A proposal by Ohio Senator Bill Coley to tax the state’s racinos and casinos to make up for money he says they should have raised in taxes—but didn’t—is getting scathing reviews from casino operators. They say the proposal could “cripple” the state’s gaming industry.
Coley’s proposal would tax promotional free gaming credits of casinos that have not met their revenue projections. Those who have would not pay extra. According to the senator, the seven racinos and four casinos have given away over $500 million in promotional credits in the last three years. Because these credits weren’t taxed, the state lost $165 million, says Coley.
“I think it’s high time that the people who made promises to the citizens of the state of Ohio live up to those promises and start delivering the revenues that they promised,” he said.
Rock Ohio Caesars, which operates two of Ohio’s four casinos, responded that it was “stunned” by the “unwarranted attack” and said that, “Eliminating or reducing these credits would cripple Ohio’s gaming industry because Ohio casinos will be forced to spend less to promote themselves,” it said, adding, “Ohio residents will then take their gambling dollars to surrounding states that offer more credits and special offers.”
Eric Shippers, spokesman for Penn National Gaming, which runs the other two casinos, chimed in later in the week, “Eliminating or reducing the discount on promotional credits would nullify one of the very weapons the state needs to help keep Ohio competitive in the ongoing regional gaming arms race.”
Buckeye State voters legalized Las Vegas style casinos in 2009 when they amended the state constitution. At that time the casino operators promoting the statewide vote promised that they would pay the state $500 million annually in taxes.
So far they have not managed to rise more than $272 million in 2013. They have declined since then. One reason for the disparity between promise and results is that the casino operators never built casinos as large as they originally envisioned.
Currently the seven racinos and four casinos are in a neck and neck race when it comes to revenues. The racinos appear to be pulling into the lead, although they have not actually passed casino revenues yet, except for one brief moment last fall.
In Columbus, Scioto Downs Racino’s revenues increased 3 percent over the previous month, to $12.8 million. The Hollywood Casino Columbus’s revenues decreased 12 percent over the year before. Scioto Downs also beat Hollywood Casino during March when video slots alone are considered, raking in $12.8 million compared to $12.4 million.
Ohio has casinos in Columbus, Cleveland, Toledo and Cincinnati. March revenues fell 8 percent compared to the previous year, although they were nearly 8 percent better than February. The highest total of any casino in the state in March was raised by Horseshoe Cleveland at $19.8, although it was 1.6 percent less than in February.
The least performing casino was the Horseshoe Cincinnati, whose revenues fell 13.1 percent in March compared to the year before.
Overall racino revenues have risen to $72.7 million (a 43 percent rise from the year before), buoyed by the opening of four new facilities in 2014.
