Ohio Casino Initiative, Issue 3 (2009)

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The Ohio Casino Amendment, also known as Issue 3, was on the November 3, 2009 ballot in Ohio as an initiated constitutional amendment, where it was approved.[1] This amendment authorizes the construction of casinos in Cincinnati, Cleveland, Columbus, and Toledo.

Election results

Ohio Issue 1 (2009)
ResultVotesPercentage
Approveda Yes 1,663,149 52.97%
No1,476,59247.03%

Election results via the Ohio Secretary of State.[2]

Text of measure

See also: Ohio Constitution, Article XV, Section 6

The language appeared on the ballot as:[3]

PROPOSED CONSTITUTIONAL AMENDMENT

TO AMEND THE CONSTITUTION TO ALLOW FOR ONE CASINO EACH IN CINCINNATI, CLEVELAND, COLUMBUS, AND TOLEDO AND DISTRIBUTE TO ALL OHIO COUNTIES A TAX ON THE CASINOS

Proposed by Initiative Petition

To adopt Section 6 to Article XV of the Constitution of the State of Ohio.

This proposed amendment would:

1. Authorize only one casino facility at a specifically designated location within each of the cities of Cincinnati, Cleveland, Columbus, and Toledo.

2. Levy a fixed tax of 33% of gross casino revenue received by each casino operator of the four casino facilities.

3. Distribute the casino tax as follows:

  • 51% among all 88 counties in proportion to such counties’ respective populations. Half of each county’s distribution will go to its largest city if that city’s population is above 80,000.
  • 34% among all public school districts
  • 5% among all host cities
  • 3% to the Ohio casino control commission
  • 3% to the Ohio state racing commission fund
  • 2% to a state law enforcement training fund
  • 2% to a state problem gambling and addictions fund

4. Require each initial licensed casino operator to pay a single $50,000,000 fee to be used for state job training purposes and make a minimum initial investment of $250,000,000 in its facility.

5. Permit approved types of casino gaming authorized by Michigan, West Virginia, Indiana, and Pennsylvania as of January 1, 2009 or games subsequently authorized by those states.

6. Authorize the casinos to operate 24 hours a day, seven days a week, at the discretion of the casino operator and require that the casino facilities shall be subject to all state and local laws and provisions related to health and building codes, but that no local zoning, land use laws, subdivision regulations or similar provisions shall prohibit the development or operation of the casinos at the designated sites.

7. Create the Ohio casino control commission which will license and regulate casino operators, management companies retained by such casino operators, key employees, gaming-related vendors, and all gaming authorized by this constitutional provision.

A “YES” vote means you approve of amending the Ohio Constitution to permit one casino each in Cincinnati, Cleveland, Columbus, and Toledo.
A “NO” vote means you disapprove of amending the Ohio Constitution to permit one casino each in Cincinnati, Cleveland, Columbus, and Toledo.

A majority YES vote is required for the amendment to be adopted. Shall the proposed amendment be approved? [4]

Path to the ballot

See also: Ohio signature requirements
  • On Thursday, June 25, supporters of the amendment turned in exactly 902,450 signatures to the Ohio Secretary of State, more than twice the 402,275 signatures required to qualify the plan for the November ballot. 13,085 signatures were thrown out because they were connected to invalid petitions.[5] SOS Brunner's office has confirmed that exactly 452,956 of the 889,365 signatures are valid signatures. The validity rate for this initiative was certified at just under 51%.[6]
  • On Friday, July 17, opponents filed a lawsuit against the petition with the Ohio Supreme Court claiming that the petition should be dismissed on grounds of fraud.[7] Petitions in Montgomery County included signatures of 23 deceased voters.[8]
  • On July 30, The Ohio Supreme Court ruled against the initiative's opposition in court, saying that Issue 3 should go on the November 3 ballot.[9]
  • Professional Petition Management was hired to collect roughly 500,000 signatures as well as ensure the issue had sufficient valid signatures to qualify the issue in over 65 (of 88) counties. Arno Political Consultants additionally served as a contractor to the committee and collected approximately 402,275 signatures.

