Is Ohio rolling the dice on casino or does Issue 6 promise a big payoff?

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By Mark Rembert

There are two things Issue 6 has provided members of the press: lots to explain, and lots of great headlines. So as Ohioans prepare to “bet” (or have already bet) on whether or not gambling will be good for the state, we’re going to look at the debate over Issue 6.

Issue 6 is an amendment to the Ohio constitution that would authorize the establishment of one casino in Ohio. We find Issue 6 on the ballot largely due to the efforts of Lakes Entertainment, Inc., a national casino developer. The proposed casino will be built in Clinton County at the intersection of Ohio State Route 73 and I 71 outside of Wilmington. Yesonissue6.com–the official Vote Yes website–lays out the argument for the casino based on an independent economic impact analysis conducted by Michigan Consultants, a private consulting firm in Lansing, MI (It should be noted that Michigan Consultants has promoted casinos and gambling establishments in Michigan in the past). You’ve probably seen the ads, but I’ll quickly sum up their case:

• Ohio is losing out to its neighbors - Indiana, Pennsylvania, Michigan, and West Virginia all have legalized casinos which generates hundreds of millions of dollars in tax revenues for those states. Some of that money is coming from Ohio residents.
• Investment in Ohio - the casino development is expected to cost at least $600 million
• J-O-B-S - the casino is projected to create–directly and indirectly–8,732 jobs
• Share the Wealth - the gaming tax levied against the casino is projected to generate $255 million in tax dollars which will be shared among Ohio’s 88 counties

Given Ohio’s economic woes, its hard not to take notice to these numbers, especially given that southwest Ohio may soon lose over 10,000 jobs as a result of the DHL closure. But critics have argued that the wording of the constitutional amendment would leave a loophole allowing the casino to operate tax free in the future. Their argument rests on a provision that adjusts the tax rate for the casino in Wilmington if another casino opens in Ohio. In such a case, the tax rate on the Wilmington casino will fall to 25% or a rate lower then the other casino (whichever is lower). Critics identify a worst-case scenario in which a casino would be opened on an Indian reservation in Ohio. Since the Indian casino would be exempt from taxes, critics argue that the tax rate on the Wilmington casino would also have to be lowered to zero. The loophole case sounds like a bad deal for Ohio, but the Cleveland Plain Dealer provides an excellent analysis of the “loophole problem” showing that the hole is unlikely to be big enough for anybody to squeeze through and threaten the taxes generated by the Wilmington casino.

So although we might not have the loophole to be afraid of, many groups have identified other issues with the amendment that raise concerns. The Buckeye Institute published its on analysis of the potential economic impact, and concludes that Ohio will lose $1 billion by not auctioning the rights to control the casino monopoly in Ohio (as opposed to basically giving away the right to Lakes Entertainment, Inc. as Issue 6 does). The Buckeye Institute has also argued that the casino will draw from the tax revenues generated by the Ohio Lottery and it will hurt leisure and entertainment business already established in Ohio. Issue 6 has been publically opposed by many groups, including the League of Women’s Voters on the ground that the amendment is inappropriate for the Ohio constitution, and by Fraternal Order of Police for its lack provisions regarding law enforcement.

 

Now that you know the facts, its time to weigh the odds and consider where to lay in chips regarding Issue 6. Please feel free to share your opinions on Issue 6 in our comments section, and remember to keep checking the WYSO News Blog for more analysis and coverage of the issues and candidates.

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