Gambling market challenges Ohio casino backers
3/29/2009COLUMBUS, Ohio A plan to put casinos in four Ohio cities would saturate the regional market that includes 27 casinos in surrounding states, raising questions about whether Ohio stands to reap any economic benefit, some gambling experts say.
New casinos would likely keep Ohio gamblers in the state instead of driving to West Virginia, Pennsylvania, Michigan or Indiana, said William Thompson, a public administration professor at the University of Las Vegas who has written books about the industry.
But on the other hand, Ohio will not be realizing a great economic windfall because it will only be Ohio people gambling, Thompson said. It s not going to be a tourist attraction, filling up hotels.
Penn National Gaming, one of the backers of the Ohio plan, says the concept will work because casinos in Cleveland, Columbus Cincinnati and Toledo would be jewels in prime downtown locations.
This proposal has been specifically designed for Ohio to compete, said Eric Schippers, vice president of Penn National Gaming. Many casinos in Pennsylvania and Indiana are in rural areas or just outside major cities, he said.
Supporters are aiming to put the issue before Ohio voters on the November ballot.
The proposal, also backed by Cleveland Cavaliers majority owner Dan Gilbert,
would allow the state to take a 33 percent cut off the top of revenues and redistribute the money to Ohio s 88 counties. The plan also promises to create 20,000 jobs.
It s a long-shot bet, but it could pay off big for all involved or not, said gambling expert Joseph Weinert, vice president of Spectrum Gaming in New Jersey.
Right now, I would not want to be a casino investor. The stocks for some of these companies are penny stocks, he said.
But the backers in Ohio are not looking at the current economic landscape, they are looking at the horizon two or three years out, Weinert said. I don t think any of them would be wanting to put a shovel in the ground right now.
Two West Virginia casinos are losing money and have laid off workers following the 2006 addition of slot casinos in Pennsylvania, which lured gamblers away from the Mountain State.
Most of Pennsylvania s casinos are thriving, but two of Detroit s three casinos are in severe debt, while the city itself is saddled with a mounting $300 million deficit. While the casinos contribute income to the city, it hasn t been enough to offset Detroit s fiscal troubles.
Detroit drew gamblers back from casinos in Windsor, Ontario, in Canada. But they didn t help their economy, Thompson said. So you really have to ask the question: What is the gambling going to do for Ohio?