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Issue Summary - Gambling

Is Gambling the best bet for New Hampshire?

Is Gambling the best bet for New Hampshire?

Issue Facts

By: Scott Spradling, Fix It Now member and Jim Rubens, Granite State Coalition Against Expanded Gambling

Some forms of gambling have been permitted in New Hampshire since 1933, when pari-mutuel betting began, followed by the opening of the Rockingham Park horse track and later the Seabrook dog track.

We were the first state to have a lottery, which was established in 1964, and in 2009 it generated net revenue of $68 million.

State revenue for gambling goes towards education programs, and since our official lottery began over $1.3 billion has been generated for this purpose.

New Hampshire also permits several other forms of gambling, such as bingo and poker, with a portion of proceeds benefitting charities. An undetermined number of residents also gamble online on illegal gambling websites that are not state regulated.

To deal with the state’s budgetary stresses, worsened by the recent recession, several bills were introduced in the Legislature during the 2009 session to legalize video slot machines at race tracks (racinos), certain hotels and resorts, or at state-owned facilities. None of the bills passed in the Legislature, but the issue is still hotly debated because of continuing state budget problems and as a result of Gov. John Lynch’s decision to form a commission to examine the ramifications of expanded gambling. After a series of hearings, the Governor’s commission issued its final report in late May.

Two bills proposing expanded gaming were introduced in the Legislature in 2010. A more expansive bill - SB 489 - was passed by the Senate in March but defeated by the House in April.

A second proposal was initiated in May. It calls for:

  • up to 10,000 slot machines at four facilities across the state
  • two facilities could have up to 3,500 slots, with a licensing fee of $50 million
  • one location could have 2,000 machines, with a licensing fee of $30 million; and one could have 1,000 machines, with a licensing fee of $15 million.
  • all facilities open to competitive bidding

Each gambling facility would need charitable gaming (scratch tickets, Bingo) on site. Any city/town hosting a facility would need approval by public vote.

The Lottery Commission would be in charge of regulation with the Attorney General's office responsible for background checks of facility operators. The bill would also authorize a commission to study gaming regulatory oversight.

Here's a breakdown of the revenue:

  • 30-percent of income generated from the slots would be distributed to the state
  • 9-percent would be divided between host municipalities and adjacent cities/towns, county property taxes, the Department of Health and Human Services, the Department of Resources and Economic Development, and police and fire services.

The bill would establish a program to treat gambling addiction.

The proposal would also establish a permit process for table gaming (poker, roulette or blackjack) with a $10 million licensing fee.

The bill passed the Senate (14-9), but failed in the House (191-141) during a special legislative session on June 9.

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Pros

Pro Issue Opinion by Scott Spradling, for expanded gambling:

 

The state needs the revenue and the alternatives are worse:

  • Our legislature began work on our state budget for the next fiscal biennium (2010-2011) facing a budget deficit from existing taxes and expenses estimated at $400 million to $500 million. The final approved and balanced budget included numerous tax increases and spending cuts, but also significant one-time benefits that will go away next time around.
  • Expanded gambling has the potential to raise hundreds of millions of dollars and solve our budget problems once and for all without any new taxes (such as a sales or income tax) and without bumping up the rates on the many other taxes we have in the state.
  • Expanded gambling will create lots of new jobs and draw tourists
  • With the current recession, expanded gambling with new licenses will generate a large numbers of good jobs in our state. Millennium Gaming of Nevada proposes to modernize Rockingham Park at a cost of $450 million creating thousands of jobs, and that is just one project.
  • Locating gambling sites in various regions of the state will draw tourists to those areas, and could be a major improvement to the economy of the North Country

The fear of increased crime rates is overblown:

  • The fear that a large increase in crime will accompany expanded gambling is not backed up by the facts. FBI data of 2005 show that the crime rate of Las Vegas is below the comparable rates of cities such as Phoenix, Arizona, Orlando, Florida and Myrtle Beach, South Carolina. In addition, the proposed legislation would devote some of the funds from gambling to recovery programs for problem gamblers.
  • A GAO report in 2000 concluded that “in general, existing data were not sufficient to quantify or define the relationship between gambling and crime…Although numerous studies have explored the relationship between gambling and crime, the reliability of many of these studies is questionable."
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Cons

Con Issue Opinion By Jim Rubens, against expanded gambling:

 

The gambling revenues are overstated and will not solve our state budget problems:

  • Casino tax revenues have not fixed budget problems in other states. Casino states have budget problems no less severe than New Hampshire’s and casino revenues are declining nationwide. In fact, racinos may become a tax drain in some states. Rhode Island legislators are considering using taxpayer dollars to buy a bankrupt race track casino there. Maryland passed a racino law and that state, too, is considering using taxpayer money to prop up two bankrupt racetracks - and casino developers have purchased licenses for only half the number of authorized slot machines.
  • Of all states with legalized slot machines or casinos, everyone has either a sales or income tax, all but 6 have both.
  • Gambling interests are overstating revenue projections. Slots revenue may not arrive in time to fix the budget deficit this biennium. First license and operating revenues would be received no earlier than about 24 months after a legalization vote (the typical elapsed time in the seven most recent racino states).
  • SB 489 would permit 17,000 slot machines in New Hampshire, making our state the second most slot-saturated state in the US, behind only Nevada. This bill also abandons the earlier concept of "limited" gambling, by making each of the 6 allowed venues into full-scale casinos.


