In 2009 the voters of Ohio voted to amend that state constitution to allow four casinos in the state’s four largest cities: Cleveland, Cincinnati, Columbus and Toledo. In part they were acting on promises that the casinos would raise large sums to be divided between the state’s 88 counties: nearly $2 billion before taxes annually.
However, the Great Recession intervened about that time, and possibly changed peoples’ habits for disposable income.
Then, after Governor John Kasich allowed video lottery terminals to be deployed at the state’s seven racetracks, the estimates were downgraded to $1.4 billion due to competition from those “racinos.” But actual numbers are far lower than that.
The promised funds turned out to be about half what everybody was expecting or $818 million. That’s compared to $987 million that the seven racinos raked in, according to an investigation conducted by the Dayton Daily News.
According to Matthew Schuler, executive director of the Ohio Casino Control Commission “All of them were wrong. It wasn’t just the campaign that overestimated.”
Penn National Gaming Inc. spokesman Bob Tenenbaum says that it’s hardly surprising that estimates were wrong given that the state ended up with 11 total casinos, instead of just four. He points out that when you include the revenues from the seven racinos and the four casinos, that you get a number close to the original estimates. Penn operates Hollywood Gaming at Dayton Raceway racino, as well as casinos in Toledo and Columbus.
Tenenbaum added, “We think this is an extremely healthy market. And we think it’s being well served.”
That’s not to say that gaming revenue isn’t climbing steadily, but since a larger than expected share of that comes from the racinos, a share of it doesn’t go to local government.
The first casino authorized by the 2009 vote to open was the Horseshoe Casino Cleveland, in May 14, 2012, followed by Hollywood Casino Toledo on May 29, 2012.
The Great Recession played a part, says Schuler. “What they weren’t looking at is the profound effects of the Wall Street collapse and the auto collapse and the Great Recession,” he said. “It still to this day has an impact. You can look at Las Vegas, and they will tell you at each casino: They are getting the same amount of visitors that they had before – they’re just not spending as much.”
He believes residents of the Buckeye State still steer their gaming by those lights, playing more cautiously than they would have before it happened.
To that, Mark Tricano, Jack Entertainment senior vice president of Northeast Ohio operations and general manager adds the racino effect.
In response to a question by the Dayton Daily News he said, “The simple fact is that the state gaming revenue is now split between eleven locations rather than the four casinos as originally contemplated.”
The 11 casinos and racinos employ almost 20,000 workers and generates at total impact on the economy of about $3.6 billion, according to the American Gaming Association. This translates into $594 million in taxes last year and about $800 million in salaries.
Schuler credits the casinos, some of which occupied older buildings, others that built brand new ones with redeveloping old neighborhoods. He says that the casino in Columbus transformed an old Delphi auto parts plant into an employer of 970. “Before then, it was a blight, it was an eyesore, it was an environmental problem,” he said.
Schuler also credits gaming to carrying out one of the promises of 2009: keeping jobs and money in the state. “We do know that after the casinos opened, looking at the revenue reports from all of your surrounding states, that their (other states’) revenue did go down,” he told the News. “That money was being repatriated to the state of Ohio.”
