Coley: Casinos cheating schools, local governments out of millio - Cincinnati News, FOX19-WXIX TV

Coley: Casinos cheating schools, local governments out of millions

FOX19 NOW Anchor Megan O'Rourke talks with State Sen. Bill Coley (R-Liberty Township) about his bill cracking down on casinos and racinos. (FOX19 NOW) FOX19 NOW Anchor Megan O'Rourke talks with State Sen. Bill Coley (R-Liberty Township) about his bill cracking down on casinos and racinos. (FOX19 NOW)

A state legislator from Butler County says casinos and racinos are getting away with cheating school districts and local governments out of millions.

Sen. Bill Coley (R-Liberty Township) says they are falling short of 2009 election promises to produce more than $500 million annually and 34,000 jobs. Instead, they are producing about half of that money due to a marketing tax loophole.

He plans to introduce legislation next week that would tax 'free play' once a casino or racino surpasses $5 million of it annually.

'Free play,' in which patrons are not taxed on their earnings, is a widely used marketing tool to attract business. By taxing those proceeds, Coley's bill would result in millions more for schools and local governments.

Citing figures from the Ohio Department of Taxation, he says schools statewide have lost out on a total of $108 million in the past 2 1/2 years.

For the Tri-State's largest school district, Cincinnati Public Schools, that breaks down to $442,000. The second-largest district, Lakota, is out $244,000, he notes.

"It's scary," he said. "We can't just look the other way on this. Schools and local governments are being cheated out of money. We have to get this under control."

Coley is still seeking co-sponsorship on the bill, but so far other Republican senators like Dave Burke of Marysville and Bob Peterson of Sabina have joined.

Bob Tenebaum, a spokesman for Penn National Gaming, which operates casinos in Columbus and Toledo, said casinos are not arbitrarily
withholding money. Plus, the casino market is still growing, so it's premature to make judgments about long-term casino revenue.

"This proposal is ill-conceived and misguided. In fact the proposal, if implemented, could wind up producing the opposite of what Sen. Coley indicates he's trying to achieve," said Eric Schippers, another Penn National spokesman. "Eliminating or reducing the discount on promotional credits would nullify one of the very weapons the state needs to help keep Ohio competitive in the ongoing regional gaming arms race. Ironically, the legislatures in both Indiana and Pennsylvania are currently crafting casino incentive legislation primarily to help their gaming industries compete with Ohio.

"Ohio's casino industry has produced hundreds of millions of dollars in tax benefits for all 88 counties, our largest cities, and school districts all over the state," he said. "Casino revenues are helping to fund new addiction prevention and treatment programs, providing funds for law enforcement training and helping to revive the horse-racing industry in the state.

Casino promotional discounts between May 2012 and February totaled just over $250 million, he said.

"This proposal seems to be based on the theory that customers receiving promotional credits would have wagered the same amount of money even if they didn't have the credit. Our experience indicates that's simply not the case," Schippers said.

"Finally, the whole issue of revenue estimates is a red herring. The original casino revenue estimates were based on the gaming landscape in Ohio at the time they were made: there were to be four casinos in the state, period. We now have 11 gaming facilities -- the four casinos along with seven racinos nobody anticipated back in 2009, when the original casino revenue estimates were developed. To base legislation like this on revenue estimates made years ago in a totally different climate simply makes no sense."

Caesars Entertainment, owners of Horseshoe Casino in Cincinnati, claim Coley's legislation would negatively impact Ohio's gaming industry. Read the entire statement here. 

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