By Patrick Crowley
The Cincinnati Enquirer

At River Downs, gamblers place bets on simulcast racing with pari-mutuel clerks. (Patrick Reddy photo) | ZOOM |

By this time next year, horse-racing tracks in Anderson Township and Warren County could be full-scale "racinos," with video slot machine gambling flanking live and simulcast betting on the horses.

Tuesday night, Ohio legislators hammered out a Republican budget proposal that could ask voters to choose between paying an extra 1-cent on the dollar sales tax - or legalizing video slots at tracks.

The proposal, which could be passed by the House today, approves a temporary increase in the state sales tax and puts racetrack casino gambling on the November ballot.

"The campaign will be either/or," said Rep. Jim Trakas of Independence, the fifth-ranked Republican in the House. "People will understand their alternative is higher taxes or allowing people who gamble to pay for it."

As Ohio grapples with the worst budget crisis in more than 50 years, legalized gambling may have its best chance ever to pass this year.

An unprecedented group of factors has created a strange alliance of big gambling, little horse tracks and strapped social services groups pushing for an issue that Ohio lawmakers have battled to a standoff for years.

Ohio faces a $4 billion to $5 billion budget deficit over the next two years and is nearly surrounded by three states that allow casino gambling.

Powerful forces sense an opening.

Big gaming money, owners of sagging horse tracks, social service groups desperate to avoid big program cuts, and gambling opponents including religious groups are all in the fight. But, after today's House vote, it may be up to the voters in the November general election to decide whether Ohio wants to take the up to $900 million a year that video slots could generate.

Big gaming money pours in

According to Ohio Citizen Action, a nonpartisan political watchdog group, Ohio candidates and political parties have received more than $1 million from the gambling industry and others pushing gaming.

Big money is flowing in from out of state and into the hands of the best lobbyists in the business. Las Vegas casino developer Stephen Wynncontributed $49,000 from 1999 to 2001 to the Ohio House Republican Campaign Committee.

The chairman of Wynn Resorts, Wynn is developing the $1.85 billion Le Reve casino and resort in Las Vegas and previously developed six major casinos in Las Vegas, Atlantic City and Mississippi, including The Mirage and Bellagio.

Another Las Vegas gaming mogul, Stanley Fulton, gave $500,000 to the GOP. Fulton is the former chairman of Anchor Gaming, a maker of gaming machines and systems, and the owner of Sunland Park Racetrack and Casino, a New Mexico racino.

MTR Gaming Group, the publicly traded operator of the Mountaineer Race Track & Gaming Resort in Chester, W.Va., is merging with Scioto Downs south of Columbus, one of the tracks pushing for racinos in Ohio.

Wynn, Fulton and MTR all refused comment for this article.

But, in a Christmas Eve press release announcing the merger, MTR president and CEO Edson Arneault said the purchase of Scioto Downs and the planned construction of a horse track in Erie, Pa., "would hedge our market position in the event of enhanced gaming legislation in either state."

Horse tracks seek salvation

The owners of Ohio's seven horse-racing tracks, including River Downs in Anderson Township and Lebanon Raceway in Warren County, are poised to add casinos. Four racinos already operate in West Virginia. Backers here say seven racinos in Ohio could bring in $500 million to $900 million a year.

Six states in all have racinos, and other states - including Pennsylvania, New York and Kentucky - are considering them.

Horse interests also gave heavily to legislative re-election funds all over Ohio: The Horsemen's Benevolent & Protective Association gave $152,550. The Ohio Harness Horsemen's Association gave $111,650. Northland Park, a horse track near Cleveland privately owned by the Milstein family of Cleveland, gave $47,568.

To make their case in Columbus, the tracks have formed an association and hired a lobbyist, Anderson Township's Scott Borgemenke, a former state GOP operative who ran the powerful Cincinnati Business Committee and once served as top policy advisor to Gov. Bob Taft.

"This is the first time a coalition of tracks and horsemen have come together, working with one voice and with one message," Borgemenke said. "We'll have to wait for some kind of (gambling) bill to move, but we believe as there is more talk about budget cuts or tax increases people are going to start looking at alternate revenue sources."

