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Monday, September 21, 2009
State/local gambling revenues drop - lesson for Ohio?
The money that state and local governments get from gambling operations dropped nearly 2.8 percent from fiscal year 2008 to 2009, the first time such revenues have dropped in more than three decades, a report released on Monday, Sept. 21, said.
The report from the Rockefeller Institute of Government in Albany, N.Y., covers revenue from lotteries, casinos, video-lottery terminals and pari-mutuel betting on horse racing and dog tracks.
The report has a warning for states like Ohio that are anticipating revenue from gambling sources to pay a bigger chunk of the cost of education and other government services.
“Expenditures on education and other programs will generally grow more rapidly than gambling revenue over time,” Robert B. Ward, institute deputy director, said in a press release.
“Thus, new gambling operations that are intended to pay for normal increases in state general spending may add to, rather than ease, long-term budget imbalances.”
Ohio’s two-year budget calls for putting 17,500 video slot machines at the state’s seven horse racing tracks to raise $933 million over two years.
That plan may be put on hold, however, by an Ohio Supreme Court decision on Monday that said the gambling plan could be subject to a referendum in November 2010.
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Slot machine plan may go to referendum vote
In a major blow to Gov. Ted Strickland’s budget plan, the Ohio Supreme Court on Monday, Sept. 21, ruled that putting 17,500 video lottery terminals at Ohio’s seven race tracks is subject to a statewide voter referendum. “While I am disappointed by this decision, we need to fully review the court’s judgment before determining next steps,” Strickland said in a written statement.
The decision casts serious doubt on whether the seven racetracks will move forward on plans to add slot machines.
John Carlo, spokesman for the Lebanon Raceway in Warren County, said he just learned of the decision and won’t be ready to comment until this afternoon. Likewise, Bob Griffin, chief executive of MTR Gaming which owns Scioto Downs south of Columbus, said he needs to go through the decision with his lawyers and see what the Ohio Lottery Commission plans to do.
LetOhioVote.org, which filed the lawsuit saying the plan should be subject to a vote of the people, applauded the court’s decision.
“We’re pleased that the Supreme Court ruled in the fashion they did and we will expedite our efforts to begin the petition process,” LetOhioVote spokesman Gene Pierce said. If the group collects 241,366 valid signatures by Dec. 20, a referendum would be held in November 2010.
Tom Smith, public policy director for the Ohio Council of Churches, also applauded the decision but said LetOhioVote.org has a lot of work to do. “I think that’s a big job. I don’t know how organized they can be,” said Smith.
The Strickland administration is counting on the slot machines to generate $933 million for K-12 funding in the current two-year state budget.
“For both gambling in Ohio and the state budget, this decision turns the world upside down and inside out,” said Republican consultant Terry Casey who follows the gambling industry. “It’s going to be a while before we see what’s going to happen.”
In a 6-1 ruling the court ordered Secretary of State Jennifer Brunner to accept LetOhioVote.org’s summary petitions to begin the referendum process.
In a dissenting opinion, Justice Paul Pfeifer said the slot machines legislation is at the heart of the state’s budget. “Without the VLT-enabling legislation, the budget crumbles,” he wrote.
The Ohio Lottery Commission, which is scheduled to meet this afternoon in Cleveland, said it has no comment until it has reviewed the decision.
