Ohio Gaming Law: News

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August

Casino Development
August 24, 2010

In Cleveland, developer Dan Gilbert has finally reached a deal with Forest City Enterprises to purchase 16 acres downtown, including a nearby parking lot, where the casino will most likely be built. It is unclear when construction will begin, but delays in achieving the land deal will most likely push back the opening of the casino to mid-2013. As a result, Gilbert is exploring a ‘Phase 1’ casino, which would locate a temporary casino in the Higbee Building. This ‘Phase 1’ casino could open as early as 2011.

Last week, Gilbert announced a preliminary agreement with Harrah’s Entertainment to run his casinos.

In Cincinnati, developer Rock Ventures LLC announced they would spend at least $80 million with small and minority owned businesses to build their downtown Harrah’s casino. Actually, the developers are hoping to top what would be a 20% economic inclusion of the $400 million project.

In the next 60 to 90 days, Rock Ventures will announce a design firm. Matt Cullen, president of Rock Ventures, expects 75% of the design work to go to local firms with a third of that (25%) going to small, minority, or women business enterprises. Ground breaking on the casino is expected this fall with the opening to occur before the end of 2012.

And in Columbus, 37 people have applied for the 7 seats on the Ohio Casino Control Commission, the panel that will regulate casinos in Columbus, Cincinnati, Cleveland and Toledo, as well as slot-machine-like games of chance throughout the state. Governor Strickland expects to name the panel by mid-September. There are some restrictions. All 7 people must be approved by the Ohio Senate. The panel must comprise of at least one attorney, one CPA and someone with a background in law enforcement. One member must live in one of the four counties housing a casino. There can be no more than four members from the same political party and none of the members can be affiliated with either of the casino developers.

Public Hearing Set On VLT Rules
August 13, 2010

The Ohio Lottery Commission will hold a public hearing in Cleveland on August 20th on the 26 proposed rules for the potential installation of video lottery terminals at Ohio’s horse racing tracks. The Joint Committee on Agency Rule Review will hear the rules on September 13. The state has yet to file their request for a declaratory judgment about the constitutionality of slots at the tracks.

In other news, ground was broke Thursday on the casino in Toledo. The Hollywood Casino-Toledo, similar to the one that will be constructed on the west side of Columbus, is expected to open in the first half of 2012. It will have 2,000 slot machines, 60 table games, a 20 table poker room and is expected to employ approximately 1,200 people with at least 90% of the permanent jobs designated for Toledo area residents.

Racetrack Slots Revived
July 23, 2010

On Monday, as expected, the Ohio Lottery Commission took two steps to restart video lottery terminals (VLTs) at Ohio’s seven horse racing tracks.

First they scrapped the original rules set forth back in 2009. Those rules limited each track to 2500 devices and committed half the revenue to the state. The new rules allow the seven tracks to operate slots 24/7 and state that players must be 21 or older.

The second step taken by the Lottery Commission was to vote to seek court approval of slot machines at the tracks. However, officials did not indicate which court they would ask for legal clarity on the constitutionality of slots or what legal strategy they may employ.

Other questions were similarly left unanswered.

How much revenue could the state expect to receive from slots? Governor Strickland’s advisers originally projected $933 million, which included a one-time license fee of $65 million per track ($50 million for each casino) and the state’s proposed 50% take (as opposed to a 33% take from the casinos). The proposed 50% take will most likely decrease due to competition from the casinos. Lottery Director Kathleen Burke indicated the financial terms would have to change, saying “because the competitive landscape has changed, that will have an impact on the rate.”

How quickly can racetrack slots be up and running? Track owners are eager to beat the casinos to opening day. Most casinos are due to start opening in 2012, although a temporary one may open in Cleveland sooner. Potential legal action could impede the track owners. The Ohio Roundtable has already threatened a lawsuit.

Racetrack Slots Back in Play
July 20, 2010

On Monday, the Ohio Lottery Commission will be asked to approve filing a declaratory judgment action on their authority to implement video lottery terminals at Ohio’s horse racing tracks. Which court the action will be filed in has not been stated. Members of the Commission are also expected to invalidate administrative rules governing the operation of the slot machines. This will clear the way for new rules that will deal with licensing, the number and type of terminals, hours of operation, security and surveillance and other related matters.

