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Published: Thursday, 5/31/2012

Racetrack slots lawsuit dismissed

Decision removes barrier to moving Raceway Park to Dayton

BY JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF

COLUMBUS -- A potential cloud over the opening of racetrack slots parlors may have lifted on Wednesday with a judge's dismissal of a lawsuit challenging lawmakers' authority to approve them without a vote of the people.

Opponents of the gambling law have 30 days to decide whether to appeal the decision by Judge Timothy S. Horton of Franklin County Common Pleas Court.

That decision also clears the path for a business tax deal negotiated between Gov. John Kasich's office and the operators of four Las Vegas-style casinos and sets the stage for Toledo's Raceway Park to be moved to Dayton.

"We're pleased," Kasich spokesman Rob Nichols said. "Because of the litigation, racetracks have been reluctant to apply for [video lottery terminal] licenses. This decision creates clarity so that the process can move forward."

Judge Horton found that the Ohio Roundtable, a gambling opponent, and 19 individuals lacked standing to sue because they "offered little more than bare assertions of harm or injury."

The plaintiffs argued that the governor and lawmakers do not have authority to approve slots-like video lottery terminals as an extension of the Ohio Lottery without putting the question to voters as occurred in 2009 with approval of casinos.

They also argued that racetrack slots parlors are not what voters envisioned when they approved the traditional ticket lottery in 1973, and that changes in state law had the effect of changing what voters approved with the 2009 casino constitutional amendment.

Rock Ohio Caesars opened its $350 million Horseshoe Casino in downtown Cleveland on May 15 and Penn National Gaming Inc. followed with its $320 million Hollywood Casino Toledo on Tuesday. Penn's Columbus casino will open this fall, followed by Rock Ohio Caesars' Cincinnati casino in 2013. The first racetrack slots parlor and the only one licensed so far will open Friday at Scioto Downs in Columbus.

Ohio Roundtable Vice President Rob Walgate argued that the case goes well beyond just gambling issues and could allow this and future governors and General Assemblies to expand where slot machines could be placed in the state.

"How are you not harmed when a governor goes behind closed doors with private business owners and alters the words to the constitutional amendment that voters passed…?" Mr. Walgate asked. "Logically, it does not make sense."

Attorneys for casinos, racetracks, state regulators, and Mr. Kasich had aligned in defense of the plan to install 17,500 slot machines at seven horse-racing tracks and to assess a state business tax against the revenue of the four casinos only after winnings have been paid out.

Part of the deal with the two operators of the four casinos calls for additional payments totaling $220 million to the state over 10 years.

Penn spokesman Bob Tennenbaum called the decision "another significant step forward" in the company's plans to relocate Toledo's Raceway Park out of the shadow of its Hollywood Casino.

Penn has been waiting for a decision and for the Ohio State Racing Commission to finalize rules to have its racing license relocated to Dayton where it will then pursue an adjacent slots parlor through the lottery.

Penn also plans to move Beulah Park to the Youngstown area to get its anticipated slots parlor out of the shadow of its Columbus casino as well as Scioto Downs.

As for Mr. Walgate specifically, the judge found that his status as a former problem gambler did not give him standing to challenge the so-called "racinos."

"To hold that an addicted gambler's injury can be redressed by challenging the constitutionality of one aspect of legalized gambling in Ohio, without removing all legalized gambling in the state, would vastly expand the requirement of standing," the judge wrote.

"Once decided, the court would face a slippery slope until the notion of standing is unrecognizable: alcoholics having standing to sue over the issuing of new liquor permits; diabetics having standing to challenge new food regulations that increase sugar content; etc.," he wrote.

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



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