Ohio Racetrack VLTs Called 'Moving Target'

Ohio Racetrack VLTs Called 'Moving Target'
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Instant Racing VLT

With Republican Gov. John Kasich preparing to sign legislation authorizing racetrack video lottery terminals, and horse industry representatives already discussing strategy, a public policy group is ready to fight the plan.

And though racing industry officials believe VLTs will become a reality, they’re not sure of the timetable given potential legal challenges and some uncertainty over how the licensing process will work.

The Republican-led General Assembly in Ohio passed legislation June 28 authorizing racetrack VLTs as part of a broader bill that outlines an agreement between Kasich and developers of full-scale casinos in four Ohio cities. Racetracks would be permitted to apply to the Ohio Lottery Commission for a VLT license, and also could petition the Ohio State Racing Commission to relocate to more advantageous markets in the state.

Rob Nichols, a spokesman for Kasich, said July 12 the governor could sign the bill into law July 15. What happens after that is open to debate.

Legislative sources said the move to place racetrack VLTs under the jurisdiction of the lottery commission was made because the lottery was set up by a constitutional amendment approved by Ohio voters. Similarly, voters in 2009 approved casinos for Cincinnati, Cleveland, Columbus, and Toledo via constitutional amendment.

The reasoning is that because the lottery commission was approved by voters, it is empowered to take action on expanding lottery offerings to things such as video gaming.

The Ohio Roundtable, an anti-gambling public policy group, sees things differently. It believes the legislation is a maneuver to circumvent an Ohio Supreme Court decision two years ago that rejected a “directive” by former Democratic Gov. Ted Strickland to install VLTs at racetracks.

Penn National Gaming Inc., which is building casinos in Columbus and Toledo, has said it would like to relocate its two racetracks—Beulah Park near Columbus and Raceway Park, a harness track in Toledo—to avoid competing with itself. PNGI has floated the Dayton market for the Beulah Park license and the Youngstown market for the Raceway Park license.

The legislation contains a special provision for Lebanon Raceway, a harness track between Cincinnati and Dayton, to move within a 20-mile radius of its current location at the Warren County Fairgrounds.

While PNGI and Lebanon Raceway have publicly stated their intentions, other racetracks could be eyeing relocation. Multiple sources told The Blood-Horse that Caesars Entertainment, which is building casinos in partnership in Cincinnati and Cleveland and last year purchased Thistledown near Cleveland, is considering requesting a relocation of the racetrack about 30 miles south to the Akron-Canton metropolitan area.

The OSRC, under the legislation, would rule on any relocation applications. There are seven licensed tracks in the state—three Thoroughbred and four harness—and most if not all have two or more “permits” acquired from meets at defunct tracks around the state; it’s unclear whether a permit can be converted into a new racetrack license.

For instance, Thistledown alone offers four separate meets: Thistledown, Cranwood, Randall Park, and Summit (Ascot Park).

“It’s kind of a moving target,” OSRC member Willie Koester said of the VLT situation and relocation provisions in the legislation when asked when the racing commission may take action.

Bob Tenenbaum, an Ohio-based PNGI spokesman and consultant, said he agrees with Koester’s assessment. He said all stakeholders must wait to see what happens with the  lottery and racing commissions.

“We have to wait and see what process is put in place,” Tenenbaum said July 13. “As soon as we’re able to make an application, we will do that. We have a desire to get both projects moving as soon as possible.”

The OSRC has scheduled its next meeting for Aug. 11. The agenda is not yet available.

Meanwhile, racing industry stakeholders are meeting to discuss VLT strategy, officials said, though racetracks and horsemen’s groups haven’t met together to hammer out a revenue deal called for under the legislation. If the industry is unable to do so—it didn’t come close two years ago after the Strickland directive was issued—the Kasich administration can devise its own plan.

In 2009 horsemen and breeders suggested a 10% cut of VLT revenue, while some track officials claimed 3% was sufficient. But a change in the tax structure could help facilitate an agreement this time. Under Strickland’s directive, the state tax was 50%; under the 2011 legislation, it’s 33.5%, the same tax to be paid by the full-scale casinos.

John Kady contributed to this story

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