Ohio’s first racino off to a very busy start

Racing, slots combo near Columbus gives Dayton officials hope.

COLUMBUS — If the initial success of Ohio’s first racino is any indication, combining slots and horse racing in Dayton would draw a crowd, at least in the beginning.

Scioto Downs south of Columbus, which opened June 1, generated so much traffic on opening day some of its video lottery terminals crashed.

Even last week’s derecho that wiped out electricity in two-thirds of the state didn’t shut down Scioto Downs.

The racino stayed open with generators and even saw a bump in business as Ohioans sought refuge from the heat.

Dayton officials hope a similar buzz occurs when Penn National Gaming Inc. puts a racino on 125 acres at the site of a former Delphi Automotive plant near Wagner Ford and Needmore roads.

“We have been looking forward to a racino coming to Dayton for a long time,” Dayton City Manager Tim Riordan said. “It will create a lot of jobs and we’re going to do everything we can to speed that up.”

That plan moved a step closer to reality with Penn National’s June 30 filing with the Ohio State Racing Commission to relocate racetracks from Columbus and Toledo to Austintown and Dayton respectively.

In Dayton, Penn plans to build a $125 million racino — Hollywood Slots at Dayton Raceway — that would feature harness racing, simulcast wagering and a gallery of 1,500 VLT games, restaurants and bars. The gaming company says the facility would bring about 1,000 racino-related jobs, both on-site and with suppliers, and 1,000 construction jobs.

It would also provide a payoff for the state. Under terms of a memorandum of understanding with Ohio Gov. John Kasich’s office, Penn agreed to pay a $75 million relocation fee for each racetrack in addition to the $50 million VLT license fee per racetrack.

Construction of the Dayton racino could get under way this fall and open in 2014, if the state applications are approved.

The state racing commission meets Tuesday to consider rule changes related to racetrack relocations. Penn also filed with the Ohio Lottery Commission last week for video lottery sales agent licenses for its Ohio racetracks.

A Hollywood theme

Penn has released few design details for the venue other than to say the decor will have a 1930-40s Hollywood-related theme, similar to the company’s Hollywood Casino Toledo. Patrons must be at least 21 to play the slots and the minimum age for parimutuel betting is 18.

Bob Tenenbaum, spokesman for Penn National, said the company plans to keep Raceway Park in Toledo open until the Dayton deal is finalized and the new facility comes online.

The Dayton racino is part of a huge increase in gambling operations in Ohio that critics say can’t be supported over time. So far, though, Ohioans seem to have an unquenchable thirst for gaming.

Michael Newsome, marketing director for Scioto Downs, told the Dayton Daily News that he plans to advertise in the Dayton market to reach those who can’t yet gamble here.

West Virginia-based MTR Gaming Group invested more than $150 million in the Scioto Downs gaming facility and $1.5 million in upgrades to the racetrack.

“Once you see it, there is no debate. You understand you’re getting the same experience you would at any gaming facility in the world,” Newsome said.

The large parking lot and modern facade of the 100,000-square foot facility starkly contrasts with surrounding cornfields. Inside there is a continual hum from the racino’s 1,787 video lottery terminals.

The decor is not over the top; this is central Ohio, not Las Vegas.

Games can be played for as little as a penny or hundreds of dollars in the high-limit area, which offers a full bar with built-in video game terminals. The main bar, a lounge located in the heart of the racino, offers refuge to gamers tired of flashy video screens.

The Clubhouse Restaurant overlooking the racetrack seats 840, and 2,000 spectators can stand behind the dining area during races.

A 300-seat buffet area with 400 more machines will open in August and a big-name concert on the track is planned for September.

Already, VLT sales there are out-performing state expectations.

VLT revenue from June 1 to June 9 topped $4.1 million, according to the Ohio Lottery Commission data. The state gets 33 percent of that pot for education programs, or about $1.4 million.

“The numbers are slightly better than we projected,” said Lottery Commission spokeswoman Danielle Frizzi-Babb, adding revenue figures from Scioto Downs first month of operations will be released Monday.

The state has projected that racinos with 1,500 VLTs, such as Penn’s Hollywood Slots at Dayton Raceway, should generate $3 million a month for Ohio.

Richard Thalheimer, president of Kentucky-based Thalheimer Research Associates, says there is room in the Midwest’s expanding gaming industry for a racino in Dayton’s mid-sized market, where the draw will be local and most of the revenue will come from VLTs.

“It’s a smaller market that’s for sure, but there is potential where you are,” Thalheimer said. “Penn’s not going to build to lose money.”

Video poker and other table games are a wish list item for Scioto Downs, which currently operates just the VLTs controlled by the Ohio Lottery Commission.

Unlike racinos in Pennsylvania and West Virginia, which have table games, the one in Columbus — in fact all racinos in Ohio once they come on line — will operate with a potential handicap. The Ohio Constitution limits the playing of table games such as blackjack and craps to the state’s four casinos.

Like Ohio, West Virginia, Pennsylvania and Iowa all launched their racino operations with just slot machines. All have since expanded to include gaming tables.

Thalheimer said the same could happen in Ohio.

“It’s not outside the realm of possibility (for Ohio racinos) to have table games in the future,” he said.

Slots favored over table games

Nationally, patrons at casinos, riverboats and racinos said they prefer slot machines over card games.

In the 2012 American Gaming Association’s survey of casino entertainment, 53 percent of respondents said electronic gaming machines such as the VLTs were their favorites, followed by blackjack at 23 percent, poker at 7 percent and craps and roulette at 3 percent each.

Randy Burnside, public relations manager for the West Virginia Lottery Commission, said the state’s four racinos represent the largest portion of its gaming revenue. In Fiscal Year 2011, the West Virginia Lottery’s gross revenue was $1.4 billion, with $727 million of that coming from racetrack video lottery receipts.

“Our racinos offer slots and game tables. It hasn’t always been that way,” Burnside said. “A lot has changed to keep up with the competition. We’re competing for customers with border states.”

A full year of table game operations at Hollywood Casino at Charles Town Races in West Virginia drove overall gross gaming revenues at the racino up 9.2 percent in 2011 to $958.7 million.

Competition from West Virginia was one of the reasons Pennsylvania added table games to its racinos, and the state now has four of the top 10 racetrack/casino markets in the country, according to the American Gaming Association’s survey.

Doug Harbach, director of communications for the Pennsylvania Gaming Control Board, said about 60 percent of the state’s gaming revenue comes from six racinos, which all have slot machines and table games.

“We came into the market with just slot machine, then West Virginia and Delaware added table games,” Harbach said. “We saw that as direct competition.”

Contact this reporter at (937) 225-2362 or josmith@DaytonDailyNews.com.

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