Toledo casino reviews mostly positive

Owners, Toledo, county, state, assess operation after 6 months

11/25/2012

BY VANESSA McCRAY
BLADE STAFF WRITER

Bowling Green resident Mark Herzig deals blackjack at the casino, which features 2,037 slot machines, 80 table games, and 4 restaurants.

The Blade/Lori King
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Bowling Green resident Mark Herzig deals blackjack at the casino, which features 2,037 slot machines, 80 table games, and 4 restaurants.

For six months, Hollywood Casino Toledo has stood in the spotlight.

Many have kept close eyes on the glitzy gambling spot since it opened to fanfare on May 29. Officials studied the declining casino revenue to see if tax revenue sizzles or sputters. Police patrolled the area for problems. Analysts kept tabs on Toledo too, assessing if it would dent Detroit’s gambling market.

After years of anticipation and a half-year of operation, some cards remain unknown, but the casino’s general manager is pleased with his property’s performance and optimistic about Ohio’s fledgling casino industry.

“As the business matures, we expect to see year-over-year growth in the years to come, and exactly what that will be ... I don’t have a crystal ball, I couldn’t tell you,” said Richard St. Jean.

The casino counted nearly 1.9 million guest visits since inception. About 223,000 people activated a loyalty card at the Toledo site — a “huge number” in six months, Mr. St. Jean said. Roughly one-third of those customers hail from southeast Michigan. Others travel from areas including Cleveland, Lima, and Fort Wayne, Ind.

Officials plan to continue attracting visitors to the facility, which has 2,037 slot machines, 80 table games, and 4 restaurants. Up to 10 summer concerts are planned at a portable outdoor amphitheater that could accommodate about 2,500 people on a parking lot near the Maumee River.

Local travel boosters said the casino helps draw people to Toledo. Richard Nachazel, presidentDestination Toledo Inc., pointed to February’s Heartland Travel Showcase, a 600-to-700-person convention that connects motorcoach operators with exhibitors from a dozen states. Show manager Janet Johnson said the casino is one reason Toledo was picked as host of the event.

“It brings some added excitement to the area,” she said.

Taxes and revenue

The Toledo casino’s revenues slid each month since June, its first full month of operation.

General Manager Richard St. Jean strolls through Hollywood Casino Toledo. He is upbeat about the casino's future despite declining revenue since June.

Mr. St. Jean expected revenues to decrease as the novelty diminished. He anticipates an uptick beginning in the first quarter of next year as customer loyalty programs grow.

“We’re still in our infancy stage,” he said.

Ohio casinos pay a 33 percent tax on gross revenues, and local governments played a mostly conservative numbers game when projecting their shares. Lucas County received about $575,000 so far, topping its $554,000 estimate. The county estimates $1.5 million in casino taxes for its general fund for 2013.

“It doesn’t solve all economic challenges of any region, and it shouldn’t be expected [to],” Lucas County Commissioner Carol Contrada said.

Casino revenues have fallen short of some earlier predictions, said Zach Schiller, of the nonpartisan research institute Policy Matters Ohio.

A 2009 constitutional amendment allowed four Ohio casinos. Cleveland’s Horseshoe Casino opened May 14. The Columbus casino opened Oct. 8, and Cincinnati’s is scheduled to open in the spring.

“My sense is that it’s awfully difficult to come to some firm conclusion this soon about what the ultimate revenue is going to be, but what we’ve seen so far is not incredibly reassuring,” said Mr. Schiller, pointing to racino competition and casino revenues that he said have “tailed off.”

At Toledo’s casino, adjusted gross revenue declined to $14.8 million in October from $20.4 million in June, according to the Ohio Casino Control Commission. The commission tallies slot-machine and table-game revenues less winnings paid to gamblers. Cleveland casino revenues fell to $20.8 million in October from $26.1 million in June. Columbus casino revenues reached almost $18.3 million in its first weeks of operation.

Casinos generated nearly $78 million in tax revenue from May through October, according to the Ohio Department of Taxation. Mr. Schiller cautioned that casino taxes won’t fill holes gouged into local governments’ budgets by reduced state funding.

At least one year of operations is needed to make accurate revenue determinations, said Matthew Schuler, executive director of the Casino Control Commission, which licenses and regulates the state’s casinos. All four casinos need to be open, and racino and Internet cafe competition are variables, he said.

Matt Cleland, Toledo Public Schools treasurer, said the district anticipates annual funds from casino taxes at funding of $1.2 to $1.3 million, a smidge of its $300 million operating budget.

“We had always hoped that it would be bigger, but I don’t think we had any delusions that it would be more,” he said.

The city of Toledo’s general fund received about $1.77 million in casino taxes so far. It projected $3.45 million for 2012, and administrators project $4.95 million for 2013.

“We’re behind a tad, but the problem is this is a whole new venture. We don’t have a track record to base it on,” said City Councilman George Sarantou, chairman of council’s finance committee.

Crime and addiction

Before the casino opened, some worried the new attraction would attract problems — from crime to compulsive gambling.

The Toledo Police Department reported a waning number of incidents since the casino opened. Lt. Mark King credited that to extra security from off-duty police officers with whom the casino contracted in mid-July. He said most arrests in the area are for disorderly conduct.

Police in Rossford, which is just across the Toledo border from the casino, dealt with traffic issues in the casino’s first weeks, but activity since slowed.

“We’re going to continue to keep an eye on it because over time you never know what element might move into the area to try to take advantage of the patrons or the casino itself,” Rossford Chief Glenn Goss said.

The Casino Control Commission reported that 19 people have been indicted for alleged cheating at the Toledo casino, compared with 39 stemming from Cleveland’s casino.

