Ohio Governor John Kasich recently presented legislators with a 2 year budget proposal that would cost the state around $66.9 billion. One of the glaring holes in the budget is the $800 million deficient which the state is looking to fill by trying to create new revenue streams that would bring in the money.
Video Poker To Fund K-12 Education
State legislators throughout the country have often turned to the gambling industry to see if more revenue can be extracted by the licensing and expansion of new facilities in the state. The reason state legislators turn to the gambling industry because it is easily one of the most lucrative markets in the country and has the potential to generate significant gaming taxes depending on what services and facilities get approved.
Ohio legislators have also decided to follow a similar route to raise the $800 million by approving video poker machines to be allowed at all seven racetracks in the state. A significant portion of this $800 million deficit will be used by state legislators to fund K-12 education in the school districts. The seven racetracks already operate video lottery terminals (VLTs) and state legislators are pushing new legislation that will allow racetrack owners to program these VLTs to include video poker.
Legislators expect the addition of video poker games to these seven racetracks in the state to generate as much as $12.5 million which will be directed towards K-12 education. The move will also bring in an additional $2.5 million in revenue to the horse racing industry. The racinos in the state are currently allowed up to 2,500 VLTs and are considered under Ohio gaming law to be a part of the state lottery and are not categorized as slot machines. The video poker machines will also come under the supervision of the state lottery.
Lottery Commission To Supervise
The proposal also calls on the lottery commission to reduce the share percentage that it pays out to the racinos from 66.5 percent to 65.5 percent. This 1 percent reduction is expected to bring in an additional $9 million a year to the commission but it would in turn reduce the amount of revenue that the horse racing commission receives by $9 million each year. The horse racing commission gets a percentage of each racinos net income each year. Lottery commission representative Danielle Frizzi-Babb stated that the commission had not requested for the video poker provision.
However the proposed amendments have not gone down well with gambling opponents. The Citizens for Community Values (CCV), an organization based out of Cincinnati have criticized the move and said that stage legislators are looking to sneak a gaming amendment past their constituents. CCV states that the casino constitutional amendment which voters approved in 2009 did not include these expansions in gambling that state legislators were now looking to authorize.
Opposition
Aaron Baer, the president of CCV called on Cliff Rosenberger, the House Speaker to drop the proposed gaming amendment before the House Finance Committee decides to send the budget to the Full House later this week. The Senate is expected to review House Bill 49 this week and take a call on the new bill. The final bill must be presented to Governor Kasich before the end of the fiscal which ends June 30.
Baer went on to say that it was unethical for lawmakers to look to expand gambling in this manner and that the move could possibly be unconstitutional. He also highlighted the fact that legislators had tried on four separate occasions to get a pass on gambling expansion but voters had ruled against it on all four occasions.
There are four Las Vegas styled casinos in Ohio which voters had approved in 1973. The racetrack terminals in the state were approved by legislators who backed their approval on the basis that these racinos were extensions of the state lottery which voters had earlier approved. Opponents to this gambling expansion approached the courts to question the legality of such a move but in the end their case was dismissed as the courts ruled in favor of the state due to the fact that those opposed to the gambling expansion did not have sufficient proof that the expansion would harm them in any way.