Ohio Casinos Could Mean Less Money For State

COLUMBUS, Ohio—Multimillion-dollar downpayments on racetrack slots proposed by Gov. Ted Strickland are at risk if Ohio voters approve a competing casino plan in November, the chief executive of a major racing company said Friday.

MTR Gaming Group Inc. CEO Robert Griffin told a special state Senate committee that a provision in the governor’s plan allowing horse tracks to get their money back if casinos are legalized is intended to reassure potential investors.

Griffin said his company is prepared to spend $6 million to $8 million to defeat the casino plan, backed by rival gaming company Penn National, and make the governor’s slots proposal a money maker.

“By providing VLTs (video lottery terminals) at the tracks, you can decide to put people back to work by creating thousands of new jobs resulting in millions of dollars in new revenue for the state and local governments,“ Griffin said. “At the same time, we can provide a very real economic boost to the horse industry and the supporting agricultural communities that are in a very real downfall today.“

But senators exploring details of Strickland’s plan expressed concern and anger at the surprises turning up in the 11th hour proposal to balance the $54 billion, two-year state budget.

“This committee was called a political stunt,“ said state Sen. Jon Husted, a Kettering Republican and member of the committee. “Today, after two days of hearings, we are clear that what this committee has done is discover the fatal flaws that need to be addressed.“

Strickland spokeswoman Amanda Wurst said the governor proposed his framework on June 19 and the details were left up to lawmakers.

“The governor continues to think the VLTs at racetracks are a better option than a tax increase,“ she said. “If the Senate doesn’t like the proposal he has put forth, they should tell Ohioans what programs they want to cut or what taxes they plan to increase.“

The Strickland administration has estimated that licenses at each of seven Ohio horse tracks would raise $65 million in licensing fees, contributing to the $933 million in total revenue they say slots would pump into state coffers. That money, combined with $2.3 billion in cuts, is proposed to fill a $3.2 billion budget hole.

However, legislative language released late Thursday revealed a provision included Strickland’s plan gives investors the option of getting their money back if a fall ballot issue legalizing casinos in four cities is approved.

Griffin said the “clawback” provision will provide the financial assurances necessary to get slots facilities moving quickly. Upon further questioning, however, he said heavy investment in the “racinos” housing slots at racetracks is probably unlikely until his company sees the outcome of the fall ballot issue. Mountaineer owns the Scioto Downs racetrack in Columbus.

When asked by state Sen. Tim Grendell, a Chester Township Republican, whether removing the clawback provision would be a deal breaker, Griffin said he wasn’t prepared to say without seeing details of any different plan and consulting his board.

“This is the biggest gamble in the history of the state of Ohio,“ Grendell quipped.

Witnesses representing horse owners also testified that the proposal’s suggested take for their industry of 4 percent would probably do little to revive the state’s suffering horse industry.

Dave Basler, executive director of the Horsemen’s Benevolent and Protective Association of Ohio, said 10 percent of slots proceeds would be the bare minimum necessary to restore the health to the horse racing side of the tracks.

Others, including Griffin and H. Steven Norton, former president and chief operating officer of Argosy Gaming, said the terms of the governor’s plan are adequate. Both men said the estimate of $933 million that slots could return to Ohio’s budget is reasonable if not conservative.

“I have heard many comments throughout this process about our commitment to the horse racing industry, and I take exception to those that imply that we do not have their interest at heart,“ Griffin said. “For the last five years, MTR Gaming has been operating Scioto Downs at a loss of more than $1.5 million a year and has continued to operate to the betterment of the horse industry.“

Husted led much of the hourlong grilling of Griffin, pressing to know why authorizing slots through the Legislature is a better option than putting it before voters in November. A Quinnipiac University poll out Friday showed a large majority of Ohioans support the slots plan but want to vote on it.

“We’re trying to decide whether to do this unilaterally or whether to take this to the ballot,“ Husted said, suggesting a course of action that Strickland has dismissed as too time-consuming.

Ohio entered a temporary budget last week for the first time in 18 years, and state Sen. Mark Wagoner, the Toledo Republican chairing the VLT panel, said it was unclear the state was any closer to a compromise heading into the holiday weekend.

“One of the frustrating things is we’ve had people demanding us to pass this legislation two or three days ago, and I think what these hearings are demonstrating is that wouldn’t have been a responsible thing to do,“ he said. “We’re starting to learn as this process goes on that there are more questions than answers.“