Ohio voters asked to approve amendment permitting gambling

Sep 30, 2008 6:56 PM

by Ray Poirier | Come Nov. 4, voters in Ohio will be asked to approve a constitutional amendment that will permit casino gambling in that state.

However, the language in the referendum specifies that only one casino can be operated, that would be a casino being proposed in Clinton County by Lakes Entertainment Inc. (LACO).

Recent polling indicates that a slight majority of expected voters currently favor the proposal. But that might be premature.

At least, that is the hope of Penn National Gaming Inc. (PENN) which operates an Indiana casino that relies heavily on the Cincinnati market area for its customers. So, Penn National, the third-largest casino company after Harrah’s Entertainment and MGM MIRAGE Inc. (MGM), has begun an advertising campaign against the Lakes Entertainment casino because the amendment would establish a "monopoly."

Lakes Entertainment has invested heavily with a group called MyOhioNow.com in gathering more than 760,000 signatures of voters to get the measure on the ballot.

One gaming analyst, Justin Sebastiano of Morgan Joseph & Co., sees the casino as meaning $140 million in earnings, before interest, taxes, depreciation and amortization, commonly referred to as EBITDA, in 2012, its first year of operation.

Penn National, meanwhile, is attempting to have Kansas return the $25 million the company had to submit with its application for a casino management contract in Cherokee County. The company walked away from the contract when it failed to win another bid in another part of the state.