The Ohio Initiative on Casino Gambling

By Ford, Tom | The World and I, March 1997 | Go to article overview
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The Ohio Initiative on Casino Gambling

Ford, Tom, The World and I

For a handful of high-stakes players, the potential jackpot in bringing casino gambling to Ohio was sweet, indeed, and the time seemed right last fall to cash in.

After all, gambling proponents reasoned, in recent years gaming had become a high-growth business in America's heartland. Ohioans bet millions on their state lottery and spent substantial amounts traveling to Las Vegas, Atlantic City, and a growing number of riverboat casinos in nearby midwestern sites such as Iowa, Missouri, Illinois, and even Windsor, Ontario.

By August, when Ohio Secretary of State Robert Daft grudgingly placed a proposed amendment to the state constitution on the November ballot, the impression in some circles was that Ohio was surrounded by gambling. Indeed, gambling's proponents--led not by names like Harrah, Trump, or Bally but by millionaire auto dealer and developer Alan Spitzer, and including some of the wealthiest and most powerful business leaders in the state--predicted that with new riverboat casinos opening in neighboring Indiana, Ohio dollars and jobs would be sucked out of the state at a record pace.

The gambling proposal they put forward was simple. It would allow only eight gambling boats to be moored in Ohio rivers, including three in Cleveland, three in Cincinnati, one in Spitzer's hometown of Lorain, and one in Mahoning County in the economically depressed city of Youngstown. The casinos would be taxed at 20 percent of their gross adjusted revenues, a rate higher than any other business in the state, and 80 percent of the tax money--an estimated $186 million per year--would go directly to the state's financially hard-pressed primary and secondary schools. The remaining 20 percent of the taxes would be split evenly between the host cities and counties.

The quest to bring gambling to the Buckeye State was not a new one for Spitzer. In 1990, he had proposed a similar amendment, which was defeated soundly at the polls by a 62 to 38 percent margin, and he had tried later to get state legislators to pass gaming-enabling statutes, again without success.

But the 1996 effort was different. This time Spitzer, who had been a lone ranger on the gambling issue in 1990, had the help of the Ratner family of Cleveland. Their Forest City Enterprises--a huge, diversified commercial real estate development firm--had built shopping and entertainment complexes around the country, including codevelopments for gaming companies like Harrah's and MGM, and owned prime potential casino land in Cleveland. Also on board was Edward DeBartolo, Jr.--a Youngstown native and owner of the San Francisco 49ers and several race tracks, and a developer of casinos and related entertainment centers--and Jeffrey Jacobs, a developer of several out-of-state casinos and of much of Cleveland's Flats entertainment area. Donald Barden--a former Lorain, Ohio, city councilman, Detroit cable television baron, and owner of one of the Indiana gambling boats--and several other lesser Ohio developers rounded out the players who would bankroll the gambling proposal and, presumably, be in line to snag one or more of the eight casino licenses if the amendment passed. Excepting Jacobs, none of these entrepreneurs had supported the Spitzer effort in 1990.

In fact, politically and economically, they had supported Ohio's popular Republican governor, George Voinovich, but on the gambling issue, they parted company.

Voinovich, halfway through his second term and eyeing a possible run at the U.

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