Court upholds Ohio lottery plan

Andrew Welsh-Huggins

Thursday, Nov. 20, 2003 | 10:22 a.m.

COLUMBUS, Ohio -- Ohio can participate legally in a multistate lottery but can't take profits from the lottery away from education, the Ohio Supreme Court ruled Wednesday in a decision that largely favored the state.

Lottery opponents said the ruling could make it easier for Ohio to introduce electronic slot machines at racetracks.

Ohio joined the Mega Millions game in May 2002. Virginia, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York and Washington also participate in Mega Millions drawings. Texas will join the states on Dec. 3.

The court ruled 5-2 against hearing an appeal of a lower court decision that said the Mega Millions game was constitutional.

Lottery opponents, who say state-run lotteries exploit poor people, said the constitution allows Ohio to run only its own lottery.

The decision left in place a decision by the 10th Ohio District Court of Appeals that said Ohio can't use profits from the game for non-education purposes.

Part of the bill authorizing the multistate lottery included an accounting maneuver allowing the state budget director to use $41 million in Mega Millions profits for general budget purposes for the fiscal year that ended June 30.

Legislation placed the proposed new revenue from the multistate lottery into an education fund for lottery profits. The same legislation then allowed the state to remove $41 million from the Department of Education's general fund, essentially canceling out the benefit to education.

The trial court judge and the appeals court said that is unconstitutional.

The Ohio Roundtable, a citizens advocacy group that brought the lawsuit, said it was pleased with that portion of Wednesday's ruling.

"We caught the politicians trying to rob the people of Ohio of millions of dollars," David Zanotti, Ohio Roundtable president, said. "Now they have to put the money back into education where it belongs."

Asked about replacing the money, Tim Keen, assistant state budget director, said his office was reviewing Wednesday's decision.

Zanotti said the court's refusal to hear the constitutional issue was troubling. He said the ruling opens the way to lawmakers interpreting Ohio's 1973 vote for a state lottery however they please.

That could include placing electronic slot machines on Ohio's seven racetracks, Zanotti warned.

"For the court to simply walk away and say, 'We're not even going to look at it,' sends a clear message to politicians, that when it comes to gambling, you can make words mean whatever you want them to mean," Zanotti said.

A plan before Ohio lawmakers would ask voters to approve a constitutional amendment in March to allow electronic slot machines at the state's seven horse racetracks.

The measure's sponsor, Sen. Louis Blessing, a Cincinnati Republican, said Wednesday's decision had little effect on his proposal.

The issue before the court involved meshing Ohio law with an out-of-state program, where slot machines are completely inside Ohio, he said.

In the 2-1 appeals court ruling in June, the court said Ohio designed its participation in Mega Millions in a way that complied with Ohio law.

"As long as Ohio's participation in the Mega Millions game is undertaken within Ohio's own regulations and the Mega Millions' rules, which are drafted concordantly with Ohio law and regulation, Ohio maintains sufficient direction of the lottery game to pass constitutional muster," the court said.

In the fiscal year that ended in June, the lottery gave schools $641.4 million, about 4.6 percent less than the goal of $672.7 million. Still, that was $6.2 million more than in the previous year that ended June 2002.

The lottery funding is about 9 percent of the state's annual education budget of about $7.2 billion.

Mega Millions beat expectations by turning a $74 million profit in its first year. State officials had estimated it would raise $41 million a year.