Gaming machines moving forward

Ohio A.G. no longer objects to devices in veteran, fraternal lodges

3/4/2014

COLUMBUS — The Ohio Lottery Commission will forge ahead with a plan to place gambling machines in veteran and fraternal lodges across the state despite questions raised about their constitutionality.

The new generation of electronic instant games is designed to replace unregulated electronic raffle machines that many of the clubs have been operating but which Attorney General Mike DeWine has declared are illegal.

The Republican attorney general had also questioned whether the lottery’s alternative was unconstitutional since all profits from the lottery are required to go to K-12 education. Mr. DeWine, however, no longer objects to the latest plan set to go before the quasi-legislative Ohio Controlling Board on Monday.

“The revised proposal has changed the formula as to funding education,” DeWine spokesman Dan Tierney said. “The attorney general’s office could defend the updated proposal in court as constitutional. He had expressed concerns that the funding portion of the previous plan might not have been constitutional.”

The lottery has asked the budgetary panel to increase its contract amount with electronic gaming manufacturer and operator Intralot, Inc. by $22.5 million over two years to purchase and operate up to 1,200 “Multi-Purpose Next Generation” vending machines.

Instead of dealing with paper tickets, players would watch a video representation of a game and know instantly whether he won. The machines would be manufactured in Mason near Cincinnati.

To date, 188 posts and clubs have requested a total of 555 machines. Two hundred more organizations are seeking more information, according to lottery spokesman Danielle Frizzi-Babb.

Forty percent of the net proceeds after expenses would be kept by the veteran organizations or fraternal lodge for their charities while 60 percent would be considered lottery profit to be turned over to the state budget for education.

The commission figures the machines will generate $10 million for education and $7 million for the posts and lodges.

“The machines will be hooked to our central system and have a predetermined outcome,” Ms. Frizzi-Babb said. “These are not games of skill. They’re not [video lottery terminals]. There’s no random number generator.

“This is designed for the fraternal and veteran organizations to use,” she said. “These will not be at lottery retailers across the state. It’s an exclusive program.”

After the state mostly shut down machines operated by Internet cafes that were deemed to be illegal slot machines in disguise, Mr. DeWine had criticized the electronic raffle machines that the lodges and clubs had been using outside existing state gambling law.

The clubs had been trying without success to be dealt a better hand in the state’s broadening legal gambling scheme that includes four outright casinos and slots parlors at four horse-racing tracks and counting. Many of the clubs are already lottery retailers for traditional ticket games.

American Legion Post 587 at 2020 W. Alexis Rd. in Toledo has never had any of the raffle machines whose legality has been in question. But, as an existing lottery game retailer, it jumped at the chance to order three of the new lottery machines.

“It’s the Ohio Lottery, so it’s got to be legal,” said Ed Yancy, chairman of the post’s board. “We didn’t want to get into anything that could cost us our license.”

He said the organization hopes to use the machines to attract more members and their guests.

“We have to be optimistic,” he said. “We do pretty well with the lottery business, especially Keno, and when the Powerball and Classic [lottery] gets up into the millions, we get more play. But we’re not going to get rich off it.”

The conservative Ohio Roundtable, a staunch gambling opponent, has a case pending before the Ohio Supreme Court seeking standing to sue the state over its expansion of gambling, particularly slot machines at racetracks, without a vote of the people.

“How has this administration been able to do whatever it wants in regards to gambling, and why don’t they give the veterans organizations slot machines like they gave the racetracks?” asked Rob Walgate, Roundtable vice president. “Why does this administration and Gov. [John] Kasich get to pick the winners and losers?”

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.