Ohio Considers Slots At Horse Tracks to increas betting business

17.06.2003, Lesen Sie hier den Bericht über «Ohio Considers Slots At Horse Tracks to increas betting business».

COLUMBUS, Ohio — The Ohio legislature is considering proposals that could put thousands of slot machines at each of the state's seven horse tracks — a move that would threaten gambling interests in Kentucky and Indiana. The plan, which is meant to plug a hole in the state's budget and revitalize the racing industry, would have to be approved by voters in a November referendum if it emerges from the legislature.

Slot - machine profits could boost racetrack purses in Ohio by an estimated $133 million annually, luring horses and wagering away from tracks in border states, including Kentucky and Indiana. "That would tap another nail in the coffin of a couple Kentucky racetracks," especially Turfway Park just across the state line from Cincinnati, said David Switzer, executive director of the Kentucky Thoroughbred Association. Horsemen "are just going to go where the money is," he said. "It would just be more competition for us." The slots — in places like River Downs racetrack in Cincinnati and Scioto Downs in Columbus — also could prompt Ohio gamblers to stay at home rather than head to Indiana to wager at the state's most profitable riverboat, Argosy Casino, in Lawrenceburg, and just down the road at Grand Victoria casino in Rising Sun.

At both casinos, business from Ohio residents is key. "Would it hurt our business? Yes. Some of their revenue would be our expense," said Grand Victoria General Manager Larry Buck. "To what degree? I don't know. That would take a lot of educated guesswork." The proposal is also a concern for Indiana lawmakers, who are depending on increased casino revenue for a state budget that already contains a deficit. "Gambling is a huge part of our revenue. It's our third-largest source of revenue," said State Budget Committee Chairman Vi Simpson, D-Ellettsville. "Anything other states do has an impact on our gaming industry — whether it's Illinois, Michigan, Ohio or Kentucky."

Budget problems are precisely the motivating factor for Ohio lawmakers. The House passed a budget that included a 1-point sales tax increase and the slots referendum. Under the proposal, if voters approve the slots, the sales tax increase would be eliminated. THE OHIO Senate rejected that idea, but members are now weighing a resolution aimed at amending the state's constitution to permit slots at the tracks. Again, voters would make the final call in a referendum, but the result would not be tied to the sales tax increase, which is also included in the Senate budget proposal.

The Senate vote could come as early as this week; though if the measure passes, the differences with the House would still have to be resolved. But even the opponents of slot machines concede that the votes probably are there to put the question to a referendum this fall.

Under both plans, the Ohio Lottery could install up to 2,500 video lottery terminals — which play like slot machines — at each of the state's seven tracks. The resulting revenue — which the racing industry estimates would be $1.3 billion annually — would be split among the state, the tracks and local governments. Roughly half of the money would go to the state, more than a third to the tracks, 10 percent to problem - gambling programs and the rest to local governments.

The major difference between the plans: Ohio Gov. Bob Taft — an adamant opponent of casino-style gambling — doesn't have the power to veto a constitutional resolution like the one the Senate is considering. Still, his press secretary, Orest Holubec, said Taft would publicly oppose slots during a referendum campaign. "He's been clear he doesn't want to see casinos in the state, and that's essentially what slots create," Holubec said.

In the past , Ohio voters also have rejected the idea of casino-style gambling. In two referendums — in 1990 and 1996 — Ohioans overwhelmingly voted against allowing it. But the author of one of this year's proposals — Sen. Louis Blessing, a Cincinnati Republican — said much has changed since the 1996 vote. Most notably, several Ohio River casinos opened in Indiana, and West Virginia installed slots at its racetracks, putting gambling on Ohio's east ern and west ern borders. "People used to have to get on a plane and fly to Las Vegas to gamble," Blessing said during a break in Senate action last week. "Now they can go to Mountaineer Park (in West Virginia), to casinos in Windsor (Canada) and to Argosy or other Indiana casinos." Slot machines in Ohio would keep residents from taking their gambling dollars across the state line, and that, in turn, could prevent broad-based state taxes from increasing significantly, he said. Fred McCarter, spokesman for Argosy Casino, said it's "impossible to predict" how the casino's business might change if slots were available at River Downs, just a few miles away. But 83-year-old Theodore Jones of Cincinnati, who has been attending races at River Downs for 50 years, said he believes slot machines would draw many new people to the racetrack. "Everybody likes to bet," he said. "You'd be surprised how many people just want to play the slots." And that's a big part of the problem for tracks in states that don't allow them. "Kentucky loses. Churchill Downs loses" when other states put slot machines at racetracks, said Alex Waldrop, senior vice president for public affairs at Churchill Downs Inc. "We're already losing to Mountaineer Park, Delaware Park (in Wilmington, Del.), even to tracks in Canada."

