The Magazine

Keeping Up with the Hoosiers

Ohio comes down with a case of casino envy.

Nov 2, 2009, Vol. 15, No. 07 • By DAVID WOLFFORD
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Ohio voters have defeated four gambling proposals in two decades and recently saw their governor jam a slot machine provision into the state budget. Now, facing a casino issue on November's ballot, they feel as though they're being pressed into a game of three-card monte.

Governor Ted Strickland--a Democrat, a psychologist, and an ordained Methodist minister--has a record of opposing gambling on moral grounds. He has called it "an insidious condition that can ruin lives." In June he declared, "I do not believe that this is the right way for Ohio to deal with our budget or to try and fund education."

Then Strickland suddenly called for the Lottery Commission to install slot machines at Ohio's seven horse tracks. The hope was to bring $933 million into the treasury. After struggling to persuade the legislature and threatening a go-it-alone executive order, the governor worked language into his 2009 budget request to accomplish this end.

Before the state could install the one-armed bandits (actually, video lottery terminals or VLTs), a group of conservatives formed LetOhioVote to stop Strickland. The group is not opposed to gambling per se, says founding member Gene Pierce, "We're just saying people have the right to vote on it." Pierce and two other plaintiffs filed suit against the state.

On September 21, the Ohio Supreme Court ruled 6-1 in their favor, temporarily stopping the governor. The ruling will delay LetOhioVote's ballot measure until November 2010. Strickland's Plan B: rescind scheduled tax cuts.

The governor's about-face, his stretching of executive authority, and his delaying of a tax cut have not helped his image. The Columbus Dispatch called his administration "one of the most dysfunctional in Ohio history." Franklin County GOP chairman Doug Preisse remains puzzled: "He crusaded against gambling in the past. When it's expedient for his budget, we see him flip flopping." Strickland's job approval has dropped from 63 percent to 48 percent.

While Strickland, LetOhioVote, and the supreme court were working through the matter of the VLTs, casino operators prepared to roll the dice with voters for the fifth time. Issue 3, if passed this November, will entitle two casino operators--Penn National Gaming and Cleveland Cavaliers owner Dan Gilbert--to open four casinos in Cleveland, Columbus, Cincinnati, and Toledo and enshrine their monopoly in the state constitution. If successful, the proposal will also impose a one-time licensing fee of $50 million per casino, create a fixed 33 percent tax on gross casino revenues, and distribute those revenues to local governments, public schools, regulatory agencies, law enforcement, and remediation for gambling addiction.

Proponents promise a windfall in taxes and economic stimulus. The casinos' PAC, the Ohio Jobs and Growth Committee, commissioned a University of Cincinnati study that estimated the scheme would produce 19,000 construction jobs and 15,000 permanent casino positions, with an average annual salary of $26,300. Charlie Luken, who chairs the PAC, is a former mayor of Cincinnati. "As mayor," he said, "I was always an advocate to bring casinos. I'd see money going from our area to Indiana, just 30 minutes from the mayor's office." Three other states bordering Ohio--Michigan, Pennsylvania, and West Virginia--also offer some form of casino gambling. And even the fifth neighbor, Kentucky, has tried to add slots at its sacred race tracks. Pro-Issue 3 commercials show Buckeye gamblers departing on tour buses to cross state lines.

Penn National Gaming, Gilbert, and their allies also suggest new casinos will increase sales at nearby restaurants, bars, and hotels. Skeptics acknowledge that the big new employers will create temporary construction and long-term casino jobs, but they question the ripple effect. You can bet the proposed facilities will resemble typical casinos: no clocks, no windows, climate controls set for comfort, bargain buffets, and cocktail waitresses serving complimentary drinks. This is not a scheme for sending gamblers across town to spend elsewhere. Issue 3 would even bar local governments from preventing casinos from staying open 24 hours.

Many question the economic forecasts. "This proposal looks like an economic lifeboat, but it is a sinking Titanic," says Democratic state representative Tyrone Yates. Several Democratic officials have endorsed Issue 3; Yates notes that pressure to fund local programs in a time of economic crisis makes gambling an easier sell.