Ohio’s casino tax revenue declines for second straight quarter

By David Skolnick
Courtesy of the Associated Press

January 21, 2014

Casino-tax revenue to Ohio’s counties and eight major cities, including Youngstown, dropped for the second-straight quarter leaving some to wonder if gambling in the state has peaked.

“We expect the revenue streams to decline due to the original excitement of gambling in the state of Ohio wearing off,” said Youngstown Finance Director David Bozanich.

After five-consecutive quarters of growth as casinos opened in Cleveland, Columbus, Toledo and Cincinnati — the latter opened in March 2013 — gambling revenue saw its first decline in 2013’s third quarter with a drop of 0.5 percent compared with the second quarter of last year. It dropped another 2 percent in 2013’s last quarter compared with the previous one.

In the quarterly distribution for October to December 2013, Youngs-town and Mahoning County each received $356,791. That’s down from $364,856 in the previous quarter, July to September, and from $366,941 in the April-to-June quarter. The city and county received $326,893 each in the first quarter of 2013 before the Cincinnati casino opened.

Mahoning County Commissioner Carol Rimedio-Righetti said the declining revenue is temporary.

“This decline right now is because we were in the Christmas season, and people needed money for other things, such as gifts, during the holiday,” she said. “I believe it will be up a little in the next quarter. I don’t think we’re leveling off.”

In the 2013 fourth quarter, Trumbull County received $629,403 in casino tax revenue compared with $643,631 in the third quarter and $647,310 in the second quarter.

“It’s continuously going down,” said Trumbull County Commissioner Frank Fuda. “One reason is the racinos are opening up, taking away casino revenue. We’re seeing a steady decline in casino revenue. People may not have the money to gamble. Over time, I expect we’ll see 1/8casino-tax revenue 3/8 decrease even more.”

Unlike casinos, racinos do not target regular revenue payments to counties and cities. The Ohio Lottery Commission, the regulator of racinos, gets one-third of the gross receipts, which it funnels to public education in the state.

Columbiana County received $323,211 this past quarter in casino-tax revenue compared with $330,517 in the 2013 third quarter and $332,406 in the second quarter.

Despite two consecutive quarters of declining casino-tax revenue, the gambling industry in Ohio will improve, said Alan Silver, an assistant professor of restaurant, hotel and tourism at Ohio University, and a casino expert with a lengthy list of gambling industry credentials.

“Ohio will be a strong market,” he said. “We’ve had a slow recovery economically nationwide, the holiday season is kind of tough, and it’s been a horrible winter. It takes time for the industry to grow. Overall, it’s going to be a solid industry for years to come. As soon as the economy recovers, we’ll see some improvement, but there’s going to be ups and downs.”

Though the tax revenue for counties and the eight major cities declined, money to school districts increased in the last six months of 2013 compared with the first six.

That’s because the school districts receive their casino tax revenue two times a year — compared with four times for counties and the cities — and the Cincinnati casino didn’t open until March 2013.

Schools received 4 percent more in revenue in the second half of last year compared with the first six months.

School systems in Mahoning County received $893,575 for the last six months of 2013. Austintown led the way with $141,626 followed by Youngstown with $134,-521, Boardman with $118,541, Canfield with $73,428, Poland with $55,388, and Struthers with $51,452.

Trumbull County school districts received $819,856 for the last six months of 2013. Warren was No. 1 in the county with $132,816, followed by Howland with $75,752, Niles with $66,211, Hubbard with $49,447, Lakeview with $48,208, and Girard with $45,230.

Columbiana County school districts got $428,943 for July to December 2013. East Liverpool received the most, $57,170. Salem followed with $54,033, Beaver with $50,633, Crestview with $32,552, and United with $32,525.