Governor’s veto of racino bill should provide needed clarity

Of all the comments made after Ohio Gov. John Kasich rejected a legislative proposal to provide $500,000 each to Austintown and Dayton for hosting racinos, this one from veteran legislator Ron Gerberry of Austintown is of greatest concern:

“I’m just hopeful that the persuasion of the governor’s office is very strong in 2015 on the majority party of the Senate. The reason that this is not getting done is that there are some folks in the majority that believe that the host racino communities shouldn’t be paid $500,000 a year, and they’ve been able to stop it. That’s unfortunate.”

We urge Gerberry to send a letter to Republican Gov. Kasich laying out the basis for his claims and revealing the names of the GOP senators who seek to deprive Austintown and Dayton of the annual payments of $500,000.

The money was promised to the two communities way back when the racinos were being created in the General Assembly. The bill did not specify where the money would come from — Penn National Gaming, owner of the Austintown and Dayton racinos, or the $150 million Penn National will be paying into a special fund over the next 10 years.

State Rep. Gerberry, a Democrat, has been around Columbus long enough to know the political games that are played on a daily basis. And, with Republicans firmly in control of state government, including huge majorities in the House and Senate, Democratic legislators are naturally suspicious when a monkey wrench is thrown into the legislative process.

In vetoing the racino amendment in House Bill 494, the governor made two key points that should become the basis for negotiations next year.

First, he said that the $500,000 that Austintown and Dayton are supposed to receive each year must come from the racino operator and not from the $150 million special state fund. The amendment Kasich vetoed said $250,000 would come from Penn National and $250,000 from the fund.

Second, the governor made it clear that in addition to Austintown and Dayton, four other communities that host racinos, North Randall, Northfield, Lebanon and Cincinnati, must also receive annual payments from the owners of the racinos. The only exception is Franklin County, which is home to Scioto Downs Racino. That’s because Hollywood Casino Columbus pays the county for playing host to its casino gaming facility.

In addition to Penn National, the other gaming companies operating in Ohio are Rock Ohio Caesars, MTR Gaming, Hard Rock International, Miami Valley Gaming and Pinnacle Entertainment.

Vegas-style casinos

There are four Vegas-style casinos in the state: Hollywood Casino Toledo and Hollywood Casino Columbus owned by Penn National; Horseshoe Casino Cleveland and Horseshoe Casino Cincinnati owned by Rock Ohio Caesars.

By rejecting the racino-payment amendment, Gov. Kasich has held in abeyance a lawsuit threatened by Penn National, which argued it was being singled out by the state for special taxation by virtue of its having to make annual payments to Austintown and Dayton.

However, the issue of whether the Wyomissing, Pa.,-based company would be satisfied if other companies were also required to pay their host communities remains unresolved.

The governor’s office has a major challenge balancing the interests of all the parties involved.

But here’s the bottom line: Austintown has a right to the $500,000 a year to make up for the added costs the township must bear since Hollywood Gaming at Mahoning Valley Race Course opened in September.