Taking odds: Ohio casino operators tout benefits of gambling palaces, foes plan next attack

Ohio ponders a future with casinos

COLUMBUS, Ohio — Developers of four new Ohio casinos looked eagerly to the future Wednesday, even as opponents concocted plans to stymie their efforts and surrounding states braced for economic losses.

Penn National Gaming Inc. president Dan Wilmott showed off the site where a 300,000-square-foot Hollywood Casino-Columbus employing 2,000 people is expected to materialize by the end of 2012.

“I know there’s been a lot of things said by the opposition, a lot of mistruths, a lot of blatant lies about what the casino will bring to the city of Columbus, to the state of Ohio,” he said. “I can assure you that we’re going to develop here, we’re going to create these jobs, and we’re going to get people back to work.”

Republican state lawmakers unhappy with the vote began work immediately on a 2010 ballot measure, however. State Rep. Clyde Evans said he plans a constitutional amendment that makes changes to the terms of the casino deal, including increasing the tax rate from 33 percent to 60 percent. That measure would need approval by a Legislature where political control is mixed.

Dennis Forst, a gaming industry analyst for KeyBanc Capital Markets in Los Angeles, also predicted there will be lawsuits forthcoming that delay the plan. He expects casino operators to turn their sights now to Kentucky, a lone casino holdout in the region.

Penn National officials enthusiastically pushed the Ohio facilities’ benefits. They pledged to assuage the concerns of their rivals, work cooperatively with restaurant and hotel operators worried about competition, and wow city planners with architectural renderings.

Penn National partnered with Cleveland Cavaliers owner Dan Gilbert in an expensive ballot campaign that touted the jobs casinos in Columbus, Cleveland, Cincinnati and Toledo would bring to a state where unemployment has topped 10 percent.

After a campaign that topped 2008’s $40 million in presidential campaign spending, the pro-casino Ohio Jobs & Growth Committee turned around an historically anti-gambling state that had rejected expanded gambling four times in the past 20 years. The pro-casino campaign spent $21 for every yes vote.

Victory came despite warnings from the opposing TruthPAC, backed by MTR Gaming Inc. chairman Jeffrey Jacobs, that the jobs numbers were exaggerated and the lengthy constitutional amendment had other problems.

U.S. Sen. George Voinovich vowed to “be their conscience” and hold casino operators to their jobs promises. He predicted casinos would take a particularly heavy toll on Cleveland, a national poverty leader and a city where he was once mayor.

“I am terribly disappointed,” Voinovich said in a statement. “As a result of the passage of Issue 3, there will be a great deal of pain and suffering in Ohio. I feel for the families of those who will experience casinos for the first time in their lives and, once lured in, will become addicted to gambling.”

KeyBanc’s Forst said economic benefits of Ohio casinos will be mixed.

“It’ll certainly help Ohio’s economy, through the tax dollars and the jobs and keeping the money in the borders of the state,” Forst said. “On a regional basis, I’m not sure it does anything at all, because whatever is gained by Ohio is potentially lost to Indiana, Michigan, Pennsylvania and West Virginia.”

A newly released report by the Indiana Legislative Services Agency predicted that state would be hard hit by casinos in Ohio, losing $93 million in gambling taxes based on revenues in the first year alone. Analyst Joseph Greff at J.P. Morgan categorized the Ohio initiative as a “mild negative” for the southern Indiana casino industry.

Michigan tourism leaders were also keeping close watch on behalf of Detroit, where casinos bring in $1.3 billion a year with the help with thousands of Ohio gamblers.

MTR Gaming Inc., which operates the popular Mountaineer Casino & Resort over the border in West Virginia, was a big loser in Tuesday’s election. Jacobs spent $6 million on his aggressive campaign against the ballot measure in hopes of protecting MTR’s interests both out of state and in Columbus, where it owns a struggling horse track.

Gambling industry expert Jeffrey Hooke, of Hooke Associates, said Ohio casino licenses could have commanded from $350 million in Toledo to $700 million in Cleveland if they had been competitively bid. The constitutional amendment calls for collecting $50 million per license.

AP Political Writer Mike Smith in Indianapolis contributed to this report.