Tax Scam Exposed in Ohio Issue 6
By David Zanotti
Co-Chair, Vote No Casinos
President, The Ohio Roundtable

Lyle Berman and the Eastern Shawnee tribe have a lot in common. They both make lots of money running tribal casinos. They both want casino gambling in Ohio. They both are trying to scam Ohio voters by playing a shell game with the state Constitution. 

Lyle Berman is a professional poker player who runs a tribal casino development company called Lakes Entertainment located in Minnesota. He is the primary money man behind Ohio ballot Issue 6, an attempt to amend the Constitution to legalize a casino monopoly owned by, you guessed it, Lyle Berman.

The Eastern Shawnee from Oklahoma want to open a tribal casino in Ohio. In 2005, they sued Ohio in federal court claiming the rights to millions of acres of Ohio lands. Realizing they had no chance to win such an absurd legal claim, they settled with a few localities who wanted to share in developing a tribal gambling casino. No federal judge validated their land claims. No jury ruled in their favor. They just cut a convenient deal with allies who claimed to be defendants but were actually negotiating a back room deal all along. 

Recently the Eastern Shawnee filed this alleged "settlement" of a federal land claim with the US Department of Interior requesting approval for two casinos in Ohio. This is no casual request. No tribe has ever made such a move on the State of Ohio. If approved, this claim will remove several  parcels of land from the state and transfer them to federal trust to be owned and operated by the Eastern Shawnee. These tax-free casino zones will be operated by a "sovereign" nation inside Ohio's borders. 

Just two obstacles remain in the path of the Eastern Shawnee. The first is the signature of the Secretary of the Department of Interior. Federal law gives the Secretary the power to hand Ohio lands to the Eastern Shawnee with the single stroke of a pen. No vote of Congress, no vote of the Ohio Legislature -- simply the decision of the federal Secretary of Interior, whose office is commissioned to work toward the enhancement of tribal economic development.

Once the DOI rules they will instruct Ohio Governor Strickland that he must enter into a compact with the Shawnee. Together they can haggle over a few details regarding the casino and perhaps settle on a percentage of "mitigation" fees to offset state costs. Neither the Governor, nor the Legislature is permitted to veto the deal or assess a tax upon the tribal casino.

The final obstacle to the Shawnee casino is Ohio's restriction against Class III, casino style gambling. Three times Ohio voters have refused to change the Constitution to permit such activity. Federal law only permits tribes possessing federal lands to gamble at the same level permitted by the surrounding state. The fastest way for Ohio to become a Class III gambling state is the passage of Ohio Issue 6 in November.

The Eastern Shawnee understand this reality which is why they told almost no one about their filing of the controversial "land claim" with the DOI. No one, except former Attorney General Marc Dann, who conveniently forgot to inform the Governor, the Legislature, or the media before he fled from state investigators. The Shawnee don't want Ohio voters to catch on that tribal casinos are intimately linked with the passage of Issue 6.

Lyle Berman has also connected the dots on this casino scam. His language in Issue 6 specifically creates a trap door in the tax formula so that the "up to 30%" tax on his casino monopoly is instantly re-adjusted downward if state or federal law permits another casino in the state. He specifically included the words "federal law" in the Ohio ballot language, anticipating a federal ruling to sanction tribal casinos. Here is how the trap door works:

1) Ohio Issue 6 passes in November making Ohio a Class III gambling state and giving Berman his Ohio casino in Wilmington.
2) The Secretary of the Interior then authorizes the Eastern Shawnee to open a casino in Ohio
3) Federal law specifically prohibits the taxation of a tribal casino or tribal lands by the State or localities.
4) Therefore Berman's Ohio casino tax rate is immediately dropped to the same level as the competing tribal casino which just happens to be zero.
5) Once a competing casino springs the trap door the automatic tax reduction leaves every Ohio county left holding an empty bag of promised casino revenues.

This last point is critical for every Ohio County Commissioner to understand. The promises of shared casino revenues being made to Ohio's 88 counties will be wiped out by this tax trap door contained in Ohio Issue 6. Any additional form of casino gambling permitted by the state or federal government in Ohio will immediately diminish revenues promised to Ohio counties by backers of Issue 6.

This scam was exposed by the Vote NO Casinos Committee at a Statehouse news conference on Friday, August 22, 2008. By the end of that day, the official backers of Ohio ballot Issue 6 conceded their language did in fact contain such a trap door. The Columbus Dispatch stated "The group's leaders admitted today that they erred by including wording that could lower the tax rate to zero and said they were working on wording to fix that."

There is just one problem with that statement: Once a flawed constitutional measure is on the ballot, it cannot be changed. If Ohio Issue 6 passes it will take a second constitutional amendment to change it. By that time, casino gambling will be legal in Ohio, the Shawnee will press to open their casinos, and in the pursuing "casino chaos" Lyle Berman and his friends will be buried by big-time casino developers who have better lawyers. 

All the more reason for Ohio voters and every County Commissioner to join Governor Strickland, House Speaker Jon Husted, Senate President Bill Harris, US Senator George Voinovich, Franklin County Commissioner Paula Brooks and a host of Democrat, Republican and Independent community leaders who all are calling for voters to defeat this flawed amendment and Vote No on Ohio Issue 6 on November 4th.