Local communities have waited long enough for their gambling bet to pay off

Just as nuclear energy failed to live up to its promise 50 years ago of electricity so cheap that it wouldn’t be worth running it through a meter, the river of cash that gambling proponents touted to Ohio voters in 2009 turned out to be less than a sure thing.

And so we see local host communities of the state’s racinos – including Austintown – wondering why they’re still waiting for the $500,000 a year they were supposed to get from the state. Austintown and Dayton were promised the money in a deal that would move horse-racing tracks to their communities, along with hundreds of slot machines at each facility.

It was seen as a win-win-win situation. The state would get additional income from the expansion of legalized gambling, the communities would get an influx of new money to cover the cost of providing services to the new businesses, and the state’s struggling horse- racing industry would get a life-saving subsidy.

But Gov. John Kasich used his line-item veto last December to strike from the state budget an amendment that would have required Penn National Gaming to pay $250,000 to each community, with another $250,000 for each coming from the Casino Operator Settlement Fund. Kasich said the entire amount should come from Penn National, and that, further, four other racino communities in the state – North Randall, Northfield, Lebanon and Cincinnati – should also receive payment from the owners of the gambling facilities.

Penn National, which operates Hollywood Gaming at Mahoning Valley Race Course, cried foul, pointing out that the company made an initial $75 million payment as part of its racino deal and would be paying another $75 million over 10 years into the settlement fund.

Half a year later, the General Assembly is still struggling to come up with a solution that makes good on the state’s commitment to the local communities.

SCHIAVONI’S PROPOSAL

Sen. Minority Leader Joe Schiavoni of Boardman, D-33rd, has put together another proposal that is similar to the one Kasich vetoed, except that it does cover all six communities. It also cuts the length of those $500,000 commitments from three years to two. Half would still come from the track-relocation fund and half from the operator in each community.

State Sen. Bill Beagle, a Republican from Tipp City, is working with Schiavoni.

“I am trying to find a very precise solution that will allow the local jurisdictions some funds in addition to what they already receive, allow the racino operators certainty in terms of their obligation and keep the cost to the state at a level the administration can support. I don’t know that we’re ever going to find a dollar figure that everyone likes, but if we can find a figure that avoids lawsuits and vetoes, then maybe that’s the right number,” Beagle said.

To our mind, the figure was established two years ago when Austintown was told it would get: $500,000. Penn National makes the case that the money should come from the $150 million it agreed to as a cost of doing business. Gov. Kasich would have Penn National pony up more.

Schiavoni and Beagle are offering a compromise that will not fully please Kasich or the racino operators, but politics is the art of compromise.

And speaking of politics, the Schiavoni-Beagle amendment might have something going for it now that it didn’t have in December. Gov. Kasich has been busy of late positioning himself as a possible Republican presidential contender. And part of his narrative is that he is a pragmatist who can work across party lines. That should make this deal more attractive to him today than it was last year.

That said, if this passes, the host communities are going to have be concerned about what happens two years from now. If the state’s revenue from gambling continues to fall below the initial projections, and increased competition among gambling venues puts pressure on the companies’ bottom line, local legislators will have to fight even harder to protect the interests of the communities they represent.