Fighting over $$$ with Penn National, Hollywood Gaming

Austintown officials lobby for $500,000 racino payment

Posted: Mar 24, 2015 11:25 PM EDTUpdated: Mar 24, 2015 11:37 PM EDT

COLUMBUS, Ohio - Leaders from Austintown and five other Ohio communities traveled to Columbus on Tuesday to lobby for money they believe is owed to them by the companies that operate racinos in their localities.

State Senator Joe Schiavoni says that when plans for Hollywood Gaming at Mahoning Valley Race Course were still in the talking stages, it was decided that the governor's office, the racino operators and the racing commission would work out a plan to make payments to cover the additional costs of police and fire protection needed by the communities.

The agreement was never worked out.

Earlier this year Governor Kasich vetoed legislation that would have given each of those communities $500,000. Kasich says the bill would have put the state in the position of making those payments instead of the gaming companies.

Schiavoni arranged Tuesday's meeting between township officials and a representative of the governor.

He says local officials are being flexible trying to attain a resolution.

“They're willing to negotiate the amount and the time frame. They just want some of the money they were promised both in writing and verbally in one way or another since the inception of the racinos,” said Schiavoni.

Penn National has pointed out in the past that it has already spent $150 million to relocate racetracks in Ohio.




http://www.wfmj.com/story/28607094/austintown-officials-lobby-for-500000-racino-payment



 

Ohio Defunding Host Communities

The article at the bottom goes far beyond PREDATORY GAMBLING, IMPACTS and the costs to HOST COMMUNITIES.

This defines the Failed Fiscal Policies.....

How Ohio Pulled $4 Billion+ from Communities and Redistributed It Upwards

Ohio: Poster Child for Mindless Global Self-Destruction

Toxin leaves 500,000 in northwest Ohio without drinking water

 

Racino communities looking to governor for payment plan



When the governor vetoed a legislative proposal to provide $500,000 each to Austintown and Dayton for hosting racinos, we thought he would lay out his ideas for the payments in the executive biennium budget he submitted to the Ohio General Assembly earlier this month.

But much to our surprise, Gov. John Kasich’s budget makes no mention of the racino communities.

Thus, we, along with Austintown Township officials, state Rep. Ronald Gerberry of Austintown, D-59th, and Senate Minority Leader Joe Schiavoni of Boardman, D-33rd, wonder if the governor has had a change of heart, or if there’s a hitch.

Last December, Kasich vetoed an amendment that would have required Penn National Gaming to pay $250,000 to each community, with the other $250,000 coming from the $150 million Penn National will be paying into a special fund over the next 10 years.

The governor contended that Penn National should be responsible for the entire amount, and then he went a step further: He said that four other communities that host racinos, North Randall, Northfield, Lebanon and Cincinnati, must also receive annual payments from the owners of the gaming facilities.

Excluded from his plan is Franklin County, which is home to Scioto Downs Racino. Hollywood Casino Columbus already is paying the county government.

In addition to Penn National, other gaming companies operating in Ohio are Rock Ohio Caesars, MTR Gaming, Hard Rock International, Miami Valley Gaming and Pinnacle Entertainment.

We praised the governor for coming up with a fair solution, but Gerberry issued a warning at the time that may be coming to pass.

Here’s what the veteran legislator said in the wake of Kasich’s action:



“I’m just hopeful that the persuasion of the governor’s office is very strong in 2015 on the majority party of the Senate.

The reason that this is not getting done is that there are some folks in the majority that believe that the host racino communities shouldn’t be paid $500,000 a year, and they’ve been able to stop it.

That’s unfortunate.”

We were skeptical about Gerberry’s claim that some senators do not believe racino host communities should be paid, but recent developments have given us pause.

ReluctanceFor instance, Gerberry and Schiavoni have been trying to get leaders from the four communities the governor added to the list to publicly support Kasich’s payment proposal, but their unwillingness to take a stand does raise questions.

After all, it’s their constituents who stand to benefit.“I think there should be at least 10 to 15 state reps crying over here saying, ‘Why haven’t these communities gotten their money?’

I don’t know why there isn’t more of a push from every racino community ... Don’t you think you would have gotten involved? Actively involved?”

We certainly would think so.In the end, however, it’s up to Gov. Kasich to press the GOP leaders in the House and Senate to take up the issue.

After all, he said no to the original proposal that would have resulted in Austintown and Dayton being paid by now.

The two communities have already budgeted for the $500,000, which is not a handout.

