Ohio casinos to hit Mich., Ind. gambling taxes

INDIANAPOLIS – Ohio voters have approved the opening of casinos in Toledo and three other cities, leaving officials and gambling interests in neighboring Indiana and Michigan worried that millions of dollars in gambling revenues – and taxes – are at risk.

Indiana’s casinos pay more than $900 million in state and local taxes annually. A report released last month by the Indiana Legislative Services Agency predicted the competition from Ohio would lead to the state losing more than $100 million of that slice of the gambling pie.

Any loss of casino tax revenue would also hurt Detroit and Michigan, which already face towering budget deficits. The state took a $121 million share of the Detroit casinos’ $1.36 billion in revenues last year.

Last Tuesday, Ohio voters approved a ballot issue to allow one casino each in Cincinnati, Cleveland, Columbus and Toledo.

“We’re cautiously optimistic there’s going to be a bit of an impact but not a profound impact,” Richard Kalm, executive director of the Michigan Gaming Control Board, told The Associated Press.

He said Detroit’s casinos get most of their business from people within 50 miles and are “not as much of a destination market as, say, Las Vegas or Atlantic City.”

The analysis released Oct. 19 by the Indiana Legislative Services Agency, the General Assembly’s nonpartisan research arm, predicts that three casinos in southeastern Indiana – which rely heavily on patrons from the Cincinnati area – would be hit the hardest.

The Hollywood Casino in Lawrenceburg, Grand Victoria Casino & Resort in Rising Sun and Belterra Casino near Vevay – all downstream from Cincinnati – could lose 38 percent of their admissions and $260 million in gambling revenues in the first year after the Ohio casinos open, amounting to a $93 million cut in the taxes they pay, according to the report.

Furthermore, Hoosier Park’s casino in Anderson, about 25 miles northeast of Indianapolis, would lose gambling customers to a new Toledo casino, costing the state another $9 million, it said.

“They’re going to get smacked, and I’m not sure what the right solution is for them,” Indiana Senate Appropriations Chairman Luke Kenley, R-Noblesville, said.

“It is a big hit, a significant hit,” said Mike Smith, president of the Casino Association of Indiana.

Mike Rozow, president of the Dearborn County Chamber of Commerce, said the Hollywood Casino had turned “an old town into a modern attraction” and would be able to compete with a Cincinnati casino, even though it will lose some customers.

Detroit casinos also put on a positive face.

“We believe that Ohio casinos would have a minimal impact on our revenue,” said Jamaine Dickens, spokesman for Las Vegas-based MGM Mirage Inc., which owns MGM Grand Detroit. He said Ohioans account for 7 percent of its revenue.

“Regardless of what is going on in Ohio, we believe that customers will continue to visit MotorCity because of the unique, high-quality products and services,” said Jacci Woods, a spokeswoman for the Detroit casino.

Nevertheless, gambling industry analyst Jake Miklojcik said Detroit risks a hemorrhage of Michigan gamblers as well as those who now visit from Ohio.

At MotorCity Casino, patron Greg Romps said he would probably sample Ohio’s casinos, especially the one planned for nearby Toledo.

“These new casinos are so nice. They make them like Vegas,” said Romps, 67, of Livonia, Mich.

Kenley said voter approval of the Ohio establishments would increase pressure on Indiana lawmakers to do something to keep the state’s casinos competitive, including restructuring the way they are taxed.

Smith suggested lawmakers approve tax credits for casino investments to help them become more regional resort locations.

A big mover behind the Ohio casino campaign is Dan Gilbert, founder and chairman of Michigan-based Quicken Loans Inc. and owner of the NBA’s Cleveland Cavaliers.

He said he remains committed to Detroit’s development, as well as to Ohio’s, and said Ohio voters showed they see casinos as “the right plan at the right time.”