Ohio Gaming Law: News

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June

Busy Week for Gambling Interests
June 26, 2009

Amid the flurry of budget-related activity, proponents and opponents of an expansion of gaming in Ohio had a busy week. To help fill the deepening budget hole, Governor Strickland has proposed and expansion of gaming by allowing the Ohio Lottery Commission to place Video Lottery Terminals (VLTs) at Ohio's seven horse-racing tracks. On Thursday, a group of eight trade associations voiced their support for the plan and applauded the governor for utilizing revenue options that do not result in a tax increase. Not to be outdone, later in the day, the American Policy Roundtable blasted the governor's plan and pledged that, if the proposal moves forward, they will take legal action to stop it. Also on Thursday, the Ohio Jobs & Growth Plan delivered more than 850,000 signatures to the Secretary of State's Office in support of placing on the fall ballot a plan that would authorize the development of four casinos in Ohio. Backers need 402,275 valid signatures for the measure to be placed before voters.

Video Slot Machines, Answer to Budget Deficit?
June 26, 2009

Faced with a budget deficit amounting to $2.43 billion dollars, Ohio Governor Ted Strickland changed his stance on video slot machines. Until last week, Strickland had adamantly opposed slot machine placement in Ohio businesses. Realizing that a deficit cure comprised solely of budget cuts would force dangerous outcomes, his tone changed quickly. He indicated that the poor economy was the driving force behind his stark change in position.

If this proposal is accepted by the Ohio Legislature, video slot machines would soon be placed in the seven Ohio race tracks. The state would see revenues, projected to reach $933 million over two years, from licensing fees and a portion of profits from each of the games.

Many Ohio conservatives oppose this move, saying that the "action defies common sense and constitutional law." Opponents cite the fact that Ohio voters have rejected the legalization of gambling four times in the last twenty years. And, without a vote by the people, they say, any legislative action would be premature and improper.

Proponents of the legislative initiative argue that allowing slot machines would avoid raising taxes, closing prisons, and cutting state employment, pension contribution, and Medicaid funding. Owners of many Ohio bars, restaurants and bowling alleys also support the plan, but take issue with the proposal’s placement of slot machines only in the seven Ohio race tracks.

Casino Signature Drive Survives Legal Challenge
June 12, 2009

A Mahoning County judge declined to cut short a petition drive seeking to place a four casino measure on this November’s ballot. With less than a month left for petitioners to submit roughly 400,000 signatures, opponents of the four casino plan sought to end the campaign in court. The opponents brought with them video of signature-seekers making false claims about the effects and locations of the proposed casinos. Judge James Evans barred the petitioners “from misrepresenting the contents, purpose or effect” of the proposal, but he did not place any other restrictions on the group. If the petition drive is successful, Ohio voters will decide whether to amend the state’s Constitution to allow casinos to be built in Cincinnati, Cleveland, Columbus, an Toledo.

Ohioans Push Lawmakers to Expand Lottery to Include Slots
June 12, 2009

The Ohio Racing Commission has been front and center in recent weeks backing measures to allow slot machines in racetracks as an extension of the Ohio Lottery program. The Commission is looking for legislative backing to install up to 2,000 slot machine-like terminals at each of Ohio’s seven racetracks. The “video lottery terminals” would draw a $50 million dollar licensing fee from each racetrack. In addition, the state would receive half of the profit going forward to help fund Ohio’s schools. Because of the plan’s connection to the lottery, the racing commission insists that voter approval is not required.

The racetrack-only plan is not related to a proposed ballot issue that would permit as many as 83,300 slot machines at racetracks, bars, private clubs, and charitable establishments like Veteran's organizations. It is also separate from a recent proposal endorsed by The Bowling Centers Association of Ohio that would allow up to 10 slot machines to be installed at each of the state’s participating bowling alleys. Much like the racetrack plan, the bowling alley proposal would be an extension of the Ohio Lottery system and generate revenue for the lottery’s education fund.

