Sunday, January 23, 2011
Through the process of elimination, it can speculated that Rock Ohio Caesars would be a major investor if — and it’s a big if — a horse-racing track and resort that’s been proposed for the Mahoning Valley becomes a reality.
Rock Ohio is a joint venture featuring Dan Gilbert, owner of the Cleveland Cavaliers and founder of Quicken Loans, and Caesars, the world’s leading gaming and entertainment conglomerate.
The joint venture was formed to own and operate the two full-service casinos being built in Cleveland.
The basis for this writer’s speculation can be found in the answer to the following question: Has the Mahoning Valley become a pawn in a chess game being played by highrollers in the gambling industry?
The game began when Indiana-based Penn National Gaming, owner of a slew of casinos and horse-racing tracks, decided to explore the possibility of relocating its track from Toledo to this region. Company representatives met with area state legislators and even picked out a site — property off Route 46 in Austintown.
Why would Penn National want to shut down its track in Toledo? For the simple reason that it’s building a full-service casino and resort there, as well another one in Columbus.
Constitutional amendment
But why the Mahoning Valley? Because of what did not happen two years ago. When the plan for a constitutional amendment to legalize casino-style gambling in Ohio was being finalized in 2009, this area was shunned. In addition to Toledo and Columbus, two other cities were made beneficiaries: Cleveland and Cincinnati. The two casinos in Cleveland and the one in Cincinnati are being developed by Gilbert and his partners.
It should be remembered that Gilbert and Penn National had joined forces to win voter approval of the constitutional amendment. Opposing the initiative was TruthPac, which was financed by the Jacobs family in Cleveland, millionaire developers who also own Mountaineer Casino Racetrack and Resort, Presque Isle Downs and Casino and Scioto Downs outside Columbus.
The Jacobses overplayed their hand — they dug up Gilbert’s record as a bookie while he was a college student — and lost.
So now, Ohio will have five Las Vegas-style casinos, while the seven horse-racing tracks could well end up with video lottery terminals (electronic slot machines) if the Ohio Supreme Court rules that such devices are permitted under current law.
What’s the play in the Valley? The plan by Penn National to locate a track in Austintown can be viewed as a direct challenge to Gilbert’s control of this part of the state. Penn’s plan triggered last week’s announcement by a newly formed entity, Mahoning Valley Downs & Resort, of a $300 million facility. If slot machines are permitted, it would be a “racino.”
Two of the principals in MVD&R, Rick Lertzman and Brad Pressman, came to town to unveil the project. But it is clear that they aren’t the major investors. They wouldn’t say who is putting up the money — no public dollars are being sought — but insisted there are three companies involved, all listed with the Securities and Exchange Commission.
The speculation
Here’s how the speculation unfolds:
It’s a safe bet that the Jacobs family isn’t behind this project. It would make no sense for MTR Gaming, which the family controls, to build a facility that would compete with its two other holdings within driving distance of Youngstown — Mountaineer and Presque Isle.
That leaves Gilbert, who has every reason to want to block Penn National from infiltrating his territory. With two casinos in Cleveland, Gilbert no doubt is banking on Valley residents making the easy trek to Cleveland to spend their money. But he would lose this lucrative market if Penn National establishes a presence here.
So, the millionaire many times over may be willing to move all in to keep his competition out.
As for the location, a survey shows there is only one possible site encompassing hundreds of acres — with water and sewer lines in place.
How will the people of the Valley know if this is a legitimate project, or simply a brilliant chess move?
An announcement by Gilbert and Caesars of their investment would provide MVD&R with instant credibility.