By DOUG GRAVES
Ohio Correspondent

COLUMBUS. Ohio — As if horsemen in Ohio don’t have enough problems already, voters in Ohio made things a bit more difficult for those in the racing industry by passing Issue 3.

Issue 3, which allows for construction of gambling casinos in Ohio, passed by a slim margin, 53 to 47 percent. This allows for free standing casinos in Cleveland, Toledo, Cincinnati and Columbus. And that’s devastating news for racehorse owners and trainers in this state.

The benefits of Issue 3 include more jobs for Ohioans and more tax revenue for Ohio. As many as 34,000 jobs are slated with the construction of the four planned casinos. And with the passing of Issue 3 more state tax from gaming institutions would help stimulate Ohio’s sagging economy.

On the down side, Issue 3 calls for a tax rate of 33 percent, most of which would go to Ohio counties, not the state. The Ohio State Racing Commission would get 3 percent of the 33 percent to fund horse racing. And for 12,000 horsemen in Ohio that simply isn’t enough funding.

“The better horses and trainers are already fleeing this state in search of tracks with higher purses,” said Gene Morgan, who trains Standardbreds at the fairgrounds in Montgomery County and Greene County. “We had a ray of hope with the video lottery terminals that were planned to be installed at tracks in Ohio. But that idea got shelved in a hurry. Now the casinos are coming and the financial picture for those of us in this business is really looking grim.”

Morgan is referring to hopes he and other horsemen had for video lottery terminals, or VLTs. Earlier this year Gov. Ted Strickland planned to put 17,500 VLTs at the state’s seven tracks as a way to bolster the horse racing industry and the state budget. But that idea got shelved by an adverse ruling by the Ohio Supreme Court.
A racetrack VLT proposal released earlier this year by the Ohio State Racing Commission suggested that five of seven tracks in the state eventually would close without gaming or if non-track casinos were approved and the tracks had nothing. Thus far, all seven tracks intend to race in 2010.

“The casinos will not pay a fair tax rate,” said Ohio Harness Horsemen’s Assoc. (OHHA) Executive Director Jerry Knappenberger said. “Nothing would go to the state, and one percent would go to the racing industry. It would kill more jobs in racing than it would create at casinos.”

Mark Robinson, OHHA campaign chairmen, said Issue 3 had other ramifications. “Not only will it be a blow to the racing industry, but it could dry up small business,” he said.

Racetracks and horsemen’s groups would have to negotiate a percentage of revenue for purses and breed development. There was no deal before the VLT directive was sidelined by the Ohio Supreme Court, which said the plan is subject to a statewide referendum.

Senate Republicans are now pushing to have companion legislation to the VLT directive repealed. Still, the group LetOhioVote.org, which pushed for the state Supreme Court ruling, plans to continue gathering enough signatures for a 2010 referendum.

Strickland, meanwhile, has asked the high court to rule on whether the Ohio Lottery can authorize racetrack VLTs without legislation action. In 2008, they implemented statewide Keno under Strickland’s order.

Ohio racetracks haven’t thrown in the towel just yet. Sources say there remain scenarios under which the Ohio Lottery could move forward with the VLT plan. There also are two outstanding lawsuits filed over the plan. Strickland, whose four-year term ends in 2010, hasn’t said the plan is dead, but he also didn’t suggest he would issue an executive order for VLTs. Such orders can be repealed by another governor.

“Obviously, the racing commission and horsemen are hopeful it will make its way through the legal process,” Knappenberger said. “If that’s the case, we feel they will go ahead. We’d still be in the hunt.”

None of the seven racetracks are reporting any closures in the near future. But, according to Tim Hamm, president of the Ohio Thoroughbred Breeders and Owners, horse owners and breeders should be prepared for further declines.

“We’re probably going to have to make more cuts,” Hamm said of purse money for the Ohio-bred program. “Revenue is down again. We had our hopes with the slots. Everyone seemed optimistic it was coming, but without slots we don’t know how many of the tracks will stay open. Maybe they’ll stay open if the state keeps dangling the carrot.”

But some horsemen are not as financially stable as the tracks.
“It’s just a matter of time before it’s a slow death,” said Ohio Trainer William “Doug” Cowans. “The way I’ve been hanging in there is by going to Mountaineer Casino Racetrack and Resort (West Virginia) and I was stabled in Pennsylvania this summer. I’d like to run in my own backyard, but my owners can’t hang in there with the purse structure the way it is. A lot of my owners are Ohio breeders, and they can’t make it on anything other than good allowance or stakes horses in Ohio.”

The seven horse racing venues in Ohio include Northfield Park and Thistledown (Cleveland area), Raceway Park (Toledo), Lebanon Raceway (between Dayton and Cincinnati), River Downs (Cincinnati), Scioto Downs (Columbus) and Beulah Park (Grove City, just outside of Columbus).