Ohio Lottery Commission issues rules on operation of video slots at race tracks

The rules require the state's seven tracks to each spend us$ 80 million to improve their facilities within the next five years. The rules also offer some detail about how the licensing and oversight of the tracks will work, including the leveling of hefty fines against tracks that don't meet deadlines.

The rules come as the Strickland administration faces more pressure - from vendors, legislators, track owners and others - to provide details about how the state plans to integrate the slots, known as video lottery terminals, or VLTs, into the Ohio Lottery by May. The lottery commission is expected to vote on the rules on August 17.

Strickland also decided Wednesday to use the Greek gaming company that operates the Ohio Lottery to initially set up slot machines at state's seven race tracks.

Intralot, which runs the state's us$ 2.4 billion online lottery games, including Mega Millions and Pick 4, has a contract option that allows it to bid first for installing the central computer system that will monitor the daily slots activity at the tracks. But the state recently told Intralot to back off just as it was about to formally present its bid and a timeline for integrating the computer system.

The Strickland administration and lottery officials said Monday they were still trying to figure out the best deal for the state without sacrificing time.

The decision to use Intralot gives the company a two-year contract to create and run the central computer system. The state plans to seek bids from Intralot and other gaming companies to manage the slots long-term. This is the "hybrid" approach lottery officials hinted at earlier this week.

The decisions follows a recommendation by the recently formed VLT Advisory Committee, made up of several former lottery directors. The group, which has had little to say until Wednesday, issued a two-page advisory explaining its decision to recommend Intralot.

Strickland hopes the decision to add slots - made through an executive order and without input from lottery officials - will generate us$ 933 million in lottery profits for Ohio over the two-year budget cycle, which began July 1. Any delays could produce a revenue shortfall for the state.

The office also confirmed the names of three administrators leading the integration: Amy Andres, chief of staff to the Department of Insurance chief Mary Jo Hudson; Office of Information Technology administrator Christian Selch; and Strickland policy adviser Terra Goodnight. Strickland spokeswoman Amanda Wurst said that all three have extensive project management experience.

An early draft of the governor's proposed timeline for integrating slots obtained by The Plain Dealer shows the state is pushing up against its own deadlines. The draft timeline shows, for instance, that it wants to settle its contract with Intralot by the end of the month and it wants to "draft, review, refine" its license agreements by August 15.

Strickland plans to keep pressure on race tracks that want a piece of the lucrative slots business. The state, according to the draft rules, will fine any race tracks us$ 15 million if they fail to file an application to run slot machines by September 15. The application fee is us$ 100,000 but its unclear how the state will impose a fine before the track enters into an agreement.

The state will also fine tracks up to us$ 100,000 a day if they fail to pony up their first installment toward a us$65 million license fee. The state is demanding that each track pay us$ 13 million on September 15.

Some track owners - worried about the lack of specifics and the potential impact of a November casino ballot issue - have privately talked about balking at the first payment.
At least one track owner is ready to pay up. "We just secured our financing," said Robert Griffin, president and CEO of MTR Gaming Group, which owns Scioto Downs track. "I look forward to being the first licensed track owner in the state in September."