Penn CEO: Ohio a $2 Billion Market

Penn National Gaming CEO Timothy Wilmott (l.) recently predicted that the Ohio would eventually become a $2 billion market once it shakes out all its demons. Meanwhile, Ohio’s lawmakers previously clamped down on internet cafes, now it faces the challenges of skill game cafes that have sprung up to take their place.

The CEO of Penn National Gaming, Timothy Wilmott, predicted that the Buckeye State would eventually become a “ billion casino state.” Wilmott made the prediction at the Mid-America Gaming Congress in Columbus two weeks ago. He said the state’s gaming revenues would rise to .45 billion this year and reach billion by 2020 at the latest. However, his projection is predicated on no further gaming competition in neighboring states.

Last year’s total revenue from 2013 was $1.1 billion, but only three of the state’s four casino resorts and four of the expected seven racinos were open. Three racinos are expected to join the mix this year. Penn National operates two racinos and the Hollywood casino in Columbus and Toledo.

Wilmott blames the listless economy and competition from the internet cafes that the state clamped down on last year. Many critics of gaming in the state point to predictions made by the Ohio Department of Taxation and casino consultants in 2009 that predicted nearly $2 billion in revenue in 2013. Those predictions were considerably off the mark.

March’s figures are much more encouraging as the state climb’s out of one of its coldest and longest winters in many years. During that month the four casinos generated $79.6 million compared to $50.9 million for the racinos.

But first Ohio has to stamp out the internet-style slot parlors.

Like the old Whack a Mole arcade game, whenever the Ohio legislature tries to stamp out a class of games, it springs up in another form.

A year ago legislators passed a law that effectively shuttered 800 internet cafes, which law enforcement claimed were gambling halls in disguise. Now many operators have opened skill-based game rooms, many of them in the same locations as the cafes were based.

In Springfield alone, three such enterprises have reopened, with names such as Roc-In-Skill Games and Joker’s Wild. Under current law, they are legal.

An attorney for Joker’s Wild commented last week, “We do it legally and above board and hope that all of the competition does.”

According to Springfield’s law director, Jerry Strozdas, “I don’t know if we can assume they’re the next step in attempts to work around the restrictions of Ohio’s gaming laws. If they are, we’ll learn that and we’ll act accordingly.”

The Ohio Casino Control Commission is responsible for regulating skill games, which are not allowed to award cash prizes. Prizes may not exceed $10 in value.

Operators of such game rooms deny that they are another form of internet café. “We’re strictly a game of skill. We don’t pay out cash,” insisted Chris Howlett, district manager with Joker’s Wild LLC, quoted by the Springfield News Sun.

Two representatives have introduced a new bill that would further regulate skill games, elaborating on the 2010 Casino Control Law that put the games under the commission. However, according to the commission’s Executive Director Matthew Schuler, he needs more tools to effectively regulate the games. “Our goal is to eliminate doubt in people’s minds. We’ll be able to validate those that are following the law, then have the tools we need to address those that are not,” he said.

The proposed law would require skill game operators to obtain a license and meet compliance standards for machinery and financial records. It would also increase penalties for breaking the law.