Ohio government approves racetrack slots in casino deal

"This was not fun. I mean, this was not easy," said Kasich, whose push for more cash for the state led the developer to halt construction until a deal was reached.

The deal was announced by Kasich and Rock Ohio Caesars CEO Dan Gilbert, whose company is developing casinos in Cleveland and Cincinnati, in a former department store where the initial Cleveland casino phase is scheduled to open early next year. Gilbert is also owner of the Cleveland Cavaliers.

The deal frees ROC from paying the state's commercial activity tax on all wagers, a sticking point between the company and state budget writers in Columbus.

The Republican-controlled Ohio House had added a provision to Kasich's nearly $56 billion, two-year state budget that said the so-called CAT tax applies to wagers plus payouts, a definition casino operators said would cost tens of millions in extra taxes and violate terms of a constitutional amendment approved by voters in 2009. The deal taxes the company on wagers minus payouts.

In exchange, it requires an additional us$ 110 million in payments from ROC over the next decade and an increase in the company's overall investment in the state from us$ 500 million to us$ 900 million. The casino application fee would be us$ 1.5 million.

A bigger surprise in the pact was Kasich's decision to open the door to slots-like video lottery terminals at Ohio's seven horse tracks. Licenses to operate VLTs would cost us$ 50 million each, for a total of us$ 350 million at seven tracks, plus 33.5 % of sales revenue.

The deal requires VLT sales agents to invest at least us$ 150 million in their facilities, including VLT machines, with a maximum credit of us$ 25 million for the value of existing facilities and land. Sales agent commissions couldn't exceed 66.5 %.

"We don't want somebody just hanging a shingle up on a side of a shanty and calling it a VLT," Kasich said at a news conference Wednesday afternoon in Cincinnati. "We want this to be legitimate, we want it to be professional and that's exactly what it will be."

Racetrack betting parlors, often called racinos, would have to open within three years of being licensed.