"I think I've heard from every major lobbying firm around town," said Ohio Senate President Doug White, R-Manchester. "All the lobbyists are getting turned loose. (The pro-gaming forces) are getting the best horses lined up and will have a very strong approach to our members. It will be a very intense discussion."

Teachers to flower lovers

For the first time, open supporters of gaming may include college presidents, doctors, teachers, social workers and the arts community. These groups are feeling the direct effect of cuts due to the budget crunch.

"Everybody that's involved with the budget is now getting involved," said Sen. Lou Blessing, R-Colerain Township, a longtime Statehouse advocate of expanded gambling. "Universities, schools, Medicaid people - anybody involved with funding is pulling their hair out why we are not doing something about this (budget) problem.

"Everybody involved in the budget is now getting involved."

"This is lobbying 2003," said Turfway Park president Bob Elliston, adding the $2 billion Kentucky horse-racing industry would be back pushing its own racino bill again next year in that state. "You create some grassroots momentum amongst a variety of groups and constituencies that could benefit from a bill that brings new money into the state."

The Republican plan discussed Monday would give Ohio local governments back the $1.3 billion in budget funds originally slated for a cut.

These are cuts that caused statewide outcry, including Cincinnati Mayor Charlie Luken's stated concern last week that the city would have to close Krohn Conservatory and many libraries.

"With a projected deficit of $4 billion to $5 billion, I don't see how we can do the next operating budget for (2004 and 2005) without seriously considering gambling," said Sen. Mark Mallory, D-Cincinnati. "Because we are either going to have huge cuts in services or massive tax increases, so I think it would be to everybody's benefit to really look at" allowing racetracks to offer video lottery terminals.

Governor opposed

The measure put forward for a House vote today must still go to the Senate, which can revise it.

And, the current Republican proposal must still be passed by Taft, who opposes gambling.

But even Taft, who has promised to veto legislation legalizing gambling, predicts Ohio's voters would ultimately decide the issue.

"I remain opposed to (gambling). It's not the responsible way to balance the budget," Taft said during a March 5 news conference announcing a $140 million funding cut to Ohio's public schools.

"It's bad social policy ... (but) it will definitely go to the ballot."

Taft and others opposed to gambling must certainly find solace in the issue's history on the ballot. It lost in 1990 and again in 1996. The last defeat was not even close.

An initiative that would have allowed casinos in four urban areas, including Cincinnati, was defeated by more than 1 million votes and failed to win in any of Ohio's 88 counties.

"There are going to be (several) plays to legalize some form of gambling, and we are going to fight them all," said David Zanotti, president of the Ohio Roundtable in Columbus, a conservative public policy group.

Religious groups are also opposed.

"We will oppose gambling whatever form it is in," said Tom Smith, director of public policy for the Ohio Council of Churches, which represents more than 6,000 congregations across the state that have nearly 2.5 million members.

"It's very clear the citizens of Ohio are against casino-style gambling," said the Rev. John Edgar of the Ohio Methodist Conference, which led the opposition to casinos in 1996. "It's a waste of money and energy to put it back on the ballot. I'm confident we would win even if those who want to expand gambling spent millions on a campaign."

Issue to the ballot?

Despite the gathering "perfect storm" of factors, not everyone in Columbus is convinced legalized gambling can win in the Statehouse.

"A lot of people think (video terminals) are the solution to our budget problems," said Sen. Leigh Herington, D-Ravenna. "I think it is unlikely it is going to happen ... because I don't think there is enough support for it."

But many lawmakers say it's a matter of pragmatism - and simple economic geography.

"Gambling is an option we need to put back on the table," said Rep. Bill Seitz, R-Green Township. "If I step one foot out of my district I'll be in Indiana and I'll be run over by the volume of automobiles traveling to Lawrenceburg and points west to those casinos.

"That is money leaving Ohio that does not come back to Ohio."

E-mail pcrowley@enquirer.com