Granite State Gambling

Budget cuts won out as the focus of Gov. John Lynch’s budget address on Feb. 13, when he unveiled his proposal for how New Hampshire should tax, spend and scrimp in the next two years. But some groups of lawmakers are wagering that budget reductions alone won’t fix the state’s financial shortfalls, and new money from more gambling is the state’s best bet for a sound fiscal future. While the governor remains clear in his message that he would veto any bills calling for a broad-based sales or income tax, he implied that he might be willing to bargain on gambling.

“I remain skeptical of expanded gambling and how it will affect New Hampshire’s quality of life,” Lynch said, urging “careful and deep thought” to the impact of any gambling proposals.  

One pair of House bills would create special lottery tickets to benefit veterans, while major bills in both the House and Seante propose everything from a state-owned casino system for funding education to destination gambling resorts to “video lottery machines” (slots, video poker, etc.).

Residents must be at least 21 years old to gamble at any of the proposed facilities. All would direct some portion of profits to gambling or drug treatment programs, and two include a provision to sell liquor. They also, in one way or another, promise that towns would have a chance to weigh in on whether or not they want to host gambling.  

Here’s a closer look at two bills up for public hearing in the Senate Ways & Means Committee on Tuesday, March 3.  

SB 169: state-run video gaming

Under Senate Bill 169, state Sen. Theodore Gatsas (R-Manchester) proposes up to 5,500 video lottery machines in a maximum of six facilities around the state. Each facility would have no less than 500 and no more than 1,000 machines. Projecting income at $148 per day per machine, that adds up to almost $300 million gross annually.

Private enterprises would apply for licenses to run the sites and pay a nonrefundable $150,000 fee for licensing and five-year renewals.  An additional one-time fee of $2,000 per machine would be used as start-up capital for each facility. All machines would be required to pay out winnings of at least 87 percent annually.  

Revenue would be split between the general fund (60 percent), the company licensing the facility (16 percent), a new gaming oversight commission the bill establishes (12 percent) and the company leasing and maintaining the machines (6 percent), with the remaining 6 percent split between all 10 N.H. counties, a centralized gambling data provider, the cities or towns where the facilities are located and a gambling addiction prevention fund.

This new revenue would be partly offset by a tax cut the bill calls for. “I strongly believe that if you create revenue you should try and eliminate a tax or a portion of a tax,” Gatsas says. He recommends cutting the interest and dividends tax in half, from 5 to 2.5 percent, saving affected taxpayers an estimated $40 million annually.  


SB 179: expanded gaming and racing

Two video gaming facilities could be coming to the North Country—one each in Grafton and Coos counties. Senate Bill 179 would also add video lottery machines to facilities already licensed for dog and horse racing. The private North Country enterprises would be required to spend at least $100 million in the construction or renovation of their facilities. No new dog- or horse-racing facilities could be constructed within 40 miles of an existing site.  

Part of the goal, according to its prime sponsor, Sen. Lou D’Allessandro (D-Manchester), is to “provide for the recovery of horse racing” in the state. The equine industry would get a boost from the 1 percent of net profits directed to the gaming commission, which would then use it to fatten the purse for live racing bets.  D’Allessandro fashioned the bill after Delaware legislation enacted several years ago.  

The state would also collect a $100,000 application fee and $50,000 fee for the required background investigation.

Approved video gaming operators would buy five-year licenses for $50 million for live horse-racing facilities, $20 million for live dog racing or $10 million for existing North Country sites. Renewal fees would start at $1 million for live horse racing locations or $500,000 for dog racing and North Country sites. Additionally, companies wanting in on the game as providers of the lottery machines would pay $100,000 per application, $25,000 per background investigation, and $50,000 per renewal.

A maximum of 2,000 machines would be allowed at live dog racing facilities, or 5,000 at live horse-racing locations and at each North Country site. Profits would be split mainly between the site operator (52 percent) and the state’s general fund (40 percent), with the remaining 8 percent divvied up between the host town, county, problem gambling programs, tourism promotions and emergency and medical personnel training.

A new gaming division of the state policy would be established to oversee the facilities.  

Front Door Politics is a weekly legislative update for everyone affected by New Hampshire laws. An online learning center, additional reporting, and a free blog subscription are available at www.frontdoorpolitics.com.