Ohio commission ready to present VLT plan to legislature

The Ohio State Racing Commission unanimously endorsed a proposal outlined by commissioner Thomas Zaino for VLTs at Ohio’s seven tracks at its monthly meeting on Thursday, and the proposal will now be forwarded to the Ohio General Assembly for consideration.

Zaino, who served as Ohio’s tax commissioner from 1999-2003, says that the legislature can authorize such a proposal without a statewide vote and without amending the constitution.

Zaino said that this proposal is different from all previous VLT proposals because the legislature would be authorized to require a state agency to operate the VLT program. He said that agency could be the racing commission, the Ohio Lottery, or a new agency.

The seven licensed agents hosting the VLT machines at tracks would be required to pay a $50 million fee and would be required to construct facilities costing at least $80 million and implement marketing programs subject to the state agency’s approval.

“The Commission believes that once the facilities are full operational,” the report stated, “gross proceeds (wagers minus winnings) resulting from operations of VLTs at Ohio horse racing track will be approximately $1.0 billion to $1.3 billion.”

Fifty percent would be paid to the licensed agents and 48 percent would be paid to the Gaming Profits Education Fund, a fund established to support elementary, secondary, special, or vocational education in Ohio. Two percent would be used to fund the regulatory agency.

The report shows that by 2013 the state would reap $625 million annually from the plan. No estimate was offered on purse increases at tracks.

Zaino said that the commission was “careful not to overpromise” in the proposal. He emphasized that the monetary amounts are “viable and achievable.”

Prior to unveiling the specifics of his proposal, Zaino reviewed the dire status of Ohio racing.

“Horse racing is dying in Ohio,” said Zaino. “Horsemen are leaving the state. Billions of dollars in betting revenues are going to surrounding states. If we don’t do something soon, five of Ohio’s seven racetracks will close and racing will never be the same in Ohio.”

He said that a loss of five tracks would mean 8,600 lost jobs and that Ohio would suffer a $328 million economic loss.

Zaino said that if the Ohio State Racing Commission is the agency for the VLT operations, it would need to be reconstituted to expand for five to nine members. The four new members would be appointed by the two political parties in the Ohio Senate and House of Representatives. Five members would be appointed by the governor, as is now done.

He anticipates a need for 150 new racing commission employees to provide on-site inspection services at the seven VLTs on an around-the-clock basis.

The commission’s proposal is not intended to be placed on the ballot, as is a separate proposal to locate casinos in the state’s four largest cities.  Developers are beginning the process to collect the needed signatures to place the casino issue on the November ballot in Ohio.

In the ballot measure, no slot machines would be located at tracks and only an estimated $18 million of the casino revenues would be set aside to save horse racing.

Zaino felt that the commission proposal offered significant advantages, including saving Ohio’s horse racing industry, limiting new gaming to tracks, allowing for faster implementation because track facilities are already in existence, and because it provides a higher effective tax rate than the downtown casino plan.

While Ohio Gov. Ted Strickland has already spoken out against the downtown casino plans, the proposal advanced by the racing commission may have greater appeal to Strickland as a way of generating revenue to fund his plans to reform education in the state.

 In a separate action, the commission voted to suspend the license of Cleveland Thoroughbred track Thistledown if it does not have a $1 million bond in place when its current bond expires later this month. Thistledown is caught up in the bankrupty action of its parent company, Magna Entertainment Corporation.--By Dean Hoffman

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