A proposal to allow casinos in Columbus and three other Ohio cities isn't yet approved for the Nov. 3 ballot, but it is playing a significant role in the state budget stalemate that has extended into its second week.

Senate Republicans are citing the issue as a major flaw in Gov. Ted Strickland's plan to add electronic slot machines at Ohio's seven horse-racing tracks to generate $933 million toward balancing the budget.

Although Strickland disagrees, they say the casino issue creates too much uncertainty about how much revenue the state would get from slots -- including whether the racetracks would go forward with slots if the casino issue passes.

The president and chairman of the company that operates Scioto Downs racetrack in Columbus said yesterday that a final decision about adding slots likely wouldn't be made until after the casino issue is decided.

The casino plan also could affect Senate Republicans' proposal to place a slots issue on the fall ballot because it could undermine the state plan if both measures pass.

"It's a very complicating factor in this whole process," said Sen. Mark Wagoner, R-Toledo, chairman of a special Senate committee studying the slots proposal.

Publicly, Strickland and legislative leaders were quiet yesterday, avoiding the highly charged news conferences, committee hearings and letter-swapping that has solidified their differences and done little to bring the sides closer to a solution.

The only major development was that Reps. Todd Book, D-Portsmouth, and Louis Blessing, R-Cincinnati, introduced a new version of the slots plan as a separate bill to be debated in a House committee with the intent of incorporating it into the budget.

The updated legislation addresses some of the concerns about the previous draft. It removes a provision that would allow racetrack owners to recover their license fees if the competing casino issue passes on Nov. 3.

Strickland generally supports the bill but hasn't reviewed it, a spokeswoman said.

The Pennsylvania gambling company Penn National has joined forces with Cleveland Cavaliers owner Dan Gilbert for a ballot measure authorizing casinos in Columbus, Cleveland, Cincinnati and Toledo.

The committee backing the issue said it has turned in more than 850,000 signatures to Secretary of State Jennifer Brunner's office. The group needs 402,275 valid signatures of registered voters to qualify for the ballot.

If the proposal makes the ballot and passes, critics of Strickland's plan say that some racetrack owners might not pay the $65 million license fee, which accounts for nearly half of the $933 million in projected revenue for the state, because of competition from casinos. They also say gaming revenue likely would be lower than estimates.

But Strickland, who opposes the casino issue, said this week that he's confident the racetrack owners will go forward, even amid the threat of competing casinos.

He also says that the revenue projections from the racetrack slots are conservative and that any loss from license fees or revenue from his slots plan would be made up with the $200 million in fees the casinos would pay the state ($50 million from each casino).

Strickland said the racetracks' owners are willing to pay the first installment of their fee -- now proposed to be $13 million by Sept. 15 -- before the casino vote and are willing to be unable to recover that money, as had been proposed.

"The track owners are very anxious to have the ability to install (slots)," Strickland said.

Robert Griffin of MTR Gaming Group Inc., which owns Scioto Downs and Mountaineer Casino near Youngstown, W.Va., confirmed that his company is willing to pay the first fee installment without a "clawback" clause.

But he said it's difficult to fully commit to the slots plan without knowing whether the casino issue will make the ballot and pass, and that his company's board has yet to consider that scenario.

"I think we would make the initial payment," Griffin said. "I think the question is, do you go forward and do you put something in the ground after the first payment?"

Even so, Griffin said MTR plans to spend $6 million to $8 million on a campaign to defeat the casino issue. He said there are major questions about the plan, including how many casinos would be built and when.

Bob Tenenbaum, spokesman for the pro-casino committee, said the debate about the casino plan as part of the budget stalemate is "a smokescreen" and it will not affect the push by casino proponents.

"It's neither something we initiated nor have control over," Tenenbaum said.

Dispatch reporter Jim Siegel contributed to this story.

mniquette@dispatch.com