Ohio Casino Initiative, Issue 3 (2009)

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Ohio Issue 3, or the Four Casinos Initiative, is on the November 3, 2009 ballot in Ohio as an initiated constitutional amendment. Issue 3, if approved, will amend the Ohio Constitution to allow casinos in Cincinnati, Cleveland, Columbus and Toledo.^[1]

A majority vote is required for initiative to be approved. A "yes" vote means voters 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.^[2]

Election results

Ohio Issue 3 was approved by voters on the night of November 3, 2009 before 11:30pm EST. Unofficial election results follow:^[3]

Issue 3
Result		Votes	Percentage
Yes		1,663,149	52.97%
No		1,476,592	47.03%
Total votes		3,139,741	100.00%
Voter turnout		40.31%

Aftermath

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.^[4]
• 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.^[5]
• Ohio Columbus Casino Relocation (2010) - proposes to relocate the Columbus casino from the Arena District to former Delphi Corp. auto-parts plant.
  • 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. ^[6]
  • The measure will appear before voters on the May 4, 2010 ballot.

Ballot summary

On August 18, 2009 the Ohio Ballot Board approved the ballot language for state initiative that proposes placing casinos in Cleveland, Columbus, Cincinnati and Toledo.^[7]

The ballot language reads as follows:^[2]
This proposed amendment would:

• Authorize only one casino facility at a specifically designated location within each of the cities of Cincinnati, Cleveland, Columbus, and Toledo.
• Levy a fixed tax of 33% of gross casino revenue received by each casino operator of the four casino facilities.
• 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
• 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.
• 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.
• 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.
• 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 approves the amendment, while a "no" vote is a rejection of the amendment. A majority vote is required before the amendment is adopted.

Constitutional changes

See also: Text of Issue 3, the Ohio Casino Initiative and Amending the Ohio Constitution

Issue 3, if voters approve it, will add a new section, Section 6(C) to Article XV of the Ohio Constitution. The beginning of the section would read:^[8]

(C)(6) Casino gaming shall be authorized at four casino facilities (a single casino at a designated location within each of the cities of Cincinnati. Cleveland. Columbus and Toledo) to create new funding for cities, counties, public school districts, law enforcement, the horse racing industry and job training for Ohio's workforce.

Supporters

Arguments

The Ohio casino plan is being backed by Cleveland Cavaliers majority owner Dan Gilbert and Penn National Gaming, Inc., a casino operating company based in Pennsylvania.^[9]

Arguments made for a casino include:

• Backers say the sites would create about 20,000 jobs — that number 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 say 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 requires 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.^[10]

The Fraternal Order of Police are supporters of the issue, stating that taxes collected from the casino will help raise salaries for police officers and will increase job positions in the force. The FOP and police forces are expected to see approximately $13 million a year in collected revenue if the measure is enacted.

Local government leaders in the Ohio county of Butler have expressed their support for the state issue, stating that the casinos make economic sense during a time when more jobs and money are needed. According to county commission members, many local residents make out of state trips to casinos and 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 opposes 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]

Donors

The Ohio Jobs and Growth Committee, a Political Action Committee supporting the measure, has received contributions from two main donors towards the campaign: Penn National Gaming, Inc. and Ohio Venture Jobs and Growth LLC. Contributions. Contributions amounted to a total of $3,907,300.^[12] However, according to financial reports filed October 22, 2009 Penn National Gaming, Inc. spent approximately $32 million between July and October 14, 2009.^[13] In final reports it is estimated that Ohio casino supporters raised $47.2 million.^[14]

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

Opponents

Arguments

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.^[15]

Below are some of the arguments made by TruthPAC against the casino measure:^[15]

• the initiative's proposed 33% tax is to "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."

Religious groups

Multiple Ohio church groups, such as the Ohio Council of Churches, have stated their displeasure with the amendment and the repercussions that may come along with it:

• According to The United Methodist Anti Gambling Task Force, the Fraternal Order of Police have been “bought” into supporting the measure, therefore swaying voters to the side of voting yes on the issue.

• Reverend John Edgar, chairman of the group, stated that the fact that the majority of the taxes collected from the measure could to raising salaries in the police departments.

