Tueday’s state election in Ohio brought good news for Lakes Entertainment and its Chairman Lyle Berman. A ballot initiative to bring casinos to four major Ohio cities passed by a 53% margin on Tuesday and Berman and Lakes Entertainment stand to profit from all four of the newly approved Ohio casino projects.
The casino initiative, known as Issue 3 on this year’s Ohio ballot, was a polarizing issue within the Midwestern state, with those opposing the initiative suggesting that it stands to benefit casinos, but not the people of Ohio. Those in favor of the bill pointed to the presence of casinos in the neighboring state of Indiana and suggested that Ohio is missing out on a viable revenue source during this economic recession.
In the end, casino supporters won out and new casinos are scheduled to be built in Cincinnati, Toledo, Cleveland, and Columbus. The two groups behind the new gaming establishments are Penn Ventures and Rock Gambling Ventures, but Lakes Entertainment has a stake in all four of the properties as well. Berman and Lakes tried to spearhead a failed effort to bring gaming to Ohio in 2008 and recently cut a deal with both Rock Gambling and Penn shortly before Election Day to ensure they would be involved in this latest attempt. The deal stipulates that Lakes will fund 10% of the cost of the ballot initiative and, in turn, will have the option to own a 10% share in each of the new casinos.
According to a report from the Associated Press (AP), Lakes filed the deal with the Securities and Exchanges Commission (SEC) on October 29th, just days before the November 4th election. The AP also reported that campaign finance documents of Issue 3 show that the campaign cost $35 million. The SEC filing indicated that Lakes already made an initial payment of $1.9 million to Penn Ventures and $2.4 million to Rock Gambling. Penn will oversee the construction and operation of the Columbus and Toledo casinos, while Rock will handle the Cincinnati and Cleveland sites.
Bob Tenenbaum of the Ohio Jobs and Growth Committee spoke with the AP about Berman’s involvement in the campaign. “At the time this was raised as a campaign issue, which was Oct. 6, Berman had no role in any of this,” he explained. “He never became involved in the campaign, but he did reach out to both Penn National and Rock Ohio Ventures in the last week of the campaign and asked if he could become involved.”
The union between Berman and Penn is an unexpected one considering the two were bitter rivals during the previous campaign to bring gambling to a single destination in Clinton County. The campaign turned so ugly that Berman and Lakes filed a defamation lawsuit against Penn, which counter-sued for defamation, libel, and slander. The AP reported that both suits have since been dropped, but that does not mean Berman and Lakes will have extensive involvement in the day-to-day operations of the new casinos.
A spokesperson for Rock, the business development company of Cleveland Cavaliers owner Dan Gilbert told the AP that Lakes would be playing a purely financial role in the casino projects. Berman and Lakes are not new to gaming in the Midwest and South. They currently own and operate several properties, including the Vicksburg Casino in Mississippi, the Four Winds Casino outside of Chicago, and the Cimarron and Ioway City Casinos in Oklahoma.
