COLUMBUS — The high-stakes game of words over a vote on casino gambling in Ohio is under way. Both sides are placing big bets and doing a lot of bluffing.
In TV ads and direct voter mailers, they are fighting over which is the real out-of-state interloper meddling in Buckeye affairs, and they are playing their own numbers game over how much in tax chips Ohio counties could cash in from the proposed $600 million casino resort in southwest Ohio.
The election is a month from tomorrow, Nov. 4.
Ohio voters repeatedly and resoundingly have rejected casino gambling, most recently by a margin of 56 percent to 44 percent in 2006. This time, the backers — a pair of Cleveland developers partnered with the publicly traded, Minnesota-based Lakes Entertainment, Inc. — were out of the gate early, airing radio and TV commercials months before filing petitions to put the issue on the ballot.
“Our tax dollars are leaving the state at 65 mph,’’ proclaims a current MyOhioNow TV ad promoting the casino. “Ohio is the only state in the Great Lakes region not to have a casino. Can Ohio afford to stand alone?”
Early polls suggested the tactic may have worked, with voters appearing more receptive this time to the idea of a single casino off I-71 near Wilmington, Ohio, about 60 miles southwest of Columbus. But that was before the ad wars were launched almost two weeks ago, with Penn National Gaming Inc. serving as the principal financial backer of the opposition. The Pennsylvania-based company owns Raceway Park in Toledo and the Argosy casino just over the Indiana border about 70 miles from the Wilmington site.
The opposition’s ads play up Lakes’ Indian casino ties and use words like “deceptive’’ and “scheme’’ to describe the ballot issue.
“The out-of-state promoter of the Issue 6 casino scheme has admitted that they included wording in 6 that could lower their casino tax rate to zero,’’ an opposition ad states. “Now they want us to lock this loophole in stone in our state constitution so that they can take hundreds of millions of dollars out of state and avoid paying taxes on their huge gambling profits.’’
Issue 6 asks voters to write into the Ohio Constitution approval of the resort that includes a guaranteed up-front investment of $600 million that will include the casino, hotel, and other amenities. While not in the proposed amendment language, the backers of the Wilmington casino estimate the project would create a minimum of 5,000 jobs paying an average of $34,000 a year.
A tax of up to 30 percent on casino receipts — reportedly generating more than $200 million a year — would be paid to the state and divided among all 88 counties on a per-capita basis. Lucas County’s annual share would be about $8.5 million.
The opposition, however, has pointed to language in the amendment that, in the event a competing casino should win approval in the state, the Wilmington casino’s tax rate would drop to 25 percent or to the rate enacted for the new casino, whichever is less.
The opposition ads suggest this could drop the tax rate to as low as zero. The scenario backing this assumes that a tax-free Indian casino would come to the state, a scenario that both sides and recent Ohio attorneys general have described as unlikely.
There are no federally recognized Indian reservations in Ohio, but the Oklahoma-based Eastern Shawnee tribe has asked the federal government to recognize specific land it has agreed to purchase here. The state is fighting that move.
“We would not say that it’s likely, but it is our contention that it is possible,” said Bob Tenenbaum, spokesman for the No on Issue 6 Committee. “We’re talking about millions and millions of tax revenue being dependent on that. Given that there is that possibility, writing something into the constitution that would effectively lower the tax paid by the Clinton County casino to zero or at least much lower than 30 percent is a dangerous thing to do.’’
Rick Lertzman, one of the Ohio developers behind the Wilmington casino, argues that the founding of an Indian casino would not lower the tax rate to less than 25 percent.
He said the proposed amendment refers to a lower tax rate paid by a competing Ohio casino. Because Indian casinos do not pay taxes but rather negotiate fees with the state, he said there would be no comparable tax rate to lower the Wilmington’s casino’s rate to. The only downward pressure could come from another commercial-taxed casino, he said.
And he said the casino, hotel, restaurants, shops, and employees will pay all other federal, state, and local taxes that other businesses pay on the top of the 30 percent casino tax.
“What is the alternative if voters vote no on this issue?’’ Mr. Lertzman asked. “It means no jobs, no tax revenues, nothing. The money just keeps going to Argosy. We just keep pumping money into Indiana and keeping jobs in Indiana.”
David Zanotti, president of the Ohio Roundtable, a staunch gambling opponent, has been watching the ad wars. His group doesn’t plan to jump in with its TV message opposing Issue 6 until days before the election.
“I think the fact that two casino groups have been playing cannibal with each other is pretty indicative of their business. …” he said.
“They’ve been making such a mess of things, our entrance will be to come in and clean it up. People are going to be sick of this.”
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