Things Get Messy in Ohio Gambling Battle

Penn National Gaming Inc. disputes claims in an Ohio affadavit in a gaming lawsuit.

A document submitted Sept. 1 suggests Penn National Gaming Inc. is underwriting an effort to overturn racetrack video lottery terminals legalized by Democratic Gov. Ted Strickland and the Ohio legislature in July, but the Pennsylvania-based company said the information is false.

An affidavit tied to a lawsuit filed over the racetrack VLT plan references involvement by PNGI in efforts to thwart Strickland’s plan, the Associated Press reported., the group that filed the suit, wants the racetrack VLT question placed on the November 2010 statewide ballot.

PNGI is one of the major backers of a referendum this November on full-scale casino gambling in Cincinnati, Cleveland, Columbus, and Toledo. As owner of Raceway Park, a Toledo harness track, the company is eligible for VLTs at that facility.

The document reported by the Associated Press talks of a conversation between Republican Sen. Bill Seitz and fellow Republican Tom Brinkman Seitz claimed Brinkman was told by the group’s attorney, David Langdon, PNGI would pay for a lawsuit and any referendum.

PNGI, which operates 19 gaming facilities in 15 jurisdictions, quickly issued a statement Sept. 1 after the Associated Press story appeared online.

“Though Penn National Gaming’s practice is to refrain from commenting on media speculation regarding its activities in any jurisdiction, the company, as owner of Raceway Park in Toledo, feels compelled to categorically deny statements made in an Associated Press story that ran this afternoon,” the company said.

“Penn National fully supports the authorization of video lottery terminals at Raceway Park in Toledo,” the statement said. “The company maintains that statements contained in an affidavit filed by the intervener/respondents (Sept. 1) and referenced in the published report are patently false and potentially libelous, and intends to pursue any and all legal remedies available to it.” spokesman Carlo LoParo told the Associated Press the organization “has received no funding” from PNGI but would gladly accept it if the company wanted to contribute.

Various groups, including the Ohio State Racing Commission and racetracks in the state, have come out in opposition to the November referendum on casino gambling in Ohio’s four largest cities. Among other things, they cite a 33% state tax rate versus 50% to the state from racetrack VLTs.

The referendum language states the horse racing industry, through the OSRC, would get 3% of gaming revenue from the casinos. But it also says the money wouldn’t be available to any racetrack with a gaming—VLT—license.

The Ohio Supreme Court was to hear arguments Sept. 2 on the lawsuit over Strickland’s VLT directive. Meanwhile, each racetrack owner must come up with a $13-million first-installment license fee payment for VLTs by Sept. 15 or face fines.

As of Sept. 1, there still wasn’t a deal announced between the tracks and horsemen’s groups on how much VLT revenue would go to purses and breed development. Strickland’s directive made no mention of money for horse racing though it assumes the other 50% of gaming revenue would go to the tracks.