A proposed ballot issue calls for four Las Vegas-style casinos in Ohio. But the fine print doesn’t appear to require anything to be built, even if voters think that is what they are getting if they approve the plan in November.
That means the lofty revenue projections approaching $2 billion in the first year and the promise of easy cash for the state’s depleted coffers could be a bluff, detractors say.
But casino backers say: Trust us, we will build.
“They have not made any commitment in the proposal that they will build one, two or four or when they would be built. They don’t give you any time frame,” said Tom Smith, of the Ohio Council of Churches, which opposes the casino proposal.
“After the election is over, they are in the constitution. They are a monopoly,” he said, noting that the proposal would require a rewrite of Ohio’s Constitution to authorize casinos specifically for the backers. “No one else can come into the state.”
The plan is being pushed by a group called the Ohio Jobs and Growth Committee and financially backed by Cleveland Cavaliers majority owner Dan Gilbert and Penn National Gaming Inc. Separately the two entities would be on the hook for at least $600 million up front to each own a pair of the casinos. The locations would be Cleveland, Columbus, Cincinnati and Toledo.
Committee spokesman Bob Tenenbaum said he believes the language in the constitutional amendment requires the casinos to be built, but he acknowledged that there is no deadline set. That concerns critics who say that Penn and Gilbert simply would hold the valuable, constitutionally protected right to build when they are ready.
Not to worry, said Penn Vice President Eric Schippers. He said his company is eager to follow through on its option to build casinos in Toledo and Columbus — if the measure makes it onto the November ballot and is passed.
“Absolutely. Without question. As soon as we would receive final approval from the gaming commission that would be established,” Schippers said. “We would begin immediate construction upon issuance of the license.”
Schippers said the company would break ground on both its Ohio projects in 2010 and open full-fledged casinos 12 to 18 months later.
Gilbert’s office on Thursday issued a statement saying the Cavs owner also promises to build casinos in Cleveland and Cincinnati — the two cities where he holds options to purchase land for the projects — if the amendment is approved. But when?
“They would start immediately,” said Elizabeth Jones, a spokeswoman for Rock Ventures, the partnership Gilbert is leading to get the casinos.
Penn’s position is interesting, considering its stake in competing casinos outside the state.
The company owns the Argosy casino in Lawrenceburg, Ind., about 30 minutes from Cincinnati. Argosy is heavily dependent on traffic from Southwest Ohio. Penn recently held a grand reopening for Argosy, which it spent $300 million to renovate.
Penn also this week put in a bid to buy the debt-ridden Greektown casino in Detroit, less than an hour from where Penn could potentially build a casino in Toledo.
Schippers explained that Penn is flush with cash after collecting $1.4 billion from a failed business transaction that would have taken the company private. The company is using the cash to buy up troubled casinos and corner the gambling market in this region.
Penn also owns a horse racing track in Toledo. Schippers said Penn is unconcerned about the direct competition even in a saturated industry reeling from the depressed economy.
That’s all the more reason why Smith, from the council of churches, believes Penn and Gilbert could eventually decide to build just one or two well-positioned casinos — say, in Cleveland or Columbus — which are a little further from direct competition.
“The benefit is they then become a monopoly and build one casino, and wherever that casino is would be the only place in Ohio that people can go,” Smith said. “Otherwise, this isn’t logical.”
The backers are strategically selling the idea of casinos in each of Ohio’s four largest cities to attract voters to sign petitions to get the measure on the ballot, Smith said.
Ohio voters have rejected four attempts to expand gambling in Ohio over the past two decades.
Smith also questioned why, if Penn and Gilbert are so sure they will build, they didn’t write a time frame into their proposal.
“Why don’t they say we are going to build these and put dates on it,” Smith asked, “and say we pledge that to the people of Ohio?”
Schippers said that Penn would have liked to have done that but that the proposal requires a gaming commission to be established to issue casino licenses and for the legislature to establish certain rules.
“It would be hard to make up a timeline absent some input from the state and gaming commission,” Schippers said. “So that is why there was not an arbitrary date in there because the process has to unfold at the state and commission levels first.”
