The past year has been action-packed for the fledgling gambling industry in Ohio.
Casinos and racinos have been rolling out faster than dice at a craps table.
“We’ve been drinking from a firehose,” Matthew Schuler, executive director of the Ohio Casino Control Commission, said as he described how his regulatory agency felt about overseeing the opening of four casinos within 11 months.
The state’s first commercial casino, Horseshoe Casino Cleveland, opened a year ago today. Since then, Hollywood Casino Toledo, Hollywood Casino Columbus, Horseshoe Casino Cincinnati, Scioto Downs Racino and ThistleDown Racino have opened.
Hang on, Ohio. The gambling ride isn’t over yet. There’s plenty more activity coming on the gaming front.
Five racinos, including the Hard Rock Rocksino in Northfield, have yet to open.
Then there are unresolved issues, such as the future of Internet cafes and sweepstakes parlors; the construction of another casino, officially the “second phase” of the Horseshoe Casino, in downtown Cleveland; and the potential relocation of the ThistleDown Racino to the Akron-Canton area.
There’s also the question of whether Ohio needs one over-arching gaming commission instead of four separate entities overseeing gambling in the state.
Here’s a quick look at those issues:
Racinos
The racino industry soon will explode in Ohio.
Scioto Downs in Columbus and ThistleDown in North Randall already are offering slots-like video lottery terminals.
The Hard Rock Rocksino at Northfield Park in Northfield should open next in December. The $250 million to $300 million project is under construction.
“If not for Goodyear or Firestone, this is the biggest project to happen in [Summit County] in years,” said Victor Milani, the former mayor of Northfield who campaigned for years to allow casino and racino gaming in the state.
There’s also the question of whether ThistleDown will relocate. Rock Ohio Caesars, which owns the track and the Horseshoe Casino Cleveland, has an option with the state to move the racino to the Akron-Canton area.
Marcus Glover, general manager of the Horseshoe Casino Cleveland, said the company is seeing how the market performs and will decide whether it’s in its best interest to move.
Penn National Gaming Inc. is relocating tracks from Toledo and suburban Columbus to suburban Youngstown and Dayton. Meanwhile, River Downs in Cincinnati and Lebanon Raceway in Lebanon also are expected to add VLTs by the end of next year.
“There really hasn’t been a time since May of last year that the gaming landscape in Ohio has not been changing,” Schuler said, “and it’s not going to stop until sometime next year when you have everything up and operational.”
Internet cafes
The future of Internet cafes and sweepstakes parlors in the state appears grim.
State lawmakers have pledged to legislate them out of business — to the delight of many, including the casino, racino, bingo and law enforcement communities.
The businesses say they’re legitimate operations, while law enforcement, including state Attorney General Mike DeWine, say they’re illegal.
“I was hoping we’d find a way to regulate them, but it doesn’t seem like that’s even possible,” said Sen. Frank LaRose, R-Copley Township, who sits on the Senate Government Oversight and Reform Committee that is hearing testimony on the issue.
He said that Ohioans didn’t have the cafes in mind when they voted to allow casino gambling in the state. The casinos and racinos are highly regulated and serve a public purpose of funneling tax money to the state, local governments and schools, while the cafes do not, he said.
But Canton attorney Samuel Ferruccio Jr., legal counsel for Pong Marketing and Promotions of Ontario, Canada, noted that 54 Ohio communities regulate or license the businesses. He said sweepstakes games are legal in the state, and many of the businesses in question are skill-based games and slots masquerading as sweepstakes.
Gaming commission
Ohio has four entities overseeing gambling: The Ohio Casino Control Commission regulates the four casinos; the Ohio Lottery Commission regulates the video lottery terminals at the race tracks; the Ohio Racing Commission oversees horse racing; and the Ohio Attorney General’s Office regulates charitable gaming, including bingo.
“I think there is some inefficiency and lack of coordination with four different entities,” LaRose said.
Behind the scenes, lawmakers are discussing the idea of creating one gaming commission, he said, but he doesn’t expect the issue to be tackled legislatively in the short term.
Horseshoe Part II
Horseshoe Casino Cleveland owner Dan Gilbert had pledged that the casino now operating in the Higbee building downtown was just “phase one” and that another facility would be built along the Cuyahoga River nearby.
After being criticized by Cleveland Plain Dealer columnist Brent Larkin for not following through with his promise, Gilbert tweeted last week that the new casino is being designed.
“We are in the early planning phase of what it will look like,” Glover said.
He added there’s no time frame for the construction.
Competition
One question that will linger is whether Ohio can sustain four casinos and seven racinos.
Even the experts don’t agree.
Alan Silver, assistant professor of restaurant, hotel and tourism at Ohio University, believes it can. But the promised levels of revenue and jobs might not be met, and the gambling venues will have to streamline their operations.
“Operators just might not be getting what they had anticipated from their initial projections and have to cut costs where they can,” he said.
Michael Paladino, senior director and head of gaming, lodging and leisure ratings at Fitch Ratings, isn’t so sure. He’s concerned with so many racinos coming online when the casinos haven’t lived up to expectations so far.
If the state shuts down the Internet and sweepstakes cafes as expected, there’s reason for optimism, especially if they are affecting the casinos and racinos as much as those entities say, he said.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.