Internet Cafes Sweeping Northeast Ohio
July 20, 2010

Brook Park became the latest community to approve Internet sweepstakes cafes. They look like gambling, sound like gambling, but are not gambling. A Toledo judge agreed, ruling these Internet cafes are not gambling because the winnings are predetermined by computer. The Ohio Attorney General’s office is leaving the legality up to local courts and officials. As a result, rules do vary from community to community. Tom Coyne, a lobbyist for the café operator in Brook Park, would like to see that change, calling for uniform state regulation.

Slots Referendum Removed From Ballot
June 30, 2010

A year after spending $1.5 million to challenge a state budget provision allowing video slot machines at horse racing tracks, LetOhioVote.org has asked Secretary of State Jennifer Brunner to remove its initiative from the November ballot. Committee members wrote “since the time this petition effort was initiated, there have been a number of important changes in the legal landscape with respect to gaming in Ohio”. Those changes include the passage of the casino amendment and the Governor’s plan to ask the courts to determine if placing video slot machines at racetracks can be done under existing state lottery laws.

Charitable Gaming
June 17, 2010

The new casino regulations will not affect the ability of churches and other nonprofit organizations to offer instant bingo, punch boards and raffles. In fact, there will be more bingo and bigger payouts. Charities will now be permitted to hold bingo sessions three times a week, up from the current two and maximum payouts will increase from the current $3,500 to $6,000.

Casino opponents had predicted such games would be eliminated.

Video Lottery Terminals
June 17, 2010

Saying they are exploring their legal and constitutional options, Ohio’s horse racing tracks are looking at the possibility of another ballot issue with a proposal for slot machines. The seven tracks want to amend the language of the recently signed casino regulations. Supporters would have 90 days to gather enough valid signatures – 241,365 to get on the November, 2011 ballot. If enough valid signatures are obtained, the new casino legislation would be put on hold until a statewide vote.

Summit County Gaming Legislation on Hold
June 17, 2010

As promised, Akron attorney Donald Malarcik has filed a lawsuit to have legislation regulating gaming parlors in Summit County’s townships declared unconstitutional. Legislation approved by Council last month was set to go in effect last week. However, a judge has granted a temporary injunction that blocks the legislation from taking effect and set a June 24 hearing date.

Governor Signs Casino Bill
June 11, 2010

Governor Ted Strickland signed the casino implementation measure this week, but not before pointing out areas of disappointment. Overall, Strickland was enthusiastic about the measure’s ability to facilitate the creation of Ohio jobs and economic opportunity in our communities.

“However, I am disappointed that this bill also creates a new income tax deduction for gambling losses on bets placed at casinos, horse races, bingo halls and other forums, both in state and out of state. This new tax deduction represents a policy shift for the state of Ohio, which has never before used its income tax laws to subsidize losses incurred from gambling,” the governor stated in a release. Strickland would have used his line-item veto on this provision if he had been able to do so, and stated that he plans to “reverse this fiscally irresponsible and misguided decision” in the 2011-2012 budget process.

Members Work Through the Night on Casino Issue
June 4, 2010

Authorization legislation for Ohio’s four new casinos, to be located in Cincinnati, Cleveland, Columbus and Toledo, cleared the House and Senate in the wee hours of the morning following the midnight constitutional deadline. After hours of deadlock, members were able to reach agreement on the appropriation of half of the $200 million in one-time, up-front fees from casino developers for workforce development programs, but Senate Republicans refused to budge on the minority hiring issue.

The House voted 82-12 in support of the conference report on House Bill 519, while the report cleared the Senate on a party line vote of 20-12, with all Democrats in opposition to the bill.

In addition to the new appropriation of fees, the conference report included transferring the regulation of so-called “skilled games” from the Attorney General’s office to the newly created Ohio Casino Commission starting in July 2011 and modified provisions dealing with initial investments and charitable bingo.

