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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.
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.
“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?
NBC4 – Casino Plan Has Voter Support; Businesses Not Sold
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
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.
Dispatch Poll Today: The Hot Issue: Would having a casino make Downtown Columbus more of a tourism destination?
City tourism leaders vexed by casino plan
Thursday, September 24, 2009
By Marla Matzer Rose
THE COLUMBUS DISPATCH
Columbus tourism officials are worried that they could lose out on hundreds of thousands of dollars and valuable cooperation from casino developers if they don’t support the November ballot issue that would place casinos in Columbus and three other Ohio cities.
Unlike the situation in Cleveland, Columbus political and business leaders — who also help support Experience Columbus, the city’s convention and visitors bureau — are not lined up behind Issue 3, which was favored for passage in a recent poll.
READ MORE
Before a casino, a cleanup
Sunday, September 27, 2009 3:31 AM
By James Nash
THE COLUMBUS DISPATCH
The state is spending $750,000 to clean up an abandoned factory in Columbus for a planned casino even though Gov. Ted Strickland and other state leaders oppose the casino.
The former Jaeger Machine Co. property west of Huntington Park in the Arena District would be home to Columbus’ first casino if voters approve a ballot measure in November for casinos in Columbus, Cincinnati, Cleveland and Toledo.
READ MORE
Opponents wary of casino gridlock
Business First of Columbus – by Jeff Bell
Franklin County Commissioner John O’Grady hates to think about what traffic will be like in the Arena District if a casino is built at the western end of Nationwide Boulevard.
READ MORE
I am really opposed to the site chosen along the Olentangy River for the Columbus Casino. So, although I am semi-OK with the state getting Casinos, I will vote against it because I think they have chosen the wrong site in Columbus. I also think they need a blend of video slots (Strickland’s proposal) and casinos and apply a slower growth to avoid oversaturation. I would love to see that site used in a way that is built around the rivers. If you have ever been to the end of Nationwide, there is a run down boat ramp and TONS of litter (from 670?) and it is city property. I think the clean up needs to happen, but I hope the area gets used for something more outdoor focused and lively than a no-daylight casino. Plus, I totally agree (with Biz first article) that the lack of street access (poor flow) could make it a difficult section to navigate. I don’t want to see it take from the success of the new ballpark. I am voting No on Issue 3, but would consider a yes with a better alternate site location in Columbus.
Projected $643 million likely would fall hard if governor gets slots
Tuesday, October 6, 2009 3:07 AM
By James Nash
THE COLUMBUS DISPATCH
Governments in Ohio would reap nearly $650 million a year from taxes on the four casinos proposed in a Nov. 3 ballot initiative, according to a state analysis published yesterday.
The 33 percent tax on proposed casinos in Columbus, Cleveland, Cincinnati and Toledo would yield $643.4 million in annual revenue, the Ohio Department of Taxation and Office of Budget and Management estimated.
READ MORE
personally, what i think they need to do is pass a blanket bill allowing casinos in ohio. period. within that law it needs to state that local communities can then decide where and if they want a casino in their community.
im not really even opposed to casinos, i just hate the fact that someone in youngstown is decided that a casino is going to be built less than a mile from my apartment.
i have a lot of friends in the victorian village/ short north area and i think there is only one (and even he doesn’t support this bill) that actually wants a casino here.
Those were some really softball questions. Is anyone else curious about (1) Why is it a Constitutional Amendment? (2) How is the hell did you get the Alabama, errrr, Ohio General Assembly to go along with that? (3) Why should we grant anyone a monopoly on anything?