Kasich to hire experts on gaming
CINCINNATI - Certain that Ohioans could get a better deal on gambling-related revenue, Gov. John Kasich will have two gaming experts advise him on how best to make casinos, slot machines, and horse tracks work for the state.
The Department of Administrative Services announced yesterday that it had selected Spectrum Gaming Group of Linwood, N.J., and Moelis & Co. of Los Angeles to serve as gaming advisers to Kasich. The governor said the two companies also would advise the Ohio Casino Control Commission.
Molly O'Reilly, spokeswoman for the Department of Administrative Services, said Spectrum was retained to establish rules, regulations and operational relationships regarding casinos, video lottery terminals and other gaming sources. Moelis will determine how the state can maximize revenue from casino gambling.
The two firms will be paid approximately $400 per hour from the Ohio Lottery Commission's budget. O'Reilly said a contract between the state and the two firms had not been completed, and a maximum dollar amount for the firms was not determined.
O'Reilly said Spectrum, which has provided similar guidance to Indian tribes, multiple states and numerous foreign countries, could need up to two years to complete its work for Ohio. She said Moelis, a newer company whose principals have decades of financial analysis experience in the gaming industry, would complete much of its work within six months.
"I'm not a gambling-gaming guy," Kasich said before his speech to the Cincinnati Rotary Club yesterday. "The only thing I do is, I may bet a dollar, dollar, dollar on the golf course. That's as high of stakes as I ever play.
"I'm not an expert in it. But I have been told, and again I haven't dug as deeply into it as I will, that this is all tied together. The race tracks, the (video lottery terminals), the casinos - they're all tied together. So let's get it done right. Haste makes waste."
The announcement coincided with the governor's trip to Cincinnati - where some fear that Kasich's suggestion that he would seek more money from casino operators could delay construction of this city's casino.
Similar concerns reportedly exist in Cleveland, where Rock Gaming and Caesars Entertainment Corp. have teamed to build a casino. The same partnership also will open the Cincinnati casino and is seeking financing for the two projects.
Penn National Gaming, which will build the Columbus and Toledo casinos, is financing its own projects.
"You think people who are opening four casinos in Ohio can't get a loan?" said Kasich, who accused casino developers of "crying wolf." Kasich rejected the notion that asking casinos for more than the $50 million in license fees they're required to pay by law would impede them from opening their doors.
Also in Cincinnati, Kasich discussed Moody's Investors' decision to maintain Ohio's "Aa1" bond rating (the agency's second-highest rating) with a negative outlook following the governor's budget presentation last month in New York.
In its latest report, released Tuesday, Moody's said its negative outlook for Ohio's economy reflected "reliance - though decreasing - on non-recurring (funding) measures and likely continuation of sluggish economic performance that will make it difficult for the state to rebuild financial reserves even as the national economy recovers."
Contrarily, the report also said that Ohio's "revenues have stabilized, with moderate growth expected over the next biennium. The budget is projected to return structural balance in 2013, when excess revenues may be used to rebuild reserves."
"The good news is, they have not decided to give us a downgrade," Kasich said, later adding: "What they are very concerned about is, the underlying strength of our economy.
"By getting our budget under control, reducing the cost of operating here in the state of Ohio, having a more effective and quicker way to deal with companies and be responsive to them, we begin to answer some of those concerns," he said.
"But make no mistake about it, Ohio is in a dangerous situation."
jvardon@dispatch.com