Meet the new Cincinnati Kid

For our purposes, the main headline comes from Ohio, where Issue 3 passed amid heavy voter turnout — if not by the wide margin pollsters had forecast. (At least they didn’t screw the pooch like all those pollsters who had the New Jersey gubernatorial race a “tossup” when it wasn’t even close.)

This means that regardless of how the Cleveland Cavaliers‘ season goes, owner Dan Gilbert (left) is last night’s big winner. Now he and Penn National Gaming get to divvy up the Buckeye State betwixt themselves, with Gilbert getting the Cleveland and Cincinnati markets. Penn, meanwhile, has committed $600 million to casino development in Columbus and Toledo, even if the good burghers of Columbus wanted nothing to do with it. (That tune will change when the 33% tax rate starts yielding dividends.) Analysts at J.P. Morgan estimate that Issue 3’s passage will translate into 4,500 new-slot sales for IGT and approximately 2,000 apiece for Bally Gaming and WMS Industries.

The Ohio Supreme Court having run a constitutional cart and horses through Gov. Ted Strickland‘s plan to enable racinos, Buckeye State voters would appear to have delivered the coup de grace. With a Gilbert/Penn duopoly now ratified at the ballot box, Strickland will have some heavy — and perhaps impossible — lifting ahead of him if he’s to further expand gambling in Ohio. And with a distinguished GOP challenger (John Kasich) breathing down his neck, Strickland probably won’t want to spend additional political capital on so divisive an issue. Then again, if Kasich is to deliver the tax cuts and educational improvements he’s promising, he may need to revisit the racino issue himself, a couple of years down the pike.

In New Jersey, Governor-elect Chris Christie (R) is promising tax cuts for everyone. Given that New Jersey’s casino tax rate is the second-lowest in the nation, we’ll see if Christie doesn’t somehow find a way to make an exception there. Or, in lieu of either cutting or raising casino taxes, perhaps Christie will throw his lot in with the horsey set and endorse their annual we-need-racinos whinge (even though horse tracks enjoy a subsidy from the state’s casinos).

If that’s the case, Christie will become The Man Who Killed Atlantic City. He inherits a parlous budgetary and economic situation from Gov. Jon Corzine (D) and will have to pay for all those tax reductions somehow. New Jersey has the nation’s best casino regulatory apparatus, so here’s hoping that Christie’s scissors don’t eviscerate it as he takes his shears to the state budget.

Good luck to Christie if he’s to keep all those plates spinning. You couldn’t pay me to take his new and unenviable job.