Even as Harrah’s Entertainment was closing its purchase of an Thistledown Race Track, lawmakers were moving to foreclose the prospect of racinos in that state. This doesn’t preclude Buckeye State voters for approving as many as seven racinos this fall, but some lawmakers seem to think that slots at the tracks merely prolongs an irreversible decline in the horseracing industry.
Ohio leaders are still figuring out some seemingly critical issues — like how the 33% tax rate will be applied: to winnings or (get this!) handle. The latter notion isn’t just preposterous, it’s downright anti-business. Also, unheedful of Kenny Rogers‘ adage, lawmakers are counting their money while still sitting at the table … before it’s even in hand, in fact. No casinos have been built, no revenue has been received and — thanks to the nebulous tax structure — it would be foolhardy to even guesstimate how much the Lege will have to spend. But they’re quarreling over the as-yet-nonexistent dollars anyway.
Penn National Gaming and Dan Gilbert‘s Rock Ventures did wrest some valuable concessions from solons, though. For instance, the costs of raw land and even construction insurance can be counted toward the statutory minimum of $250 million investment per casino, which means Ohioans might be playing in some pretty low-cost venues, as casinos go. Gilbert also supposedly has been meeting with emissaries of Harrah’s CEO Gary Loveman.
That means but one thing: management contract. (It would also translate into two Harrah’s-flagged casinos and possibly a wholly owned racino to compete with two Penn casinos — three, if racinos are approved.) Gilbert’s casinos currently don’t have jack for brand equity, so a Harrah’s alliance is a 1,000% improvement, especially as he’d turn over the heavy lifting to one of the best-regarded management and marketing infrastructures — and the most rigidly standardized, bar none — in the casino industry. For its part, Harrah’s not only stands to get a cut of Gilbert’s action, it would be able to sink Total Rewards drillbits directly into the Cleveland and Cincinnati markets. It’d be win-win, no question about it.