While the seven racinos in Ohio — there also are four Vegas-style casinos in Cleveland, Columbus, Cincinnati and Toledo — have spurred economic growth, they also forced governments to spend more on police and fire protection and road maintenance.


 - See more at: http://www.vindy.com/news/2015/feb/21/racino-communities-looking-to-governor-f/#sthash.ewD4jH8J.dpuf

Ohio: Spectrum Grossly Overstates Projections...Again

Ohio's gambling jackpot lower than predicted

Alexander Coolidge, The Cincinnati Enquirer 2:40 p.m. EDT June 5, 2013

 

It's early, but casinos are seeing less betting, racinos plan fewer slot machines and governments get less revenue.

 

CINCINNATI — One year after it started, expanded gambling in Ohio is off to a slower start than expected, leading to potentially smaller payouts for the state's cities, counties and schools.

 

The state could fall $260 million to $360 million short on annual gambling revenue, an Enquirer analysis of results from all 11 Ohio gambling venues shows.

Why the shortfall? In large part it's because racinos, racetracks with associated casinos, were projected to install more video slot machines — and that overestimated demand for gambling in the Columbus market.

It's too soon to say whether the Horseshoe Cincinnati Casino, the last of four to open in the state, will add to or stem the statewide shortfall. The Enquirer analysis shows the casino to be outperforming original expectations here if its initial performance is projected through a full year. But revenues have dropped from the venue's inaugural month in March.

Together, the four casinos in Cincinnati, Cleveland, Columbus and Toledo are on pace to generate $950 million in gambling revenue a year, the analysis shows. That's compared with $1.1 billion forecast in a study commissioned by Ohio Gov. John Kasich's office in 2011.

If the pace continues, the casinos will deliver $315 million in taxes rather than the $375 million originally projected.

Meanwhile, racinos are setting Ohio up for further disappointment: The governor's study projected the state's seven racetracks would generate $1.2 billion in annual gambling revenue — with the state keeping $391 million — from play at 2,500 video slot machines each.

But most of the tracks are opening with 1,000 to 1,600 video lottery terminals. Gambling experts say fewer slots likely will mean less gambling revenue, which would produce less money for Ohio schools, the sole beneficiary of racino gambling because the Ohio Lottery administers it. Analysts see those plans as a sign that developers expect fewer slot players.

"Racinos are either playing it safe or they don't think Ohio's as large a market as initially thought," said Mark Nichols, an economist at the University of Nevada, Reno. "That means fewer tax dollars."

People flood the gaming floor of the Horseshoe Casino Cincinnati on opening night, March 4, 2013.(Photo: Amanda Davidson, The Cincinnati Enquirer)
 

Under those calculations, Ohio would receive $450 million to $550 million total from gambling based on effective tax rates of 33% to 33.5%, which are about in the middle among states with gambling.

Last year neighboring Pennsylvania, which has about 1.2 million more residents than Ohio, received almost $1.5 billion from gambling on $3.2 billion in revenue, according to the American Gaming Association's annual report, State of the States. Pennsylvania opened its first casinos in 2007 and now has 11 total freestanding and racetrack casinos. It taxes slot machines at 55%, among the highest rates across the USA, and 16% for table games.

Ohio, with four land-based and racetrack casinos at the end of 2012, received $138.2 million on $429.8 million in gross gambling revenue, the report said.

In part because of the effects of Hurricane Sandy on New Jersey tourism, Pennsylvania casinos became the second highest grossing behind Nevada, according to the report. Pennsylvania's gambling operations also generated the most revenue for the state, besting even Nevada because of its higher tax rates.

Ohio now has four freestanding casinos, two racinos and two on the way this year. Three more racinos are expected to open in 2014.

Columbus casino underperforms

Three casinos are doing less business than projected in 2011 with Hollywood Casino Columbus as the biggest underperformer. In 2011, Spectrum Gaming Group of Atlantic City, N.J., forecast for the governor that the Columbus casino would be the largest in the state, generating $381.7 million in gambling revenue a year.

Since opening in October, Hollywood Casino Columbus has generated $132 million and is on track to bring in $236.6 million after one year. Officials with Penn National Gaming, which owns all Hollywood casinos, said they're satisfied with both of their casinos in Columbus and Toledo.

Toledo was forecast for $235 million in revenue; it likely will pull in $197 million.

"We're very happy with the performance of both our properties," spokesman Bob Tenenbaum said.

He declined to discuss Spectrum's study.

