Questions Answered on The Ohio Casino Proposal
Several weeks ago, Columbus Underground took part in a conference call with Bob Tenenbaum, the spokesperson for the Ohio Jobs & Growth Plan, which is being proposed as Issue 3 on this November’s ballot and will allow for the development of four casinos in the state of Ohio.
We gathered up a variety of questions and got as many of them answered as possible during the conference. Read on to hear Bob’s overview of the issue, as well as the Q&A session.
Bob Tennebaum: First, we want to give you a brief rundown of what Issue 3 is about.
Issue 3 is a constitutional amendment. It amends Article 15, Section 6, which specifically authorizes four casinos. One in Cleveland, one in Columbus, one in Cincinnati and one in Toledo. It sets a flat permanent casino tax rate of 33% and that is in addition to all of the normal taxes that businesses pay. The tax will produce an estimated $651 million per year. We are using 2013 as the first year, although we believe the casinos will probably start operating sometime in 2012. The tax figure goes up gradually each year, by five years it is estimated to be $771 million. That money is divided primarily among the 88 counties, the eight largest cities in the state and every school district in Ohio. It also produces $200 million in upfront license fees. Those go to the state and are designated to job training and workforce development. This proposal requires a minimum of $250 million in private economic investment in each of the casinos. We are looking at a mandated $1 billion in economic investment. This will create an estimated 34,000 new jobs, split 50/50 between construction and permanent jobs. The University of Cincinnati estimates that these casinos will generate $11 billion in economic impact over their first five years of operation - construction phase included.
Issue 3 does NOT stop charitable gaming in the form of casino nights that are conducted by religious and fraternal organizations. Charitable gaming is authorized in the Ohio Revised Code. Issue 3 has no impact on anything outside of Article 15, Sect 6.
And there is no loophole that would allow the casinos to engage in cash wagering and not pay taxes on it.
The most common question we get is: “Casino proposals have lost in Ohio 4 times since 1990 and as recently as last Nov, why would this one pass?”
The answer is because the economic climate is so different today, even more than it was seven or eight months ago. This issue provides revenue for cities and counties and schools. Polling shows that a general question about favoring casinos in Ohio, a majority say yes. We believe people have not liked the proposals that have been put before them. We want this one to be the one voters say, “that’s the one we’ve been waiting for.”
I’d be happy to take some of your questions:
Walker Evans: Hi, Bob.
BT: Hi. Is this your question or one that you solicited from the Columbus Underground readers? Which I thought was a great idea.
WE: This one is from a reader - talking about Keno. The revenue with that program has been less than expected. How do you propose to use casinos to bring people back to gambling?
BT: I think they are two very different things. I think Keno’s implementation was ill-advised and not done well. Not a great accessibility. Marketing not terribly significant. No comparison to the kind of casinos we are talking about. These are Las Vegas style casinos, first class in every way. They are entertainment venues as much as they are gambling venues. If any of you have been to the newly remodeled Hollywood casino in Lawrenceburg, IN, the old Argosy casino, is operated by Penn National which would operate the Columbus and Toledo casinos. People have walked in and just been blown away. They spent $340 million on renovations. People say it felt like Vegas. Very different from Keno which is kind of hit or miss in various bars and restaurants.
WE: One of the touted benefits of adding casinos in Ohio is keeping that revenue from going outside of the state as it currently is going to casinos in our neighboring states. Is there any concern that with Keno, slots and the addition of casinos in Ohio, there will be too much market saturation to fully capture this in-house revenue?
BT: That’s actually not an enormous concern. Keep in mind that these are business judgments, but the belief is that there is sufficient market share in Ohio to support all of this. We have not yet revised our revenue estimates to take into account the slots proposal. Our belief is that it won’t make a difference. We have been waiting because the Supreme Court is supposed to rule soon whether the slots proposal was even constitutional. At that point we have indicated we would look at projected revenue.
Regarding out of state revenue - it’s a lot of money. The estimate is about a $1 billion. It is estimated that Ohioians wager about a $1.5 billion every year. That’s just the money being spent, not the lost tax revenue because the taxes are being paid in other states. It’s estimated that about $500 million would probably continue to go outside of the state. Some of that money is say people going to Vegas and you don’t go to Vegas just to gamble, you go for a lot of other reasons. We are hearing that is what bugs people the most - watching people they know get on a bus to go spend that money in other states when we could be keeping that revenue in Ohio.
WE: You mentioned the slots being reviewed to see if they will actually happen. Do you think that if they do happen will it effect the strategy or the polling situation to pass the casinos proposal?
BT: No. But you could make an argument either way. My own opinion is that the slot discussion may have helped us a bit. But our job is to sell this particular issue. The issue that’s been taken away is that Ohio is not and shouldn’t be a gambling state. That boat as sailed. The legislature and the governor authorizing electronic slot machines at the race tracks made Ohio a gambling state. We are now a gambling state.
