Penn Gaming Advocates Ohio Casino Plan
Penn National Gaming Inc. officials Oct. 21 advocated their proposal for casino gambling in Ohio’s four largest cities—an issue that will be decided via referendum Nov. 3.
PNGI is one of two primary investors in the “Ohio Jobs and Growth Plan,” which would authorize casinos in Cincinnati, Cleveland, Columbus, and Toledo. Company officials, during a conference call on third-quarter earnings, said the ballot measure has widespread support.
“This is a battle for the hearts and minds of Ohio voters,” PNGI chairman Peter Carlino said. “The opponents are casino people that don’t want to see it happen.”
Carlino mentioned Jeff Jacobs, chairman of MTR Gaming, which owns Mountaineer Casino, Racetrack & Resort in West Virginia and Presque Isle Downs & Casino in Pennsylvania. Both properties draw heavily from Ohio.
The opponents, organized as TruthPAC, claim polls indicate shrinking support for the casino measure known as Issue 3. On Oct. 21, two former Ohio attorneys general called for its defeat.
“Ohio’s constitution should not be a playground for special-interest groups with big checkbooks,” Betty Montgomery said in a statement. “The price a few high-hollers will pay to get a seat at our constitutional table is shockingly low, and the cost to Ohioans will be appallingly high.”
The casinos would pay a tax rate of 33%; funds would go to counties, not the state.
PNGI officials called the measure a $1-billion economic development plan at a time when Ohio’s unemployment rate is in double-digits. Opponents have picked apart the ballot language and publicized investigations into absentee-voter ballot fraud.
Issue 3 has shown how much PNGI is willing to invest to protect its interests. In 2008, the company spent more than $30 million to defeat a referendum for a privately-owned casino in southwest Ohio located about an hour from its Hollywood Casino in Lawrenceburg, Ind. That facility draws heavily from Ohio and Kentucky.
This year, Issue 3 backers are believed to have spent in excess of $50 million pushing the plan.
When asked by an analyst on the conference call how much the company would spend on lobbying in the fourth quarter, Carlino said: “We know, but we can’t tell you.”
As for a stalled plan to install video lottery terminals at Ohio racetracks, PNGI officials called it a “fluid situation.” The company, which said it “completely supports the proposal,” owns Raceway Park, a Toledo harness track, and is one of two track owners that paid a since-refunded licensing fee.
Carlino called PNGI “the leading casino/racetrack operator in the country.”
As for its finances, PNGI reported a 2.5% increase in net revenue for the third quarter: $620.4 million this year versus $617.9 million for the same period in 2008. The company’s top three revenue-producers for the third quarter of 2009 were Hollywood Casino in Lawrenceburg, Ind., at $119.2 million; Charles Town Races & Slots in West Virginia at $116.6 million; and Hollywood Casino at Penn National in Grantville, Pa., at $73.4 million.
PNGI president and chief operating officer Tim Wilmott said the company is “challenged by a softening of the consumer on a macro basis. Spend-per-visit and time-on-device are affecting many of our businesses.”
“It’s not the best time in the world to be in the consumer business, but on balance, we did pretty well,” said Carlino, who called 2009 “the busiest period in our history.” The company in involved in projects—or potential projects—in Maryland, Nevada, New York, Ohio, Pennsylvania, Texas, and West Virginia.
PNGI said it plans to spend $98 million on a Perryville, Md., facility that will have 1,500 slot machines. The company successfully bid for the slots facility earlier this year. A percentage of revenue from the facility will go to Maryland’s racing and breeding industry.
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