Horseshoe Casino Cleveland also looks as if it will fall short of first-year gambling revenue projections of $279.6 million.

Officials with Caesars Entertainment, which runs both Horseshoes, said they are not alarmed. Instead, they are focused on longer-range goals of growing the casinos into destinations that each will generate $300 million in revenue a year.

"City casinos take longer to ramp up than suburban casinos," said John Payne, president of Caesars' central U.S. markets that includes 20 casinos.

Racetrack casinos put in fewer slots

Meanwhile, racino developers are pulling their punches on installing one-armed bandits, installing a third fewer video lottery terminals than envisioned in the state's forecast.

All were authorized and forecast to install 2,500 machines each, but none has indicated it will do so.
ThistleDown in suburban Cleveland opened in April with fewer than 1,100 slot machines. Scioto Downs in Columbus, which opened in June 2012, has 2,100. Most racino developers are saying they want to open with 1,600 or fewer slots.

The Spectrum study envisioned 29,120 gaming positions — chairs in front of slot machines or at gambling tables at casinos and racinos — but operators are on track to create 20,000.

Steve Gallaway, principal of Denver-based Gaming Market Advisors, said racino developers are hedging their bets. They don't think the market can absorb all the slot machines allowed, so they're putting fewer in.

"For Ohio, that means less tax revenue until the economy improves," he said. "The market is still just as viable, just not today. Once the economy strengthens, making the demand there, Ohio will see those machines" after a three- or four-year delay.

Governments cautious on revenue

The effect of gambling tax revenue will be felt throughout Ohio, especially once the casinos have had a few years experience and all seven racinos are up and running.

Municipal, county and school officials say they have been cautious about projections.
Cincinnati now is counting on about $10 million in casino tax revenues annually, compared to estimates that anticipated $20 million a year.

The city's casino money is not assigned to cover any specific expense although the city manager's office has identified it as a potential source of up to $3 million in annual money for a streetcar project starting in fiscal year 2015-16.


For the next fiscal year, the city is counting on $9.1 million to flow into the general fund, including $1.6 million the city is carrying over from this year that it hasn't spent.

"The city's been conservative about casino projections," city spokeswoman Meg Olberding said. "We need to give it a full year before we know precisely how much revenue we can count on."

Hamilton County Commissioner Greg Hartmann said the county wants to use $6 million to $8 million in anticipated casino tax revenues to help it shore up its $38.6 million stadium fund. Those numbers are based on low-ball estimates.

Cincinnati-area school officials say they're not sure what implications less gambling money might have. The Ohio Lottery Commission keeps 33.5% of all gambling revenue from racetrack video lottery terminals, and the money goes to the Ohio Department of Education.

Jenni Logan, treasurer for the Lakota School District, said lottery money is part of the state financing that makes up 40% of her $150 million budget.

"It's part of the money the state gives to school districts," she said.

Competing ideas, then flood of options

Ohio's flood of gambling options started four years ago with different groups that never envisioned competing with one another.

After nearly two decades of courtship by gambling companies, Ohio voters legalized casino gambling in 2009 through a constitutional amendment. Developers Rock Gaming and Penn National Gaming won the vote with promises to create thousands of jobs and generate $650 millionin tax money for 88 counties, more than 600 school districts and four host cities.

The numbers behind the casino plan were based on generating $2 billion in gambling revenue and did not anticipate racino gambling.
 

^“Racinos are either playing it safe or they don't think Ohio's as large a market as initially thought.^”

— Mark Nichols, University of Nevada, Reno

 

But Ohio lawmakers' own bid to generate gambling tax dollars from the state's seven racetracks were threatening casino developers' promises even before the ballot initiative passed.

The same year as the amendment plan, legislators hatched a plan to raise $933 million in taxes and fees over two years by legalizing what they predicted would be a $1 billion-a-year business of installing video slots at racetracks. Like the casino plan, racino legislation didn't envision competition from casinos.

Matt Schuller, now executive director of the Ohio Casino Control Commission, said conventional wisdom in the legislature in summer 2009 was the casino amendment would fail. At the time, Schuller was chief of staff to Ohio Senate President Tom Niehaus.

"The conventional wisdom was that people in Ohio hated gambling," he said.

Then-Gov. Ted Strickland signed the budget plan that authorized slots at racetracks. The plan immediately became mired in litigation, and opponents won the right to put a repeal initiative on the Ohio ballot.

