Legal fight over gambling in Ohio still being waged
5/20/2012COLUMBUS — The second of Ohio's Las Vegas-style casinos could open on the Toledo riverfront next week with a major legal question still unsettled.
A Franklin County Common Pleas judge is expected to decide soon whether to dismiss a lawsuit that claims Gov. John Kasich was out of line when his office negotiated side deals with the casino developers that, in part, redefined a state business tax in a way more to the casinos' liking. That deal led to the promise of an additional $220 million in casino payments to the state over the next decade.
The case does not challenge the right of the four voter-approved casinos to exist, but it could have a major impact on their bottom lines.
"We believe in the process," said Rob Walgate, vice president of the Ohio Roundtable, an ardent gambling opponent and plaintiff in the lawsuit.
"The people spoke when they passed the constitutional amendment and said they want four casinos," he said. "The casinos are involved in our lawsuit because they chose to be involved. We didn't sue them. They intervened in the lawsuit."
The lawsuit also argues that lawmakers overstepped their authority by approving a total of 17,500 slot machines at seven horse-racing tracks as an extension of the Ohio Lottery. There was no racetrack slots ballot question.
No slots parlor has yet opened, but Scioto Downs in Columbus has received a temporary license.
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The deal negotiated between the Kasich administration and casino developers Penn National Gaming and Rock Ohio Caesars involved issues that were not directly dealt with in the 2009 casino constitutional amendment. Lawmakers hope to send the governor a bill this week that incorporates those changes.
"We have grave concerns with the memorandum-of-understanding that was struck," Mr. Walgate said. "We didn't say anything for 12 to 18 months [after the 2009 casino ballot issue] because there was no need to say anything.
"But if the governor has the ability to place slot machines under the lottery at seven racetracks, the governor and legislators would then have the authority to place them wherever whenever," he said.
The deal with the governor's office ensures that Ohio's commercial activity tax, which applies to business gross revenue, would be applied to casino revenue after prize payouts are deducted. It also detailed how Penn National eventually could move its two racetracks — Raceway Park from Toledo to Dayton and Beulah Park south of Columbus to the Youngstown area — so that they could pursue their own slots parlors out of the shadows of the two casinos.
Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.