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Ohio casinos falling short of projected jobs

With three casinos operating in Ohio and Horseshoe Casino Cincinnati opening today, employee counts are falling short of projections made by backers of the 2009 Ohio constitutional amendment that allowed development of the gambling facilities.

Ohio’s four casinos have created just under 6,000 new jobs since May, about 1,500 short of 2009 projections. While one developer Rock Ohio Caesars LLC (ROC) says they’re still hiring at casinos in Cleveland and Cincinnati, the other, Penn National Gaming, Inc. has scaled back staff in Columbus and Toledo, opting not to replace employees who have left.

Host cities aren’t complaining that the employment figures don’t meet early projections.

“(Job) predictions are just that,” Chris Warren, Cleveland’s chief of regional development, said. “The 1,500 jobs at the Cleveland casino will become 4,500 when the second phase of the project is done.”

Folks who opposed the casino initiative say the success of the 2009 casino campaign rested on a promise of jobs, that now isn’t fully being met.

“At the time, we argued they were over guesstimating the number of jobs. Clearly, that is exactly what happened,” said Tom Smith, public policy director for the Columbus-based, Ohio Council of Churches. “I guess I’m really not all that surprised.”

With the opening of the Cincinnati casino, a $400 million facility, the countdown to a full year of operation for all four casinos begins. That’s the time frame state officials say is needed to measure the impact the casinos will have on Ohio jobs and the economy.

ROC, a joint venture comprised of Midwest-based Rock Gaming LLC and Caesars Entertainment Corporation, employs 3,294 at its Horseshoe casinos in Cincinnati and Cleveland. The gaming company continues to hire at both locations, Jennifer Kulczycki, ROC spokeswoman said

The Cincinnati casino has an estimated annual payroll of about $55 million, and Cleveland $50 million.

Penn National Gaming’s Hollywood casinos in Columbus and Toledo have a combined 2,640 employees. That’s 586 fewer than when the casinos opened last year. About 90 percent of Penn’s employees are local hires who have never worked in a casino. Some found they didn’t like it, Bob Tenenbaum, spokesman for Penn National said.

While there have been no layoffs, positions have not been filled after departures.

“It takes about a year to a year-and-a-half to figure out exactly what your operation will be,” Tenenbaum said.

Penn National declined to release annual employee payroll figures, but Tenenbaum said the average yearly salary is about $40,000.

Rob Nichols, spokesman for Ohio Gov. John Kasich’s office, said the administration never relied on the jobs data generated during the 2009 casino amendment campaign, which was before the governor took office.

“All the data and figures that were passed around during the campaign, we didn’t have those expectations,” Nichols said. “We never said the casino jobs would be a panacea to Ohio’s economic woes. We are glad Ohioans are working. We are glad the jobs were created.”

Jeff Rexhausen, a senior research associate at the Economics Center for Education & Research at the University of Cincinnati said the 2009 job projections could be off because variables have changed.

The Ohio Jobs and Growth Committee — the political action committee that raised over $60 million to support the casino proposal — asked the Economics Center for Education & Research at the University of Cincinnati to study the potential direct and indirect economic impacts of casinos in Cincinnati, Columbus, Cleveland and Toledo.

The 2009 study was based on employment projections that Rexhausen said came from the committee. The figures estimated four casinos would create 15,807 jobs in the state, including 7,500 which would be direct employment at the casinos, with an additional 8,307 created throughout the state as a result of casino operations.

The combined total jobs including 19,000 temporary construction positions were estimated at 34,000. Opponents contended fewer than half the permanent jobs promised would be realized based on how many people casinos in surrounding states employed.

Since those projections were made, Rexhausen said the location of the Columbus casino changed. Video lottery terminals have since been approved for Ohio racetracks, expanding the proliferation of gambling. And, a waterfront development proposed for Cincinnati near the casino site was delayed due to the economy.

“The economy is in recovery, but it continues to struggle. That could have an effect,” Rexhausen said.

Officials for the casino host cities say they are focusing on what is happening now, not 2009.

When voters amended the state constitution to allow casinos, they only authorized one for Cleveland. A deal with the governor will allow the two phases to be considered a single casino. Phase II will overlook the Cuyahoga River on a bluff.

“We’re still three to five years from the opening of Phase II, but the economic benefits will be two times that of the first phase,” Warren said.

And, new jobs are sprouting around Cleveland as a result of the casino in sectors such as food service, entertainment as well as the procurement of goods and services. Warren did not have job statistics, but said there are a “few hundred” new jobs in each of the sectors.

Toledo has not seen much spin-off development from its casino, Bill Wersell, vice president of Small Business Development Services for the Toledo Regional Chamber of Commerce, said. Local businesses — cleaning services, transportation workers along with downtown hotels and restaurants — do claim an uptick in patronage.

“The casino is drawing people to downtown Toledo from out-of-town. We need those people,” Wersell said.

Meg Olberding, spokeswoman for the city of Cincinnati, commended ROC for its outreach to the community, in terms of hiring locally and the design of the facility. The entrances to casino restaurants face out to the community (rather being inside the gaming venue) so patrons don’t have to walk through the casino to access them.

Those eateries also mean more jobs.

Independent restaurants such as Jimmy Buffett’s Margaritaville, add about 200 jobs to the mix. Bobby’s Burger Palace, by chef Bobby Flay, has about 100 employees, Kulczycki said.

“We’re really pleased,” Olberding said. “I think we’ll see spin-off development in the future.”

Suzanne Coleman-Tolbert, president and CEO of the Central Ohio Workfoce Investment Corporation, said the nonprofit partnered with Penn National to move individuals in the Columbus area off the unemployment roles into 36-hour a week casino jobs paying $19 an hour.

About 172 people were trained to be cashiers, dealers, and slot machine attendants. Of those 150 were hired and 113 remain employed generating an annual payroll of $4 million.

“Even though our numbers seem low, these individuals were ecstatic to get trained and hired on,” Coleman-Tolbert said.

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