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    What’s gambling worth to Ohio?

    November 21, 2014

    Ohio’s casinos and racinos were responsible for $2.2 billion of the state’s economy in 2013, according to a new study commissioned by the American Gaming Association. And that number is expected to increase this year with the opening of additional racinos.

    The gambling venues were responsible for about 7,500 jobs and generated $672.5 million in local, state and federal taxes last year, according to Oxford Economics, the international research firm that conducted the study.

    “I think this shows we create a lot of economic impact and jobs,” said Himbert Sinopoli, vice president and general manager of Hollywood Casino Columbus.

    For example, he said the casino has 1,025 employees, and 48 percent make $20 or more an hour. Hollywood Columbus pays about $4 million annually in payroll taxes and $4.5 million in property taxes.

    “We see a lot of positives for people who were unemployed or underemployed and their families,” Sinopoli said.

    The $2.2 billion is not a net economic gain, according to a local economist, who added that the more money Ohioans spend at casinos, the less they’ll have to spend at other local entertainment venues and shops.

    “It’s the idea that you’re diverting money from other places,” said Bill LaFayette, owner of local economic-consulting firm Regionomics. “Yes, casino employment has gone up, but employment in other businesses has gone down.”

    Economic gains come only from the non-Ohioans who travel here to gamble and from Buckeyes who previously left the state to gamble and now do so here, he said.

    “Everyone else is neutral, give or take,” LaFayette said.

    Ohio’s gambling revenue totaled $1.07 billion in 2013, well below the annual estimates of about $1.9 billion discussed when allowing gambling in the state was initially proposed. The state receives a third of this in the form of taxes.

    “The casinos and racinos have underperformed,” said Zach Schiller, research director at Policy Matters Ohio.

    However, the numbers for 2013 don’t reflect complete years of activity for some of the venues. Only three of the four casinos were open for all of 2013, and only one of the seven racinos — Scioto Downs — was open the entire year, while three were open part of the year and three opened this year.

    Gambling revenue statewide this year stood at $1.13 billion through the end of October and is expected to total about $1.4 billion for the year.

    “We would expect the overall economic impact and the number of jobs to increase by about the same percent,” said Aran Ryan, an Oxford director.

    Oxford’s economic-impact findings were based on a nationwide survey of casinos and racinos, Ryan said.

    For example, Ohio’s casinos and racinos must disclose their monthly gambling revenue but are not required to disclose revenue from nongambling operations, such as bars, restaurants and gift shops.

    Oxford estimated this total was $85.6 million last year based on industry standards and not specific numbers from Ohio’s casinos and racinos.

    Sinopoli said nongaming revenue at Hollywood Columbus is about one-twelfth of gaming revenue, which was $210.8 million in 2013.

    Oxford estimated the total property taxes generated by Ohio’s casinos and racinos was $56.2 million in 2013.

    This included the actual property taxes paid, plus “the employees who would purchase a house, that was included as well … using economic multipliers for a state,” Ryan said.

    All this estimating can lead to errors, Schiller said.

    “There’s no question there’s been an economic benefit, but it’s hard to measure these indirect gains,” he said. “They’re not as clear as the direct numbers and can be inflated.”

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