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Do IT this week: Layering
By Dennis J. Willard
Beacon Journal staff writer
POSTED: 10:04 p.m. EST, Nov 28, 2009
COLUMBUS: Thanks to voters, casino operators have their own little constitutionally protected monopoly in Ohio.
But as the tough process begins to negotiate the fine-print rules with state lawmakers and Gov. Ted Strickland, casino operators should take heed of the old axiom, albeit with a twist, those who live by the constitution may also die by the constitution.
The casino operators have already shopped a bill to state leaders to begin the process of passing what is called implementation legislation.
This is a fancy term for putting the intent of the change to the Ohio Constitution into law.
Voters this month approved an amendment to the constitution to allow the construction of casinos in Cleveland, Toledo, Columbus and Cincinnati.
The amendment consumes about 2,400 words across four pages, compared to the proposal on the table that is 43 pages long.
A lot of constitutional interpretation will be going on in the next few months.
Casino operators clearly have the upper hand because the constitution, like paper against rock in the old children's game, beats the laws passed by the legislature and signed by the governor.
Lawmakers, however, are not powerless. In fact, they can negotiate with casino operators from a great position of strength because they have the authority to draft a constitutional amendment of their own to go back to the voters.
The starting point is the language in the Ohio Constitution. This includes a new subsection that is very specific on certain points regarding those four casinos, including pinpointing their location in each host city. Gross casino revenue will be taxed at a 33 percent rate. The casinos and their operators will be treated like any other business in Ohio, with appropriate fees, taxes and other charges applying to them, including each paying $50 million upfront for a license and investing $250 million in each facility.
The amendment spells out where the taxes on gross revenue will go: 51 percent to 88 counties, 34 percent to school districts, 5 percent to the four host cities, 3 percent to fund the Ohio casino control commission, 3 percent to the horse-racing industry, 2 percent to the state law enforcement training fund and 2 percent to gambling and addiction services.
There is a nice little anti-shell game line to prevent the funding manipulations that have occurred since the state lottery was founded. It states that the funds ''are intended to supplement, not supplant, any funding obligations of the state.''
Less than a month after the issue passed, this is already being debated, because the amendment notes the $200 million in license fees must pay for state economic development programs. Some lawmakers are thinking about channeling the money into established funds to free up a like amount elsewhere in the state budget.
Regulating industry
The casino control commission, composed of seven members appointed by the governor with the advice and consent of the Ohio Senate, will license and regulate the industry.
The state tax department and the commission have the right to inspect books, accounts, records and memos and place certain employees under oath for questioning.
Operators cannot hold a majority interest in more than two licenses or facilities, the gaming can be jobbed out to management companies and the casinos can be open 24 hours a day with up to 5,000 slot machines at each location.
Local health and building codes apply, but local governments cannot get clever with zoning, land use, subdivision regulations or any other rules that deter the casinos from operating.
So how does this play out across 43 pages of proposed legislation?
In detail, the bill defines terms and then addresses sections of state law to outline the constitutional changes.
For example, the constitution creates the gaming commission, but the legislation indicates each member will be paid $5,000 a month and expenses to meet at least once a month.
The commission will also be required by law to submit a written report on Sept. 1 each year to the governor and legislative leaders that includes gross casino revenue, actions taken by the commission and other information.
Under the proposed law, the Ohio inspector general will join the tax commissioner and gaming commission in looking at books and placing people under oath.
There's a nice job at the commission for a director, appointed by the governor, who will make up to $136,000 a year, and that director will be in charge of hiring assistant directors, deputy directors, regional managers and others.
One must pass a background check and have a record clean of recent felony convictions to get the job.
The law, for example, allows the commission to approve an ex-felon's employment at a casino if his or her record has been clean for five years, and ''there is no basis in fact for believing that the applicant. . .will commit such an offense again.''
Confidentiality
Another section outlines what will be confidential.
Some make sense, like the names of minor children of license applicants or their Social Security numbers, but the proposed law also shields personal financial information of the applicants.
And then there is the leeway granted the commission to keep confidential any information deemed necessary ''to protect the privacy of an applicant, any trade secret, or which would result in undue embarrassment or ridicule if otherwise disclosed.''
