Other Aspects of Expanded Gaming

 
Because the issue of expanded gambling is so important, I feel I should offer an explanation of my position. 
I have no moral objections to gambling and have placed a few bets in Las Vegas myself. Nor do I think the social problems, such
as addiction, while serious, are sufficient reason not to consider expanded
gaming. Under the right circumstances, I could support it, but not this present
bill as presented to the legislature. Here are my concerns.

In the recent referendum in Salem, 81% of the people supported having a casino here. It is important to realize that that is not the question that the House will be considering. The vote will be on expanded gaming; there is absolutely no guarantee that Salem will be the site. While I think it would be the best location, there will be other applicants for the no-bid license. Remember, the Maple Leafs were leading the Bruins by three goals in the third period, but that’s not how it turned out. I suspect that the results of the referendum would have been a lot different if the casino were to be located in, say, Hudson. But this is just one consideration.

Like many people, when I first heard about a casino, I thought, “Sure, why not?” After all, adults should be able to spend their entertainment dollars any way they might like. If the town and state stand to gain, so much the better. I would have been part of that 81%. 
However as a citizen legislator (I’m a retired Salem High teacher), I realized I had to look into the consequences of this more carefully. As a result, I learned several disturbing aspects of expanded gaming and cannot support the present proposal.

The most serious issue is one that is not easy to face up to. As we look to other states, we see that gambling interests first have an extraordinary influence, and then often a corrupting influence. In almost every state where gambling has been introduced, public officials have fallen. The most recent example was the resignation of the Lieutenant Governor of Florida for wrongdoing by her company. Two years ago, there was a major scandal involving the Pennsylvania state senate regarding undue influence on their gaming commission. There are many other examples.

I am concerned that the license is no-bid. We require bids on highway projects and snowplowing contracts, but a huge enterprise like a casino will be awarded based on a flat $80 million license fee. Why not invite higher offers? Could it be that vested industry elements were involved in the drafting of the bill?

The bill does include a minimum commitment of $425M. But that figure would include both the $80M license fee and the approximately $70M for the sale of the Park. That would leave $275M as the first shovel hit the ground. Compared to the $1.3B estimated cost of the casinos proposed for the Boston area, ours would hardly be the “high end” establishment the Governor said she could support. Instead it would be a convenience casino catering to local gamblers.

Recently, Millennium gave a presentation showing lovely pictures of an enhanced $600M plan with a hotel and entertainment venue. They’ve had years to develop the plan yet a major modification shows up two weeks before the vote. Even someone not very skeptical would have to question the timing. There is also no assurance – it’s not part of the bill – that any of this would actually happen. Be aware that, even if this bill is successful, there will be no revenue beyond application fees in the next few years. The bill provides up to five years for the minimum investment to be made.

This bill makes regulation look like an afterthought, not the serious element it has to be. Everyone is talking about the honeymoon. I want to talk about the marriage.

New Hampshire does not have a good record of regulation and enforcement.
Our banking and securities regulators could not prevent the FRM scandal from
defrauding investors in Meredith. Our Liquor Commission, which is 100% state
controlled, is embroiled in lawsuits alleging personal animus over the awarding
of a multimillion-dollar warehouse contract. This bill assigns responsibility
for regulation and enforcement to a confusing mix of the Lottery Commission,
the Racing and Charitable Gaming Commission, and the state police. Who’s in
charge?

Our state is comparatively unsophisticated and inexperienced in the world of major league gaming. When I see a coordinated, developed regulatory structure in place, here in New Hampshire I will reconsider my position since a major concern will be addressed.

Gaming is very different than, say, a restaurant not making it. With the fee structure and the first flush of cash, the state effectively becomes partners with the facility. When Massachusetts opens its destination casinos, the New Hampshire operation will inevitably have to get breaks to stay alive in the form of lower taxes and more venues. It happened at Rockingham and Seabrook. When interest in racing declined, the owners came to the legislature to gain concessions in order to stay in business. That was very reasonable and proper under the circumstances, but it is not something the state would think of doing for any other private business. After all, with only one operator providing a revenue stream that the state becomes dependent on, it’s a fair question to ask, Who’s controlling
whom?

There are other issues. Charity games will eventually disappear. There’s a promise that they will be held harmless, with revenues guaranteed. No effort by the charity is required under the bill to maintain that guarantee. I cannot see how such a promise can be made in good faith. It looks like an afterthought, not a serious commitment. Ending the guarantee might very well be the first concession asked for by the licensee.

Another early concession that the casino interests will likely be seeking will be a reduction in the tax rate. At 30% New Hampshire is more than neighboring Massachusetts’ rate of 25%. (Compare both of these to Pennsylvania
at 55%) And they will get it because, remember, the state is a partner.

It has been suggested that the town of Salem stands to gain $13M from a casino. I simply don’t see how the projected revenues can support anything near that. It makes it very hard to take the statements of the proponents at face value. Whatever we might get will certainly drop with time as competition from Massachusetts takes hold. How much disposable income is available when you consider you lose $50 every time you pull up to the one-hosed bandit at the gas station?

A thought about jobs. The construction of a casino (like the construction of the mall itself) will likely provide many temporary jobs to Massachusetts
contractors who have the size and ability to undertake such a project. Once
opened, the highly paid executives running the operation will come from out of
state. We locals will be left with the lower end casino, restaurant, hotel
jobs. There’s nothing wrong with any of this, but the jobs
pot-at-the-end-of-rainbow will not be what people are hoping for.

As I said, if there is a realistic, effective regulatory mechanism in place, I would support expanded gaming. As presently structured, however, I cannot support SB 152 at this time. My other objections, however real they may be, are not deal breakers for me.

None of this is pleasant for me, but I cannot ignore what I have learned, and what seems reasonable. Many people are wishing these facts away, but as a former President once said, Facts Are Stubborn Things.