Earlier this week, Ohio Sen. Bill Coley (R-Liberty Township) announced that a legislation aimed at preventing casino operators from receiving tax deduction on promotional gaming credits has been proposed.
Rock Ohio Caesars LLC (ROC), one of Ohio’s casino owners, released a statement on the matter, saying that it is “stunned” by his “unwarranted attack” on the state’s gaming industry.
Ohio legalized its gambling in 2009 after a statewide vote had been held. Casino owners promised that they would annually contribute more than $500 million in tax revenues. First casinos opened doors in May 2012 and tax revenues had their peak in 2013 when the amount of $272 million was generated. Furthermore, those have been falling since then.
Sen. Coley pointed out in a statement, posted on Ohio Senate official website, that currently there are four casinos on the territory of the state. After residents voted in favor of their construction almost six years ago, developers decided to establish venues much smaller than what was originally promised. They assured that this would not have any negative effect on tax revenues. But Sen. Coley claimed that they have failed to live up to the initial expectations.
The Senate member pointed the so-called promotional gaming credits that casinos offer to their visitors as one of the main reasons for the decrease in tax revenues.
Sen. Coley explained that Ohio casinos offer $10 to $20 in free play and currently, they are permitted to deduct those promotions from their overall gaming revenues. According to the official, the state’s gambling facilities are paying less in taxes. He further commented that only in March, casinos have deducted more than $500 million from their revenues, which makes $165 million that could have been contributed to the state.
ROC is a joint venture of Rock Gaming LLC and Caesars Entertainment Corp. The operator manages two of the state’s four casinos – Horseshoe Cleveland, which opened in May 2012, and Horseshoe Cincinnati, launched in March 2013.
ROC explained in its statement that casinos offer promotional gaming credits to attract new customers and reward their loyal ones. Casino comps are among those aspects that make Ohio’s gaming industry competitive at a time when neighboring states are taking due measures to enhance their gambling establishments.
ROC also pointed out that the credits could not be defined as revenue to the facilities but rather as revenues that have been previously taxed and were reinvested for promotional purposes.
According to ROC officials, if the state decides to impose a cap or completely eliminate casino comps, this will most definitely “cripple” Ohio’s gambling industry, as operators will need to spend less on promotional campaigns. Furthermore, residents will probably decide to travel to neighboring states where casinos offer various promotions and additional credits. And this might lead to casino workers losing their jobs and the state losing huge amounts in tax revenue.
