Timetable for moving Raceway Park unclear

COLUMBUS -- Penn National Gaming still wants to relocate its Raceway Park license from Toledo to suburban Youngstown, but when that might happen is anybody's guess, the company said Wednesday.

Questioned by House committee members as they ponder legislative changes dealing with four Las Vegas-style casinos and racetracks soon to be equipped with slot machines, the gambling corporation said pending litigation makes it impossible to set a timetable.

"We don't plan to just close down those racetracks and wait to see what happens," said Eric Schippers, a Penn senior vice president. "We're going to continue to run our meet as we wait and see, and are building, so there's going to be a seamless transition. Finally, our employees at those existing facilities have been given the right of first refusal both to the relocated track or the casinos in those markets."

No formal request for relocation approval has been submitted to the Ohio State Racing Commission. Penn wants to move both its Raceway Park and Beulah Park tracks in Grove City to the Youngstown and Dayton areas respectively because it fears their expected slot-machine operations would compete with Penn's new casinos on the East Toledo riverfront and in Columbus.

Penn has an option on land in Austintown near Youngstown where it hopes to move Raceway Park's license and has purchased land in Dayton. But a lawsuit that challenges Ohio's authority to equip racetracks with slot machines without a vote of the people keeps the issue up in the air.

The House State Government and Elections Committee is considering House Bill 386. The bill deals with the Ohio Lottery Commission's role in drafting rules to regulate racetrack slots, who has to submit to background checks as part of casino and slots licensing, and how much money will be set aside to deal with the anticipated increase in gambling addiction.

The committee on Wednesday accepted a major rewrite of the bill in anticipation of a vote Tuesday to report it to the full House. Among other changes, the amended bill kills a controversial proposal that would have given jurisdiction to the Ohio State Highway Patrol to investigate crimes inside the voter-approved casinos in Toledo, Cleveland, Columbus, and Cincinnati.

The Ohio Casino Control Commission, which is simultaneously writing its own rules, plans to place that authority with the state attorney general's Bureau of Criminal Identification and Investigation.

The bill further refines the definitions of holding company and investor in gambling companies such as Penn, one of the issues that recently prompted the casino commission to delay the anticipated openings of Rock Caesar Ohio's Horseshoe Casino in Cleveland and Penn's Hollywood Casino Toledo.

The operators anticipated openings in mid-March and April 1, respectively, but those dates have been set aside.

Fortress Investment Group holds a small stake in Penn. Although the firm as an entity has filed the necessary paperwork for licensing, individual members of its board had balked at submitting to background checks.

Last week, the commission agreed to a deal with Penn in which Fortress created a limited liability corporation through which shareholders would grant proxies to two individuals who alone would vote their Penn shares. The idea was to limit the number of people who would be considered to have some day-to-day control over the two Penn casinos.

"I think the commission recognizes that what we're trying to do is protect the integrity of gaming so that those who might have some element of control go through the process,'' Mr. Schippers said. "I think both what we've worked out and what this law would do is make sure that those who have no element of control of the facility don't have to go through the process.''

The lawsuit challenging provisions of the slots and casino plans was filed by the Cleveland-based Ohio Roundtable.

"Penn and Rock bought a piece of the constitution fair and square,'' said Rob Walgate, the nonprofit organization's vice president. "They spent $40-some million dollars to buy a piece of the constitution, but I don't think for one minute that Ohioans ever intended that whoever owned the constitution would then hide others in the background who are involved in it and also own a piece of the constitution.''

Another potential obstacle for Penn was removed this week when the former executive director of Fortress, David J. Mudd, resigned altogether from the investment company. Mr. Mudd is under investigation by the Securities Exchange Commission in relation to his prior role as head of mortgage giant Fannie Mae.

Last week, Penn assured the casino commission that Mr. Mudd had taken an indefinite leave of absence from Fortress, but he was still at least tentatively on the list of people that the commission expected to undergo licensing investigation.

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