Efforts to facilitate installation of video lottery terminals at Ohio racetracks continued to quicken Dec. 22 when a public policy group that filed suit over VLTs was given a deadline to respond to motions to dismiss its case.

Franklin County Common Pleas Court Judge Timothy Horton set Jan. 23, 2012, as the deadline for the Ohio Roundtable to reply to motions to dismiss its case. Ohio Attorney General Mike DeWine recently filed four motions to dismiss the suit, which challenges the constitutionality of a 2011 law that gives the Ohio Lottery Commission authorization to license seven racetracks as VLT agents.

The Ohio Roundtable claims the state legislature—and ultimately Republican Gov. John Kasich—doesn’t have the authority to pass such legislation. The group believes racetrack VLTs should be approved by a constitutional amendment, similar to one that authorized four full-scale casinos in 2009.

Several years ago the Ohio Supreme Court declared as unconstitutional a move by Democratic Gov. Ted Strickland to install VLTs at racetracks through a directive to the lottery commission.

The lottery commission already has adopted regulations for VLTs, and one company—MTR Gaming Group, which owns the Scioto Downs harness track near Columbus—has applied for a VLT license. MTR Gaming officials believe the lawsuit will be dismissed, and they anticipate having a VLT facility open in the second quarter of 2012.

Each track must have a minimum of 2,500 machines, but can ask the lottery commission for more depending on market conditions.

by John Kady

The office of Ohio Attorney General Michael DeWine filed papers in Franklin County Common Pleas Court Dec. 9 to dismiss a lawsuit filed by the Ohio Roundtable, a group attempting to nullify a law allowing video lottery terminals at the state’s seven racetracks.

The Ohio Roundtable, a conservative anti-gambling organization, filed the suit several weeks ago challenging the legislation after it was signed into law by Republican Gov. John Kasich. The public policy group contends VLTs can’t be installed at racetracks without a statewide vote of the people.

The legislature contended the 2009 constitutional amendment authorizing four full-scale casinos also gives the Ohio Lottery Commission power to expand its offerings in the form of electronic gambling devices. The legislation approved by Kasich permits the lottery commission to name racetrack operators as lottery agents.

Each racetrack would have to pay a $50 million licensing fee before they could be authorized as agents. The tracks would pay the state about 33% of gross revenue like the full-scale casinos currently being built in the state’s four largest cities.

DeWine’s office earlier had set September 2012 as the deadline for a response to the Ohio Roundtable lawsuit, but the latest action is an attempt to speed up the process. Many racetracks in Ohio already have made plans for VLTs but are waiting for resolution of the lawsuit to move forward.

In a legal case that has lingered for almost five years, the United States Court of Appeals for the Sixth Circuit issued an opinion Jan. 24, 2012 that states the federal Interstate Horseracing Act of 1978 trumps Ohio statute in regard to horsemen having a say in where races are transmitted.

In the fall of 2006 two Ohio racetracks—Beulah Park and River Downs—asked the Ohio Horsemen’s Benevolent and Protective Association for approval to send their signals to Harrah’s Chester Casino & Racetrack in Pennsylvania for a 3% host fee. The Ohio HBPA wouldn’t consent unless the fee was raised to 5%.

The Ohio tracks then asked for a ruling from the Ohio State Racing Commission, which granted permission for the signals to go to Harrah’s Chester. The Ohio HBPA then sued the OSRC, Beulah Park, and River Downs, but later dropped the tracks from the suit.

The action led to a period of heightened animosity between the horsemen’s group and the racetracks, which have since changed hands and now are owned by casino companies.

The Court of Appeals opinion, which affirms a judgment from the U.S. District Court for the Southern District of Ohio, states that federal law preempts state law if they “directly conflict.” The Ohio Revised Code states horsemen’s consent is required to send signals, but “shall be consistent with the interest of preserving live racing.” It also grants the OSRC power to overrule horsemen’s groups.

“To respect the state law is to slight the federal one,” the opinion states.

Lexington-based attorney Doug McSwain, chief counsel for the National HBPA who helped represent the Ohio HBPA in the case, said horsemen’s rights under the IHA “are fully vindicated” in the latest opinion.

“The ‘horsemen’s veto’ cannot be taken away or diluted by any state law, and if any state’s law purports to do so, it will not survive constitutionally,” McSwain said.