There is some opposition to this issue, including some very significant church organizations, United Methodist Church and the Ohio Roundtable in the Cleveland area. Their opposition is based on moral and religious grounds. We expect that and respect that. We don’t think the majority of voters in Ohio agree, but we respect that. The big money opposition is coming from something calling itself TruthPac. It’s funded by MGR Gaming, a West Virgina based gaming company. It owns Scioto Downs and Mountaineer Racetrack and Casino in West Virgina. 70% of their customers there come from Ohio. They are protecting their own interests.
WE: You mentioned the amount of money that would be kept in the State. Have their been any studies on wealth redistribution within the state?
BT: I don’t have any studies that indicate that. You tend to hear poor people tend to gamble more. I haven’t seen any studies that state that. I think the problem is overstated.
WE: For me personally, something that has kept me opposed to casinos in the past is the worry that what we would get would not be what you see in Las Vegas - upscale, state of the art, glamorous venues. But you said earlier in the conversation that we would be getting something like that. The proposal for Columbus has it being planned for the Arena District, which has developed into a fairly significant entertainment district. Is it too early to say what sorts of other amenities we could expect to complement it? Convention center meeting space? Performance space?
BT: The people doing the development are probably the most successful regional casino operator in the country. It is a little different here because most of their casinos are not in urban areas. They are trying hard to provide lots of amenities. First class amenities for sure… but not hurting the businesses that already exist. We currently have no plans for a hotel connected to the casino. The developer wants to help the existing Downtown hotels. There will be restaurants in the casino, and performance spaces, but nothing to compete with Nationwide Arena. The idea is to become complementary. In my mind the Arena District is exactly where the casino should be placed.
WE: Thanks for taking the time to answer some of our questions, Bob.
BT: No problem. Thank you, everyone.
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Related Tags: casino • Features • gambling • interviews • november 3 2009 ballot • Politics • voting
September 11th, 2009 at 8:43 am
Thanks to timing, he dodged having to respond to this :
“Casinos and lotteries in most states are reporting a downturn in revenue for the first time, resulting in a drop in the money collected by state and local governments, according to new state data.
The decline comes as states are rapidly expanding gambling in hopes of stemming severe budget shortfalls, and it indicates that gambling is not insulated from broader economic forces like recessions, as has been argued in the past.”
http://www.nytimes.com/2009/09/10/us/10gambling.html
A.
September 11th, 2009 at 9:56 am
@Andrew - I read that article yesterday and thought the same thing.
One of the other points in that article:
“Crime jumps 10 percent in areas with casinos, personal bankruptcies soar 18 percent to 42 percent and the number of new gambling addicts doubles, “
–
I love how these initiatives are masked in such good will titles. Golly gee who could possibly be against jobs and growth in Ohio? If you are against jobs and growth especially in Ohio you must be either a socialist or a terrorist.
September 11th, 2009 at 10:36 am
“You tend to hear poor people tend to gamble more. I haven’t seen any studies that state that. I think the problem is overstated.”
You have not been looking.
September 11th, 2009 at 3:39 pm
I am opposed to anything that rewrites our state constitution to solely benefit 1 o 2 casino companies. The Ohio State constitutional amendments are the foundation and principles of our state. I do not agree with amending the constitution to benefit private companies in the state.
Additionally, I have taken pride as a Columbus citizen in the revitalization of downtown Columbus with the creation of the Arena District over the past decade. I do not think a casino is something Columbus citizens will take pride in and accept as apart of the Arena District.
Lastly, I am sickof casinos boasting job development. These are NOT sustainable jobs. The jobs will primarily be waitstaff, card dealers, bartenders and janitorial staff. While these jobs are important in their own right, they will not be attracting out-of-state job applicants or revitalizing the Columbus Job market with new talent. These types of jobs are currently available (minus the card dealers) now in Columbus. Don’t let this fool you!
September 11th, 2009 at 5:40 pm
On the issue of poor people gambling, the problem is that people are already running out-of-state and spending money anyways. Let’s at least bring the money back to Ohio where it can create jobs and opportunities. As far as revenues go, I guess it’s a good thing that Issue 3 is meant to supplement revenue unlike Strickland’s slots plan which is supposed to balance the budget. Issue 3 won’t fix all our problems but it will bring some relief, which is why I’m voting for it.
