if there is another violation.

The issue was not about the legality of the software. The casino began using the software when it opened in May before it was tested by an independent lab and approved by the commission. This continued until September when the casino self-reported the violation. The software has since been authorized and is in use at the casino.

Northfield Park Update
January 21, 2013

Northfield Park has finally submitted its application to the Ohio Lottery Commission for its racino. Hard Rock International, a partner of the track, still has paperwork to submit before the commission can begin its initial review. The initial review should take about 30 days. After the initial review and receipt of the $10 million application fee, a more thorough review is done which would include background checks and an examination of security plans. That process takes about 6 months.

Northfield Park has already begun construction. They hope to open fourth quarter of 2013.

VLT Lawsuit
January 21, 2013

Oral arguments were heard in the 10th District Court of Appeals of Ohio on the appeal of the VLT lawsuit that was dismissed last year by a Franklin County Common Pleas judge. The lawsuit challenged the constitutionality of Ohio’s casinos and VLT’s at the racetracks. The judge ruled the plaintiffs didn’t have legal standing to bring the lawsuit. A ruling should be forthcoming in the next several months.

Internet Cafes
January 17, 2013

Owners have organized in a group called the Internet Café Coalition of Ohio. They have created a website and plan to lobby state lawmakers.

Northfield Park Racino
January 16, 2013

Work has begun on the Hard Rock racino at Northfield Park. It is expected to open during the fourth quarter of this year. This is despite the fact Northfield park is the only track that has yet to file its license application, which must be granted before the racino can open. The application is expected to be filed in the next few weeks.

Warren County Racino
January 16, 2013

A second racino in the Dayton area is nearing the start of construction. Miami Valley Gaming & Racing has completed its purchase of harness racing licenses from the Lebanon Trotting Club and Miami Valley Trotting. The Ohio State Racing Commission gave preliminary approval to relocating the Lebanon Raceway to a site at Ohio 63 and Union Road, off I-75. However, at its latest meeting, the racing commission told developers to rethink their plans. Miami Valley Gaming had proposed a 700-seat grandstand. The racing commission thinks that is too small. It is unclear if Miami Valley Gaming will make any revisions.

Plans call for live racing 75 days a year and 1,800 VLTs. The racino is expected to open the first quarter of 2014.

River Downs Racino
January 15, 2013

Demolition of the existing River Downs facility is expected to begin soon, then rebuild and re-open as a racino in 2014. The Ohio Lottery Commission is reviewing Pinnacle Entertainment’s application to operate 1,600 VLTs.

With the ongoing construction, the Ohio State Racing Commission is considering moving the 2013 River Downs summer racing season to Beulah Park, which currently has no live racing between May 14 and November 18.

Austintown Racino
January 15, 2013

The site for the new racetrack with VLT facilities is being cleared, but actual construction will not begin before March 2013. March is the earliest the Ohio State Racing Commission will consider Penn National’s license application. This is because of a proposed rule change that would codify the $75 million transfer fee. Penn National wants to transfer its racetrack permit from Beulah Park in Columbus to the Hollywood Slots at Mahoning Valley Race Course. At this week’s meeting, the racing commission approved the relocation rules. The racing commission will review and hold public hearings before deciding on the relocation application, anticipated around summer 2013.

The Ohio Lottery Commission must also approve Penn National’s application for VLTs at the relocated racino in Austintown. Construction should take about a year and a half, and the racino is expected to open in 2014.

Casino Revenues
January 14, 2013

December revenues at Ohio’s three casinos reversed earlier trends.

The Horseshoe Casino in Cleveland had seen revenues decline in every month since June, which was the first full month of operation. December revenues increased $4.1 million, a 20% increase from November.

The Hollywood Casino in Toledo had seen even more precipitous drops in revenue since June, also its first full month of operation. That trend reversed with December revenues increasing $600,000, a 4% uptick from November.

Meanwhile, the Hollywood Casino in Columbus saw revenues decline for the first time since it opened in October. December revenues declined $2.1 million, a 10% decrease from November.

The racino at Scioto Downs saw a slight increase in December revenues, rising $30,352, a less than 0.5% increase from November.