Future legislation to be pursued for creation of new lottery games that the governor vetoed


By ROBERT CONNELLY

rconnelly@vindy.com

COLUMBUS

A provision for new Ohio Lottery games was among 44 items Republican Gov. John Kasich vetoed last week – a move that Ohio’s two largest racino/casino operators applaud.

It had called for self-service terminal-generated instant win-style lottery games for EZPlay Keno and EZPlay bingo at bars and restaurants with certain liquor permits.

According to the provision, the games would have been “available for play in graphical, paperless and interactive formats” including winnings and an option for a paper pay voucher to be redeemed. It would have required the Ohio Lottery Commission to acquire and make available 1,500 machines to be in operation before Jan. 1, 2016, with an additional 1,500 machines acquired and made available by March 1, 2016.

The provision, pursued by State. Rep. Bill Coley and others, was inserted into the Senate version of the state biennial budget and was line-item vetoed by Kasich.

In a written explanation, Kasich said adding the machines “erodes the executive authority of the state Lottery Commission and unnecessarily restricts its ability to determine the best deployment of resources to maximize net proceeds to the Lottery Profits Education Fund.

“In addition, given the unplanned costs, uncertain market demand and short time frame to introduce these new games, it is improbable that sales performance would yield the anticipated revenue projections – putting structural pressure on the state budget. Therefore, this veto is in the public interest.”

Coley of Liberty Township in Butler County, R-4th, said he met with other state senators when a lottery report was discussed. That report said the top three revenue-generating games for the lottery are Pick 3, video lottery terminal revenue from the seven racinos and keno.

Coley and other legislators had hoped the provision would generate about $60 million more for Ohio schools. That $60 million in revenue is an estimate after the state lottery commission would have spent about $48 million on the machines.

“The lottery needs to get their foot off the brake and on the gas and help these establishments [bars and restaurants] promote the lottery,” Coley said. He added he’s heard from taverns and the restaurant industry that they feel the lottery isn’t promoting them well enough.

He also said this was about getting more funding to schools. “We have a lot of requests in education ... for additional funding and everything from technology to early childhood,” Coley said.

He added he will pursue new legislation similar to the vetoed provision. “I absolutely intend to work with the lottery commission and the governor’s office” on future legislation, Coley said. “I’ve found the lottery commission is very good to work with. Sometimes you’ve got to push and prod to get things done a little quicker ... we’re strongly encouraging them to do that without the need for legislation.”

Danielle Frizzi-Babb, lottery commission communications director, said the commission “didn’t craft the language” that was vetoed. “We are always open to new games ... but we have to consider the capital investment required for a new game,” she said of the $48 million cost of machines.

“Had that been allowed to take effect, that’s another expansion of gaming that creates additional competition,” said Bob Tenenbaum, spokesperson for Penn National Gaming Inc., which operates Hollywood Gaming at Mahoning Valley Race Course in Austintown. “We were not unhappy to see the governor veto that.”

Tenenbaum added, “It was an unanticipated expansion of gaming.”

“We applaud Gov. Kasich’s well-reasoned decision to veto the proposed gaming expansion in the state’s operating budget,” said Dan Reinhard, vice president of legal and government affairs for Rock Gaming, which operates Thistledown Racino and Horseshoe Casinos in Cleveland and Cincinnati. “This would have had a detrimental effect on the state’s developing gaming industry, as well as the industry’s thousands of hardworking employees.”

Keno has risen in popularity every year since the Ohio Lottery introduced it in February 2010. Players choose from a range of numbers, and if a gambler matches 10 of 20 numbers, they win the top prize of $100,000. Numbers are drawn every four minutes, from 6:04 a.m. to 2:28 a.m. every day. The game is hoted at establishments with certain liquor permits. A Booster number, which can be bought for $1, can increase the winnings.

Revenue generated by the game has risen steadily from its first year, fiscal year 2011, of $157.9 million to $298.1 million in fiscal year 2014, the last year for which that revenue data are available.

Bill Seagraves, chairman of the Ohio Veterans and Fraternal Charitable Coalition, said the provision would not have affected such groups. “We really didn’t care if they got them or not,” he said of the machines. “As long as we can use raffle machines for our charity work, we don’t mind.”

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