Friday, October 17, 2003

Ohio videoslots no sure bet

Local track owners pull for racinos

By Robert Anglen
The Cincinnati Enquirer

Greater Cincinnati racetrack owners are not yet willing to bet that the latest proposal to install slot machines at Ohio's seven horse parks will make it to the finish.

The state Senate on Wednesday approved funding college scholarships and school construction with revenue from video slot machines at the racetracks, but now the House must approve the plan before voters see it on the March 2004 ballot.

And track owners say they've gotten this far before - only to see the issue scratched.

"You are asking me to second-guess or look into the crystal ball of a politician, and I can't do it," said Jack Hanessian, general manager and co-owner of River Downs racetrack in Anderson Township. "We've seen things go up and down in this. Today we are up."

• The Ohio Senate passed a bill on Wednesday that would place before voters in March a proposal to permit video slot machines at the state's seven horse racetracks. Proceeds would be used to fund college scholarships and school construction.

• The Ohio House must also pass the bill. House Speaker Larry Householder is reluctant. He says the state ought to use the money to reduce the 1-cent sales tax increase that was enacted July 1.

• The horse racing industry says video slot machines would help them compete with riverboat gambling in other states.

Already, the proposal is drawing heat from lawmakers who say that slot machines at racetracks shouldn't be used to fund new programs.

"Our concern is creating new entitlements," said Dwight Clark, spokesman for House Speaker Larry Householder, R-Glenford. "The Senate has put forth a proposal that creates a new entitlement."

While Householder has indicated he "might be receptive" to so-called racinos if revenues are used to repeal a 1-cent sales tax increase imposed this year, he has not scheduled any hearings on the issue.

Under the Senate plan, the state would get 52 percent of revenue from the machines, and would spend up to $25 million of that on school construction. About $475 million yearly would go to scholarships.

About 12,500 students who graduate in the top 10 percent of their high school classes would receive $5,900 a year for four years if they attend college in Ohio, said Sen. Kevin Coughlin, a Republican from Cuyahoga Falls.

Republicans got support from several Democrats by adding a second scholarship based on financial need. Students would qualify through various performance standards such as attendance, grades and extracurricular activities.

Only four months ago, it was the Senate that killed a similar racino proposal that made it through the House. That one called for using video-slot machines revenues to bankroll a prescription drug discount program for seniors, to help pay for new school construction and to provide scholarships for college high-achievers. But Republican and Democratic lawmakers split over where the money should go.

Instead of ending up on the November ballot, the proposal went the way of several other legislative attempts to put slot machines at racetracks: nowhere.

"This has happened so many times," said Keith Nixon, whose family owns part of Lebanon Raceway. "In a lot of ways, it is still in the beginning."

The horse race industry is pulling hard for racinos. Track operators contend Ohio is losing millions of dollars to states with legalized gambling, such as Indiana, where the most profitable casino is 30 minutes away from River Downs.

Nixon said racinos are able to offer bigger purses than tracks without casinos, enabling them to draw big-name jockeys and host bigger and better races.

The latest racino proposal calls for giving $5,900 grants to the top 10 students in each of Ohio's graduating classes. By 2009, there are estimated to be about 50,000 students receiving grants.

In addition, the proposal calls for spending 5 percent of revenues or $25 million, whichever is less, on school facility construction.

"We picked it up after everything fell apart in the spring," said Sharon Hershey, legislative aide to Coughlin. "It's anybody's guess what they are going to do now," she said of the House.

Hanessian said track owners still have the option of petitioning to put the issue on the ballot.

He said the biggest fighting over the plan has always been where to spend the money, not about whether racinos are OK.

No matter how the issue gets on the ballot, Hanessian said, voters want to make sure they know where the money goes.

"The state is not going to fund the campaign for passage (of racinos). We are," he said. "People do look at where the money is going. ... They don't want to be fooled."


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