Both the House and Senate adjourned around 4:00 am this morning and members will now be heading home for summer recess. Legislators will likely return to work in Columbus come mid-August for a brief few weeks prior to the November elections. Session schedules for the remainder of the year will likely be released by the Senate President and Speaker of the House in the coming weeks.

House, Senate Move Casino Bills; Compromise Needed Next Week
May 28, 2010

As the constitutional deadline approaches, the House and Senate passed separate casino implementation measures with some substantial differences. Although the majority of the provisions within the two bills are similar, the House’s plan includes $200 million in appropriations from the one-time operating fees and language regarding minority contractors, which the Senate did not include. Senate Republicans would prefer to deal with the appropriation of the funds in a separate bill at the later date, while House Democrats see this as an opportunity to get additional funds into workforce development programs now. According to the constitutional amendment passed, the implementation language will need to be finalized by next week, although there are no repercussions included in the constitution for not passing the legislation.

House, Senate Begin Debate on Casino Implementation Bills
May 24, 2010

Members of the House and Senate began hearings on the new regulations that will oversee the state’s four new casinos as approved by the voters last fall. With a constitutional deadline of June 3, members will need to work fast on reaching consensus in the House and Senate versions, which have some significant differences. According to the House sponsor, Representative Todd Book (D-McDermott), the major differences between the House version (HB 519) and the Senate (SB 263) include the fee appropriations of $200 million in up-front registration fees and regular reports on diversity hiring practices and purchasing from Ohio-based operations.

House Economic Development Committee has the measure starred for a vote out of committee on Tuesday morning, while Senate Government Oversight Committee is planning for hearings on Tuesday and Wednesday next week with a possible vote on Wednesday. The General Assembly is winding down before its summer break. Both the House and Senate are scheduled for the rare Thursday session next week; it is expected that the casino implementation legislation will pass by next Thursday.

Ohio House and Senate introduce casino regulations
May 18, 2010

Unable to reach an agreement, the Ohio House and Senate each released their own version of legislation designed to regulate Ohio’s casinos. Lawmakers will now have until June 3 to pass a single law. The House and Senate agreed on most issues.

Highlights:
Same in both versions:

Anyone under the age of 21 is prohibited from entering the casino, unless they are 18 and employed in a non-gambling function;

A $2 million application fee to anyone seeking a casino license. This will cover the costs of conducting background checks and other expenses associated with processing the application;

Alcohol consumption will be restricted to the hours of 5:30a.m. until 2:30a.m. Casinos will not be allowed to provide free drinks to valued customers;

Requires a cashless gaming system. Gamblers may put cash in a slot machine, but it credits them with the appropriate value in chips and bets are wagered in chips;

Convicted felons are barred from most casino jobs for at least ten years after their conviction. Any hiring of felons would be subject to commission approval;

Casino licenses subject to renewal every three years;

Establishes a seven member commission. Each member would serve staggered four year terms and would be limited to three total terms;

Ohio Casino Control Commission would be allowed to hire an executive director;

Gaming agents who are specially trained peace officers would police casinos and conduct investigations;

Casino inspectors would be granted unlimited access upon demand to casino facilities and the right to seize equipment for examination.

Differences between the two versions:

House version calls for a $5,000 liquor license for casinos, Senate version is for $25,000. The Senate version also permits restaurants and bars within the casino complex to serve alcohol with licenses costing $2,344;

House version spells out how some of tax windfall from one-time casino licensing fees would be spent on workforce development programs. Senate version defers spending decisions to future legislation;

In what appeared to be one of the major sticking points between the two, House bill requires casino developers to submit plans ensuring hiring of minority contractors and employees. Senate version has no such provision.

Representative Lou Blessing has stated he will seek to amend the legislation to allow video slots at nearby horse racing tracks. Each track would pay a 50% tax to the state until the casinos open. Once casinos open, the rate would drop to 33%. Casinos will pay a 33% tax rate.

Issue 2 Passes
May 12, 2010

The site of the Columbus casino is moving to the West Side after voters overwhelmingly passed Issue 2 in the May primary.

