Part of the fabric of Cleveland JACK Casino, Ohios gambling industry now 10 years old – cleveland.com

CLEVELAND, Ohio The downtown JACK Cleveland Casino ushered in Ohios modern gambling era in 2012, and since its inception, the urban casino has been a learning experience for the people running it.

Cleveland was new, said Jack Clevelands General Manager Scott Lokke. No one really understood the urban gaming market. Learning came very fast and very quick and forced us to run audibles very quickly.

Originally called the Horseshoe, Clevelands casino was the first to open in Ohio after a constitutional amendment in 2009 made them legal. Its doors opened on May 12, 2012, and was followed by three more casinos, with one in Columbus, Cincinnati and Toledo.

The casinos together have funneled billions of dollars of tax revenue to the state, even though they didnt live up to some early projections.

When Cleveland Cavaliers owner Dan Gilbert, the original owner of Clevelands and Cincinnatis casinos, introduced the Horseshoe, he promised the casino would be a source of two-way traffic, attracting and sharing visitors with the rest of downtown.

Lokke said a lot has changed in the casino and downtown, but the mantra stays the same.

Were such a part of the fabric of Cleveland, Lokke said.

Ohio welcomed legal gambling at the ballot box in 2009 after four failed attempts. Gilbert was one of the main figures pushing for legalization, and at the time Caesars Entertainment had an ownership stake in Clevelands casino.

Lokke worked for Caesars at the time and worked on the development side for both the JACK Cleveland Casino and what is now the Hard Rock Casino in Cincinnati.

Clevelands Casino was much different, he said. It was Caesars first urban casino outside of Vegas. Most casinos were built as destinations, with resorts, hotels and other amenities built to encourage days or weeklong stays.

The JACK Cleveland didnt even have its own hotel and was attracting a customer that may pop in for a few hours. Most visitors live 15 to 20 miles from the casino, Lokke said.

Lokke said the Horseshoe debuted with 2,500 slot machines and just 60 table games, since slots were the revenue drivers in most suburban casinos.

Patrons quickly showed they wanted something different. They skewed younger, and wanted more bars, music and entertainment, fewer slots and more table games.

Lokke said 1,500 slot machines were cut from the casinos lineup and the number of table games was raised to 100. He said the model for the JACK has been a more fun, entertaining atmosphere that fits in with downtown nightlife, and changes since the beginning have skewed towards that direction.

The trend towards more interactive gaming has spread to more urban casinos and even Las Vegas in the last decade, Lokke said. Slot machines used to be three rolling columns. Now video gaming machines look more like video games.

More recently JACK Cleveland has added an outdoor gaming space, a second parking garage (casino-goers park for free) and a new poker room. Now its in the middle of adding a 5,000 square-foot sportsbook in anticipation of legal sports betting in Ohio.

When the casino moved into the Higbee Building, a phase 2 was always envisioned, but never panned out. Soon after casinos were legalized, horse-racing tracks in Ohio won the right to have slot machines. This added seven competitors across the state and two in Northeast Ohio, though unlike the casinos, the racinos cannot offer table games, poker rooms or even games of skill at the slots.

In 2016 Rock Gambling separated from Caesars and become JACK Entertainment, which came with a rebranding of the downtown casino. Matt Cullen, the casinos first CEO, later led a team of investors that bought JACK Entertainment from Gilbert, turning it into an Ohio-based gaming company with two locations.

In 10 years of existence, JACK Cleveland Casino has brought in $2.19 billion in gambling revenue, which is money it makes on people placing bets.

Its paid one-third, or about $731 million of that revenue, in taxes. Its sent $373 million to Ohios 88 counties, $248 million to school districts and $37 million to its host city, not counting Clevelands split of the taxes sent to Cuyahoga County.

Those pushing for legalization were careful not to predict how much revenue would be made, but Ohios gambling industry hasnt lived up to estimates from the state.

In October 2009, before legal gambling hit the ballot box, Ohios Department of Budget and Management and Department of Taxation analyzed the impact of opening casinos on the states budget.

Even considering the possibility of racinos also opening for business, that analysis predicted $1.42 billion in yearly gambling revenues from Ohios four casinos. The casinos combined brought in $984 million in 2021 during a record year.

JACK Cleveland had a record year in 2021 with $257 million in gambling revenue, but the 2009 analysis predicted $473 million of annual revenue. The same analysis over-predicted how much revenue the Columbus and Cincinnati casinos would pull in by wide margins as well. Only Toledos prediction was close.

Since 2013 the casinos gambling revenue has grown from $821 to $984 million a year. The seven racinos now bring in upwards of $1.2 billion every year.

Ohio was late to gambling compared to its neighbors, with Indiana, Pennsylvania and Michigan all having casinos first. The analysis didnt expect gamblers to flock from outside Ohio. It did predict, though, that Ohio would recapture its in-state gamblers.

Detroit was an early adopter and became an established market before any Ohio casinos opened. The citys three casinos brought in $1.3 billion of gambling revenue in 2021, dwarfing Ohios four casinos.

Clevelands casino has been outperforming the one in Pittsburgh. From January to April, Pittsburghs Rivers Casino has brought in $74 million in slots and table games revenue, compared to $86 million at JACK Cleveland.

Its not like gambling revenue in Ohio isnt growing. Ohios casinos and racinos have broken the record nine out of the last 10 years. The only year they didnt was in 2020, when COVID-19 related shutdowns and curfews disrupted the industry.

Over 10 years, Ohios casinos have brought in $8.15 billion in revenue, paying about $2.72 billion in taxes on gambling earnings alone.

Lokke would later become JACK Casinos general manager in 2015. Since then, downtown Cleveland has seen major change, as well as a pandemic.

Since the casinos inception, both Rocket Mortgage Fieldhouse and Public Square have been renovated. The residential population, even after being deterred by COVID-19, reached the Downtown Cleveland Alliances goal of 20,000 people living downtown by 2020.

From the beginning Lokke said the casino was developed with minimal food and beverage to help push people out of the venue into downtown. Gamblers are still rewarded with vouchers for restaurants and tickets to shows or games through JACKs reward platform.

Lokke said the casino has welcomed 35 million visitors since May 2012, and as of late averages 10,000 people through a 24-hour day. While casinos set revenue records since the COVID-19 pandemic began, attendance is still down compared to two years ago.

As workers return downtown and Sherwin-Williams builds its new headquarters on Public Square, Lokke said hes expecting even more change.

A rising tide raises all boats, Lokke said.

The JACK casino isnt done changing either. Lokke said there was many capital improvements made in the first half of the casinos life. In the past 18 to 24 months, he said JACK has invested tens of millions of dollars into the property.

Lokke said he expects several more years of growth for the casino.

Ten years really isnt that long for an entirely new industry that really didnt exist before in Ohio, Lokke said.

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Part of the fabric of Cleveland JACK Casino, Ohios gambling industry now 10 years old - cleveland.com