"This has been a difficult choice for me but I believe a necessary one," said Strickland, who said a "conservative" estimate found the gambling expansion would bring in net revenue of $765 million to the state.

Strickland’s concession comes as he tries to work with lawmakers to craft an acceptable budget by the end of the month.

Strickland's plan includes $1.3 billion in state agency spending, $770 million in cuts to the Medicaid health insurance program for the poor and a cut from 14 percent to 8 percent in the state share of contributions to the Public Employees Retirement System.

The increased gambling could fly in the face of Ohio voters who have turned down expanded gambling four times.