In the bill, casino operators must outline how they are going to meet a minimum of 90 percent employment from workers who live in the host city metropolitan areas and their plans to purchase goods and services from Ohio companies.
It is the law and not the constitution that prohibits anyone younger than 21 from wagering at the casinos.
The bill also outlines how local officials must act as casino operators and begin the process of pulling permits and passing inspections to build their facilities. And it is clear that reluctant bureaucrats are not going to drag their feet.
In fact, the proposed law goes as far as to state ''in the event of any direct conflict between this [bill] and the provisions of any municipal ordinances, rules or regulations, the terms of this [bill] shall control.''
Punishing violators
Labor backed the casino amendment, and the bill includes a provision that the prevailing wage will be paid on the construction projects.
The proposal also creates fines for key employees ($5,000), license holders ($10,000) and gaming vendors ($25,000) for engaging in non-criminal fraudulent acts that range from making false statements on applications to permitting someone younger than 21 to gamble.
The bill also outlines a host of more serious felonies, including cheating, that bar anyone who is convicted from entering the casino for life.
This industry-backed bill is just the starting point for discussion in the legislature.
At the same time, there are lawmakers who have not accepted that voters approved the amendment, particularly in central Ohio, where a casino is slated for Columbus, although the issue failed in Franklin County.
There will be a push to come back to voters statewide to somehow allow Franklin County and Columbus to opt out, but this is a dangerous path to follow.
Using this logic, President Barack Obama should not be recognized as president in any county that supported the McCain-Palin ticket.
Still, right now, the casino operators need lawmakers to get the implementation bill passed, and there will never be a better time to negotiate the large and small issues.
After the law is enacted, the casino operators will once again hold all the cards.
Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
COLUMBUS: Thanks to voters, casino operators have their own little constitutionally protected monopoly in Ohio.
But as the tough process begins to negotiate the fine-print rules with state lawmakers and Gov. Ted Strickland, casino operators should take heed of the old axiom, albeit with a twist, those who live by the constitution may also die by the constitution.
The casino operators have already shopped a bill to state leaders to begin the process of passing what is called implementation legislation.
This is a fancy term for putting the intent of the change to the Ohio Constitution into law.
Voters this month approved an amendment to the constitution to allow the construction of casinos in Cleveland, Toledo, Columbus and Cincinnati.
The amendment consumes about 2,400 words across four pages, compared to the proposal on the table that is 43 pages long.
A lot of constitutional interpretation will be going on in the next few months.
Casino operators clearly have the upper hand because the constitution, like paper against rock in the old children's game, beats the laws passed by the legislature and signed by the governor.
Lawmakers, however, are not powerless. In fact, they can negotiate with casino operators from a great position of strength because they have the authority to draft a constitutional amendment of their own to go back to the voters.
The starting point is the language in the Ohio Constitution. This includes a new subsection that is very specific on certain points regarding those four casinos, including pinpointing their location in each host city. Gross casino revenue will be taxed at a 33 percent rate. The casinos and their operators will be treated like any other business in Ohio, with appropriate fees, taxes and other charges applying to them, including each paying $50 million upfront for a license and investing $250 million in each facility.
The amendment spells out where the taxes on gross revenue will go: 51 percent to 88 counties, 34 percent to school districts, 5 percent to the four host cities, 3 percent to fund the Ohio casino control commission, 3 percent to the horse-racing industry, 2 percent to the state law enforcement training fund and 2 percent to gambling and addiction services.
There is a nice little anti-shell game line to prevent the funding manipulations that have occurred since the state lottery was founded. It states that the funds ''are intended to supplement, not supplant, any funding obligations of the state.''
Less than a month after the issue passed, this is already being debated, because the amendment notes the $200 million in license fees must pay for state economic development programs. Some lawmakers are thinking about channeling the money into established funds to free up a like amount elsewhere in the state budget.
Regulating industry
The casino control commission, composed of seven members appointed by the governor with the advice and consent of the Ohio Senate, will license and regulate the industry.
The state tax department and the commission have the right to inspect books, accounts, records and memos and place certain employees under oath for questioning.
Operators cannot hold a majority interest in more than two licenses or facilities, the gaming can be jobbed out to management companies and the casinos can be open 24 hours a day with up to 5,000 slot machines at each location.
