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Exec explains Cleveland casino construction shutdown

3:10 PM, May 12, 2011   |    comments
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CLEVELAND -- The President/COO of Dan Gilbert's Rock Gaming LLC says construction of the Cincinnati and Cleveland casinos is being shut down because of too many unanswered questions about state regulations and how much tax it will pay.

Matt Cullen told Channel 3's Tom Beres, "There was too much economic uncertainty to move forward with the investment. It's difficult to invest in any business when you don't know what the tax rate will be."

Gilbert plans to invest a billion dollars in two casino projects here.

Work had begun on converting the old Higbee building on Public Square into a Caesar's Horseshoe Casino. Construction workers were sent home.

The Ohio House has passed a measure which would apply the state's Commercial Activity Tax to all bets placed, not just what the casino has left after paying winners.

"It is inconsistent with the interpretation anywhere else in this country," Cullen said.

He claimed it would be impossible to calculate what the proposal specifies.

"Somebody comes in and bets $50 alll day and leaves with $100. We would wind up paying a tax on $1,000," Cullen explained.

Cullen said Rock Gaming wants to stick to the constitutional amendment approved by voters in 2009.

That specifies $50 million licensing fees for each casino and a 33 percent tax rate, which would rank in the upper levels of casino taxes nationwide.

Ohio Gov. John Kasich has previously said the casino operators negotiated a good deal for themselves and he expects them to give the struggling state additional financial help.

Rock Gaming is investing more than the $250 million specified minimum in its casino projects.

Cullen would not speculate how long the project would be shut down.

Asked if it could jeopardize Cleveland's entire casino project, he said, "We are fully confident and very hopeful with the plan approved by voters in 2009."

Penn National's casinos in Toledo and Columbus are moving forward.

There are still unresolved issues between the city of Columbus and Penn National dealing with water and sewer capabilities being furnished to a new casino site.


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