Support

The Ohio casino plan was backed by Cleveland Cavaliers majority owner Dan Gilbert and Penn National Gaming, Inc., a casino operating company based in Pennsylvania.[10]

  • The Fraternal Order of Police supported Issue 3. They said the taxes collected from the casino would help raise salaries for police officers and would increase job positions in the force. The FOP and police forces are expected to see approximately $13 million a year in collected revenue with the enactment of Issue 3.
  • Local government leaders in Butler County expressed their support for the state issue, stating that the casinos made economic sense during a time when more jobs and money were needed. According to county commission members, many local residents made out-of-state trips to casinos thus making the other states are the beneficiaries. According to Commissioner Gregory Jolivette, "You’ve heard a sucking sound as money goes outside the state to Indiana, to Michigan, to Pennsylvania. Every (Ohio) county will benefit from this proposal."
  • On Friday, October 16, 2009 the Cleveland NAACP announced their endorsement for Issue 3. Despite the organization's support, President George Forbes said he personally opposed gambling but in light of prospective casino owner Dan Gilbert's pledge to hire a significant number of minorities and award a share of construction contracts to black contractors, the organization now supports the measure.[11]

Arguments

Logo of "Yes on 3" campaign

Arguments made in favor of the casino initiative included:[10]

  • Backers said the sites would create about 20,000 jobs — which includes construction work, casino employees and workers at businesses that sprout up around the locations — and result in $1 billion in new private investment.
  • Additionally, they said the projects would provide $200 million in licensing fees and $600 million in tax revenues for the state, counties, cities and school districts.
    • The proposal required that at least $250 million be invested at each of the four casino sites. Operators would have to pay $50 million in licensing fees for each location.
    • A “permanent, guaranteed” tax of 33 percent would be charged on gross casino revenues. The proceeds would be split among counties and cities, school districts, racing and casino commissions and law enforcement.[12]

Campaign contributions

The Ohio Jobs and Growth Committee, a PAC in support of Issue 3, received contributions from two main donors: Penn National Gaming, Inc. and Ohio Venture Jobs and Growth LLC. Contributions amounted to a total of $3,907,300.[13] However, according to financial reports filed October 22, 2009 Penn National Gaming, Inc. spent approximately $32 million between July and October 14, 2009.[14] In final reports it is estimated that Ohio casino supporters raised a total of $47.2 million.[15]

Date Committee Amount
February 6 Penn National Gaming, Inc. $17,300
February 13 Penn National Gaming, Inc. $26,750
February 27 Penn National Gaming, Inc. $66,500
March 9 Penn National Gaming, Inc. $1,000,000
March 11 Ohio Venture Jobs and Growth LLC $1,000,000
March 13 Penn National Gaming, Inc. $70,000
May 20 Penn National Gaming, Inc. $300,000
May 21 Ohio Venture Jobs and Growth LLC $26,750
June 5 Penn National Gaming, Inc. $400,000
June 25 Ohio Venture Jobs and Growth LLC $500,000
June 30 Penn National Gaming, Inc. $500,000
- Lakes Entertainment Inc. $1.9 million

Opposition

Supporters of the anti-issue 3 campaign include: Parma Mayor Dean DePiero, Youngstown Mayor Jay Williams, Cleveland pastor E.T. Caviness of Greater Abyssinia Baptist Church, Rep. Lou Blessing, Rep. Tyrone Yates and Sen. Teresa Fedor.[16]

Other opponents include:

