October 21, 2014

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Casino backers lean on jobs angle

COLUMBUS — Backers of a casino proposal on the November ballot are counting on Ohio’s abysmal economy to shift the winds in one of the nation’s most stubborn anti-gambling states.

Everything about the campaign — the state’s fifth major gambling referendum in the last two decades — centers on the jobs issue.

Unemployment in Ohio, a once-proud manufacturing mecca, has topped 10 percent. A related decline in income-tax revenue has set off a battle over balancing the state budget that lingers nearly four months into the fiscal year. Casinos could raise nearly $1 billion for the state.

The pro-casino forces — Penn National Gaming Inc. and Cleveland Cavaliers owner Dan Gilbert — have even named themselves the Ohio Jobs & Growth Committee.

Omnipresent TV ads herald creation of 34,000 jobs from four casinos to be built in Cleveland, Columbus, Cincinnati and Toledo.

And, in a reversal from past campaigns, a host of unions eager for employment are working the phones.

An Ohio Newspaper poll conducted by the Institute for Policy Research at the University of Cincinnati found that 59 percent of registered voters support Issue 3 on the Nov. 3 ballot. The four previous gambling issues, all of which failed, had similar strong support in advance of voting.

Still, the usual anti-gambling coalition of business interests, church groups, newspapers and high-profile political figures isn’t as united this time, said Herb Asher, an emeritus political science professor at The Ohio State University.

“What we’ve seen in the past is that gambling issues do well early on in the campaign, and then all of those voices weigh in and support erodes very sharply,” he said. “What you’ve got this year is the economy, the idea of keeping dollars in-state, and the growing awareness that there’s gambling all around us having an impact.”

This year’s gambling issue asks voters to amend the Ohio Constitution on such casino issues as the parcels on which casinos could be built; how to distribute a 33 percent casino tax to counties, cities, schools and gambling regulation and addiction services; and the combined $300 million in ongoing state license fees and minimum initial investments required for each facility.

The anti-casino TruthPAC — backed by MTR Gaming Inc. chairman and majority owner Jeffrey Jacobs, a Cleveland developer — has taken sharpest aim at the job figures in its opponents’ ads.

TruthPac says casino proponents ignore social costs such as addiction, divorce and bankruptcy, and the impact of casinos’ low food and beverage prices on adjacent bars and restaurants.

A University of Cincinnati jobs study about the projected casino impact released earlier this year predicted 39,251 jobs and $4 billion in overall economic impact. Researcher Jeffry Rexhausen confirmed social costs weren’t considered.

Of total jobs predicted, 15,807 would be permanent, the study said. Of those, 7,500 would come from direct in-state employment at casinos. A quarter of the casino jobs would pay $27,500 a year or more, and 2 percent — 150 jobs — would pay $80,000-a-year executive salaries.

The average casino wage, according to the study, would be $26,300 a year, about $13,700 lower than the most recently calculated state median.

For proponents, including a vocal group of Cincinnati state lawmakers, a key argument for legalization is geography, since neighbor states Michigan, Indiana, West Virginia and Pennsylvania all allow casino gambling.

They note that Ohio residents — particularly in the border cities of Cincinnati, Toledo and Cleveland — go out-of-state to spend their recreational gambling dollars. Ohio taxpayers lose the revenue, the argument goes, but still bear the social costs.

Anti-gambling groups, including social conservatives and churches, prefer to paint Ohio as an intentional holdout against gambling’s dark side. They have successfully fought back riverboat casinos, racetrack slots, and other gambling proposals four times in 19 years.

Democratic Gov. Ted Strickland, an ordained Methodist minister, opposes the casino issue, but reversed his position on a separate gambling issue earlier this year. He fought successfully to include slots-like video lottery machines at horse tracks — and more than $900 million in associated revenue — in the state budget.

However, the Ohio Supreme Court agreed with a legal challenge that sought to put the issue before voters next year, creating the budget hole.

Church groups have since urged Strickland to begin campaigning more publicly against the casino issue. He has declined.

Highlights of Issue 3

  • Authorizes one casino each in Cincinnati, Columbus, Cleveland and Toledo.
  • Levies a fixed tax of 33 percent on gross casino revenue.
  • Distributes the casino tax in the following percentages: 51 percent to Ohio’s 88 counties, proportionate to population; 34 percent distributed among public school districts; 5 percent distributed among host cities; 3 percent to a new Ohio casino control commission; 3 percent to the Ohio Racing Commission; 2 percent to law enforcement training; 2 percent to problem gambling and addiction services.
  • Requires initial license fee of $50 million for state job training.
  • Requires minimum initial investment of $250 million per facility built (construction not required).
  • Allows Ohio casinos to adopt any game authorized in Michigan, West Virginia, Indiana or Pennsylvania.