Issue 6 seeks OK to build first casino

By Marc Kovac

The amendment would allow the construction of a $600 million casino complex in Clinton County.

COLUMBUS — Ohio voters have been asked four times since 1990 whether the state should allow casinos within its borders.

In 1990, 1996 and 2006, a majority of residents who cast ballots voted “no.” The most recent defeat, during the 2006 gubernatorial contest, promised slot machine revenue-backed college scholarships; it failed 43 percent-57 percent.

Enter No. 4, a constitutional amendment that appears on the November general election ballot. It’s Issue 6, the last of five to be determined by voters (with Issue 4 removed at the request of its petitioners).

If approved, the amendment would allow the construction of a $600 million casino complex, located roughly between Columbus and Cincinnati in Clinton County.

Its backers, an out-of-state entertainment company and two Ohio entrepreneurs (with the former holding a controlling interest in the project), say the new development will lead to the creation of thousands of jobs and millions of dollars in tax revenues for state, county and local governments.

“We think it’s going to help a struggling economy and provide hundreds of millions of dollars [and] sorely needed jobs and revenue needed to help Ohio’s county governments,” said Rick Lertzman, one of the Ohio partners promoting the project.

Its opponents include another out-of-state casino company that operates in neighboring Indiana and a conservative group long opposed to such gambling expansions in Ohio. They are urging “no” votes, based on the wording of the ballot issue and resulting loopholes, and on the social and economic costs posed by increased gambling activities.

“The idea of putting a casino here has been voted on three times in our state and in all cases voted down,” said state Sen. Ron Amstutz, a Republican from Wooster and vocal opponent of the casino project and other gambling expansions. “In those situations, a few people in Ohio would have gotten rich. In this case, a few people out of Ohio in another state would get rich, which is an even a worse idea if you think of it from that perspective.”

The casino is being promoted by Lertzman and Brad Pressman, who formed myohionow.com as part of their efforts; along with Lakes Entertainment Inc. (Nasdaq: LACO).

According to information compiled by the company online at www.lakesentertainment.com, Lakes “has development and management or financing agreements with four separate tribes for casino operations in Michigan, California and Oklahoma, for a total of five separate casino sites. Lakes is managing the Cimarron Casino for the Iowa Tribe of Oklahoma and the Four Winds Casino Resort for the Pokagon Band of Potawatomi Indians. Lakes is also involved in other business activities, including possible development of a company-owned casino resort project in Vicksburg, Miss. ....”

The new casino would be built close to Wilmington in southwestern Ohio, near the intersection of Interstate 71 and state Route 73.

Proponents say the casino will create up to 5,000 jobs with average salaries of $34,000. According to a study by a Michigan group released by Lertzman and Pressman in September, the project would generate more than $1 billion in adjusted gross revenues, including $849.7 million in gaming revenues and $164 million in food and beverage sales.

The capital investment for the facility would top $635 million. And the project, according to proponent arguments compiled by My Ohio Now, would generate $200 million in special tax revenues, most of which would be distributed to Ohio’s counties.

But opponents, including Republican U.S. Sen. and former Ohio Gov. George Voinovich and Ohio Roundtable President David Zanotti, said the social and economic costs far outweigh the potential benefits.

“Encouraging this will be a net negative by not only pulling jobs from other businesses that are in the region but also by pulling money out of people’s pocketbook, many of whom could be better served by investing it in something that would help them for their future a lot more than this would,” Amstutz said.

“They always talk about the money that you’re getting,” Voinovich said recently. “But what about the money that people are spending on gambling that they’re not [spending] on automobile[s] or they’re not buying a vacuum cleaner? Or how about paying their mortgage or their car payment.”

He added, “I really believe that these proposals that we have over the years, including the one that we have before us, are a threat to Ohio’s families. ... It causes a tremendous concern in the community and generates a great deal of social services that have to be provided.”

Zanotti’s group — www.aproundtable.org — also has pointed out loopholes in the ballot issue wording, including one concerning the opening of any future casinos in the state. Under its interpretation, if a tribal casino is able to gain approval to establish operations in Ohio, then My Ohio Now’s tax rate would be reduced to zero.

But Pressman countered that it’s unlikely that a tribal casino will secure the necessary approvals to open in Ohio, and, regardless, the My Ohio Now project would continue to pay taxes in any case.

He also dispelled opponents’ comments that casino profits would go out of state.

“They don’t look at all the facts of the matter,” he said. “They don’t look at an entire business running. They don’t look at business expenses. They don’t look at taxes that we’re going to have to pay as an operating business in the state of Ohio.”

He added, “I mean, the fact of the matter is, in terms of tax rate, this casino will be the highest-taxed business in the state of Ohio. ... The truth is, this is the largest private investment in the entire state of Ohio in the 21st century, and it’s being done without state finances. The state isn’t really putting up any kind of money. The taxpayers don’t have to pay really anything for this investment.”

mkovac@dixcom.com