  • House Minority Leader William Batchelder and Assistant Minority Leader Lou Blessing, Jr. opposed Issue 3 and argued that the measure would not create as much revenue as supporters of the amendment said it would:
    • As stated in an analysis by Ohio’s Office of Budget and Management and Department of Taxation, the amendment would generate about $643 million a year off of the 33 percent tax revenues. However, Batchelder and Blessing countered that analysis saying that a “loophole” in the amendment would not generate as much revenue as supporters are saying.
    • They cite that the definition of a casino revenue in the amendment does not include cash wagering. However, supporters of the amendment say that the state General Assembly could pass a statute that would allow for cash wagering to be taxed.
    • According to the two legislators, however: "Whether the General Assembly would do that at all is highly speculative. More importantly, the General Assembly has no authority whatsoever to contradict, rescind, repeal or override a provision of the Ohio Constitution. Your assumption that a statute would correct the provision of a constitutional amendment is not only speculative, but false."[17]
  • Multiple Ohio church groups, such as the Ohio Council of Churches, were opposed to the proposed measure:[18]
    • According to the United Methodist Anti Gambling Task Force, the Fraternal Order of Police had been “bought” into supporting the measure, therefore swaying voters to the side of voting yes on the issue.
    • According to Reverend John Edgar, chairman of the group, "We have seen the FOP be bought, and we haven't even started yet.” The FOP fired back when the secretary and treasurer of the group, Mark Drum, stated: "Church organizations have every right to express their opinions on gambling in general and Issue 3 in particular, but we have that same right. Questioning the motives of our members in endorsing Issue 3 is outside the bounds of fair campaigning."
  • Progress Ohio, a politically liberal group, joined with the politically conservative group Citizens for Community Values on October 5, 2009 in opposition to Issue 3. Historically, according to reports, the two groups were on opposite sides of such issues, such as Ohio’s same-sex marriage question that was on the statewide ballot in 2004.[19]
  • David Zanotti, CEO of the American Policy Roundtable, stated the groups opposition to the measure in a youtube video for the "Vote No Casinos" campaign. In the video, he gives examples of how the measure is being supported by groups that want the measure to pass so they could control the Ohio market. According to Zanotti: "If the people who go to church don't show up on Election Day - the casino industry will capture Ohio. This will send a horrid message across the nation and encourage corrupt politicians to get in bed even deeper with the casino industry."[20]

National Taxpayers Union

The National Taxpayers Union (NTU) was opposed to Issue 3 because NTU determined that the issue would raise taxes and expand government. "Many taxpayer advocates in the state believe that, while states/localities should make decisions on whether to allow gambling, they should be taxed at rates consistent with other businesses," they said. The measure is listed on NTU's 2009 General Election Ballot Guide. (dead link)

Arguments

Logo of Issue 3 opponents

Below are some of TruthPAC's arguments against the casino measure:[16]

  • the initiative's proposed 33% tax is too "stingy"
  • "charitable gambling could be banned"
  • "a loophole allows non-taxable cash wagering"
  • there isn't any information on the construction of the casinos

Sandy Theis, spokesperson for TruthPAC stated in an interview:“I think this plan is as flawed as the ones that voters have defeated before. Like its predecessors, this one is tilted in favor of the casinos and those are the people who wrote the plan and so far against the taxpayers."

Campaign contributions

Opponents raised a grand total of $25.7 million against the casino measure.[15]

Contributor Amount
TruthPAC $9.1 million
Families Against Issue 3 $2.4 million
Democrats Against Issue 3 $370,000
Citizens Against the Wrong Plan $307,000
Vote No Casinos $38,675

According to the October 22, 2009 filed financial reports the main donors of the campaign against Issue 3 include:[14]

  • Cleveland developer Jeff Jacobs, who is also chairman of MTR Gaming Group, owns casinos in West Virginia and Pennsylvania, and has a horse-racing track near Columbus, Ohio.
    • Jacobs and MTR Gaming Group have donated approximately 95% of the total funds reported by TruthPAC
  • Northfield Park, a horse track in northeastern Ohio

TruthPAC reported a total of $5.9 million in revenue and $5.4 million in expenditures for the time period of July through October 14, 2009.[14]