The racino plan laid unresolved but dormant as Strickland campaigned against Kasich and the court battles dragged on.

Meanwhile, Rock Gaming that tapped operating partner Caesars Entertainment Corp. and quietly tweaked its gambling revenue projections, forecasting each would generate $300 million in gambling revenue. Penn National Gaming later also updated the revenue forecast for Toledo: $195 million.
Then in mid 2011, Kasich announced his plan to authorize video slots at racetracks. His study envisioned a $1.2 billion racino industry controlled by seven racetracks operating 2,500 slots apiece that would co-exist with a scaled-down $1.1 billion casino industry.


http://www.usatoday.com/story/money/business/2013/06/05/ohio-gambling-revenues/2392697/

 

 

Ohio: Revenues about half of what officials had predicted

Revenue projections in Massachusetts are overstated.

Why would we believe we are different?

Bill Kearney

Massachusetts ‘Gaming’ Future

Promises, promises - http://www.youtube.com/watch?v=DpKAnp5Klzw&noredirect=1





ASSOCIATED PRESS - February 5, 2013 - Ohio casino revenue may be less than projected

 CLEVELAND -- Gov. John Kasich's budget proposal suggests that revenue from Ohio's four voter-approved casinos could be about half of what officials had predicted years ago.

The Cleveland Plain Dealer reports that state officials estimated four years ago that the casinos could take in as much as $1.9 billion a year after all were in operation.

But Kasich's budget proposal issued today projects that gross casino revenue will be $957.7 million for the fiscal year beginning July 1. It could increase to just over $1 billion in the following fiscal year.

The figure is significant because smaller revenues mean fewer tax dollars for the state.

Officials say the lower estimate takes into account competition from racinos and lower-than-expected revenues

http://www.goerie.com/apps/pbcs.dll/article?AID=2013302059920See More


 

So much for those promises!

School officials say casino revenue is of little help to cash-strapped districts
FPS staff report
January 22, 2013

Ohio public school leaders say the casino tax revenue districts are set to receive by Jan. 31 is a drop in the bucket compared to major school-funding reductions in recent years.

A survey conducted by three statewide education groups representing Ohio public schools puts the casino proceeds for schools in perspective.

The Ohio School Boards Association (OSBA), the Buckeye Association of School Administrators (BASA) and the Ohio Association of School Business Officials (OASBO) said today they want to make sure the public understands exactly what the casino revenue will mean for schools.

“We have seen reports from across the state about this supposed revenue windfall from the casinos that will be going to school districts at the end of the month,” said OSBA Executive Director Richard Lewis. “While we are appreciative of the $38 million that will be distributed to school districts statewide, we caution that it be kept in perspective. We fear the public will see these funds as the Ohio Lottery all over again — a solution to our school-funding problems.”

“The level of casino revenue funding for this first fiscal year is considerably less than the losses school districts have experienced in the current education budget,” said Kirk Hamilton, BASA executive director. “Ohio school districts have lost significant funding with the elimination of federal stimulus funds and the reduction in replacement funds for local tangible personal property taxes no longer collected. Total education funding for Ohio schools was reduced by $1.6 billion over the past two years in spite of slight increases in allocations from Ohio’s General Revenue Fund.”

OASBO Executive Director David Varda pointed to a survey the groups recently conducted to find out how school districts are affected by the casino revenues, especially in light of recent funding losses.

More than 345 school district treasurers/CFOs responded to the survey. “When asked what percentage of their district operating budgets the casino revenues would represent, no one reported more than 2%,” Varda said. “More than 76% of respondents reported the casino revenues make up less than 1% of their school district’s operating budget.”

The survey also showed that approximately half of the districts responding lost more than $500,000 in each of the past two years. Many districts reported losses as much as $1 million to $2.5 million.

“When you divide $38 million among all school districts statewide, the casino revenues should not be assumed to make up for the losses they’ve just experienced,” Varda said. “This new revenue stream for schools is not a solution to school funding.” Carrollton schools are scheduled to receive $48,995.73, which Treasurer Roxanne Mazur said accounts for less than one percent of the district’s annual budget. She said the district is projected to lose $280,000 in revenue this year.

Brown Local schools are slated to receive $14,665.25 and lose about $120,000 in funding.

Minerva Local School are to receive $41,169.05, Conotton Valley, $10,295.34; Southern Local, $18,160.34, Edison, $38,217.60 and Buckeye Career Center, $27,456.01.

State officials said this is the only distribution that will be made to schools in 2013. Beginning in 2014, there will be two distributions per year.

