Opponents Question Strickland On Slots Revenue

COLUMBUS, Ohio -- Gov. Ted Strickland's revenue estimates for putting slot machines at Ohio's seven horse racing tracks are based on reviews of studies of Ohio's revenue potential and the experience of other states, his office said Monday.

Strickland's estimation that the state would gain $933 million over the next two years from the lottery-run slots is not based on the study of a specific proposal and was described as "reasonable, even conservative" by Strickland spokeswoman Amanda Wurst.

But the proposal by the governor, who backtracked on his opposition to expanded gambling because of a $3.2 billion budget deficit, foresees considerably more revenue for the state to spend on education than a similar proposal pushed for months by the Ohio State Racing Commission.

Once the state pays commissions to the machine operators and upgrades the capabilities of the racing commission to oversee slots, it can expect to receive $505 million over two years, the commission study found. About $105 million of the difference comes from licensing fees being $15 million more expensive for each casino in the governor's plan.

The details of Strickland's proposal -- which assumes 5,600 to 12,200 slot machines -- will be worked out by lawmakers negotiating the final budget plan, if the Legislature accepts expanded gambling.

Gambling opponents continued to denounce the plan Monday, saying the revenue estimates were unreliable and threatening a possible legal challenge should it be approved.

"When gambling has been expanded in Ohio, gambling projections have never come to fruition," said Rob Walgate, a spokesman for the Ohio Roundtable, a conservative-leaning public policy group. "At the end of the day they can't deliver on what they promised. They're going against the wishes of millions of Ohioans."

Walgate said the Roundtable would likely mount a legal challenge to Strickland's proposal. But Ohio State University law professor Donald Tobin said opponents were "in a bind" because Ohio law gives the Legislature the ability to expand the lottery.

Some critics pointed to Strickland's expansion of the Ohio Lottery to include Keno as an example of projections falling short. Keno, a game that resembles bingo that can be found at some bars and restaurants, has not matched expectations.

Strickland hoped it would bring in about $73 million to help balance the budget for the current fiscal year that ends June 30. But the latest estimates are that it will bring in between $25 million and $30 million.

However, even gambling opponents acknowledge that a direct parallel can't be drawn between Keno and slots, a widely known and popular game.

State Rep. Ron Amstutz, a Wooster Republican and negotiator on the conference committee deciding the budget plan, acknowledged the differences and said he didn't yet have enough information to evaluate Strickland's revenue predictions. But he still called the gambling proposal a "poison pill" in the budget.

"I think most of us in this caucus will be looking for alternatives to balance the budget rather than reaching out to folks that can't really afford this," Amstutz said.

A complicating factor in gambling revenue projections is that gaming revenue has gone down with the economy. Revenue from slots terminals at West Virginia's racetracks are down about 7 percent from projections for the fiscal year ending June 30, said West Virginia Lottery spokeswoman Nikki Orcutt.

States that led the charge to put slots at their racetracks could also expect to get more out-of-state visitors. But with slots at racetracks in Pennsylvania, West Virginia and Indiana, it is unclear how many out-of-state visitors Ohio would get.

One study by the MTR Gaming Group and referenced by the governor found that four West Virginia racetracks with about 11,000 slot machines reached a total of about $970 million in revenue in 2006. However, the study found that new competition from slots in Pennsylvania resulted in a 1.6 percent revenue decline in 2007.

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