Local health and building codes apply, but local governments cannot get clever with zoning, land use, subdivision regulations or any other rules that deter the casinos from operating.
So how does this play out across 43 pages of proposed legislation?
In detail, the bill defines terms and then addresses sections of state law to outline the constitutional changes.
For example, the constitution creates the gaming commission, but the legislation indicates each member will be paid $5,000 a month and expenses to meet at least once a month.
The commission will also be required by law to submit a written report on Sept. 1 each year to the governor and legislative leaders that includes gross casino revenue, actions taken by the commission and other information.
Under the proposed law, the Ohio inspector general will join the tax commissioner and gaming commission in looking at books and placing people under oath.
There's a nice job at the commission for a director, appointed by the governor, who will make up to $136,000 a year, and that director will be in charge of hiring assistant directors, deputy directors, regional managers and others.
One must pass a background check and have a record clean of recent felony convictions to get the job.
The law, for example, allows the commission to approve an ex-felon's employment at a casino if his or her record has been clean for five years, and ''there is no basis in fact for believing that the applicant. . .will commit such an offense again.''
Confidentiality
Another section outlines what will be confidential.
Some make sense, like the names of minor children of license applicants or their Social Security numbers, but the proposed law also shields personal financial information of the applicants.
And then there is the leeway granted the commission to keep confidential any information deemed necessary ''to protect the privacy of an applicant, any trade secret, or which would result in undue embarrassment or ridicule if otherwise disclosed.''
In the bill, casino operators must outline how they are going to meet a minimum of 90 percent employment from workers who live in the host city metropolitan areas and their plans to purchase goods and services from Ohio companies.
It is the law and not the constitution that prohibits anyone younger than 21 from wagering at the casinos.
The bill also outlines how local officials must act as casino operators and begin the process of pulling permits and passing inspections to build their facilities. And it is clear that reluctant bureaucrats are not going to drag their feet.
In fact, the proposed law goes as far as to state ''in the event of any direct conflict between this [bill] and the provisions of any municipal ordinances, rules or regulations, the terms of this [bill] shall control.''
Punishing violators
Labor backed the casino amendment, and the bill includes a provision that the prevailing wage will be paid on the construction projects.
The proposal also creates fines for key employees ($5,000), license holders ($10,000) and gaming vendors ($25,000) for engaging in non-criminal fraudulent acts that range from making false statements on applications to permitting someone younger than 21 to gamble.
The bill also outlines a host of more serious felonies, including cheating, that bar anyone who is convicted from entering the casino for life.
This industry-backed bill is just the starting point for discussion in the legislature.
At the same time, there are lawmakers who have not accepted that voters approved the amendment, particularly in central Ohio, where a casino is slated for Columbus, although the issue failed in Franklin County.
There will be a push to come back to voters statewide to somehow allow Franklin County and Columbus to opt out, but this is a dangerous path to follow.
Using this logic, President Barack Obama should not be recognized as president in any county that supported the McCain-Palin ticket.
Still, right now, the casino operators need lawmakers to get the implementation bill passed, and there will never be a better time to negotiate the large and small issues.
After the law is enacted, the casino operators will once again hold all the cards.
Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
Comments
Click here to post your comments
Ravenna, Oh
Posted 05:56 AM, 11/29/2009
Just the fact that so much legislation must be considered to keep out dishonesty and crime should tell one how bad this kind of entertainment can be.
And the admission of how casino operators will still have the upper hand protected by a constitution is a concern.We can never
go back now and completely innocent residents that overwhelmingly voted against a casino in their backyard have to deal with the greed and self indulgence of someone else's gambling habits that don't deal with the casinos in "Their" backyard
on a daily basis. The voters of Ohio were misinformed and lied to,preyed upon during bad
economic times,shortages of ballots at voting booths were suspicious and now Ohio can be proud of the fact that they are another state with casinos but no real jobs or infrastructure.
But most of all,we have a Governor with no backbone
who would not stand up to the Casino operatives and
just say no.
Akron, OH
Posted 09:24 AM, 11/29/2009
To Abitconcerned: The Governor opposed the casino proposal. He urged Ohio voters to vote against it. He's indicated that he'll veto implementing legislation if the legislature tries to give away the store to the casinos. How, exactly, did he "not stand up to the Casino operatives and just say no"?