Anticipated Budget Shortfall Fuels Gaming Proposals
May 26, 2009

Ohio's growing state budget deficit, projected to reach $3 billion by the 2010‑11 legislative session, has resulted in another gambling proposal as a possible solution to bridging the gap. An immediate stop-gap measure is the addition of 14,000 slot machines at the state's seven racetracks. The Ohio State Racing Commission endorsed the idea, claiming the action could bring in approximately $625 million a year by 2013 to direct towards public education. Governor Strickland, following his prior stance, remains opposed to this proposal. Various Ohio senators have expressed concerns as to whether authorization to add the slot machines should occur by legislation or be placed on a statewide ballot for public approval. The Ohio Senate President, Bill Harris, has opposed gambling initiatives in the general state budget, but remains open to the ballot initiative. Also, another gambling proposal has arisen through proponents of four additional casinos, who are actively collecting signature petitions for ballot access. If the requisite number of signatures are gathered, this upcoming November will be the third time in the last four years that Ohio voters have been asked to vote on a casino issue.

Ballot Initiative Language Approved
April 21, 2009

The Ohio ballot board, which reviews language submitted for constitutional ballot initiatives has approved the language submitted by gaming proponents who want to open casinos in Cleveland, Columbus, Cincinnati and Toledo. The approval allows proponents to move forward with gathering signatures in order to place the initiative on November's ballot. The proponents must gather over 400,000 signatures from registered voters in order to place the issue on this year's ballot.

Veto Threat Lurks For Expanded Race Track Gaming
April 21, 2009

Gaming proponents could shortcut the constitutional ballot initiative procedure by persuading the Ohio legislature to authorize slot machine games in horse race tracks. However, even if the legislature is won over, the gaming proponents face another challenge in the form of Governor Ted Strickland's veto power. Although he has not announced an intention to veto proposed measures that would expand gaming at racetracks or other venues, Strickland has indicated that expanded gaming is not the right direction for Ohio in spite of the dire economy.

Possible New Hope on the Horizon for the Horse Racing Industry
April 3, 2009

The Ohio State Racing Commission has drafted a plan to allow limited slot machine gaming in race tracks in order to support the struggling horse racing industry. According to the Commission, five of Ohio's seven racing tracks may close within the next year due to financial difficulties if no assistance is forthcoming. Closure of race tracks would adversely impact over 10,000 jobs associated with the tracks and related industries. The Commission plan would allow slot machines to operate at the tracks. The plight of the horse racing industry in Ohio has been highlighted recently, encouraging supporters to seek a way to help the industry survive.

Casino Petition Language Must Be Changed
April 3, 2009

In order to place a proposed constitutional amendment on November's ballot, gaming proponents must have their petition language approved by Ohio Attorney General Richard Cordray. Last week Cordray rejected the proposed wording of the ballot initiative that would allow casinos in Cleveland, Toledo, Columbus, and Cincinnati. The Attorney General objected to the language because the summary of the petition was too vague, and the language could exempt gaming winnings from taxation. Proponents of the ballot initiative are undaunted and have indicated that they will reword the petition and resubmit it to Cordray.

More Details About Latest Gaming Proposal
March 19, 2009

More details have emerged about the new gaming proposal backed by Dan Gilbert, the owner of the Cleveland Cavaliers. The proposal would authorize casinos in Columbus, Cleveland, Cincinnati and Toledo. Projections indicate that the casinos would raise $1.8 billion in revenue per year. The gaming proponents said that the casinos would raise around $600 million in taxes and create 20,000 jobs in Ohio's recession stricken economy. The taxes would be distributed to state, county and local governments as well as public schools and Ohio horse racing tracks. The horse racing industry would not otherwise benefit from the proposal.

Governor Strickland has said that the new proposal is too similar to the proposals that failed on Ohio's ballots in the years past. Representatives from the Governor's office indicate that expanding gaming is not the right approach to improve Ohio's faltering economy.

Another Proposal for Ohio Casinos
March 11, 2009

As Ohio continues to struggle with the economic downturn, another gaming proposal is vying for voter approval. A new coalition of gaming proponents, including Cleveland Cavalier's owner Dan Gilbert, has proposed a ballot initiative that would allow four casinos in Cleveland, Columbus, Cincinnati and Toledo.

