Details of the Deal
Terms of the deal struck earlier this week between Governor Kasich and Rock Ohio Caesars were disclosed today.
Rock Ohio, developers of the casinos in Cleveland and Cincinnati, have agreed to pay the state an additional $110 million over the next 10 years- $10 million for each of the first 5 years and $12 million for each of the next 5 years. In return, the state will assess the commercial activity tax on total wagers minus payouts.
The agreement would also allow each of Ohio’s seven horse racing tracks to apply for a 10-year sales agent license to operate video lottery terminals (VLTs) for a $50 million licensing fee plus a 33.5% tax on all VLT revenues. License fees would be paid in three installments – $10 million upon application, $15 million when VLT transactions begin and $25 million one year later.
Before VLTs can be installed at the racing tracks, an agreement with the horse racing industry must be reached over ‘funds to benefit the industry.’ If such an agreement can’t be reached, the state can step in and impose one.
Other terms include:
- Casino licenses are renewed every three years, at a cost that covers the expenses of the Ohio Casino Control Commission;
- A license can be transferred if approved by the Casino Control Commission and payment of a $1.5 million application fee;
- Rock Ohio will invest a minimum of $900 million into its two casinos, up from $500 million required by the constitutional amendment passed by voters in 2009.
The state will decide at a later date this year on whether horse racing permits can be transferred from a track’s current location to a new location.
Penn National has not yet agreed to the terms of the deal between Rock Ohio and the State. Discussions are ongoing.