Canal Fulton, Oh
Posted 09:34 AM, 11/29/2009
@Abitconcerned,
Im concerned as to where you got that information?
Akron, OH
Posted 03:28 PM, 11/29/2009
@Abitconcerned. many industries have "much legislation must be considered to keep out dishonesty and crime". Many of much more than these casinos will have.
By your philosophy on legislation, medicine is bad. Education is bad. Driving is bad. Need more examples?
Akron, OH
Posted 03:29 PM, 11/29/2009
@Abitconcerned, you also say "We can never go back now".
That statement cannot be more wrong. Maybe you should go learn more about the legislative process.
Orrville, Oh
Posted 03:50 PM, 11/29/2009
Founding Fathers of this Representative Republic neglected to make gambling, stealing, or defying demands of Natural Law: what Mother Nature, God, or Whatever Power decreed to be the reality of the real world, God, democracy, capitalism, the US Constitution, and free, fair, and affordable commerce legal in the USA.
They demanded every corporation, farmer, business, outsourcer sweatshop, and nonprofit, tax-exempt, organization and Church; markets the cost; in the wholesale and retail price of his or her product and service; Of every workers, consumers, and taxpayers living (including pension and health care); enabling parents to love, nurse, nurture, discipline, protect, and provide for every child (job) they conceive; and fund schools, infrastructure, national security, government services, and etc.; with money derived from wages or independent business profit.
Representatives of this Representative Republic negotiating with gamblers, Hillarys, Chinese, Foreign and Domestic Investors and Stockholders; Makes free, fair, and affordable commerce IMPOSSIBLE; Makes funding schools, infrastructure, and etc. IMPOSSIBLE; Makes balancing every budget IMPOSSIBLE; Makes union workers, consumers, taxpayers, and America’s grandchildren’s children LIFE UNAFFORDABLE; and created the $40 trillion social security and the $9.3 trillion national debt. America’s grandchildren’s children are responsible to pay interest with this debt until they are 18 years old. Then pay the debt with the $7.30 per hour government mandated labor wage.
There is no reason to believe America’s grandchildren’s children that go to bed hungry can afford life; and pay this debt; with the $7.30 per hour; government mandated labor wage; in a hundred million years; with money derived from wages or independent business profit!
Norton, Oh
Posted 04:03 PM, 11/29/2009
COLUMBUS: Thanks to voters, casino operators have their own little constitutionally protected monopoly in Ohio
This opening line strikes me as biased and sarcastic. We have utility monopolies... cable tv monopolies... albeit not constitutional, but they still exist.
Mr Willard... At least when Bob Dyer writes a column, we know its his point of view along with an occasional fact tossed in for good measure. Its obvious from this opening statement, you were/are against the casinos, and let your bias show.
Our Governor and his religious cronies are going to do everything within their power to delay this project from moving forward. Then, our already financially strapped state will find itself in a lawsuit, sucking more money from the coffers.
Politics in action....
clinton, oh
Posted 05:04 PM, 11/29/2009
Can never go back .Correct
You will never be able to go back to a non casino state.It will never happen.
For all who argue about legislation,I dont ever recall the state constitution being rewritten in such away as this to allow manufacturing into this state.
I don't recall having to ask voters if they would object to an Automotive plant or technical facility
to come to Ohio
I dont recall being 21 being an issue to work at a manufacturing plant.
There is a h-e-l-l of a lot a difference between legislation allowing manufacturing and business,
and legislation required for a casino.
Strickland said he wasn't crazy about casinos but wouldn't do anything to stop it
Taft prevented them from coming
clinton, oh
Posted 08:00 PM, 11/29/2009
You see people placing opinions on this subject who claim to care about bringing financial relief to the state as though that is their main concern for condoning casinos
But you go to other ABJ articles about auto plants closing up in our state,taxation issues,school funding articles, and academic issues in schools and the same people are curiously silent and non existent.
And then these same people attack a columnist for
inserting personal opinion in an article,when in
fact it is they who have personal opinion.
They first and foremost want to gamble in Ohio,
but claim to support it for the financial good of the state
clinton, oh
Posted 10:29 PM, 11/29/2009
This is what Ohio voted for
http://www.itepnet.org/pb19gamb.pdf
