Published on December 9, 2013 by Terry Goodwin

It took lawmakers several attempts to convince Ohio residents that casinos would be beneficial to the state budget. The legislators and lobbyists ran with the idea that not only the tax revenue, but also the economic impact of having casinos in a town would far outweigh the negative possibilities.

After years of trying, residents finally embraced the idea, authorizing four casinos back in 2008. The cities of Toledo, Columbus, Cleveland, and Cincinnati received the rights to host the casinos, and last year the gaming facilities were off and running. In the year since the casinos opened, revenue has fallen short of expectations.

The 2013 budget proposed by Governor John Kasich included $958 million in tax revenue from casino gaming. The actual figure came out to $868 million, falling nearly $100 million short of expectations. That has led to some questions in Ohio as casino operators search for answers, and lawmakers spoke to the unpredictability of projections.

"Estimates of casino revenue are very difficult to predict when you don't have any prior performance to go off," said Fred Church, Deputy Director of the Office of Budget and Management.

Year two will be equally hard for lawmakers to predict, as the first year is typically a higher grossing revenue producer than future years. The excitement of the new casinos have worn off, and now the gaming facilities must rely on their loyal customers to drive revenue. Analysts predict that it takes three years before accurate predictions of casino revenue can be made.

The developers of the four casinos, Penn National Gaming and Rock Gaming, pay the state a 33% tax on slot revenue. That is one of the highest percentages in the US, and indicates the small margins that the operators are working on.

While the 2013 revenue projections were off, officials in all four cities, and the state, are preparing for less revenue in 2014. Budget adjustments are being made upwards of $1 million in each city, and an adjustment of around $10 million is expected in the state budget for next year.

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