Ohio Casino Taxes Come Up Short In Year OneJuly 29, 2014 11:54 am
Although Ohio has had a horse racing industry since the 1930’s, the mid-western state did not open its first casino until 2012. At the time the state executive budget estimated Ohio’s casinos would generate more than $309 million in annual tax revenues, but the latest report released by the Department of Taxation shows gambling revenue off by almost 12% at $273.4 million in 2013.
Commenting on the lower than expected figures, Columbus city auditor Hugh Dorrian, said: “I think they did a reasonably good job because this was a brand new, unique venture in the state of Ohio. They had no home state experience to look at to make an educated guess.”
One of the factors which may also have contributed to less revenues for casinos is the extra competition that has come to bear on the Ohio gambling market, with five racinos opening up soon after Ohio’s casinos did in Cleveland, Columbus, Toledo and Cincinnati. Furthermore, another two racinos are scheduled to open in the near future, which will then take more potential revenues way from the casino market.
In addition, Ohio has had to contend with out-of-state competition eating further into its casino revenues, a phenomenon not only experienced by mature casino market such as the one in Atlantic City, but also by newer markets such as Pennsylvania, Maryland and now Ohio.
When taken in combination, Ohio’s casinos and racinos generated $351 million in tax revenue for 2013, with 90% of the tax money going towards counties, cities and school districts. Needless to say, the lower tax funds have played havoc with the budgeting practices of Ohio’s 88 counties, but it looks like they can at least expect a more reliable prediction for next year, as casino tax revenue estimates have been lowered to $331 million for 2015.
Commenting on the cash shortfall now being experienced by several of Ohio’s counties, Hugh Dorrian, added: “I think the lesson all of us should learn is to don’t place too much reliance on untested revenue streams.”