Making the News

Enquirer-Community Press, Cincinnati

Originally Published:Wednesday, November 4, 2009

Work on casino design, rules to start quickly
No temporary casinos likely before 2012 openings

By Alexander Coolidge
Enquirer-Community Press, Cincinnati

With Ohio voters approving four casinos across the state - including one in downtown Cincinnati - lawmakers now have six months to enact regulations that will govern how they are run.

Ohio becomes the 13th state to permit full-blown casinos after voters were promised 34,000 new jobs amid recession and more than $650 million in annual tax revenue. Neither of those promises can happen until regulations are hammered out and licenses issued to casino operators.



Still, developers say they will begin the design work on the casinos so they'll be ready to build when they get their licenses.

Detroit entrepreneur Dan Gilbert, who owns online mortgage lender Quicken Loans and the Cleveland Cavaliers, envisions a 300,000-square foot casino on Broadway Commons on the northeast edge of downtown.

"We'll immediately begin pre-construction development work and drawing up architectural plans," said Gilbert spokeswoman Jennifer Kulczycki on Tuesday.

Cincinnati officials say Gilbert's plans won't require a zoning change, but will be reviewed by planners to make sure they comply with building and other codes. Gilbert has voluntarily agreed to subject his plan to the Urban Design Review Board, which reviews plans for high-profile downtown projects to ensure they fit the city's

Gilbert's casino will be authorized to operate up to 5,000 slot machines in a space one and a half times the size of a typical Wal-Mart Supercenter.

Gilbert will also own the Cleveland casino. He plans to hire a professional casino operator to run both and plans to sell minority stakes in each casino. Wyomissing, Penn.-based Penn National Gaming - the parent company of Hollywood Casino Lawrenceburg - will own and operate the Columbus and Toledo casinos.

Developers behind the casino initiative say it will take about six months to get their licenses and another 18 to 22 months to construct the casinos that would open sometime in 2012. They don't plan to open temporary gambling facilities before then.

Some gambling opponents were mulling Tuesday whether to seek another referendum to amend the casino proposal.

State Rep. Louis Blessing, a Republican from Colerain Township, said he was considering a new amendment that would increase the tax rate from 33 percent.

Blessing said he's considering a bill that would pave the way for a May referendum to boost the tax rate to 50 percent and open the four casinos to a competitive bidding process. He said the state could "easily" get $200 million to $300 million per license. He also said his amendment would clarify ambiguities in November ballot measure, such as taxing cash wagering, requiring background checks and expliciting permiting casino-type gambling by church groups and other non-profits.

Blessing stressed such a measure wouldn't nix the casinos, but improve terms for Ohio and clarify some legal issues.

"The people voted for casinos - I intend to follow their wishes," he said.

To get it on the May ballot, Blessing would need the vote of three-fifths of members from both the Ohio House of Representatives and Senate. He acknowledged cobbling together enough votes to win another ballot measure could be difficult and said he'd drop the effort if he couldn't drum up enough legislative support.

Bob Tenenbaum, a spokesman for the pro-casino group Ohio Jobs and Growth Committee, said Ohio lawmakers can clarify legal ambiguities as part of the rulemaking process over the next six months. But he said tinkering with the tax rate and trying to shoehorn a bidding process would fly in the face of what Ohioans voted for at the polls Tuesday.

"You're talking about attacking the entire issue just approved by voters," he said.

First Tax Revenue Arrives With First Bets

Barring such a successful challenge, the state will get its first influx of casino cash once it begins issuing licenses for a one-time fee of $50 million each. But those checks won't get cut until there are rules in place. Tax revenues from ongoing operations won't arrive until the casinos start accepting their first bets in 2012.

Leaders of the Ohio Senate and House of Representatives will review the ballot measure. Then one or more bills will be proposed on how to implement the referendum. Legislative leaders will assign those bills to be reviewed, debated and amended by a yet-to-be determined single committee in each chamber.

"The legislation has to be well thought out and has to give authority to (the newly-created) casino control commission," said Fredric Gushin, a managing partner of consulting firm Spectrum Gaming Group in Atlantic City.

There is much policy to be figured out in the next six months: The referendum that was approved by voters on Tuesday created a casino control commission to regulate casinos - but gives it no specific powers. The measure gives the General Assembly six months to pass laws that flesh out regulatory policy to be carried out by the new panel.

Gushin said Ohio lawmakers need to decide a host of issues: how many state inspectors will be on site during casinos 24-hour operations; spelling out how "loose" slots will be; what the process will be vetting owners, operators and vendors; how money will be transferred within the casinos; and how problem gamblers can get themselves voluntarily barred from the facilities.

A former assistant attorney general of New Jersey's Division of Gaming Enforcement, Gushin's firm now provides consulting services to clients such as West Virginia and Delaware on implementing new regulations broadening gambling from video terminals to table games.

As lawmakers decide Ohio regulations, the casino control commission also created by the referendum will appointed by Gov. Ted Strickland who vehemently opposed the casinos. The Senate will confirm his choices.

In a statement, Gov. Strickland said he was "personally disappointed" at the passage of Issue 3, but would give the referendum a chance to succeed.

"The voters have spoken and state leaders and legislators must now implement the constitutional amendment while making sure it benefits the people of this state and puts more Ohioans to work," he said.

The amendment dictates that the commission have at least one lawyer, one accountant, one person with a law enforcement background and one resident from one of the four host counties: Hamilton, Franklin, Cuyahoga, Franklin or Lucas. No more than four members can be from the same political party.

Ohio voters will likely vote next year on still more gambling. Strickland's stalled bid to permit video slot machines at Ohio's seven racetracks - including River Downs in Anderson Township and Lebanon Raceway - is subject to potential referendum in 2010.

Ohio's Supreme Court granted anti-gambling group the right to put Strickland's plan - which was passed into law by the legislature - onto next year's ballot if it could collect about 245,000 signatures by Dec. 18.

"We were very active today collecting signatures at the polls," said Carlo LoParo, a spokesman for the group, on Tuesday. He added the group will submit between 500,000 to 600,000 signatures to ensure the measure goes on the ballot.

Analysts have expressed doubts over the racetracks plan's viability if casinos are set to be built. They note the casinos will be subject to a lower tax rate and offer more than just slot machines, which will make them more profitable and competitive.








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