CLEVELAND, Ohio — Jack Casino, in the heart of downtown Cleveland, is just one of four casinos to open across Ohio after voters approved the casino initiative in 2009.
- Ohio’s four casinos earned a record total of almost $851 million in revenue for 2019, bringing in just under $280 million in tax revenue for the state
- The casinos were projected to generate over a billion dollars of combined revenue each year, but revenues have never reached those lofty projections.
- The former director of research for the Ohio Department of Taxation says the recession that began in 2008 and where the casinos ended up being located are among the reasons for the revenue shortfall
Projections were that the four casinos would generate over a billion dollars of combined revenue each year. But revenues have never reached those lofty projections.
“We had to make an estimate of what would happen to gambling revenues four to five years into the future. And would they recover to pre-recessionary levels,” said Mike Sobel, the former director of research for the Ohio Department of Taxation.
Mike Sobel is the former director of reasearch for the Ohio Department of Taxation. He headed the estimates the state did for what casino revenue would be if Issue 3 passed.
He says there are a several factors for the shortfall, like the recession that began in 2008, as well as where the casinos ended up being located.
“Columbus casino was supposed to be in the Arena District, and the estimate was based on it being in the Arena District, not out on the far west side, and we would have had quite a bit lower estimate had we estimated on the far west side,” said Sobel.
According to the Ohio Casino Control Commission, Ohio’s four casinos earned a record total of almost $851 million in revenue for 2019, bringing in just under $280 million in tax revenue for the state. Casinos have generated almost $2 billion in tax revenue for the state since the first one opened in 2012. 51% of that tax revenue goes to the county fund, with 34% going to schools, 5% to the host city, and 2% to the problem gambling and addictions fund.
“It goes into our general revenue and that supports our public safety, police, fire,” said Melanie Campbell, commissioner of budget for the City of Toledo. “You know, in total about $5.8, $5.9 million of our general fund budget, so yes, it is helpful.”
Campbell said the Host City Fund benefits from the tax money. The County Fund is distributed to each of the state's 88 counties based on population, and Erie County officials say they see about $900,000 in revenue, compared to the $1.3 million it projected.
Spectrum News 1 reached out to the major casinos like Jack in Cleveland and either didn’t hear back, or had our request for comment denied.
Jay Masurekar, managing director and head of gaming for Key Bank National Markets, says competition from industries like racinos led to a brief decline in casino revenues from 2015 to 2018. He says the state’s regulatory environment has also been a roadblock for casino growth.
“It is extremely difficult to start a casino and not everyone can. Compared to other businesses, you know, a restaurant business, for example, you can just get certain approvals and just get started. That’s not the case in gaming. The licenses are limited, the investments are really significant. They are typically going for hundreds of millions of dollars, if not billions of dollars nowadays,” said Masurekar.
And Masurekar says the casino industry has made its impact on Ohio’s economy by creating 20,000 jobs overall.
Another potential impact to the state’s casino revenue is Kentucky's decision on whether to legalize casinos or sports betting. Both issues are supported by the Commonwealth’s new governor.
“It will have a very significant impact, mostly on the Cincinnati market. So those properties are really going to take the brunt of most of that legalization in Kentucky,” said Masurekar
While casinos have brought a new source of revenue, the amount of payoff is for you to decide.