Casino consultant charged Ohio $1.5M

Associated Press

COLUMBUS

Invoices show the consultant helping Ohio develop rules and regulations related to its four new casinos charged the state more than $1.5 million in 2011.

More than $1.4 million of the costs for Atlantic City, N.J.-based Spectrum Gaming Group came from fees of up to $375 per hour, The Columbus Dispatch reported after reviewing the documents. About $85,000 was travel-related as Spectrum representatives visited regulators and the first two casino sites in Cleveland and Toledo and went elsewhere to meet potential vendors and a developer.

Spectrum’s services will be funded with fees from vendors, employees and the casinos, which pay $1.5 million to apply for a license, said Jo Ann Davidson, chairwoman of the Casino Control Commission.

The billed expenses included nearly $200 a night for stays at a Columbus hotel near the casino oversight agency and round-trip flights between Philadelphia and Columbus that topped $1,000.

Spectrum’s lead consultant for Ohio, who was overseas and unavailable for comment, referred questions to regulators, the newspaper said.

The commission believes Spectrum is following its work agreements with the state, Casino Control Commission executive director Matt Schuler said.

“What I have seen is, they stay very strict to the terms of the agreement and to the scope of the work that has been approved by the commission,” Schuler said.

“We need to be good stewards of the funds and make sure they’re following the letter of the law and have it be transparent.”

Davidson said consultants traveled more in the initial stages because the commission had a smaller staff. Regulators expect to spend less for outside reviews of applications for the planned casinos in Columbus and Cincinnati, in part because the same owners are involved, and rely more on commission staff as it hires more people.

“If we can do it ourselves, that is exactly what is going to happen,” Schuler said.

He defended the expensive price of Spectrum’s air travel. State contractors are prohibited from flying first-class and are asked to book the cheapest flights available, but Schuler noted that the charges depend on the going prices, especially when flights are booked under time constraints.

“As we’ve been working through the licensing process, on many occasions we needed their attorneys to assist us with very little notice in our discussions with the casino operators,” he said.

There are set government rates for hotels and food allowances, but a spokesman for the state Office of Budget and Management said there’s no limit on air travel expenses.

Spectrum’s hotel charges were about twice the government rate, which some hotels won’t honor for government contractors. The $56 allotted for each traveler’s daily meals and incidental expenses was on par with the government rate.

Ohio’s second casino consultant, hired to advise the state on how to get the best returns from its burgeoning gambling market, is expected to be owed much more than Spectrum because it struck a deal to get a percentage of casino revenue it helps generate. Los Angeles-based Moelis & Company is expected to earn $2.4 million in retainer fees through April and incentives worth up to $13 million, the newspaper said.

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Information from: The Columbus Dispatch, http://www.dispatch.com