Newspaper editorial positions

Main article: Endorsements of Ohio ballot measures, 2009

Editorial boards in support

  • The Toledo Free Press was in favor of Issue 3. "These casinos are a major attraction, a world-class operation that would put Toledo in the rare position of getting its share along with the state’s “Three C” cities. It would boost the region’s self-esteem to have such a big league draw, and we have to give our citizens (and law enforcement officials) enough credit to believe the attendant challenges will be met with intelligence and careful preparation," said Editor in Chief Michael Miller.[21]
  • The Cleveland Plain Dealer editorial board was in favor of Issue 3. They said, "Issue 3 is a gamble. But business as usual will not work for Cleveland or for Ohio. That alone makes Issue 3 a worthy bet." The Plain Dealer had previously been an opponent of casino measures.[22] Plain Dealer columnist and former editorial director Brent Larkin disagreed in a November 1, 2009 column, calling Issue 3 a "sucker bet."[23]

Editorial boards opposed

  • The Columbus Dispatch was opposed, they said, "The Ohio Constitution is no place for such detailed, self-interested amendments. If Ohioans wish to bring casino gambling to the state, the proper way would be to approve a succinct amendment granting the governor and General Assembly the authority to draft statutes, rules and regulations for such enterprises. In this way, the state would retain leverage to properly license, govern and tax casinos. As times and circumstances changed, the state would be able to respond. If State Issue 3 is approved by voters, the amendment would be unalterable by any action of this or future governors and legislatures. Only another statewide vote could change the amendment."[24]
  • The Toledo Blade was opposed, saying that a gambling casino monopoly should not be enshrined in Ohio's Constitution. "Voters should also remember that the reason it is difficult to amend the state constitution is to avoid having short-term concerns or passions result in wholesale changes that harm the state in the long run. What is given away in haste, such as control over gambling, may be regretted at leisure."[25]
  • The Youngstown Vindicator was opposed to Issue 3, they said, "We have said before when commenting on other casino gambling issues in Ohio: Gambling is the most successful scheme for the redistribution of wealth ever devised. It takes from the poor and gives to the rich. That’s because, as any gambler can tell you, the house never loses. Don’t be taken in by the promises of easy money being made by Issue 3 proponents. Vote no on Issue 3"[26]
  • The Akron Beacon Journal was opposed to Issue 3. In an editorial, the board said, "The state estimates the casinos would generate $643 million in annual tax revenue, slightly less than the $651 million claimed by Issue 3 proponents. But studies of gambling's economic impact on communities show that most of the money wagered comes from local residents who quit spending on nearby bars, restaurants and the like. Studies also show an overall negative impact, once the social costs of gambling are included, among them, increased crime, broken homes, bankruptcies and addiction treatment. In other words, casinos are not an engine of economic growth."[27]
  • In an opinion column published by the Toledo Free Press, Tim Higgins wrote that his opposition to the measure was not related to immorality, amount of revenue brought in, or the jobs that may or may not be created for Ohioans. However, Higgins writes:
“My objection to Issue 3 is much like it was to Issue 6 before it from the 2008 ballot. It is that both proposed Amendments limit gambling in Ohio by creating a casino monopoly, something that should never be considered in Constitutional politics. As we would never place such a monopoly in the hands of a utility company or a corporate media outlet, neither should we do so for a group operating casinos. Penn National may be a great corporation, but so was the group who failed to get Issue 6 last year; and it does not make them more deserving of such a monopoly.”[28]

Investigation

On October 12, 2009, TruthPAC asked the Ohio Elections Commission to find the pro-Issue 3 campaign guilty of violating election law. The allegations by the group stem from their claims that false statements were made about the number of jobs that casinos would create in the state. Also among the allegations is that the pro-casino campaign dismissed claims that Issue 3 would exempt wagers made in cash from taxes that the proposed casinos would have to pay.

