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Racinos gain ground on Ohio’s casinos

Dayton facility opens this fall; will be one of seven racinos in state.

Ohio’s racinos, which feature horse racing and slot machines, are on track to surpass the state’s casinos in monthly revenue sometime this fall.

The state’s four casinos brought in $71.2 million in May while Ohio’s five racinos — which offer slot machines but not table games — reported $55.7 million in profit. But Penn National Gaming this fall will open racinos in Dayton and Youngstown, which could make racinos the overall revenue leader.

In slot revenue alone, the racinos already exceed casinos. One reason why racinos are gaining momentum: location.

“The advantage the racinos have is that the majority of them are in the suburbs and a lot of people don’t want to drive into the main cities,” said Alan Silver, an Ohio University professor and gambling expert. “We’re seeing these suburban-type racinos pick up a lot of people.”

Gary DeWitt, general manager of Hollywood Gaming at Dayton Raceway, says access from Interstate 75 will be key for the Dayton racino, which is located north of downtown at Needmore and Wagner Ford roads.

“This facility doesn’t take a back seat to any facility,” DeWitt said Wednesday while conducting a media tour. “There’s been a lot of talk about market saturation, but we feel real good about the Dayton market. Miami Valley (Gaming) is 30 miles south of us, but we believe our location is pretty attractive to the Troy, Vandalia, even Springfield market.”

Miami Valley Gaming, in Warren County, brought in $11 million last month, its second-highest total since opening in December. Silver visited the facility recently and called it “a great property.”

MVG has 1,600 slot machines; the Dayton racino will have 1,000. DeWitt says there is room for both businesses.

“(Miami Valley Gaming) had a really nice month last month, which is very encouraging to us as well,” he said. “We feel we will definitely do very well in this market also.”

Catching up

With seven racinos operating more than 8,500 video lottery terminals, or slot machines, and offering harness or thoroughbred racing, the facilities pose a significant challenge to the state’s four casinos, which offer slots and table games.

“They will surpass the casino revenue,” Silver said. “If you add tables games into the equation it’ll be a runaway situation, where the racinos are just going to really out-perform the four casinos.”

Silver expects the racinos to lobby the state for table games in “two to three years.”

Ohio voters approved casinos in 2009 and the first one opened in Cleveland in May 2012.

Racinos were approved by the state legislature in July 2o11. Scioto Downs in Columbus opened as a racino a year later and last month took in more slots revenue ($12.4 million) than the Hollywood Columbus casino ($12 million).

“We started with a constitutional amendment that basically limited gaming, as we think of it, to four casinos,” Penn National spokesman Bob Tenenbaum said. “The state made a decision to allow the Lottery to set up VLTs at the seven racetracks and that changed the landscape.

“What is the landscape? We think, as a company, that within the next four-to-five years, Ohio will be a $2 billion-a-year gaming market. How that breaks out between racinos and casinos remains to be seen.”

Last year, the casinos and racinos generated combined revenue of slightly more than $1 billion.

Penn National operates two of Ohio’s four casinos and will have the two racinos Dayton and Youngstown open.

Finishing touches

At Hollywood Gaming at Dayton Raceway, about 200 construction workers are putting the final touches on the 130,000-square-foot main facility, which is surrounded by 1,700 parking spots. The carpet is being laid and air conditioning is keeping things cool.

Among the many food offerings will be the Skybox restaurant, where customers can eat a steak and watch the action on the gaming floor and the harness-racing track. A nearby lounge will include several big-screen televisions.

The paddock, with 125 horse stalls, is nearly finished. It features radiant heat for the cold months and a 400-gallon hot water heater. The five-eighths-mile track is a composite, all-weather surface, which allows for racing in inclement conditions.

The racino is expected to employ about 500 people, DeWitt said. Racing begins Oct. 3, but the opening of the main building is not firm.

“If things go well this week with all of our permitting and other licensing requirements we will definitely announce something next week,” DeWitt said.

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