Editor’s note: This article concerns the case Walgate v. Kasich, of which author Paula Bolyard is a plaintiff. The case is currently before the Ohio Supreme Court.
When lawmakers write defensive language into their legislation, anticipating constitutional challenges to their law and to the governor’s implementation, you know there’s a problem:
“3770.21 Video lottery terminals (2): Any claim asserting that any action taken by the governor or the lottery commission . . . violates any provision of the Ohio Constitution . . . shall be brought in the court of common pleas of Franklin county within sixty days after the action is taken.”
When Ohioans voted to amend Ohio Constitution in 2009 to allow casino gambling, they limited it to four specific locations. The amendment on the ballot read:
“Authorize only one casino facility at a speciﬁcally designated location within each of the cities of Cincinnati, Cleveland, Columbus, and Toledo.”
Lawyers for the casino industry wrote the language of the amendment to their exact specifications, even mapping out the precise locations of the casinos to the point that the Ohio Constitution now looks like a real estate deed.
But when Kasich took office in early 2011, he faced an $8 billion budget deficit and flat economy. He began making noise about the casinos not paying their fair share, saying “Ohio got a bad deal” when they amended the constitution. Included in the amendment was a provision that the casinos would be subject to the same taxes most other business in the state had to pay—including the Commercial Activity Tax (CAT). But questions arose about whether casinos would have to pay that tax based on their income less winnings paid out, or on their income before payouts.
A memo from the Legislative Services Commission, requested by Democratic Senator Eric Kearney, said that the CAT applied to the casinos’ revenues before the payouts. The Ohio House, wishing to erase any doubt, included language in the state’s biennial budget clarifying that casinos would pay the CAT based on revenues before rather than after the payouts. Potentially billions of dollars were at stake.
The casinos threatened to pull out of Ohio. Said Eric Schippers, senior vice president of public affairs for Penn National, in May 2011,
“This unique and discriminatory tax hike on the casinos—which we believe is patently unconstitutional—will likely have severe consequences on our more than $1 billion planned investment in Ohio and the 34,000 jobs we were hoping to create,”
The casinos wrote themselves a bad deal (in their opinion) when they crafted the amendment and wanted the governor to fix it. Construction on the casinos stopped, and a stalemate ensued.
Instead of taking the issue back to the voters in order to remedy the “bad deal” Ohioans imposed upon themselves at the ballot box, Kasich, faced with losing billions in casino tax dollars he planned to use to plug his budget holes, struck a closed-door deal with the owners, reducing their CAT liability and expanding gambling through video lottery terminals (VLTs) in one swift move. He signed a memorandum of understanding that included a long list of promises the state would make to keep the casino owners happy. Casino operators would pay millions more in upfront fees (violating the fees voters approved in the constitutional amendment), while sheltering a large portion of their income from the CAT. The state would expand gambling in the state and sell licences for the operation of VLTs at seven horse race tracks, six of which are controlled by casino interests.
The legislature quickly fell in line, passing the necessary laws—some in violation of the state constitution—to make the deal appear to be on the up and up. The laws were obviously written defensively, as if anticipating there would be constitutional challenges.
At the time, David Zanotti, President of the American Policy Roundtable said,
“If John Kasich were a commentator on Fox News right now, and some governor somewhere was trying to do this, he would be on a rant about how they were stepping on voters’ constitutional protections.”
In addition to the carve-out to exempt the casinos from part of their CAT liability, the legislature performed amazing contortions to justify the VLTs: the legislature re-imagined the constitutional definition of “lottery”:
“(A) The state lottery commission shall promulgate rules under which a statewide lottery may be conducted, which includes, and since the original enactment of this section has included, the authority for the commission to operate video lottery terminal games. Any reference in this chapter to tickets shall not be construed to in any way limit the authority of the commission to operate video lottery terminal games.” [emphasis added]
In fact, VLTs were not in use when Ohioans voted to allow a lottery in Ohio in 1973. States did not even begin experimenting with them until 1981 and it was not until 1989 that South Dakota became the first state to legalize VLTs. Hearings in the Ohio General Assembly at the time made it clear that only paper lottery tickets were considered.
Nevertheless, Governor Kasich and his Republican legislature insisted that Ohioans had authorized VLTs way back in 1973 when they approved the lottery — or they would have done so had they been invented at the time. Ignoring the will of the people, the legislature simply legalized VLTs—essentially slot machines—at favored race tracks chosen by the state, creating a state-sponsored monopoly.
This is about much more than casinos and gambling—it’s about the rule of law and good government. The American Policy Roundtable and eight other plaintiffs (I am one of them) filed a lawsuit—Walgate v. Kasich—claiming the governor’s deal violated at least three constitutional amendments dating back to 1973 when Ohioans first approved an amendment to allow a paper ticket lottery in the state. Judge Timothy Horton in the Franklin County Common Pleas Court threw the case out, saying none of the plaintiffs had standing—none had the right to challenge unconstitutional laws in the state. He implied that the Roundtable and other plaintiffs—parents, teachers, business owners, taxpayers—were using the courts “wantonly and/or for political or social gain.” The Tenth District Court of Appeals agreed, and now the case is before the Ohio Supreme Court.
What’s important to understand is that the court has not ruled on the actual merits of the case. They have only stated that the plaintiffs—We the People—have no say when our governor and our lawmakers stray beyond the boundaries of the Ohio Constitution. In a state with one-party rule, this grants almost unlimited power to those who govern us and the special interests that support them. The Supreme Court must allow Ohioans—We the People—to have our day in court so they can rule on the constitutionality of this backroom-deal-turned-law, and so we can have confidence that our elected leaders are not above the law.
Paula Bolyard describes herself as a Christian first, conservative second, and Republican third. She is a member of the Wayne County Executive Committee and is owner and moderator of the Ohio Homeschool Yahoo! Group. She is a contributor at PJ Media Lifestyle, PJ Media, and RedState.
All opinions expressed belong solely to their authors and may not be construed as the opinions of other writers or of OCR staff.