Ohio Gambling Revenue Falling Short of Predictions
Since expanded casino and racino gambling took effect in the state of Ohio about a year ago, revenue generated by the state’s eleven gambling properties is lower than what was initially expected, according to a report by USA Today.
The difference between what state officials had hoped to rake in during that period and what is realistically expected is between $260 million to $360 million – a considerable deficit. Gambling revenue in Ohio has been earmarked for local municipalities and schools, institutions that will feel a fiduciary effect due to the shortfall.
Various reasons behind unmet expectations
One contributing factor is that officials simply overestimated the number of gamblers that would be attracted to a casino in Columbus, the state’s capital.
Making matters worse, the state’s racinos – combined racetrack and casino venues – have not installed as many video lottery machines as they originally had planned. The failure to have those terminals, which are operated by the Ohio Lottery, up and running will be especially felt by Ohio’s schools, as the revenue generated by such machines was meant to go directly to education.
According to Mark Nichols, who is an economist at the University of Nevada at Reno, “Racinos are either playing it safe or they don’t think Ohio’s as large a market as initially thought.That means fewer tax dollars.”
Casino expansion of major concern to neighboring states
Ohio happens to be geographically situated in the center of a region that is currently experiencing a casino proliferation race, of sorts, as many of its neighbors scramble to expand casino gambling within their own borders.
Indiana, in response to moves in Ohio as well as proposed casino expansion in Illinois, where a bill that would have allowed for the construction of five new casinos failed at the end of last month, has been mulling the idea of allowing for new casinos to be built in its inland areas. Indiana was one of the first states to introduce casino gambling, and has enjoyed the revenue benefits from having done so way back in the mid-1990’s.
Pennsylvania has likewise been steadily working toward adding to its casino roster, with a new property in the works for the Philadelphia area. The Keystone State has also considered allowing residents to place wagers online. Pennsylvania, in contrast to its western neighbor Ohio, has been enjoying surging gambling revenue, with a recent report by the AGA announcing that Pennsylvania is actually the number one state in the nation when it comes to gambling earnings.
Possibility of too many casinos
With so many new casino projects in the works, there are some who are suggesting that perhaps too many casinos are being opened to cater to too few gamblers. This may very well be the case in Ohio, where even the extremely well-publicized Horseshoe Casino in Cincinnati, which opened earlier this year, has experienced a revenue decline from its initial months in operation. That property, according to reports, is still meeting its fiscal expectations.
The concern of some civic groups and business leaders is that casinos designed to prevent revenue from crossing over the borders to other states while at the same time attracting new tourists may in fact merely cause casinos situated too near one another to swipe each other’s customers, a problem that is likely to worsen as states look to open even more gambling properties.