Ohio Casinos are struggling in a Big Way

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The state of Ohio launched casino gaming to much fanfare in 2009. And their government officials expected rapid success for Ohio’s four casinos. Initial estimates had the gaming establishments earning $1.9 billion in annual revenue, with $643 million of this amount going towards the state through taxes.

Unfortunately, the projections have fallen way short of reality. Heading into 2014, Governor John Kasich’s staff has significantly revised what they expect the casinos to earn. And these figures are in stark contrast to a more optimistic study that was done by Spectrum. Here’s a quick look at the contrasts:

2014 Projection on Columbus’ Hollywood Casino – $215 million (Spectrum, $381.7 million)

2014 Projection on Penn National’s Toledo Casino – $190 million (Spectrum, $235 million)

2014 Projection on Cleveland’s Horseshoe Casino – $245 million (Spectrum, $280 million)

2014 Projection on Cincinnati’s Horseshoe Casino – N/A, just opened in March of 2013

The new projections on the first three casinos show just $650 million in annual revenue. And unless the Cincinnati establishment makes $1.25 billion, the four casinos are assuredly going to fall short of the $1.9 billion mark.

The whole reason why Ohio chose to open casinos in the first place was to give the state budget a massive boost. And while they are getting millions more in tax revenue, it’s not nearly at the predicted mark of $643 million. The end result is that Ohio’s schools, counties and cities will all be struggling more because they expected to get a bigger share of the casino taxes.

As for the reasons why Ohio isn’t pulling in as much revenue as expected, the main culprit is the sluggish economy. Casinos in other states are also making it hard for the Buckeye state to meet their revenue projections.

Steve Gallaway, who heads the Gaming Market Advisors, recently discussed the struggle of Ohio casinos. “Nobody expected the economy to still be lagging like this,” he said. “They will come back, but instead of one to two years, it may be five to 10 years before Ohio realizes the positive impact of gambling.”

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