Voters to decide hotly contested gaming proposal

10/30/2009

COLUMBUS - Efforts to bring casino-style gambling to Ohio have come up snake eyes with voters four times before.

But backers of a fifth attempt hope Lady Luck finally will smile on them as they roll the dice again. Issue 3 will ask voters on Tuesday to write into the Ohio Constitution the specific sites of four 24-hour, Las Vegas-style casinos in Toledo, Cleveland, Columbus, and Cincinnati with up to 5,000 slot machines each and any table game offered in neighboring states.

Toledo's casino is proposed for a 44-acre, reclaimed former industrial waste site along the south side of the Maumee River abutting Rossford and I-75.

The primary financial backers behind Issue 3 are Penn National Gaming Inc., owner of Toledo's Raceway Park, and the Hollywood Casino in Indiana, among other gambling ventures, and Dan Gilbert, majority owner of the Cleveland Cavaliers. They've received the backing of the likes of the Fraternal Order of Police, the Toledo Police Patrolman's Association, the Ohio AFL and a number of other labor organizations, and the chairman of the local Democratic and Republican parties.

"What this is really about is jobs, opportunity, and economic development," Penn National spokesman Eric Schippers said. "We think the average voter will recognize, given the economy and high unemployment rate, that this new investment is an outstanding opportunity."

The backers of Issue 3 argue that this is a chance to keep in the state the roughly $1 billion that Ohioans are wagering in other states such as Michigan, Indiana, Pennsylvania, and West Virginia. A prominent pro-Issue 3 TV ad pictures Ohioans on a bus headed out of state to gamble while commiserating about how they'd prefer to spend their money in Ohio.

Opponents include Gov. Ted Strickland, the League of Women Voters of Ohio, traditional opponents of expanded gambling including many members of the clergy, and competing casinos and racetracks seeking to protect their own interests.

While some argue that expanded gambling or altering the Ohio Constitution for that purpose is a bad idea in general, others contend Ohioans could do better than the hand they're dealt with Issue 3. They argue that, compared to other states, the 33 percent tax rate on wagers and one-time $50 million state licensing fee per casino are bargains for what amounts to a lucrative monopoly for two operators.

"The proponents are going to spend, I'm guessing, north of $50 million [to promote Issue 3]," said Sen. Louis Blessing (R., Cincinnati), who had supported gambling expansion but opposes this ballot question.

"Think about what they're going to net when they pay no tax on their casino operations," he said. "If I were them, I'd spend half a billion. I'd do anything to get this passed - anything."

He contends that the proposed amendment would create a loophole through which cash wagers, such as bills inserted into electronic slot machines, could escape the tax levied on other wagers. The constitutional amendment would specifically tax "money exchanged for the purchase of chips, tokens, tickets, electronic cards, or similar objects." It doesn't include "cash" in the list.

The backers, however, insist the dollars inserted into the machines would be converted into electronic credits that would indeed be taxed.

They point to the estimated 19,000 construction jobs and 15,000 permanent jobs paying an average of $33,000 a year that they say the casinos would bring. A study conducted by the University of Cincinnati at the Issue 3 committee's expense estimated that the four casinos would generate $651 million a year in taxes to be distributed among all counties, school districts, the eight largest cities, a new state gambling regulatory panel, a state racing commission fund, state law enforcement training, and gambling-addiction programs.

According to the Jobs and Growth Committee that's behind the plan, $17.7 million a year would come to Lucas County - $6.4 million directly to county government, $11.3 million to Toledo, and $8.7 million to local school districts. Wood County purportedly would get $3.6 million, $2.3 million of which would go to schools.

Gaming consultant John Glassey, who has held senior management positions with Merv Griffin's Resorts in Atlantic City and Connecticut's Foxwoods Casino Resort, claimed those projections are too rosy. "Their entire plan is predicated on Ohio citizens betting half a billion dollars more annually by 2013, and they won't," he said. "They also say Ohio must show robust income and population growth, and that won't happen either."

The amendment would obligate each casino developer to make a minimum $250 million investment in each site. But opponents have noted there's no deadline for construction.

Mr. Schippers said Penn National is committed to building the Toledo casino and promised it would be a good neighbor, not stealing customers from existing businesses.

"We do not intend to orphan businesses," he said. "We intend to bring more customers downtown. We can successfully provide a shot in the arm to business."

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.