Poker champ Berman stakes claim in Ohio casinos

A casino developer and poker champion behind last year's failed bid to expand gambling in Ohio has staked a claim to all four casinos the state's voters approved Tuesday.

Lakes Entertainment Inc. chairman Lyle Berman cut the deal Oct. 29, just days before the election, according to a filing Wednesday with the U.S. Securities and Exchange Commission.

Under its terms, Lakes agreed to fund 10 percent of the cost of the ballot initiative borne by both Penn Ventures and Rock Ohio Ventures, the development businesses of Penn National Gaming Inc. and Cleveland Cavaliers owner Dan Gilbert. In exchange, Lakes has the option, but not the obligation, to a 10 percent share in each casino's profits.

According to campaign finance reports, the campaign has cost at least $35 million.

Representatives of both development companies emphasized that Berman will only be a passive investor in the casinos.

The SEC filing said Lakes has already made an initial payment of $1.9 million to Penn Ventures, which is developing the Columbus and Toledo casinos, and $2.4 million to Rock Ohio, which is developing the Cleveland and Cincinnati casinos.

Allegations that Berman was involved in this year's casino effort were made early in October after a business proposal written in January surfaced that named My Ohio Entertainment, with Berman as a participant, as a partner to one of the casino campaign's consultants.

Tony George, a Cleveland developer, told The Associated Press at the time that Berman had approached him after the 2008 proposal failed in search of partners for a repeat effort.

"My understanding through his representatives was that he felt that this is the time to pass gambling in Ohio," said George, chairman of the George Group. "But he realized it wasn't just going to be one casino, that you've got to include the major population areas like Cleveland-Akron, Toledo, Columbus, Cincinnati. He was looking for allies."

George didn't know at the time whether Berman had succeeded in finding a business link to the 2009 effort, and the pro-casino Ohio Jobs & Growth Committee denied any relationship. They said the document appearing to name Berman as a player was merely a proposal that had not been accepted.

Bob Tenenbaum, a committee spokesman, said Thursday that the deal with Berman was struck after that time.

"At the time this was raised as a campaign issue, which was Oct. 6, Berman had no role in any of this," Tenenbaum said. "He never became involved in the campaign, but he did reach out to both Penn National and Rock Ohio Ventures in the last week of the campaign and asked if he could become involved."

He declined to say why the information about the relationship was held from voters until the day after the election. A message seeking comment from Berman was not immediately returned.

Penn National spokesman Eric Schippers said Ohio Jobs & Growth was truthful when it said Berman played no role in this year's casino issue - and he will play no active role now.

"To be clear, there is no seat at the table," Schippers said. "They have no role in how the facilities will be built, constructed or operated."

Jennifer Kulczycki, a spokeswoman for Gilbert's business, said a handful of campaign advisers will be given the chance to invest in the casinos now that they've been approved. She said Berman was not one of those advisers.

Berman has been chairman and CEO of Lakes Entertainment since 1998. The company was formed as a spinoff to Grand Casinos Inc., which Berman co-founded as a competitor to casinos in Las Vegas and Atlantic City. Among his other business interests have been PokerTek Inc. and Rainforest Cafe. He is also a multiple winner of the World Series of Poker.

During last year's campaign pushing a single Ohio casino in Clinton County, Berman and Penn National were bitter rivals.

Berman and his partners in the effort to bring a casino to Clinton County in southwest Ohio sued Penn National for allegedly making false and defamatory statements, which including information about Berman's involvement in the bankruptcy of a Las Vegas casino in 1996. Berman and his partners, MyOhioNow co-founders Rick Lertzman and Brad Pressman, questioned in a news release whether Penn National met the ethical standards to hold a gaming license.

The next day, Penn National and its No on 6 Committee shot back with a countersuit, accusing Berman, Lertzman and Pressman of defamation, libel, slander, deceptive trade practices, false advertising and abuse of the legal process.

Court records show both lawsuits were dismissed last spring.

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On The Net:

U.S. Securities and Exchange Commission: http://www.sec.gov

Lakes Entertainment Inc.: http://www.lakesentertainment.com