Kentucky better gets it's act together. Plans are already underway by horse breeders from Kentucky to head to Ohio. Read further below!
By Aaron Marshall, The Plain Dealer
COLUMBUS, Ohio -- The state's first "racino" in Columbus will swing open its doors Friday, ushering in what will likely become a new era of slots gambling at Ohio's seven thoroughbred and harness racing tracks.
It seems certain that at 2 p.m. next Friday, the 1,800 slot machine-like devices at Scioto Downs, a track in Grove City just south of Columbus, will be open for business and the state's first "racino"-- part casino and part racetrack -- will be born.
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| Jim Allen, chairman of Hard Rock International, talks about plans to build a racino at the Northfield Park race track, in Northfield, in April. |
The state lottery commission gave the green light this week by licensing what are known technically as "video lottery terminals" for the owners of Scioto Downs, MTR Gaming Group.
The group has agreed to pay $50 million for rights to run VLTs--free-standing terminals which appear to players in every way to be a slot machine. The difference is that slot machines are controlled by a chip inside each machine, and video lottery terminals are connected to a network of computers that monitors payouts and play, usually from an operations room in the facility.
State lottery officials are expecting tax revenues of about $3 million a month from the VLTs installed at Scioto Downs.
But what's less certain is when the other six tracks in Ohio, including Northfield Park and Thistledown, may pony up $50 million and dive headlong into the racino business.
Also not known is the impact of a lawsuit in a Franklin County court challenging whether the video lottery terminals, commonly called VLTs, are legal under the state constitution.
For right now, the case brought by the Ohio Roundtable challenging the VLTs in front of Common Pleas Court Judge Timothy Horton has so far kept all but one of the track owners in the starting gates.
The case was specifically mentioned as a key sticking point by Northfield Park and Hard Rock International officials in early April when they announced plans to build a $275 million racino development at Northfield Park in the near future.
And Bob Tenenbaum, a spokesman for Penn National, a gaming giant which agreed to pay $150 million to the state for the rights to transfer horse tracks in Toledo and Columbus to Dayton and Austintown, said the lawsuit is "obviously" the main issue keeping Penn from moving forward with its plans.
While a ruling from Horton is expected soon on a request by the state and track owners to dismiss the case, the legal wrangling could drag on through the year if the judge allows it to move forward and a trial is held.
And, if Horton eventually decides that VLTs are not a legal lottery game and thereby unconstitutional, then track owners could find themselves back at square one.
However, Rep. Lou Blessing, a powerful GOP lawmaker who is the second-highest ranking House member, said this week that he doesn't view the lawsuit as a long-term obstacle to racinos.
The Cincinnati-area veteran lawmaker said that if the judge finds the VLTs are illegal, he easily has the votes needed to pass legislation to have the legislature declare them legal and allow them at the state's horsetracks. This week, state lawmakers passed legislation by wide majorities which limits the VLTs to the state's seven horse tracks.
"The people of Ohio approved four full-blown casinos. We doubt they are going to object to VLTs at places where they already have gambling," Blessing said. "That argument is gone."
Rob Walgate, vice-president of the Ohio Roundtable, the group who brought the anti-racino lawsuit, said lawmakers' attitudes about gambling in Ohio have shifted so that "it's suddenly the wild West" just because four casinos were approved by voters.
"Why does the governor and the legislature get to pick the winners and the losers with VLTs?" Walgate asked. "There are a lot of bar and restaurant owners across this state wondering why the governor picked seven horse track owners to be the winners, and them to be the losers. This is just more proof that the gambling interests are running the show at the Statehouse."
Whether it's by a court ruling or by the state legislature passing a law, it's starting to seem likely that Ohio will go from having little gambling opportunities to being saturated with them rather quickly, experts predict.
"The market will fill up pretty quickly," said William Thompson, a professor at University of Nevada Las Vegas who studies the gambling industry. "Once you have the racinos all in place you will be approaching the saturation point in Ohio."
One of the most competitive markets for gambling will likely be Northeast Ohio where the Horseshoe Casino in Cleveland, and three racinos could someday be competing with gambling enterprises in Erie and several in West Virginia, just over the state line.
That could be a boon for Northeast Ohio gamblers who would likely see better payout rates on slot machines and perks thrown at them to get their business, Thompson said.
"I've done a study that looked at 13 commercial casino states across the country and when casinos where near other casinos they gave higher payouts on slots," he said. "Monopoly casinos gave lower payouts than those competitive casinos -- which were those with options within 50 miles -- that had to treat the customers a little better."
Money generated by VLTs at racinos will also spike the quality of horse racing in Ohio once agreements are reached among the tracks and Ohio horsemen groups as to how much VLT money to divert to horse racing purses, according to Blessing.
Blessing said he expects the total horse racing purses in Ohio to raise sharply from $26 million a year to as high as $140 or $150 million annually once the racinos are in full swing.
"We think you're going to see 100 or so horse farms spring up in Ohio and people going to buy high-quality horses . . .in Kentucky just to race in Ohio," Blessing said. "There's going to be some pretty serious money to win because of these racinos."
