43
Fourth quarter casino tax payouts plummet
COLUMBUS
Fourth-quarter Ohio casino tax distributions to counties and major cities for 2016 plummeted 11 percent below their 2015 levels.
However, when a full-year comparison is made, the decline in distributions to those local governments was not nearly as precipitous.
The full-year decline was between 2.4 percent and 2.7 percent from 2015 to 2016, according to Ohio Department of Taxation figures.
Mahoning County and Youngstown each got $344,960 for the fourth quarter of 2015, but that fell to $307,490 for each in 2016’s last quarter.
In counties with a major city, the major city and the county government share equally in the county’s total.
Comparing the fourth quarters of 2015 and 2016, the drop was from $606,997 to $540,331 for Trumbull County and from $312,665 to $277,937 for Columbiana County.
The fourth-quarter 2016 distributions were the lowest since the peak for fourth- quarter distributions in 2013 – during the first year all four Ohio casinos were open.
Ralph Meacham, Mahoning County auditor, noted that casino tax revenues for the final quarter of 2016 have dropped about 7.8 percent from $333,397 each for Youngstown and Mahoning County for the third quarter of that year.
“I’m not sure if we’re seeing a trend there,” Meacham said, noting that revenues previously have fluctuated from quarter to quarter.
“It seems to be bouncing around. I don’t know if I can draw any conclusions from this,” he said of the quarterly casino tax revenue reports.
In 2016, Youngstown and Mahoning each got $362,488 for the first quarter and $332,580 for the second quarter.
Jessica Franks, communications director for the Ohio Casino Control Commission, said she wasn’t sure why tax revenues dropped 11 percent in the fourth quarter.
However, she did note that the single major change during 2016 was the renaming of the Cleveland and Cincinnati casinos from Horseshoe to Jack in May and June, respectively.
The security and traffic control arrangements, including road closures, for the summer 2016 Republican National Convention made it difficult for regular local patrons to get to the Cleveland casino, she observed.
“A lot of them may have stayed away that week,” Franks said.
“The tax distributions are dependent on the revenues that are brought in by the casinos,” she noted.
The commission regulates Ohio’s four casinos.
Full-year casino tax distributions fell from $1,368,810 in 2015 to $1,335,955 in 2016 for Mahoning and Youngstown, from $2,408,582 to $2,347,583 for Trumbull County and from $1,240,665 to $1,207,556 for Columbiana County.
The fourth-quarter activity in 2016 occurred two years after Hollywood Gaming at Mahoning Valley Race Course in Austintown, which was the last of Ohio’s seven racinos, opened Sept. 17, 2014.
Ohio’s casinos have suffered from competition of its racinos, said Alan Silver, a gaming industry analyst on Ohio University’s faculty.
The racinos are conveniently located near suburban gamblers and offer entertainment and free parking, he observed.
The renaming of the Cleveland and Cincinnati casinos didn’t help them, he added.
In Ohio, total casino revenue fell from $812,320,350 in 2015 to $797,942,734 last year.
Meanwhile, total Ohio racino revenue rose from $831,362,399 in 2015 to $893,501,865 in 2016.
The Austintown racino’s video lottery terminal revenue rose from $92.1 million in 2015 to $99.9 million in 2016.
“For some people, the racino might just be a little bit closer to them than a casino, so it might just be a factor of just sheer convenience,” Franks said.
The racinos also appear to have figured out customer preferences in restaurant and entertainment amenities, she said.
The Austintown racino is conveniently located for residents of Mahoning, Trumbull, and Columbiana counties and nearby Pennsylvania residents, observed Mahoning County Commissioner Carol Rimedio-Righetti.
“Our racino here offers the slots. They also offer, on the weekends, great entertainment. They have excellent food. It’s a destination,” she added.
Longer distance travel to a casino is less convenient for Valley residents, especially under winter driving conditions, she observed.
All Ohio casinos now have a multi-year operations record, with the Cleveland and Toledo casinos having opened in May 2012 and the Columbus casino in October 2012, followed by the Cincinnati casino in March 2013.
The first racino, Scioto Downs in Columbus, opened June 1, 2012.
Silver said skill-based games need to be considered as another amusement option.
The Ohio Casino Control Commission is now developing rules concerning regulation of skill-based amusement machines and will seek public comment on future draft rules.
Ohio’s casinos pay a 33 percent tax on gross gambling revenues, but that tax isn’t paid on their food and beverage sales.
Tax distributions from the gambling tax collection go quarterly to Ohio’s 88 counties and eight major cities, including Youngstown.
Ohio’s casinos have slot machines and table games, but no horse racing.
Its racinos have slot machines and horse racing, but no table games.
“If the patrons don’t necessarily want to play table games, like poker or blackjack, then the racinos may present a more attractive option for them,” Franks said.