Friday, July 14, 2000

Put games at tracks, Ohio told

Lawmakers get numbers report

By Debra Jasper
Enquirer Columbus Bureau

        COLUMBUS — Officials at River Downs and other Ohio racetracks envision a simple way to stop Ohioans from crossing into neighboring states to gamble millions of dollars in casinos or at racetracks.

        They want legislators to follow West Virginia's lead and allow Ohio racetracks to work with the Ohio Lottery to install video gaming devices, which, like slot machines, give players a chance to win jackpots.

        Advocates of the gaming devices say they would generate $778 million in annual sales statewide, hand the state an extra $233 million in annual lottery profits and give the state's racetracks money to beef up their purses and attract premier horses. Without the devices, race officials predict business at tracks such as River Downs will continue to dwindle.

        “I'm very concerned about the whole future of racing in Ohio,” said Jack Hanessian, general manager of River Downs racetrack near Cincinnati. “This year business is down considerably, 10 to 15 percent.”

        At the heart of the problem, Mr. Hanessian and others say, is the tracks' inabili ty to compete with states that offer gamblers more options. In West Virginia, for example, racetracks use part of the money generated by gaming devices to offer $11,000 purses for lower-level horse races — twice as much as typically offered at Ohio tracks. A portion of casino admission fees subsidizes purses for horse races in Indiana as well.

        Bigger purses attract better race horses, which attract bigger crowds, leaving Ohio tracks struggling, horse racing officials say. “The purses are so high in other states we can't compete. We're completely surrounded,” said Michael Weiss, general manager at Beulah Park near Columbus.

        Mr. Weiss said he's hopeful legislators will recognize the impact of competition and take action. If they don't, “the entire racing industry in Ohio will be in danger,” he

        said. "It's a matter of survival now.”

        The push to put gaming devices at tracks surfaced this year when a legislative committee began hearings on how to revive sagging lottery profits, which dropped to $2.1 billion last year from $2.4 billion. The committee in March proposed that the state join a multistate lottery, such as Powerball, to reverse the slump.

        Committee members also heard testimony from Delaware track officials and others about the millions of dollars video gaming devices could put into state lottery coffers. One Delaware official said the state collected $120 million from the machines last year — making them Delaware's third largest source of direct revenue.

        The average daily purse at tracks in Delaware before the video gaming devices were installed in 1994 was $8,000 — about $630,000 annually. Now, daily purses exceed $125,000 and in 1999 total purses were more than $27 million for harness racing alone.

        The West Virginia lottery has also reaped benefits from the machines. According to the 1998 West Virginia Lottery report, video gaming at four race tracks brought in 43 percent of the sales revenues for its lottery, as compared to 26.3 percent through Instant Games, 16.8 percent through Powerball, and 5.4 percent through Keno. The committee also heard from casino officials in Indiana who said as much as 75 percent of their income is generated by video gaming.

        Despite the numbers, however, the committtee stopped short of recommending Ohio bring in the games. And track officials concede they face huge hurdles in even getting legislators to discuss the issue as part of the lottery bill expected to stir debate in the House this fall.

        Ohio House Speaker Jo Ann Davidson, R-Reynoldsburg, noted even that bill has fostered huge opposition and it would only expand the lottery system in place. So what are the chances legislators will want to add gaming devices to the bill?

        “I'm not going to run the odds for you on that,” she said, adding, “I am reluctant to support (the gaming devices).”

        Gov. Bob Taft also would prefer to find a way other than video gaming devices to stabilize the lottery, said his spokeswoman, Mary Anne Sharkey.

        If the issue does surface, the Rev. Tom Grey, a United Methodist minister and executive director of the national Coalition Against Gambling, said anti-gambling forces will work to defeat it.

        “All the racetracks would be doing if they got (the gaming devices) would be using horses as a cover to run a casino,” the Rev. Mr. Grey said. “The horses would be a sideshow to the main attrac tion, which would be the machines.”

        Not everyone is ruling out the idea. Sen. Louis Blessing, R-Cincinnati, said gaming devices are an excellent way to turn around the Ohio Lottery's decline. Mr. Blessing said Indiana is making hundreds of millions of dollars from Ohio gamblers who visit riverboat casinos.

        “How much sense does that make? Zero,” he said.

        Rep. Donald Mottley, R-West Carrollton, who sponsored the bill to put Ohio in a multistate lottery, added that the efforts of anti-gambling forces could backfire.

        “Ironically, there might be a time to say, "Hey, since we have to fight the same people no matter how modest the proposal, maybe we should broaden our base of support with the racetrack industry,” he said. "The opposition creates a risk people are going to consider adding (video gaming) to the mix.”

        Mr. Mottley expects a hearing on the lottery bill in November, after the election, but isn't sure if he will support video gaming at racetracks. He said it's just one option legislators should examine. “It's a great topic for a lame duck session,” he said.

        Meanwhile, track officials are working to generate wider support for the video gaming devices. Gary Daughterty, executive director of the Ohio Horsemen's Benevolent and Protective Association, said track officials met with his group in June to ask them to back the idea.

        Sticking points remain over how profits would be divided, he said, but the horsemen believe the gaming devices are desperately needed. “If we don't stop the bleeding, all of a sudden you are going to have a hemorrhage on your hands,” Mr. Daughterty said.

        Tom Aldrich, of the Northfield Park racetrack in Cleveland, agrees. He said Northfield lost some major horses to tracks in Indiana, where purses shored up by casino admission fees are more than $100,000 per night for 10 races compared to Northfield's $58,000.

        “We're finding it more and more difficult to attract horses because the prize money is mediocre at best compared to other states,” he said. He said tens of thousands of people, from breeders to concession workers, depend on the horse race industry and legislators should take that into account. “Each race track is trying to solicit legislators to ... consider (video gaming devices) as an option.” Rep. Robert Corbin, R-Centerville, said he's not sure where he stands yet on video gaming devices but the demand for them underscores one certainty. “We will be facing a crisis decision in this state very shortly about what we're going to do about gambling.”


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