Crowded gambling market adding new racino this week

Counting nearby Indiana casinos, southwest Ohio will have easy access to 9 casinos or racinos by end of 2014.

Miami Valley Gaming & Racing’s Jim Simms is anxious to open the new racino this week in Warren County because by next September, nine racinos or casinos will be operating within a 90-minute drive of the state’s newest gambling spot on Ohio 63, just east of Interstate 75.

“First to market is always important,” Simms, president and general manager of Miami Valley Gaming, said last week.

Miami Valley will be the seventh new gambling operation opening in the Columbus, Cincinnati and eastern Indiana region, which includes the Scioto Downs racino south of Columbus. The casino-like component of the 120-acre Warren County complex — where gamblers will eventually also be able to bet on live harness racing and other simulcast horse races — is scheduled to open at noon Thursday.

By next September, two more racinos are scheduled to open, east of Cincinnati at Belterra Park at the former River Downs and in north Dayton at Hollywood Gaming at Dayton Raceway. The Dayton site is at the former Delphi plant at Wagner Ford and Needmore roads.

When complete, southwest Ohio and southeast Indiana will offer players more than 11,000 machine and table games. The Horseshoe Casino in Cleveland and Thistledown racino offer about 3,100 for northeast Ohio.

Alan Silver, a casino expert and professor at Ohio University, said casino and racino projections say Miami Valley is well-positioned to hit its $125 million annual target, despite the growing number of gaming opportunities in southwest Ohio.

Silver said competing gaming properties have to figure out not only how to lure customers in but earn their loyalty and repeat business.

“It’s going to take away business from Indiana and the pie gets smaller for all the participants to cut a piece off,” Silver said. “It’s really unclear whether all these options will grow the gaming market in the next year or so. Even if it doesn’t grow the market, it will pull in millions.”

Battle for Dayton market

Miami Valley Gaming is counting heavily on the early start to give them an edge over the Penn National racino expected to open in September in north Dayton.

“We want to send a message to Dayton, Ohio — We’re the closest gaming venue to you,” Simms said.

Miami Valley has leased billboards and invested heavily in TV advertising and other Dayton-area media, Simms said. To play on Ohio pride, guests will win Lucky Buckeyes and be eligible for Golden Buckeye promotions.

While acknowledging there will be competition with Miami Valley for the Dayton market, Bob Tenenbaum, spokesman for Hollywood Gaming at Dayton Raceway, said Penn National expected to draw from a 50-mile radius also stretching from Springfield into Indiana, and north of Interstate 70.

Hollywood Gaming at Dayton Raceway will offer different amenities and building design than Miami Valley, playing off the Hollywood décor known at other Penn National businesses, including the Hollywood Casino in Columbus, Tenenbaum said.

Tenenbaum said Penn National was anxious to open in Dayton but is confident they would be able to win market share after opening in September.

“We’re confident that people who are interested in this kind of entertainment will give us a try. Once they give us a try, we’ll be able to compete against everybody else,” Tenenbaum said.

Silver said both racinos, less than 30 miles apart, are positioned to attract suburban patrons who don’t want to drive to Cincinnati or Columbus to play slots. The Warren County racino benefits by being close to an outlet mall, Kings Island amusement park and other attractions.

With so many gaming options but only so many gaming dollars, Silver said, the new racinos will have to work to keep customers coming through their doors.

“Everybody is attempting to build loyalty because that’s what’s going to make a new property successful — building a customer database and maintaining loyalty,” Silver said.

In Columbus, Scioto Downs racino south of town has been able to compete with the larger Hollywood Casino on the city’s far west side by offering millions of free play. Free play is loaded onto loyalty cards that track what games are played, how long they’re played and how much money is played on each game. Tracking allows the companies to directly market promotions and events to certain customers.

“When new properties open, they’re going to do everything they can to get people who come from Indiana and other areas to join the club,” Silver said. “With the competition here, it’s very important to develop loyal customers.”

As more properties compete for Ohio gamblers, Silver said, casinos and racinos will need to focus on events, restaurants and other amenities to attract patrons.

Ready to compete

Last week, hundreds of construction workers and Miami Valley Gaming staff worked outside and inside the main building that will house 1,600 electronic slot machines or video lottery terminals, two restaurants and two bars alongside an off-track betting parlor and harness track and grandstand.

During an interview in his office overlooking the harness track, Simms acknowledged he was anxious about “rolling the dice on a new project.”

Simms has more than 15 years experience as an executive in the gaming industry. He came to Miami Valley Gaming from a job as president and general manager of the Wheeling Island Hotel Casino Racetrack in Wheeling, W.Va.

Simms said they would gain advantage in part through use of a $6 million Bally system used to coordinate gambling action, and track and tabulate bonuses for players on all 1,600 machines — 600 more than are expected at the Dayton racino.

Unlike casinos such as the Horseshoe in downtown Cincinnati, racinos offer off-track and live horse racing. However, Ohio law prohibits them from offering poker, roulette and other table games available at the state’s traditional casinos.

“I would say we’re at somewhat of a competitive disadvantage,” Simms said, expressing hopes Ohio lawmakers would eventually eliminate this limitation.

But Ohio’s four casinos have fallen far short of initial projections made in 2009, when voters were asked to legalize gambling by amending the Ohio Constitution. The casinos were expected to take in as much as $1.9 billion each year when fully operational, according to an industry-funded report.

The four casinos have averaged $72.4 million during the last eight months all have been open, and at that pace, would gross less than $869 million, taxed at 33 percent.

Jo Ann Davidson, chair of the Casino Control Commission and former speaker of the Ohio House of Representatives, said it’s too early to know whether Ohio’s gaming facilities will reach their estimates, but the racinos have cut into the gambling market.

“There’s no question there’s competition and I think it’s whatever experience the person wants,” Davidson said. “And hopefully they’re using it as entertainment, not for an addiction. Some have a preference for VLTs and others want more variety.”

Davidson said she hasn’t changed her opposition to gambling but said it is doing some good by returning money revenues to cities, counties and schools.

“Ohioans are going out of state and if they want to visit the casino for entertainment purposes, we ought to be recovering the revenue for Ohioans,” Davidson said.

Racinos have an edge over casinos because machines are less expensive to operate than employees manning table games, Silver said. He said racinos have to find ways to distinguish themselves from others, “A slot machine is a slot machine — any type of casino is going to have the same types of games.”

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