A’town racino should beware

Sandwiched between the headline-grabbing massacre at Marjory Stoneman Douglas High School in Florida and the politically charged Winter Olympics in South Korea were several stories out of Pennsylvania that could impact the Mahoning Valley’s economy.

Indeed, the stories brought to mind a piece that was published in 2015 in The Vindicator under the headline, “What are the odds Ohio racinos will add table games?”

There are seven racinos – horse-racing tracks and slots casinos – in the state, including Hollywood Gaming at Mahoning Valley Race Course in Austintown.

There are four Las Vegas style, full-service casinos in the state – Cleveland, Toledo, Columbus and Cincinnati.

Here’s what The Vindicator story published three years ago said, in part:

“Now that all 11 gaming facilities are open in the Buckeye State, what’s next for Ohio gaming?

“The main question for patrons of the state’s seven racinos is when will table games come to the facilities?”

The short answer: It all depends on what’s at stake.

If the racinos find themselves at a financial disadvantage by not having table games, there could be a push to place the issue before the voters of Ohio.

That push may well begin in the Mahoning Valley given what’s going on in Pennsylvania.

Last week, the Associated Press reported on the Pennsylvania Gaming Control Board conducting an auction for the fourth of 10 licenses for new mini-casinos. The winning bidder – albeit short-lived – was Las Vegas Sands Corp. The international casino giant offered $9.9 million to build the casino within 15 miles of a point picked by the company in Hempfield Township in Mercer County – a stone’s throw from Youngstown.

Customer base

In other words, the Sands Corp. looked across the Pennsylvania-Ohio line and saw the Mahoning Valley with a customer base deeply rooted in gambling, legal and illegal.

Here’s how the Associated Press framed the Sands Corp.’s bid:

“There are already three casinos operating in western Pennsylvania, close to the Ohio border: Rivers Casino in Pittsburgh, Meadows Racetrack and Casino in suburban Pittsburgh and Presque Isle Downs Casino in suburban Erie.

“Other than metropolitan Cleveland, eastern Ohio’s only gambling location is the slot machine-only Hollywood Gaming Mahoning Valley in Youngstown.”

Under Pennsylvania law, mini-casinos can operate up to 750 slot machines and license holders can pay $2.5 million more to operate 30 table games. Bids are limited for now to the owners of Pennsylvania’s 11 casino licenses that allow holder to operate up to 5,000 slot machines and 250 games.

Of interest to Valley residents, Penn National Gaming, which owns the Austintown racino, won the first mini-casino license in Pennsylvania last month.

Penn National bid $50 million to put one in the south-central region that includes the city of York.

As for the Sands Corp.’s bid, it was invalidated by the gaming control board just hours after it was granted. Why?

For the simple reason that the company had said it would build the mini-casino within a 15-mile radius of Hempfield Township in Mercer County.

Unfortunately, the radius intruded upon a zone already reserved two weeks earlier by Mount Airy Casino Resort, according to a report in The Morning Call newspaper in Allentown.

Pennsylvania-based Mount Airy bid $21.2 million to build its mini-casino in the vicinity of New Castle in Lawrence County – a stone’s throw from Youngstown.

Thus, even though the Mercer County casino project has been shelved, Mahoning Valley gamblers looking for some table-game action will still be a short drive away from the Lawrence County facility.

Area gamblers can already be found at the tables in Jack Cleveland Casino downtown and Mountaineer Racetrack, Casino and Resort in Chester, W. Va.

Each of the full-service gambling establishments is just over an hour’s drive.

The one in Lawrence County would be even closer.

To be sure, there are people who simply enjoy playing the slots. But with craps being second nature to a goodly number of Valley residents, tables are the major draw. And the growing popularity of Texas Hold ‘Em and other poker games has given rise to a diverse clientele.

Looking over the casino landscape, it’s clear Hollywood Gaming at Mahoning Valley Race Course is being squeezed.

The comment three years ago from Jon Lucas, president of Hard Rock Rocksino Northfield park in the Cleveland suburb of Northfield seems prescient today:

“I hope the next step is that racinos get table games, and I certainly don’t have a crystal ball. … The single biggest comment we get from our guests is why don’t we have table games, and obviously that’s because of legislation. It seems like the demand is there for that and would make a more level playing field. … I also think it would do the same as VLTs [video lottery terminals] in Pennsylvania and West Virginia, in bringing business back [to Ohio].”

A constitutional amendment similar to the one approved by Ohio voters in 2009 for the four full-service casinos is the only way the seven racinos can be transformed.

In 2012, the Ohio General Assembly paved the way for the racinos to be run by the Ohio Lottery Commission. That legislative act triggered lawsuits with plaintiffs arguing that the expansion of gambling in Ohio requires a vote of the people.

But proponents argued that video lottery terminals are just an extension of the games offered by the lottery commission.

Table games, on the other hand, would change the status of the racinos, which is why another constitutional amendment would be needed.

Meanwhile, Pennsylvania continues to roll the dice in the Valley’s direction.