• According to Edgar: "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." ^[16]

Also, in an odd pairing of political beliefs, the group 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 are on opposite sides of such issues, such as Ohio’s same-sex marriage question that was on the statewide ballot in 2004.^[17]

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."^[18]

Hiram College research

According to a study by the Public Policy Research Group at Hiram College, the measure would hurt Ohio jobs if enacted:

• The study, authored by multiple researchers in the group, stated that the casinos would hurt other businesses in the state and would likely lead to a net job loss in certain communities.

• Thomas Pascarella, one of the authors of the report, classified the proposed casinos as a “zero-sum gain”.

• At a press conference, Pascarella stated: "One person is a dollar worse off, and someone else is a dollar better off in the region," he said during a press conference near the Statehouse. There's been no growth, there's just been an exchange of money. ... There will be no need for a grocery store down the street (or) a new theater because the population is growing as a result of the casinos. In fact... just the opposite would seem to be the case." The study was conducted in a neutral manner, with the group stating that it was not against the casinos, but that a more fiscally responsible public policy on the issue.^[19]

Legislature

House Minority Leader William Batchelder and Assistant Minority Leader Lou Blessing have gone on record to state that Issue 3 would not create as much revenue as supporters of the amendment say 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."^[20]

Local impacts

Some areas of Ohio are against the measure because they are not receiving casinos in their area. Areas, such as Mahoning County, state they would not receive as much revenue as the areas in the state that would get casinos. At a meeting at the Youngstown City Council chambers at the city’s hall, Mahoning County Domcratic Party Chairman David Betras stated “The issue isn’t whether you support or oppose gambling. The issue is they passed us up.”^[21]

Although supporters say that casinos would raise $3.5 million in the area, Betras countered by saying that if the area got a casino, it would be substantially more.

National Taxpayers Union

The National Taxpayers Union (NTU) is opposed to Issue 3 because ultimately NTU determined that the issue will 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.

Donors

Opponents raised a grand total of $25.7 million against the casino measure.^[14]

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:^[13]

• 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.^[13]

Newspaper editorial positions

Main article: Endorsements of Ohio ballot measures, 2009

Editorial boards in support

• The Toledo Free Press is 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," says Editor in Chief Michael Miller. ^[22]

• The Cleveland Plain Dealer editorial board is in favor of Issue 3 saying, "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 has been against past Casino measures.^[23] Plain Dealer columnist and former editorial director Brent Larkin disagreed in a November 1, 2009 column, calling Issue 3 a "sucker bet". ^[24]

Editorial boards opposed

• The Columbus Dispatch is opposed, saying, "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."^[25]

• The Toledo Blade is 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."^[26]

• The Youngstown Vindicator is opposed to Issue 3, saying, "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"^[27]

• The Akron Beacon Journal is 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."^[28]

• In an opinion column published by the Toledo Free Press, Tim Higgins writes that his opposition to the measure is 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.”^[29]

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. 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."^[30]

Polling information

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.^{[31] [32]}

• A SEA: Polling and Strategic Design revealed that 48% of voters planned to vote in favor of Issue 3, while 44% planned on voting "no" and 8% said they were undecided.^[33][34]

• 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.^[35]

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%

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. ^[36] 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%. ^[37]

• 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.^[38] Petitions in Montgomery County included signatures of 23 deceased voters. ^[39]

• 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.^[40]

• 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.

• Ohio is one of three states with initiative or referendum that allow ballot initiatives to qualify for the ballot in odd-numbered years.

Other casino measures

See also

Articles

Interviews

Interview with spokesman Bob Tenenbaum (05/19/09)

External links

Basic information

Supporters

Opponents

Additional reading

• The Plain Dealer,"Get last-minute info on issues and polling places for Election Day Tuesday," November 2, 2009
• The Columbus Dispatch,"Casinos aren't only ballot issue," November 1, 2009
• The Community Common,"Three Issues Face Ohio Voters In Upcoming Election," October 30, 2009
• The Atlantic,"Ballot Initiatives To Watch On 11/3," October 26, 2009

References

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