Ohio has just finished making the transition from a state to no gaming at all, to four casino resorts in its four largest cities, and most racetracks either transformed into racinos or on their way.
The last of the casino resorts, the Horseshoe Casino in Cincinnati, opened a year ago. Most of those in the immediate neighborhood are happy with the changes it has wrought.
“On a scale of one to ten, I would give them a ten,” Tabatha Anderson, president of the Pendleton Neighborhood Council, told WVXU last week. “If I could give them higher I would.” Pendleton’s sidewalks, lighting and streets have been improved.
Over-the-Rhine Community Council Peter Hames added, “You know I think they really understand that their business is about customer service. So they appreciate the need to have a good experience for the people who come to visit them as well as the people who live in the neighborhood right next to the casino.”
A neighborhood car detailing business has seen its customer volume skyrocket with the casino across the street. Abandoned buildings are being rehabilitated. Hotels are opening in the area. A pub and laundromat may open soon in the area.
Although Ohio has legalized gaming at four casinos and seven racinos, it is cracking down on every other kind of gaming, especially internet cafes and sweepstakes games, but also video bingo at VFW halls.
For many years Ohio had a constitutional band against any kind of gaming. A slight crack in that edifice occurred in 1933 when the state legalized horseracing and the accompanying wagering. In 1973 the state’s voters approved of a state lottery.
It took more than three decades for the state to once amend the constitution, this time to allow four casino resorts. It was a narrow victory, however, and many attributed the win to predictions of how much money the gaming would bring in.
Those estimates have turned out to way off the mark, in fact about $1 billion short of expectations. The voters were told that about $1.9 billion would be raised annually. In the first year of full operations, the actual figure is $839 million, of which host cities, education and the state’s 88 counties have got about $376.7 million.
This has generated predictable “I told you so’s” from the American Policy Roundtable, which opposed the amendment in 2009. Its spokesman, Rob Walgate said last week, “What I think we’ve seen is a lot of false promises here,” he said, according to the Zanesville Times Recorder . “They can’t hit the numbers that they promised. They lied.”
Defenders of the original numbers, such as Alan Silver, a gaming industry expert at Ohio University, says it is very difficult to predict revenue for a new industry. He called it similar to hitting, “a moving bird with a .22.” He says that when slot machines at racetracks and the state’s then unregulated internet cafes were added to the mix, that they drew off some of the profits.
Estimates were based on neighboring states, with no historical data for Ohio to factor in, according to Brad Cole, managing director of research with the County Commissioners Association of Ohio, quoted by the Recorder.
Because the state legalized various gambling activities without any plan, the regulating agencies were also assembled in a somewhat slapdash fashion. The racing commission oversees horse racing, but the slots that make the racetracks “racinos” are regulated by the Ohio Lottery Commission. The state Attorney General is responsible for charitable bingo and internet cafes (or rather, responsible for closing them down, since the legislature effectively banned them last year); while the Ohio Casino Control Commission oversees the four casinos. It is also responsible for skill games, which are regulated under a 2007 law.
This duplication of effort and responsibility has the result of multiplying costs and redundant personnel, say some critics.
Now, like a lot of states, Ohio must look at online gaming. It is possible that another constitutional amendment will be required for that activity to become legal in the Buckeye state.
In a separate but related development, the Ohio Horsemen’s Benevolent and Protective Association last week signed a 10-year agreement with two racinos, Hollywood Gaming at Mahoning Valley Race Course—which is still being built—and ThistleDown Racino, (formerly Thistledown).
The horsemen and the racinos have been negotiating percentages of Video Lottery Terminal (VLT) that will be earmarked for racing purses for over a year, and finally signed agreements on March 7 and 10. State law states that the percentage must be between 9 percent and 11 percent. The actual percentage they agreed to has not been released, although that will eventually become a matter of public record.
The Ohio State Racing Commission (OSRC) had given hints that it intended to delay approving racing dates for the racinos until an agreement was reached.
With the Mohoning agreement in hand, Penn National Gaming Vice President of racing Christopher McErlean told the Bloodhorse, “We are hopeful that with a signed contract now in hand, the (OSRC) will act at its next scheduled meeting (March 27) to issue a racing permit and approve the 2014 racing dates we have applied for at Mahoning Valley.”
Mohonging Valley, which will be located near both Youngstown and Austintown, will replace the existing Beulah Park near Columbus.
