What about the effect on businesses in the areas surrounding casinos?
It’s hard to say. I’ve talked about this with an economics professor at University of Nevada, Las Vegas (UNLV), and he indicates that if a casino can bring in tourists from out of state and it does it in connection with a hotel, that’s a net win. To the extent that you’re just bringing in local people and they’re spending their dollars at a casino as opposed to somewhere else, for example going to the casino restaurant as opposed to the local restaurant, then it’s just trading dollars, and it will hurt the local businesses. If you do it so there’s a synergistic kind of relationship between the casino and other events and venues in the city, I think casinos can be helpful.
Businesses would be well served to tie in the presence of a casino with their own attractions. For example, if you can bring in people for a football or baseball game, you can run packages where they stay in a hotel near the casino, and spend a whole weekend instead of just coming in for the game.
What will businesses that want to work with casinos need to know?
There’s going to have to be a whole regulatory scheme set up for licensing and background checks, investigations and other decisions concerning all of the rules and regulations that govern casinos. Nevada has been doing this for years and has pages and pages of regulations. It’s not something you can just do in a day. So the specifics are secondary right now to the legislature getting something done. Businesses will need to keep abreast of the regulatory requirements as the legislative process develops.
What lies in the near future for gaming in Ohio?
The legislature is already talking about putting another amendment on the ballot. They have the authority to put in another constitutional initiative and amend this one. Already, several legislators have recommended that an amendment be proposed that provides for the option of competitive bidding and an increase in the tax percentage. So that has to filter its way through the process before it becomes clear what’s going to happen. It’s pretty aggressive to think they can get all this done in six months — and do it the right way.
It’s interesting to note that the most successful gambling jurisdictions are New Jersey, Nevada and Mississippi and there have been studies by economists at UNLV that show that these states also have the lowest taxes on casino revenues. If you’re a casino operator and you have a decision to make about where to put your money, you’re going to put it in the jurisdiction where you can get the best return. This creates better properties and a better gaming experience, so the revenues go up.
Michael E. Zatezalo is the managing director of Kegler Brown Hill & Ritter, focusing his practice primarily in real estate and financing and gaming law, for which he serves as the practice chair. Reach him at (614) 462-5497 or [email protected].