Officials also worry about gambling addicts.

“After six months you can lose quite a bit of money and develop compulsive gambling,” said Peter Silverman, a Toledo lawyer who is a member of the commission.

COMPASS Corp. for Recovery Services reports an increase in gambling-related inquiries and more people seeking counseling since the local casino launched. Marilyn Rule, manager of the problem gambling program, would not provide numbers but called the bump substantial.

“What I have learned is that now that the casino is here, people are more aware that treatment is available,” she said. “I do know that the number of problem gamblers increases with legal gambling being so available.”

Ohio’s voluntary exclusion program permits gamblers to bar themselves from entering a casino. As of mid-November, 146 people had joined the program.

Impact on Detroit

The Toledo casino’s sweeping, sand-colored facade greets motorists on nearby I-75.

When it opened, nobody knew exactly how much traffic the new gambling site might divert from Detroit’s casinos. Jacob Miklojcik, president of the economic and policy analysis firm Michigan Consultants, said he estimated Toledo would affect Detroit’s business by 2.5 to 4 percent.

Revenue from Detroit’s three casinos fell by about 2 percent from May through October of this year, compared to the same period in 2011, according to Michigan Gaming Control Board numbers. MotorCity Casino’s revenue dropped about 4.9 percent. Greektown Casino’s fell by about 1.4 percent, and MGM Grand Detroit’s about 0.14 percent during that period.

Hollywood Casino Toledo, situated along the Maumee River and I-75 next to Rossford, counted nearly 1.9 million guest visits since opening in late May.

“The revenue impact is not as significant as the experts once predicted, and we have a strong following from residents of our surrounding states,” said Yvette Monet, spokesman for MGM Resorts International, parent company of MGM Grand Detroit. “We are surprised at how quickly the honeymoon has ended in Ohio.”

A MotorCity Casino representative was not available, and a Greektown spokesman declined to comment.

Mr. Miklojcik said nonsmoking rules and racino competition could impact Ohio's casinos’ revenues.

Since June, Lakefront Lines cut two days from its local bus service to Greektown. Paul Grant, manager of the firm’s Toledo tour department, said he thinks that's partly a result of the Toledo casino’s presence.

Employment

Efforts are ongoing to unionize employees at the Toledo casino, owned by Penn National Gaming Inc., said Ken Lortz, United Auto Workers director for Ohio and Indiana.

The UAW is participating in conversations, but Mr. Lortz wouldn’t say what other unions are involved. Four unions, including UAW, represent Cleveland casino employees. Penn signed a “neutrality agreement,” which allows unions access to employees, the casino’s Mr. St. Jean said.

The casino has about 1,150 employees. Mr. St. Jean said the casino opened with “ample staff.” Some employees’ hours have been reduced; he said he expects to reinstate hours as business increases.

Around the casino

Paul Bamford heard a knock on the door one night last summer about 10:30 p.m.

For 40 years, he’s lived in a house on a narrow residential street near the Toledo-Rossford boundary. He can see the casino from his front yard.

That night, a stranger at his doorstep asked to borrow money. Mr. Bamford said no. The request was an isolated incident since the casino came to the neighborhood, but he now takes greater precautions to lock doors and keep lights on.

When the casino first opened, Mr. Bamford, 69, and his neighbors were besieged by customers looking for a place to park. Six months later, No Parking signs still hang along Selkirk Street, but cars no longer line both sides of the street. Most of his other worries haven’t materialized.

“Initially, I think we were concerned about crowd, noise — but it hasn’t been that bad,” Mr. Bamford said.

After half a year, the casino’s neighbors, customers, and others in the community are becoming accustomed to its prominent presence along the Maumee River.

Inside the casino, guests milled about undisturbed by the jingle of slot machines and flash of multiple TV screens.

The scene is loud, large, and colorful. “Sensory overload” was how Mr. St. Jean recently described it as he cut across the carpeted casino floor, shaking hands, and waving hello to employees and customers. He stopped to greet Brandon Coleman, 22, a steakhouse buser. The Bowling Green man praised the friendly workplace atmosphere and said he’s gotten to know regular customers.

“We have our ups and downs,” Mr. Coleman said. “During the week it slows down a little bit, but we have a steady flow usually.”

Others are still discovering the casino. MaryAnn Green, 79, of Detroit took a bus trip to visit the Toledo casino for the first time with her sister last week and won $8 on a penny slot machine. She’s visited Detroit casinos and gambling places in Windsor and Las Vegas.

“ ... This one, I think, is one of the prettiest ones,” she said.

Dela Coats, 40, lives close enough to the casino that her house shook during its construction. She was a frequent visitor when it opened, although she’s not a gambler.

“We used to go all the time,” she said, then the casino routine grew “kind of boring.”

Some food is expensive, but she said the burgers at the lounge Scene are delicious. Entertainment offerings will be the key to keep people coming in the door, she said.

Government officials praised the casino. Councilman Sarantou said it diversifies the economy and adds jobs.

The casino has been a good neighbor, said Rossford Mayor Neil MacKinnon III.

He said he wants to encourage more connectivity between two big draws — the casino and Bass Pro Shops — and lengthen visitors’ stays in the area.

“I don’t know if anybody knew for sure what life was going to be like with the casino down the street, and I understand that people had concerns, but it’s been fine,” he said.

Mr. Silverman said he takes a watchdog-approach to his Casino Control Commission role. He called it an “extraordinary task” to license, regulate, and open several casinos in such a tight timeline.

“And the most surprising thing is how well it’s gone,” he said.

Contact Vanessa McCray at: vmccray@theblade.com or 419-724-6065.