The 2008 gaming initiative failed in large part due to funding to the opposition by Penn National Gaming. Under this proposal, Penn National Gaming would own one of the four authorized casinos. The details of the new initiative remain to be seen, and it is unclear whether voters are ready for another gaming initiative so soon after the failure in 2008.

Ohio Investigates Gaming Opportunities to Plug $7 Billion Hole in the State Budget
February 10, 2009

Given the poor economy, high unemployment, and expected budget shortfalls, it's no surprise that gaming opportunities are looking more attractive for the state. Although ballot initiatives have failed in the past, voters and legislators may give more consideration to a proposal that allows casinos in multiple cities and generates substantial income for the state. Gaming proposals are still likely to face stiff opposition from those concerned that the social costs of gaming outweigh the benefits. In addition, it's possible that casino gaming may not meet income projections. For example, Keno, which was added to the Ohio State Lottery in 2008, was projected to generate $73 million a year for the state budget. However, Keno sales were much lower than projected, generating only $25 million a year. Despite the drawbacks, gaming may be a viable alternative to shore up the faltering state budget as spending cuts become more urgent.

Proposal for State Lottery to Offer Slot Machines
February 10, 2009

Representatives of Ohio's racetracks are asking the State Lottery to enter the slot machine gaming business. Governor Ted Strickland has the power to direct the State Lottery to operate slot machines at racetracks. If the Governor authorized such a move, neither legislative nor voter approval would be required. The proposal would generate immediate revenues of over $1 billion from license fees. With the shortfall in the state budget, the prospect of immediate cash is attractive. However, Governor Strickland would almost certainly come under fire from those who oppose gaming as well others who believe that voters and legislators should have a say in any gaming proposal. In any event, the Governor's office appears unlikely to act on the proposal.

Fresh Gaming Proposals Jockey for Position
January 29, 2009

Gaming proponents continue undeterred after the defeat of Issue 6 on the November 2008 ballot. Penn National Gaming, which funded the opposition to Issue 6 that resulted in the initiative’s 62%-38% loss, is proposing a more inclusive initiative to appear on the November 2009 ballot. The proposal would allow up to four casinos in Ohio and authorize Ohio’s seven race tracks to offer full Las Vegas-style gaming. The new proposal would require license fees of $50 million to $100 million for each casino and race track.

Penn National Gaming is negotiating with the Ohio legislature to formulate a proposal that would appear on the ballot without requiring petition signatures. Since the legislature would be involved in drafting and voting on the proposal, the new proposal could be perceived as more even-handed and fair to taxpayers. With Ohio’s economy in dire straits, voters may be more inclined to approve a gaming initiative that would bring money and jobs to the state.

My Ohio Now, the organization that proposed Issue 6 last year, is also preparing a drive for another ballot initiative in 2009. Issue 6 drew criticism from voters in part because it would have authorized a virtual monopoly of a single casino in Wilmington, Ohio. Unlike Issue 6, My Ohio Now’s new proposal would allow casinos in Ohio's three largest cities.

Issue 6 - An Expensive Price Tag
January 5, 2009

Issue 6 proponents lost the election on a proposed constitutional amendment which would have authorized a casino in Wilmington, Ohio by a wide margin, but their expenses nearly matched the opponents. All told, Issue 6 was the priciest ballot initiative in Ohio's history, with funding in excess of $62 million. Casino supporters spent $12.97 for each "yes" vote, and casino opponents spent $10.90 for each "no" vote.

Most of the $26 million funding for “My Ohio Now” and others in favor of Issue 6 came from a Minnesota gaming company called Lake Entertainment Inc. Funding for the opposition came from a rival casino operator, Penn National Gaming, spent more than $36 million opposing Issue 6. Penn National Gaming owns the Argosy Casino in Indiana near Cincinnati. Since many of Argosy Casino’s patrons come from Ohio, Penn National Gaming would have suffered if a casino had opened in Wilmington.

Issue 6 proponents, including My Ohio Now’s Rick Lertzman, have already indicated that they will try to place a gaming issue on the ballot in 2009.