Despite opposition from 20 veterans groups, Ohio gambling machine expansion approved
3/10/2014COLUMBUS — Some 20 representatives of veterans groups gathered at the Statehouse today to oppose a new generation of gambling machines that the Ohio Lottery Commission argues have been developed for them and fraternal organizations.
But after some debate, the Ohio Controlling Board voted unanimously to approve a $22 million, two-year expansion of an existing contract with Greece-based Intralot, Inc., to purchase up to 1,200 of the machines to replace raffle machines that Attorney General Mike DeWine has determined are illegal.
Some lawmakers on the panel, however, questioned why an expansion of legal gambling options in the state went to the quasi-legislative budgetary panel rather than the General Assembly as a whole.
“Why not a similar approach to the Internet (sweepstakes) cafes several months ago?” asked Rep. Chris Redfern (D., CatawbaIsland), a board member who doubles as chairman of the Ohio Democratic Party. He was referring to legislation passed last year to all but put such cafes out of business because they were using machines that the state determined were illegal slot machines in disguise.
Connie Miller, director of operations for the Ohio Lottery Commission, told the board that the commission decided to purchase the“Multi-Purpose Next Generation” of lottery machines exclusively for veterans groups and fraternal organizations to fill a gaming void expected to be created by the loss of their existing raffle machines.
So far a court restraining order stands in the way of the permanent unplugging of the raffle machines.
“Ultimately, the legislature or the judiciary may certainly come up with a different decision than this,” Ms. Miller said. “What we’re proposing is to offer an option that uses the traditional lottery model and would provide a legally and accountable solution for these venues.”
But many Veterans of Foreign Wars and American Legion posts would just as soon not have that the lottery commission not meddle in their affairs and for the state to allow them to keep the raffle machines that they believe are attractive to players than video lottery alternatives.
“They’re strong-arming and forcing us to accept what they’re offering,” said Suzette Price, director of services for the American Legion in Ohio.“This is not the offer that we want…The controlling board made a very good point in noting that the machines we currently have are not shut down within the veterans’ service organizations because they cannot prove that they’re unconstitutional.
“Until the restraining order is lifted and the Ohio Supreme Court comes up with a decision on that, at this point and time those machines are not illegal,” she said. “They’re acting a bit prematurely…”
The lottery commission reported that it has orders for roughly 600 of the 1,200 machines it ultimately hopes to purchase through Intralot. The machines would be manufactured in Mason near Cincinnatiand the company would slice 1.83 percent of the wagering take off the top as its fee for operating them.
Of the net proceeds, the lottery commission would keep 60 percent and the lodges, posts, and clubs would keep 40 percent for their charities and their own operations.
Of the 60 cents on the dollar that the lottery would keep, it figures 58 cents, after expenses, would be used to help fulfill the lottery’s constitutional duty of helping to fund K-12 education. That’s a better return in terms of percentage than traditional lottery games or the lottery-run slots-like machines at horse-racing tracks.
The commission figures that once all 1,200 machines are fully deployed, the machines will generate about $10 million a year for education and $7 million for the clubs.
Ms. Miller noted that, should the experiment with the veterans and fraternal organizations fail, the new machines could be adjusted to replace aging lottery machines already in bars and taverns across the state.