David McKee

In the end two, casino operators bent over, grabbed their ankles and took it hard from Gov. John Kasich (R), who can claim a near-unqualified victory — and in blistering time. With money and pilings already sunk into Ohio, neither Penn National Gaming nor Rock Ohio Caesars had what it takes to just walk away (or at least threaten to do so) in the face of a gubernatorial shakedown. Earlier this week, Kasich announced what might be called “Strickland Plus.”

In addition to extracting heavy tribute from the four casinos in progress (ROC assented to $110 across 10 years, plus a $900 million minimum capital investment (an 80% increase on what was previously agreed) in return for a 10-year duopoly), Kasich okayed seven racinos — the latter a goal of ex-Gov. Ted Strickland (D, right) but one that the state’s Supreme Court thwarted. Predictably, there are few wet blankets who say the accord wasn’t usurious enough, wondering why a 50% tax rate on VLTs was taken off the table. Interestingly, the governor announced a $750,000 giveaway to manufacturer Thyßen Krupp the same day his big gaming bonanza was disclosed.
Penn’s 11th-hour bristling at the Kasich deal enabled it to extract the one concession it dearly wanted: the right to close down its tracks in Columbus and (especially) Toledo, and relocate its racino licenses elsewhere … like Youngstown or Dayton. The importance of these “portable” licenses is of obvious value to Penn, which would have been competing with suddenly redundant Toledo and Columbus casinos otherwise. One doubts, however, that employees of Raceway Park and Beulah Park will share Continue reading →