The complaint, filed by the group, includes an affidavit from state Representative Lou Blessing, Jr.. Blessing, also a Cincinatti-based lawyer, launched an investigation to find out if cash wagers still occur. According to Louis Blessing in a sworn statement: "On a Saturday afternoon, my wife and I went to the Hollywood Casino in Lawrenceburg, Indiana. We stayed for about an hour, and specifically played the slot machines to see if they accepted cash wagers. Everyone we played did accept cash wagers."[29]

Polls

See also: Polls, 2009 ballot measures
  • A poll conducted by the Institute for Policy Research at the University of Cincinnati from October 14-20, 2009 revealed that 57% of voters planned on voting yes on Issue 3, while 39% planned to vote no and 4% were undecided. A total of 687 registered voters were polled via a telephone survey.[30][31]
  • A poll conducted by the Institute for Policy Research at the University of Cincinnati, commissioned by a consortium of Ohio's newspapers, found that Issue 3 had a commanding lead in the polls at the end of September. The poll was conducted between September 16-22 and interviewed 713 respondents.[34]
Date of Poll Pollster In favor Opposed Undecided
Sept. 16-22 Institute for Policy Research, University of Cincinnati 59% 38% 3%
Oct. 7-11 SEA: Polling and Strategic Design 48% 44% 8%
Oct. 14-20 Institute for Policy Research, University of Cincinnati 57% 39% 4%

Aftermath

2010 casino-related proposals

Shortly after the approval of Issue 3, several legislators filed a series of casino-related ballot measures for the 2010 ballot.

  • Ohio Cities Casino Amendment (2010) - the proposed amendment would allow cities to opt out of hosting casinos by passing a local referendum.[35] The measure did not qualify for the 2010 ballot. Proposed ballot measures that were not on a ballot
  • Ohio Casino Revenue and Commission Amendment (2010) - the amendment proposes increasing the state's share of casino revenues and amending the Ohio Lottery Commission's authority.[36] The measure did not qualify for the 2010 ballot. Proposed ballot measures that were not on a ballot
  • Ohio Columbus Casino Relocation (2010) - proposes to relocate the Columbus casino from the Arena District to former Delphi Corp. auto-parts plant. It appeared on the May 4, 2010 statewide ballot as Issue 2 where it was approved by voters.Approveda
    • The group Stand Up Columbus began circulating a petition on December 23, 2009 in order to persuade legislature to introduce a bill to change the approved amendment. The group does not want the new casino to be built in Columbus’s Arena District and wants a change of location. The group wants the legislature to propose the change in the next legislative session and wants a vote on the matter as soon as May 4. Although a petition would not force a public vote on the matter, petition circulators are hoping signature gathering will persuade lawmakers to touch upon the issue. In addition to the group, The Columbus Dispatch editorial page stated its opposition to a casino being built in the Arena District, arguing that Penn National’s plan was being put into play without any community input.[37]

Implementation

In June 2010, Gov. Ted Strickland signed Ohio House Bill 519, which contains a number of provisions aimed at implementing Issue 3. The state's horse track owners then announced that they intended to mount a veto referendum petition drive to collect signatures within 90 days of Strickland's June 10 signing of the bill to allow the state's voters to decide whether they want HB 519 to go into law. The state's horse track owners believe that their businesses will be harmed if they are unable to install slot machines at their horse tracks. The horse track owners will had until early September to collect 241,365 signatures. If they do collect the signatures, HB 519 will not go into effect until the state's voters have a chance to vote on it in November 2011.[38][39]

Casino opening

The Horeshoe Casino Cleveland was given the go-ahead by the Ohio Casino Control Commission to open the week of May 14, 2012, more than two years after the approval of the 2009 ballot measure.[40]

Similar measures

Defeatedd Ohio Issue 6 (2008)
Defeatedd Ohio Casino Gambling (2006)
Defeatedd Ohio Riverboat Gambling Initiative (1996)
Defeatedd Ohio Casino in Lorain (1990)
Approveda Ohio Lottery Proceeds for Education Act (1987)
Approveda Ohio Charity Bingo, Issue 9 (1975)
Approveda Ohio State Lottery Question, Issue 1 (May 1973)

See also

Articles

Interviews

Pencil.png Interview with spokesman Bob Tenenbaum (05/19/09)