Summit County Passes Gaming Legislation
May 12, 2010

As expected, Council passed legislation intended to provide greater oversight of Internet cafes and sweepstakes parlors in the county’s nine townships. The legislation will require each business to pay a $1,000 annual fee, as well as a $200 fee per machine, to be paid every six months. Businesses will also have to disclose ownership and prove compliance with Ohio’s gambling laws with a certificate or report from “an authorized independent testing laboratory”.

Other key components of the legislation:

Hours are restricted to 1:00 p.m. to midnight on Sunday and 10:00 a.m. to midnight Monday through Saturday;
No business may open within 500 feet of a school, public library, public playground, or any establishment with a liquor permit;
No one under the age of 18 will be permitted to enter the premises;
Businesses will be required to provide names and addresses of all owners and employees;
Licenses will not be issued if someone involved with the business has been convicted of a gambling “or other crime of moral turpitude within five years preceding the application”.
Law enforcement may enter an establishment without first establishing probable cause of a crime and obtaining a search warrant. Don Malarcik, an Akron attorney, has stated he will file suit sometime in the next 30 days, before the new law takes effect.

Ohio Supreme Court okays probe into LetOhioVote.org
May 3, 2010

In a unanimous decision, the Ohio Supreme Court has stated that Secretary of State Jennifer Brunner may proceed in her attempt to identify donors of LetOhioVote.org, the group leading the charge to have slot machines at horse-racing tracks put to a vote. The Court stated Brunner’s issuing of subpoenas was not a judicial proceeding. Therefore, she did not overstep her authority. However, the Court also indicated that LetOhioVote.org could still take their case to common pleas court.

In other casino news:

Columbus will annex the potential casino site. This would be subject to passage of Issue 2 on May 4, which would move the site of the Columbus casino from the Arena District to a former Delphi plant on the City’s West Side. Columbus would also give Franklin Township $67 million over the next 50 years. The money would be spread out over much of the West Side, regardless of whether the property was in the city or township. In addition, Columbus would annex no township land over the same 50 year period. Businesses in the township would be permitted to impose a 2.5% income tax, subject to approval by property owners. Funds generated would be used primarily on economic development of the area.

It appears Cleveland, where casino support was the strongest, will be the last city to get a casino. The hang-up: securing the land. Originally scheduled to open late-2011 or early-2012, Dan Gilbert now states that date is most likely mid-2013.

And finally Summit County Council is seeking a 6 month moratorium to keep Internet cafes and storefront sweepstakes from opening in any of the county’s townships while they contemplate legislation to regulate these businesses. Proposed legislation mirrors that of Akron. Such businesses would be required to purchase an annual license and pay a fee on each machine. Council member Paula Prentice hopes some sort of legislation can be approved in the next month.

No All Night Drinking?
April 12, 2010

Democrats plan to introduce ground rules for Ohio’s four new casinos. Some proposals include not allowing casinos to serve liquor 24 hours a day or to give free alcoholic drinks to players. According to Rep. Todd Beck, surrounding states have similar rules.

Things are heating up in Summit County with regard to unregulated storefront gambling parlors. Due to recent licensing requirements in the cities and villages, Internet cafes, sweepstakes cafes and skill arcades have begun scurrying to the townships, where no such regulation exists. Individuals packed council chambers last week expressed their feelings, pro and con. While stating that some form of regulation is coming, Summit County Council has agreed to study and not rush legislation that would regulate such establishments.

VLT Issue Certified for November Ballot
April 5, 2010

Secretary of State Jennifer Brunner’s office has certified petitions filed by LetOhioVote.org to include a referendum on a new law that would authorize installation of video lottery terminals (VLTs) at seven Ohio horse racetracks. VLTs were originally authorized by the General Assembly as part of the state budget at the request of Governor Ted Strickland. The issue will appear on the November 2, 2010, ballot.

Another Vote
March 30, 2010

Voters will decide this November on the issue of video slots at horse racing tracks. Secretary of State Jennifer Brunner ruled that LetOhioVote.org submitted enough valid signatures to get the issue on the ballot.

