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Ohio Tracks React To Slots Approval

June 16, 2011

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Ohio track operators have begun looking toward the future following Gov. John Kasich’s announcement Wednesday of an agreement that includes allowing slot machines at the state’s seven racetracks. Although the news was met with open arms by Northfield Park chief operating officer Tom Aldrich, who said he had a shovel ready to begin the process, Lebanon Raceway president John Carlo was a bit more tempered because of issues concerning the possible relocation of his track to Dayton.
“We’re all very pleased,” said Aldrich. “We hope this opportunity stays on track and it certainly looks good.”
The slots-at-tracks agreement came about as a result of the finalizing of a deal between the state and Rock Ohio Caesars (ROC), which will operate free-standing casinos in Cleveland and Cincinnati. The state still has to come to an agreement with Penn National Gaming, which plans on opening casinos in Toledo and Columbus.
To read the entire “Comprehensive Gaming Review Agreement Fact Sheet,” please click here.
As for the racetracks, each site—including the harness tracks Northfield Park, Lebanon Raceway, Toledo's Raceway Park and Scioto Downs—will have to pay a $50 million, 10-year license fee, plus 33.5 percent of sales revenue to the state. Racetracks would be required to invest at least $150 million—including the cost of the slot machines—with a maximum credit of $25 million for the value of existing facilities and land.
The tracks have until June 30, 2012, to apply for the license, and will then have three years to have the facility up and running. Otherwise, a racing license could be offered to another company “in reasonable proximity” of a racetrack.
“There’s no worry, the date is moot,” Aldrich said with a laugh.
Aldrich said that it was his understanding that the agreement still has some hurdles to overcome before it is actually set in stone.
“My understanding is that this can be done by executive order with the governor through the already-established lottery commission,” Aldrich stated. “Even if does go through the lottery by executive order, he has to execute it. All the rules and regulations that apply, there is a committee that has to bless this. There are still a lot of unanswered questions.
“But from where we were, this is a good start. There is still the question of moving racetracks, negotiations with horsemen, and other aspects that have to be flushed out.
But it’s certainly a good day, and I’m confident that the opportunity is so great that we will work it out.”
The relocation of racetracks is what has Carlo concerned. With county officials voting against allowing Lebanon Raceway to install slot machines, track officials searched out several possible relocation sites before settling on the Dayton area. However, Penn National also has proposed to move its Beulah Park Thoroughbred track in Columbus to Dayton.
"There are still things out there like the consideration of moving racetracks, and that’s a big issue for us,” said Carlo. “Before we commit to being anywhere, we have to know that somebody else won’t be sitting on top of us.
"We have our market and we think that market needs to be what it has been. I think that the numbers that have been tossed around as far as investments and licensing fees, they make sense for us without another track beside us in Dayton.”
While Carlo mulls over Lebanon’s future, Aldrich said blueprints have long been on Northfield Park chairman Brock Milstein’s desk
“The plans have been in Brock’s office for some time,” said Aldrich. “They call for a separate building in the east corner of the current preferred parking lot. But those are the current plans and things change.”
Aldrich added that because Kasich has now set things in motion, he will be able to sit down and discuss revenue splits with the horsemen.
“In the past there hasn’t been much to negotiate over,” he said. “Now, the good news it that negotiations are in order because there is something to talk about.”
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