September 11th, 2009 at 5:58 pm
Nice work. I have also talked to Bob…the man knows what he is doing, he has worked on successful campaigns in the past, and I think the bottom line of his argument regarding the governor is solid: We are a gambling state now. Are any of us (and that is a broad “us,” obviously) going to go to the racetracks to play slot machines? Probably not. But would I be interested in going to a classy downtown casino for some Friday night poker? Yes. I think many people could be interested in that. I think it is intelligent for them to not make any part of their plan compete with the businesses already there…that is politically smart and theoretically good for the city. There are virtually no unbiased (i.e., not funded by an interest group, prop or con) that have been conducted in the last 10 years on things like crime, although the consensus is that it goes up…most of the gaming facilities have been in rural areas like the Argosy, where and increase in crime is not surprising. A nice casino in a vibrant and active spot like the Arena District is not going to attract muggers. The 3-C connector and this together could have an awesome impact on our tourism viability, and the tax benefit is solid. I am a little concerned with their union history, and wished you had gotten a question in about that, but that development is more recent, like last week, I think.
September 11th, 2009 at 7:54 pm
David S Lewis Says: The 3-C connector and this together could have an awesome impact on our tourism viability...
Perhaps the 3-C could bring people in from Dayton to gamble in a Columbus Casino, but I doubt too many people are going to be riding a train from Cincy or Cleveland to gamble here when those cities are also getting their own Casinos under this proposal.
September 11th, 2009 at 8:13 pm
I think the comment made by Mr. Lewis about 3-C sounds valid. What if someone made a Saturday morning trip on 3-C to see a Buckeye game, play cards, then stay the night downtown?
I can picture similar scenarios for visitors to Cincy and Cleveland as well. Wouldn’t 3-C & Casinos provide remarkable intrastate tourist opportunities?
September 12th, 2009 at 12:41 pm
“Casinos and lotteries in most states are reporting a downturn in revenue for the first time.” Of course they are. Have you paid any attention to the state of our economy recently?
The fact of the matter is casino revenues will recover. And any revenue, in good or bad times, would improve the situation in Ohio as it will first, create a revenue stream that doesn’t currently exist (some money is better than no money) and second, contribute money to state and local governments that sorely need it.
Plus, casinos will add thousands of jobs to our economy. With an unemployment rate over 11%, we need jobs more than ever. And a lot of these jobs won’t require a college education - providing opportunity for folks who may need it most.
To me, it’s a no-brainer - bringing money, jobs and tourism into our state versus $0, no job opportunities and little reason for tourists to come to Ohio. Voting yes is a solution, voting no is just supporting the problem.
September 12th, 2009 at 5:21 pm
How have the “upscale” casinos in Detroit been doing?
September 13th, 2009 at 5:57 am
Great point JonMeyers.
September 13th, 2009 at 10:35 am
My biggest issues with the casino lan is that 1) it allows for no competitive bidding for the rights to build the casinos and 2) I really don’t think the Arena District needs the casino say as much as the City Center location does. You already have entertainment venues down there, and frankly the Hyatt could use some more hotel competition down there. If we are going to allow some company to come in and build, shouldn’t we use that to revitalize an additional part of the city instead?
September 14th, 2009 at 9:09 am
This a such a sham. He states that he respects groups against gambling but doesn’t believe that majority are against it. Excuse me! What exactly were the last four failed ballot attempts about? Also, poor people don’t gamble more? See a Dispatch article a year or so ago (sorry I don’t have the link) that examined lottery ticket sales by zip code and showed a definite correlation between low income areas and high lottery sales. All such B.S.
September 15th, 2009 at 8:56 am
Casinos a winner, poll shows
Tuesday, September 15, 2009 7:46 AM
BY DARREL ROWLAND
THE COLUMBUS DISPATCH
Seven weeks before election day, Ohioans by a wide margin say they favor a plan to put casinos in Columbus and three other Ohio cities, according to a new Quinnipiac University poll.
The issue was passing by a 21-point margin in the survey released today, down a bit from a 26-point lead in July but still a large hurdle for gambling opponents to overcome less than two months before Ohioans vote on state Issue 3.
READ MORE
September 15th, 2009 at 9:47 am
Are there actual plans already created for the casino? Artist renderings?
September 15th, 2009 at 10:00 am
JonMyers Says: How have the “upscale” casinos in Detroit been doing?
While it’s true that the economy is hurting across the board, I’m not sure if it’s quite apples to apples to compare a similar business in Detroit to a city like Columbus.
A casino in Toledo or Cleveland however…
September 15th, 2009 at 10:31 am
@Walker - will you be voting yes or no in favor of the proposal? Why?
September 15th, 2009 at 11:24 am
Two things here.. First off, writing casinos into our state constitution seems absolutely insane to me. A constitution is for setting up the law of the land, and I don’t think it’s appropriate writing into law that there shall be four casinos and they shall be these four casinos, etc… Also, how is Columbus supposed to draw tourism from this from Cleveland, Cincy, and Toledo when those towns are all getting casinos too? Doesn’t that just encourage people to go out gambling in their own town? Why take a drive or a train to another city with the same casino? We would just be competing for Springfield, Marion, and Wooster’s gambling money, cuz people in Detroit aren’t going to go to Toledo to gamble, people in Buffalo aren’t going to go to Cleveland, and Cincy already has a riverboat!
