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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2011 > June > 24 > Entry
Editorial: ‘Racino” critics putting up good hurdles
Gov. John Kasich and the Republican legislature are rushing to pass legislation allowing slot machines at Ohio’s race tracks, including at Lebanon Raceway and at Beulah Park outside Columbus, which wants to move to Dayton.
They want a law passed by June 30 that would require the race tracks to submit their applications for up to 2,500 slot machines by Dec. 31.
Luckily, this race is probably going to take longer to run than the governor wants. (He’s counting on a quick $350 million in license fees paid over the next couple years, not to mention the 33.5 percent tax that the “racinos” would have to pay on their net profits.)
The conservative Ohio Roundtable, among others, is promising a court fight. It argues that the state can’t pretend that slot machines are the high-tech equivalent of lottery tickets.
Supporters of slots at the tracks argue that because Ohioans OK’d a lottery, that gives the state authority to expand into lottery-like machines.
The argument is a stretch, a legal absurdity.
Moreover, consider the context in which it’s being made. It took five tries to get Ohioans to change the Constitution and approve just four casinos. Before those complexes have even been built, the state’s policy makers want to expand the gambling options from four to 11, pretending that stripped-down casinos aren’t really casinos.
Does anyone think that this is what voters agreed to when they amended the Constitution in 1973 to allow a lottery, and then in 2009 when they voted to allow one casino in Columbus, Cleveland, Cincinnati and Toledo?
A secondary fight — one that could also go to court — will involve Penn National Gaming, which owns Beulah Park near Grove City, versus Lebanon Raceway. Penn wants to move Beulah to Dayton. It has rights to build the Columbus casino and doesn’t want that casino to cannibalize Beulah. (It also wants to move its Toledo track to Youngstown for the same reason.)
But Lebanon Raceway is asking why Penn should be allowed to protect Penn’s casino profits in Columbus, yet cut into Lebanon’s.
Lebanon also argues that the state racing commission has a rule that says race tracks can’t locate within 50 miles of each other, and, unlike Beulah, Lebanon must move because it can’t have slots at its track on the Warren County Fairgrounds.
Delaware North Companies, the entertainment and gaming firm that Lebanon Raceway has hired to operate the gaming side of things, says it would have to re-think its business plan — code for saying it might pull out — if Penn gets to move Beulah here.
The important thing that both Montgomery and Warren counties have to watch is this:
The “racinos” won’t be resort-quality. The state is only going to require the developers to invest $150 million. Just the VLTs — which are $20,000 a pop —will cost $50 million.
Additionally, in Lebanon’s case, building a new track could cost $20 million, according to Delaware North. That doesn’t leave a lot left that has to be spent on the “racino.” And the developer would also get credit for the value of the land in meeting the minimum capital requirement.
For comparison purposes, the casino complex in Cleveland is projected to cost $900 million. Just the first phase — a $350 million project in the former Higbee Building in downtown — includes 2,100 slot machines, 65 table games and a World Series of Poker room with 25 tables.
Anything that’s going to be offered locally is going to be low-budget relative to Ohio’s other casino options. As economic development ventures go, “racinos” are nothing to get excited about — and they are something to worry about if all they do is drain people’s wealth.
The questions about whether Ohio needs seven “racinos” — and if the Dayton region needs two of them — are far from answered.
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