Brunner continues to spar with LetOhioVote.org over its contributors. The Ohio Supreme Court’s latest ruling granted a protective order to New Models and LetOhioVote.org to stop depositions Brunner was attempting to take. New Models has also asked the Court to sanction Brunner and Attorney General Richard Cordray’s office. The justices will consider that at a later time.

Penn National Purchases Beulah Park Race Track
March 17, 2010

Penn National has reached an agreement to purchase Beulah Park. While Beulah will currently operate “status quo”, Penn National has made it clear that the future must include some other type of gambling to supplement the horse racing. Voters will decide in November on video slots. What has not been addressed is what happens to Beulah should video slots be voted down.

House Committee Looks At Expanding VLT Legislation
March 15, 2010

The House State & Local Government Committee heard testimony this week from several hospitality groups seeking inclusion in a measure that would allow video lottery terminals at Ohio’s ailing racetracks. Representatives from the Ohio Hospitality Coalition are requesting that the committee expand the bill to allow for VLTs at bowling allies and off-track betting sites.

The primary co-sponsors of House Bill 250 are meeting with interested parties in order to hammer out potential amendments that address tax rates and upfront licensing fees. The bill was introduced prior to the passage of State Issue 3, which authorized four casinos to pay a much lower tax rate than the 50% currently in the bill. Committee Chairman Representative Ronald Gerberry (D-Austintown) is supportive of the measure, but said that he doesn’t plan to continue hearings if it lacks the support needed to clear committee.

Who is against slot machines at the racetrack?
February 24, 2010

That’s what Ohio Secretary of State Jennifer Brunner wants to know. As part of an investigation launched against LetOhioVote.org, Brunner has subpoenaed the principals of LetOhioVote.org and New Models.

LetOhioVote.org supports a ballot measure to prevent horse racing tracks from getting slot machines. New Models, a Virginia based corporation, is listed as the sole source of its funding. Brunner says that voters have a right to know who is behind the proposed ballot issue.

New Models is not without controversy. During the 2008 presidential campaign, they were behind automated calls to Pennsylvania voters accusing Barack Obama’s aunt of being in the country illegally and that Obama was accepting campaign contributions from her. New Models also raised money for Ken Blackwell during his 2006 gubernatorial campaign.

Alternate Site Selected
February 10, 2010

Voters will decide on alternate site for the Columbus casino. The first hurdle towards moving the casino site from the Arena District to the former Delphi Plant was cleared when the Ohio House voted to place the issue on the May 4 ballot. An attempt to include an amendment that would allow voters to vote on opening a casino in Youngstown was defeated.

A move to put video lottery terminals at Ohio’s horse racing tracks suffered a setback. Petitioners failed to obtain the required 241,366 valid signatures. Organizers will now have 10 days to gather the remaining 27,065 signatures required.

Ding, Ding, Ding!
February 10, 2010

Penn National has agreed to the former Delphi Plant on Columbus' economically depressed west side as an alternate site for their casino that was originally approved for the Arena District in last November's elections.

There are still obstacles to overcome. A three fifths vote by the Ohio House and Senate is needed to get this issue on the May ballot. Legislators face a February 3 deadline to get the necessary votes. Then voters statewide must approving amending the constitution a second time to replace the Arena District site with this new location. The new site must then be annexed from Franklin Township because both Penn National and the City of Columbus want a casino within city limits. The new location also requires environmental cleanup as a former industrial site.

Meanwhile, Penn National will develop both sites until a definitive location has been determined. Officials want the casino up and running sometime in 2012.

Where to Put a Casino
January 11, 2010

The focus in Franklin County has now shifted to the location of the casino approved by Ohio voters last November. Penn National has agreed to consider alternative locations outside the Arena District. City officials offered four alternate sites: Westland Mall, the former Delphi plant, Cooper Stadium and unspecified areas around Polaris Fashion Place.

The Constitution would need to be amended to name a different site. To get on the May 4 ballot, the legislature would have to act before February 3.