Gambling businesses may not be additive, they cannibalize other local businesses:

  • Slot casinos of the type being proposed for New Hampshire may not benefit the state’s economy and simply cannibalize existing local businesses. A literature survey done for the Federal Reserve Bank of Boston states, “[c]asinos that cater to a local market generally do not bring outside money into the economy … [and] may have no net ancillary economic impacts. Residents patronizing such casinos may simply substitute gambling for other goods and services.”


Gambling creates many negative social problems and increases crime rates:

  • Multiple casino locations may force negative social and economic impacts on many New Hampshire communities. These impacts include: higher rates of gambling addiction, violent crime, domestic abuse, suicide, and increased welfare, social service and criminal justice costs.
  • A 2006 study published in The Review of Economics and Statistics found that, by the fifth year after the introduction of a casino, host counties saw rates of robbery, aggravated assault, auto theft, burglary, larceny, and rape increase by an average of 10 percent. The casino-crime link has been shown in several additional studies, with the Review of Economics and Statistics study now used to assess casino impacts in most independent gambling cost-benefit analyses. Gambling advocates often cite older studies which use small sample sizes and less rigorous statistical methods and report no definite link between casinos and crime.
     
  • Gambling addiction treatment fails to solve the problem created by casinos. Six casinos spread around the state would increase baseline pathological gambling disorder by about 1 percent of New Hampshire’s adult population. Only 7-12 percent of gambling addicts even attempt to access available addiction treatment services. About half or more of revenue at a typical slots casino is extracted from problem and pathological gamblers, meaning that the state budget would be built around the continuous creation of new gambling addicts to replace those who gamble themselves and their families into bankruptcy.
     
  • Slots are several times more addictive and harmful than existing New Hampshire gambling. Gambling addiction onset is over 3 times faster with slot machines compared with table games, lotteries, or betting on animal racing. Here are the intake statistics from the Rhode Island Gambling Treatment Program: 69% slots, 10% horses or dogs, 9% table games, 8% lottery. Through frequent display of “near misses,” slot machines are designed to make players think that they are winning 2 to 5 times more than in reality. Recent brain science shows how these near misses promote gambling addiction.
     
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Learn More

Information:

What's at Stake, www.whatsatstake.unh.edu
 
NH Lottery Commission, www.nhlottery.org
 
Racing & Charitable Gaming Commission, www.racing.nh.gov
The Racing and Charitable Gaming Commission is an agency of The State of New Hampshire. It regulates Thoroughbred Racing, Harness Racing, and Greyhound Racing in New Hampshire under RSA 284, Games of Chance Regulations under RSA 287-D, and Bingo and Lucky 7 Regulations under RSA 287-E. The Commission's duties include the licensing of racetracks and individuals (drivers, owners, trainers, etc.), collection of taxes and fees, Bingo, Lucky 7, and Games of Chance.

Groups against expanded gambling:

 

Granite State Coalition Against Expanded Gambling, www.noslots.com
A non-partisan organization dedicated since 1991 to a single mission: halt the expansion of gambling in New Hampshire, particularly casinos and electronic slot gambling machines. "We invite all concerned residents of our state to get involved and help preserve our quality of life".
 
Groups in favor of expanded gambling:

Fix It NOW New Hampshire, www.fixitnownh.org
A group of concerned New Hampshire citizens joined together as Fix It Now New Hampshire. Their goal: stop the money migration out of our state and find a permanent, sustainable source of new revenue for our state. These leaders see the introduction of limited gaming at Rockingham Park and other racetracks as one of the best possible solutions to increase revenue and build a better future in New Hampshire. The coalition has partnered with Millennium Gaming, one of the most respected operators of gaming facilities in the United States.

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Take Action

If you are interested in gambling and want to take action here are some choices:

  • Contact one of the organizations listed in Learn More. These groups represent the pro or con positions of issues.
  • Contact a government official as follows:

1. Contact members of the New Hampshire House of Representatives or the state Senate


2. Contact the Committee chairperson or members of the: House Way and Means Committee members or the Senate Ways and Means Committee members – These are the committees that oversee this issue.


3. Contact the head of the New Hampshire Lottery Commission


4. Give your opinion to Governor Lynch: Governor John Lynch's website
 

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Issue Status

The bill passed the Senate (14-9), but failed in the House (191-141) during a special legislative session on June 9.

Gov. John Lynch formed a commission to examine the ramifications of expanded gambling. Its final report was made public on May 20.

Learn More/Take Action

Do you think New Hampshire should expand gambling? Whatever your thoughts are, we urge you to make your voice heard. See the "Learn More/Take Action" section on this page for more information.

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