Casino Delays
Penn National officially broke ground on its Columbus casino last week, but when it will actually open is still up in the air somewhat.
Days after the groundbreaking, Franklin County officials rejected Penn National’s application for a certificate of zoning appropriateness, a certificate that is needed to begin construction. Planning Administrator Lee Brown cited 11 deficiencies in the application. Penn National officials have vowed to respond quickly so as not to delay construction.
But then House Republicans proposed an amendment to the budget that would substantially impact how casinos would be taxed. The constitutional amendment passed in 2009 requires each casino to pay a $50 million license fee and a casino-specific tax of 33% on gross revenue. They would also pay the state’s commercial activities tax of 26 cents on every $100 in gross gambling revenue, which is what the casino takes in minus what it pays out in winnings. The proposed amendment would tax casinos on money wagered. In other words, a tax on every bet made.
Penn National has hinted that if this amendment were adopted they would have to ‘re-evaluate’ their investment, originally projected at $400 million. They also stated that a lawsuit against the state would be a possibility.
Meanwhile, the opening of the Cincinnati casino has been pushed back to 2013, due to the uncertainty over taxes and fees that may be imposed upon them. Operators there have also hinted at the possibility of scaling back their project.
Officials from Penn National and Rock Caesars Ohio are expected to meet with Moelis & Co., one of the gambling experts hired to advise Governor Kasich. The other expert, Spectrum Gaming Group, is expected to make a presentation to the Ohio Casino Control Commission on Wednesday.