Governor Pushes for Slots in Ohio

Gov. Ted Strickland's plan to balance the budget with gambling money includes legalizing up to 15,250 slot machines at Ohio's seven horse racetracks, with most of the games plugged in by next May.

The governor's office estimates the machines will rake in nearly $1 billion in 14 months -- from May 2010 to the end of the 2011 fiscal year.

The plan would allow the state to collect 48 percent of that revenue for education spending while the other 52 percent would be split among the seven track owners and pay administrative and operational expenses, including payouts to lucky winners.

The state would also collect a one-time licensing fee from each owner, somewhere in the neighborhood of $65 million for each location depending on how many machines are at each track.

All of these figures are moving targets, said Strickland's budget director Pari Sabety, in particular the licensing fee, which some track owners may balk at.

"We've looked at some states where they have pegged the licensing fee high and the revenue share low or visa versa," Sabety said. "So If you get a big licensing fee, do you give the track owners more on the backside? So that is a lot of the kind of stuff we're going to have to work through."

Strickland, a Democrat, announced Friday, June 19, that he was reversing his stance against gambling and introduced the slots plan that he believes could net the state $933 million in the next two years.

The gambling proceeds represent crucial new revenue for Ohio, which is struggling to balance its next biennium budget in the face of a $3.2 billion shortfall.

The governor also proposed $2.4 billion in cuts to state agencies and programs as Ohio's economy and job creation efforts continue to struggle.

But Strickland's turnaround on gambling has drawn the most attention. It has provided the conference committee, a bipartisan legislative panel working to present the governor a balanced budget by June 30, some needed direction.

None of the three prior budget proposals -- from the governor, House and Senate -- included expanding gambling.

But with budget negotiations at a stalemate and the unexpected size of the budget gap, the six-member committee is likely to work from the governor's latest plan and add its own twists to the slots proposal.

Senate President Bill Harris, an Ashland Republican, has long frowned on gambling as a budget solution. But Harris said he is willing to consider the governor's plan.

For the complete story, please see Reginald Fields, Ohio could see 15,250 slot machines under Gov. Ted Strickland's budget proposal, Cleveland Plain Dealer, June 22, 2009.