September 15th, 2009 at 3:15 pm
JonMyers Says: @Walker - will you be voting yes or no in favor of the proposal? Why?
I’m really still on the fence at this point. I’m not opposed to the idea of gambling, although I’m not much of a gambler myself. And if Ohio is going to get a casino, I’d rather them be in our Downtowns rather than out in no-mans-land next to an outlet mall.
I’m still concerned that the final product won’t be quite as “top of the line” as we’re being told it will be, and that’s my biggest hangup. If we’re going to allow a private company to build this thing and profit from it, I’d like it to be something state of the art that is really going to benefit our city as much as possible.
The Constitution thing doesn’t really bother me at all, though. Many people seem to take issue with that, as if it’s a sacred document where amendments of any modern sort aren’t allowed. When was the last time anyone even looked at the Ohio Constitution? If Lottery Tickets are in the Constitution, why not Casinos?
September 15th, 2009 at 3:28 pm
Are the only choices:
1) Yes - casino in the Arena District
or
2) No casino
I don’t really care if we get a casino or not, I just don’t want it in one of our downtown neighborhoods. Here’s one NIMBY thing I will fully own!! Can’t they stick it up near Polaris or somewhere like that? They’re building hotels left and right up there. Why?!?
If those suburbanites stick us with their casino and don’t give us our streetcar, I’m going to be LIVID!!!
September 15th, 2009 at 4:37 pm
As someone who is a gambler (poker) and who has patronized more casinos than I care to mention I’m emphatically against it. Period.
I don’t buy the “Las Vegas Style” shtick at all. Vegas casinos are more and more convention and entertainment destinations. Obviously, gambling is huge, but it isn’t necessarily the key traffic driver, which is an important distinction. Where that traffic comes from is another important distinction.
While a downtown Columbus casino may have some of the entertainment fluff, make no mistake it’s design is pure gambling with a sophisticated risk management back of the house engineered to empty every local wallet that walks through the door. As most people know, the casino itself would be designed to push and feed every chemical and biological impulse to get local feet back in again and again. Translation - draining local pockets.
Nor do I buy the line on “better marketing”, which is being sold as a key differentiator of this particular effort. I don’t think the public and especially the government is qualified to make an assessment on these particular operator’s marketing savvy.
Additionally, with all the hard work and progress inching forward on developing downtown and supporting neighborhoods the arrival of a casino would destructively piss away the incremental gains we’ve achieved downtown. It would be a dominate, desperate cultural entity in our downtown and surrounding areas. Just what we need to attract and retain the brains we need.
Lastly, a casino as a job growth and economic development engine is about 15 years too late. For once can we go about economic development and job growth in a contemporary, forward thinking, relevant fashion rather than wasting our time with a last minute hail mary bomb that won’t do shit in terms of differentiating or positioning our city/ state for the future.
The fact we have to vote this down AGAIN should tell you something.
September 15th, 2009 at 5:43 pm
“If Lottery Tickets are in the Constitution, why not Casinos?”
Yeah you’re right, I guess since it’s already broken…
My point is that it’s one thing to say “gambling’s allowed, let the best casino developer/operator win!” and quite another to write a specific business into the constitution of the state. Plus, doesn’t the state run the lotto?
September 15th, 2009 at 8:53 pm
NBC4 - Casino Plan Has Voter Support; Businesses Not Sold
September 15th, 2009 at 11:06 pm
I had a long post about growing up near Wheeling Downs, but I’ll just say I’m against this Casino proposal wholeheartedly. The whole concept, marketing, lobbying, and (local) press coverage wreaks of this:
http://www.youtube.com/watch?v=abSd-TOXbwg
September 16th, 2009 at 1:05 pm
Not sure how I will vote yet, BUT…
IF this proposal is going to happen, I wonder if our City shouldn’t look at tying several different initiatives into one package. Specifically :
-Casino
-New Convention Hotel
-Train Station for 3C service
What if the City suggested moving the casino to the site of the proposed convention hotel on High and Nationwide Streets? Then they could capitalize on the stimulus of the casino and the taxes that will be generated to build a facility that will have a hotel and train station attached. They might even be able to build a bigger hotel, since it has been suggested that we are very far behind our competitors in terms of full-service rooms. There could be great synergies developed here.
This assumes that the site is big enough to fit all that (the casino might not like going vertical) and it’s not too late to change the site.
Perhaps they could also look at reviving the Streetcar proposal with some of the revenue to serve a new multi-use facility on this site, although that’s a bit more of a stretch.