The groups that conducted the survey noted the voter-approved casino amendment language that set up the distribution payments for schools, states, “… distributions to school districts and local governments, under this amendment, are intended to supplement, not supplant, any funding obligations of the state.”

Governor John Kasich is scheduled to release his new proposal for school funding in the next few weeks and the legislature is working on the new state budget.

http://www.freepressstandard.com/News/02012413.htm

Ohio: A Lesson

Voter approval of a Gambling Industry crafted referendum [after flooding Ohio with $$$$] produced predictable consequences, not all fully realized.

Interesting to watch!


Ohio's casino consultants rake in the chips: editorial
By The Plain Dealer Editorial Board The Plain Dealer

The Columbus Dispatch took a closer look at what gambling consultants charge the Ohio Casino Control Commission. Short answer: Top dollar, though the money comes from casino fees, not state taxes.

Spectrum Gaming Group, a New Jersey outfit, charged Ohio more than $1.5 million last year, about $85,000 of that for travel; some hourly fees reached $375. The newspaper also noted that Los Angeles investment bank Moelis & Co. may collect $15 million for helping Gov. John Kasich's administration dicker with casinos to fatten the state's cut of casino profits.

These fees qualify as wretched excess. But, as the Dispatch also reported, Spectrum was the casino commission's de facto staff during political bickering that stalled the commission's appointment. Ideally, as commission Executive Director Matthew T. Schuler told the Dispatch, Spectrum may "work [itself] right out of a job" as the four casinos win licenses and the commission builds out its staff.

There's a sorry Statehouse context here. As to Moelis' work, then-Gov. Ted Strickland failed in 2009 to offer Ohioans a taxpayer-friendlier alternative to the (casino-written) ballot issue.

Then, an equally irresponsible General Assembly practically invited firms such as Spectrum to Ohio to cash in. The GOP-run Senate and the Democrat-run House dawdled for 22 weeks after the 2009 referendum vote before they created the casino commission -- and that law didn't take effect until September 2010. Then Strickland waited another month to pick commissioners. His appointees were capable, but Republican Kasich unseated Democrat Strickland. Then, predictably, GOP senators, just before Christmas 2010, vetoed Strickland's commissioners. Finally, last February, almost 15 months after voters said they were OK with casinos, Kasich named today's commission.

Given that chronology, the wonder, arguably, isn't how costly the consultants are -- and they are too costly -- but that they aren't even costlier.

Gambling lawsuit filed

Gambling lawsuit filed
Ohio Roundtable takes Governor Kasich to court.

(Cleveland) - An anti-gambling group has filed a lawsuit in an effort to stall the expansion of gaming in Ohio.

The Ohio Roundtable, a division of the American Policy Roundtable is suing Gov. John Kasich in Franklin County Court, seeking to stop the placement of slot machines at state racetracks, the expansion of Ohio's Lottery and the forgiving of casino owners' tax debt.

The A.P. Roundtable's David Zanotti claims all of those actions require constitutional amendments. Zanotti says Kasich has taken short cuts and negotiated backroom deals to skirt Ohio's Constitution.

He says casino laws and guidelines were set when Ohio voters approved State Issue 3 in 2009, and they can’t be changed without another vote.

Kasich spokesman Rob Nichols says the Governor does not comment on pending litigation. He contends Ohioans have repeatedly supported various types of gambling over the past century.

The Roundtable expects that the suit will eventually land before Ohio's Supreme Court.



On Suing A Governor -- Again
By Mr. David Zanotti

"You can't fight City Hall." That's what we heard growing up, right? Good news is Sam Adams and his friends never believed that slogan. Today the Ohio Roundtable, led by Rob Walgate and Melanie Elsey sued Ohio Governor John Kasich in Franklin County Court. The Governor has participated in an illegal scheme to expand gambling in Ohio on mulitiple levels in total disregard to the principles of Constitutional government.

Its a big case with lots of claims but the essence is this: Ohioans have been quite intentional since 1850 regarding the regulation of gambling and lotteries. They have made a few careful exceptions through Consitutional amendments passed by the voters. The Kasich Administration has trashed those amendments in a series of clever back room deals with casino operators and racetrack owners. The Republican controlled Legislature looked the other way and passed legislaton including the provisions of the back room deals.

Now we will find out what the Courts in Ohio think about the Governor trashing the rule of law.

By the way, John Kasich is a Republican and commentator on FOX News. Something to think about.