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Long wait is over for Dayton racino

Gambling facility at site of old Delphi plant offers 1,000 slot machines, harness racing

Six years after Delphi shuttered its facility at the corner of Needmore and Wagner Ford roads, the property is making a comeback as gambling and glitz replace blue-collar brake plant workers.

Hollywood Gaming at Dayton Raceway will open for business Thursday after a grand-opening event featuring local dignitaries and, in the racino’s theme, showgirls.

Penn National Gaming purchased the site — 119 acres in north Dayton — for $3.2 million in August 2011 and broke ground in the spring of 2013. The gaming giant overcame two lawsuits, remediation of a polluted brownfield and a spat with harness racers about the number of enclosed seats overlooking the five-eighths-mile track.

“Considering the eagerness of the operators and the horsemen, and the excitement when Gov. (Ted) Strickland first announced it (in 2009) and Gov. (John) Kasich revisited it, we had expected some of this to move a little faster,” said Connie Miller, deputy director of operations for the Ohio Lottery, which oversees the state’s racinos.

The Dayton site will be the sixth racino to open in Ohio. The seventh debuts next month in Youngstown. Racinos feature slot machines and no table games and also offer harness or thoroughbred racing.

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“It was a long haul related to the hoops they had to jump through,” said Shelley Dickstein, Dayton’s assistant city manager for strategic development. “We admire their tenacity.”

Still, some question the true economic impact of the racino, which will employ more than 500 and fear Hollywood Gaming’s 1,000 slot machines will lead to an increase in addictive gambling.

“Every other state had it and (Ohio) felt it closing in,” said Rob Walgate of Ohio Roundtable, a public policy group that challenged the racinos in court on constitutional grounds. “No one’s willing to take a stand and say, ‘We don’t need that.’ Gamblers become addicts but politicians become addicts to that tax money.”

Main attractions

Customers who want to try their luck at Hollywood Gaming will be greeted by rows of slot machines, also called video lottery terminals. But there will be very few “one-armed bandits” in the 125,000-square-foot racino. Most of the machines have touch buttons to allow for faster play.

“The button is easier and faster,” Miller said. “From a property standpoint, it’s one less thing to clean and it’s probably 3-to-4 inches of additional width, which adds up quickly.”

The “Hollywood” theme includes art deco decor to the giant projection screens that will show previews of current movies.

Huge flat-screen televisions above a large lounge area will be tuned-in to sports events and a food court and sports bar will offer everything from appetizers to fine steaks.

Watching the activity from above will be 450 security cameras. Also present, 24/7, will be up to eight investigators employed by the Ohio Lottery.

The lottery keeps 33.5 percent of net winnings — what’s left after payouts to players — and most of that money goes into the Lottery Profits Education Fund. The fund received $139 million in fiscal year 2014, which ended in June.

According to Miller, the lottery has 330 employees and had total operating expenses of nearly $7.2 million last year.

Montgomery County and the city of Dayton will get a cut of the action. Penn National paid $85,434 in property taxes to the county this year and that sum will increase when the property is re-evaluated next year to reflect the company’s $125 million investment.

Penn National Gaming spokesman Bob Tenenbaum said the company will not seek any tax abatements after the property is re-evaluated. In addition to building costs, Penn National paid $75 million for a racetrack relocation fee and a $50 million licensing fee to the state.

“Our concern will be making sure the valuation is fair, but we did not seek any tax abatement,” Tenenbaum said. “We have had help from the city and county in terms of some of the traffic-pattern issues that needed to be dealt with. There’s a couple new traffic lights on Wagner Ford and Needmore Road.”

The city will benefit from payroll taxes and will collect 2.25 percent of winnings of $1,200 or more. The state will take 4 percent of such prizes.

On the track

The racino also features harness racing — a change from the original plan to offer thoroughbred racing. Customers can bet on live races — which debut Oct. 3 — as well as races from around the country that will be simulcast year-round on banks of monitors.

More than 1,000 enclosed seats are available for customers watching and betting on races. Penn National had planned for 600 seats until the Ohio State Racing Commission insisted on more as part of an agreement that transferred a racing license from Raceway Park in Toledo to Dayton.

There will be 56 race dates and the season will end Dec. 27. By mid-October, there will be five nights of racing per week, with about 12 races per session.

A spacious paddock south of the track includes 125 stalls and a huge hot water heater.

The influx of slot machine money into a once-struggling industry has again made Ohio a player on the national stage. A headline in the Daily Racing Form earlier this year touted the Buckeye State’s improved harness racing climate, proclaiming “Ohio ready for a resurgence.”

“Ohio’s the hottest state in the country for standardbred racing,” said Jerry Knappenberger, executive director of the Ohio Harness Horsemen’s Association.

He said after racinos were given the go-ahead Ohio jumped from No. 6 to No. 2 in the country in the number of mares bred to standardbred stallions.

“What was once a billion-dollar industry, and 25,000 jobs, had probably dropped down to 15,000 jobs, but it has rebounded,” Knappenberger said. “We employ more people in Ohio in horse racing, standardbred and thoroughbred combined, than Honda and Procter & Gamble combined.”

Harnessracing.com reported that purses at all commercial tracks in Ohio totaled $23.7 million for the first half of 2014, up from $15.1 million in the first six months of 2013.

Regional impact

The impact on the local economy likely won’t be dramatic, experts say. Dickstein is not making grand predictions on the domino effect of Hollywood Gaming, which two years ago boasted that the racino would account for 1,500 jobs at the site and surrounding area. It later reduced that prediction to 1,000 total jobs.

“We don’t think this will be a catalytic change so that new development comes on,” she said. “But we are certain that those jobs and activity will support some of the other development that had occurred prior to the departure of the GM-Delphi jobs.”

Thomas Traynor, a Professor of Economics at Wright State University, says the area will benefit when gamblers keep their cash in Dayton, but the racino “will not have any appreciable impact on the local economy” because much of the money pumped into slot machines potentially could be spent at other entertainment venues.

“Dayton will benefit by having money spent in the city that otherwise would have been spent in the suburbs or elsewhere,” Traynor said. “This isn’t really any different from spending moving from one part of the community to another when a new mall opens.”

The Ohio Lottery recorded $3.2 billion in total sales in FY 2014, boosted by four new racinos. That set a lottery record and exceeded expectations but Miller remains cautious when forecasting success of the slot machines. For example, Belterra Park, southeast of Cincinnati, has reported subpar totals in its first three months of operation.

“Because they are all going to be local facilities, they’re going to be drawing mostly from a radius of around 30 miles,” Miller said of the racinos. “If you don’t have expectations that the circle is going to get very much bigger, you should be OK.”

Larry Parr, co-owner of the Paradise Key Cafe, located across the street from the racino, said he’s seen a boost in business that has “been substantial enough to notice,” but expects it to level off now that construction is slowing down.

He’s hoping racino employees discover his business, which he says has the best chicken wings “on the planet.”

“We’ve been told they’re not allowed to gamble, drink or hang out there,” he said of the employees. “Hopefully they’ll stop at our place.”

Racino general manager Gary DeWitt said if all goes as planned the racino will be hiring more employees in the coming years.

“If the response is what we think it will be, we’re going to be hiring up to the moment we open and thereafter,” he said. “We’ll definitely be looking for qualified team members even after we open.”

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