External links

Basic information

Supporters

Opponents

Additional reading

References

  1. Ohio Secretary of State, "2009 Official Election Results," accessed July 30, 2013
  2. Ohio Secretary of State, "A History of Statewide Issue Votes in Ohio," accessed July 30, 2013
  3. Ohio Issues Report, "State Issues Ballot Information for the November 3, 2009 General Election," accessed July 30, 2013
  4. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  5. Official Final Worklog from The Ohio SOS
  6. Official Final Worklog from The Ohio SOS
  7. The Columbus Dispatch, "Group sues to toss casino petition," July 18, 2009
  8. Dayton Daily News, "Casino foes take case to Supreme Court," July 17, 2009
  9. The Associated Press, "Ohio Supreme Court: Casino signatures stand," July 31, 2009
  10. 10.0 10.1 The Plain Dealer, "Ohio casino backers hire troubled California firm Arno Political Consultants," April 28, 2009
  11. The Plain Dealer, "Local NAACP backs Issue 3 after getting hiring pledge," October 17, 2009
  12. Vindy.com, "Ohio casino backers to start signature drive," April 16, 2009
  13. Donors for Ohio Casino Initiative
  14. 14.0 14.1 14.2 The Columbus Dispatch, "Gambling interests ante up to promote Issue 3," October 23, 2009
  15. 15.0 15.1 The Columbus Dispatch, "Casino backers put $47 million into campaign," December 12, 2009
  16. 16.0 16.1 The Plain Dealer, "Ohio casino foes lay out plan to defeat ballot measure," August 25, 2009
  17. The Cleveland Plain Dealer, "Casino loophole could mean less tax money for Ohio, GOP lawmakers charge," October 8, 2009
  18. The Columbus Dispatch, "Issue 3 divides police, churches," October 2, 2009
  19. Springfield News-Sun, "Odd couple joins forces to oppose Ohio casinos," October 5, 2009
  20. American Policy Roundtable, "Gambling -- A Portal into Political Reality," October 27, 2009
  21. Toledo Free Press, "Election endorsements: issues and offices," October 30th, 2009
  22. Cleveland Plain Dealer, "Ohio voters should pass Issue 3, amending the state Constitution to allow casino-gambling in Cleveland and three other cities," October 11, 2009
  23. Cleveland Plain Dealer, "Even shiny new casinos like Pittsburgh's ring up disappointment: Brent Larkin," November 1, 2009
  24. Columbus Dispatch, "Editorial: No on State Issue 3," October 11, 2009
  25. The Blade, "Protect the Constitution," October 8, 2009
  26. Youngstown Vindicator, "’Round and ’round it goes (sort of like a roulette wheel)," October 11, 2009
  27. Akron Beacon Journal, "No on Issue 3," October 11, 2009
  28. Toledo Free Press, "Issue 3 is flawed," October 9, 2009
  29. TruthPAC Files, "TruthPAC Files OEC Complaint Against Issue 3 Proponents," October 12, 2009
  30. University of Cincinnati, "The Ohio Newspaper Poll," October 21, 2009
  31. Casino City Times, "Ohio voters support casino measure," October 26, 2009
  32. Examiner, "New Ohio poll shows Ohioans less likely to tumble dice for casinos on Election Day," October 16, 2009
  33. The Vindicator, "Betras: Casino support lessens," October 16, 2009
  34. WTDN-TV, "Ohio poll shows strong casino support," September 29, 2009
  35. Associated Press, "Lawmakers aim to thwart Ohio casino development," November 25, 2009
  36. The Vindicator, "Changes sought for Ohio casino plan," November 5, 2009
  37. The Columbus Dispatch, "Campaign on to move casino site," December 27, 2009
  38. Cincinnati Enquirer, "Ohio horse tracks consider their own ballot issue," June 11, 2010
  39. Text of Ohio House Bill 519 (2010)
  40. News Talk Radio Ohio, "Ohio's first casino to open in May," February 15, 2012