Removes hurdle for 17,500 slot machines to be installed by the Ohio Lottery

An Ohio group has pulled a referendum that would have required voter approval for a gaming expansion at the state’s seven racetracks.

The group’s action this week removes a hurdle for 17,500 slot machines to be installed through the Ohio Lottery Commission.

The state Legislature passed a bill a year ago to permit slots at Beulah Park, River Downs, Thistledown, and four harness tracks. The group LetOhioVote sued, contending a referendum was required in order for the plan to go forward. The Ohio Supreme Court upheld that position.

Meanwhile, voters last November passed a constitutional amendment that will bring standalone casinos to Cleveland, Columbus, Cincinnati, and Toledo.

Las Vegas-based Harrah’s Entertainment Inc. won the rights in an auction last May to acquire Thistledown from bankrupt Magna Entertainment Corp. for $89.5 million but renegotiated the deal, in light of the referendum push and the standalone casino plan in place. The Ohio Racing Commission last week approved the sale of Thistledown to Harrah’s Entertainment for $43 million, less than half the auction bid price.

According to the Cleveland Plain Dealer, a Harrah’s official told the commission that Rock Ventures, a company controlled by Cleveland Cavaliers majority owner Dan Gilbert, has a contingency agreement to buy part of Thistledown. Rock Ventures also will operate the standalone casinos in Cleveland and Cincinnati.

Pennsylvania-based Penn National Gaming Inc. has the rights to the standalone casinos in Columbus and Toledo, owns Raceway Park harness track in Toledo, and received commission approval to buy Beulah for $37 million from Charlie Ruma.

West Virginia-based MTR Gaming Group Inc. owns Scioto Downs harness track in Columbus. The Dr. J. David Rutherford Partnership owns River Downs.

The funding source for LetOhioVote has not been disclosed.

Ohio Gov. Ted Strickland has indicated the governor will wait for a court order clarifying whether the state constitution allows him to expand the lottery commission to oversee slots at the racetracks.

Strickland’s original plan called for a 50 percent tax rate on proceeds from slots at the racetracks. An attorney for the tracks reportedly told the Columbus Dispatch that Strickland’s proposal lapsed after 90 days and that the tracks would now seek a 33 percent tax rate, the same rate the standalone casinos will pay.