Those places — plus Iowa, Louisiana and New Mexico — have installed thousands of slot machines at racetracks. The profits are used to bump up purses —– the money paid to the top finishers in a race — which attract more and better horses for racing. The resulting races then attract more bettors, who place wagers at tracks and off-track-betting centers across the nation. "People who wager want to see better athletes," said Jack Hanessian, general manager of River Downs.

A modern clubhouse and beautiful setting — the Ohio River and the Kentucky hills beyond provide a backdrop to a well-manicured infield and a paddock decorated with bright red and white flowers — River Downs has been struggling to fill its fields and offer quality racing. The track's average total purse each day is $50,000, a number that could climb to $170,000 daily with the profits from slot machines, Hanessian said. "Right now, our purses are at the bottom end of purses across the country," he said. "We need something to help us compete."

One day last week, in the fourth race at River Downs, horses ran for a total purse of $7,100. Supplemented by revenue from slot machines, a similar race at Mountaineer Park would have had a purse of $28,000, said Dennis Moore, a breeder, trainer and owner of horses.

In Indiana, where riverboat casino revenue helps supplement purses at tracks, horses in a similar race would have vied for $14,000, he said. "That's really hurting racing here" at River Downs, said Moore, who trains 4-year-old Star de Marfa, the horse that won the race on Monday, earning $4,260 for his owner, jockey and trainer to split. "I think (slots) are going to be a necessity for racing as we know it to survive in Ohio."

Moore, whose farm is in Indiana, said that while he prefers the atmosphere at River Downs, some owners require him to take their horses to other tracks, where the purses are higher. He spent part of the spring racing at Indiana Downs, a new track near Shelbyville that benefits from the state's casino tax subsidy. Moore isn't alone. River Downs officials said so many trainers have been taking their business to Indiana Downs that the Ohio track was left with too few horses to make fields attractive for betting.

Business picked up when the Indiana Downs season ended, but Hanessian is worried that, without a long-term solution, Ohio racing will continue to wither. Switzer, of the Kentucky Thoroughbred Association, noted that New York is preparing to install slots, a move that is likely to entice some of Kentucky's high-quality horses out of state.

If Ohio follows suit, Kentucky could lose many second-tier horses, the ones that fill some of the race cards at Churchill Downs and nearly all of those at smaller tracks like Turfway Park and Ellis Park in Henderson. Turfway President Bob Elliston said that because live racing at River Downs and Turfway Park doesn't overlap, the biggest threat to his track is if River Downs uses slot machine revenue to upgrade their simulcast facility. "That could make them a real competitor for us," he said. "Any state that puts slots in place has an ability, because of the strength of those resources, to invest heavily in their facilities."

Churchill's Waldrop hopes that if Ohio approves slot machines , Kentucky lawmakers will reconsider making a similar change. "We already have casino-style gaming occurring in Illinois, West Virginia, Missouri and soon a lottery in Tennessee," he said. "We're surrounded by this. Ohio is just one more state. The pressure is already extreme." But Switzer said he's not confident the Kentucky General Assembly will act. "I never like to assume or look into a crystal ball when talking about state legislators," he said. "The impact from Mountaineer Park has been substantial. The impact from Indiana riverboats has been substantial, but it really hasn't moved anything (in the Kentucky legislature). I don't know whether the Ohio situation will move folks either." But Rep. Tom Burch, D- Buechel , said he believes that if Ohio tracks are allowed to install slots , Kentucky legislators will be more likely to make the change, especially because it could mean $400 million for the state's coffers. Ohio slots "would be just another state picking the pocket of Kentucky," he said. "People wanted the lottery and now they want slot machines at tracks. I've introduced it twice and I'm going to introduce it again. The bill is already written."

In Ohio, some opponents have already started their campaign against slots. The Ohio Roundtable — a group that helped beat the earlier casino referendums — launched a television ad last week telling viewers that children are at risk when their parents are gambling. The group is urging Ohioans to call their legislators and tell them to vote no. But even some gambling opponents acknowledge that lawmakers likely have the votes for passage. "They will get it on the ballot," said Tom Smith, director of public policy for the Ohio Council of Churches. Still, he testified against the proposal at a committee hearing Wednesday. "Slot machines are like the crack cocaine of gambling," he told the Senate State and Local Government and Veterans Affairs Committee.

Sen. Jim Jordan, a Republican from Urbana, fears lawmakers are overlooking the harm that slot machines could cause in favor of raising money for the budget. "This is not you and your buddies playing poker," Jordan said. "This is you and a machine. This is the most addictive kind of gambling there is." Still, he said opponents are more likely to defeat the measure at the ballot box than in the Statehouse. "I don't believe the attitudes of Ohioans have changed" since the 1996 referendum, Jordan said. "This proposal is coming from the lobbyists, from the race t racks. It's not coming from the people."

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