Rules for legalized slots at racetracks laid out in Ohio

CLEVELAND -- Ohio Gov. John Kasich laid out rules for legalized racetrack slot machines on Wednesday as part of an agreement that settles a dispute with Rock Ohio Caesars, which is developing casinos in Cincinnati and Cleveland.

The deal was announced by Kasich and casino developer Dan Gilbert, owner of the Cleveland Cavaliers, in a former department store where the initial Cleveland casino phase is scheduled to open early next year.

Rock Ohio Caesars is a joint venture between Gilbert's Rock Gaming and Las Vegas-based Caesars Entertainment on two Horseshoe-themed casinos in Cincinnati and Cleveland.

The deal frees ROC from paying the state's commercial activity tax on all wagers, a sticking point between the company and state budget writers in Columbus.

The Republican-controlled Ohio House had added a provision to Kasich's nearly $56 billion, two-year state budget that said the so-called CAT tax applies to wagers plus payouts, a definition casino operators said would cost tens of millions in extra taxes and violate terms of a constitutional amendment approved by voters in 2009.

The deal taxes the company on wagers minus payouts.