Revenue sharing offered in attempt to bring expanded gambling to NH

Posted April 12, 2014, at 8:49 a.m.

CONCORD — Casino advocates dangled $25.2 million in revenue sharing for cities and towns before lawmakers Thursday in the latest attempt to expand gambling in the state.

Proponents told the House Ways and Means Committee the money will help reduce property taxes and take some financial pressure off communities.

“This piece of legislation benefits all of the people in the state of New Hampshire,” said Senate Bill 366′s prime sponsor, Sen. Lou D’Allesandro, D-Manchester. “We know the communities have gone without the $25.2 million every year (since 2009). This addresses that situation.”

Lawmakers ended revenue sharing with communities in 2009 when budget writers struggled to balance the state budget during the recession.

Bill opponents said there is nothing to stop the state from doing the same thing in the future if it needs money.

Will Stewart of the Greater Manchester Chamber of Commerce called the revenue sharing proposal “a nice bribe.” The organization opposed the bill.

“It’s like giving a dog a bone and then taking it away,” Stewart said. “There is the legitimate concern that the next time the state experiences hard times, the money will be right there on the table and will be a target.”

Although the House killed House Bill 1633 by about 30 votes last month, the Senate approved SB 366, which would legalize two casinos with 5,000 video slot machines and 240 table games, and sent it to the House, which has never voted to legalize casino gambling.

D’Allesandro has said his proposal would provide about $150 million in annual revenue for the state, including the revenue sharing, plus $120 million in licensing fees. The Lottery Commission estimated the two casinos would generate $168 million for the state and $480 million for its operators when they are fully operating.

Under the bill, the state would receive 35 percent of the gross revenue from the video slot machines and 18 percent of gross table game revenue.

But several committee members and Rep. Steve Vaillancourt, R-Manchester, said the state needs more money from gambling for enough House members to switch sides.

“Every year gambling has come in, the state’s take has gone down, down, down,” Vaillancourt said. “This is greed. Greed killed gambling (in the past) and greed will kill this.”

He suggests the state take less up front money through licensing fees but a higher percentage of gross revenue. He said that is the best scenario for the state in the long run.

Vaillancourt also said the number of facilities had to double to address concerns about monopolies or the bill would never pass.

He said if the committee considered changes to the bill he would help convince enough lawmakers to approve gambling, but would work to overturn the committee if it recommends the bill be killed as it did HB 1633.

Vaillancourt was not the only lawmaker to urge the committee to consider alternatives.

Earlier in the hearing, Senate President Chuck Morse, R-Salem, urged the committee to approve the bill and the Senate would be willing to work with the House on a compromise.

“We’re willing to sit at the table,” Morse told the committee, “but we need your help to get this one done.”

Jerry Gappens, executive vice president and general manager of the New Hampshire Motor Speedway, said his facility is interested in bidding on the smaller casino, which would be a perfect fit as it tries to become a year-round destination.

He noted Loudon is closer to southern Maine than the casino in Oxford, Maine. “Like any good business, we’ve got to look at additional revenue sources,” he said.

Gappens noted the speedway draws over 400,000 people for a six-month period, including two NASCAR races. Like a casino, “we’re an entertainment facility. People can come and enjoy it but they don’t have to come if they don’t want to,” he said.

The sales and marketing director of another entertainment facility, Hampton Beach Casino, opposed the bill, saying a casino would be unfair competition.

Andrew Herrick said entertainment is a loss leader for casinos that pay 40 to 75 percent over market to attract top performers to entice customers to their facilities.

“They make it impossible to compete,” he said. “If a 1,500-seat venue opened across the street we could compete every day, but with a loss leader competing, we would be out of business in 18 months.”

He said while the bill protects the Verizon Wireless Arena, venues like the Music Hall in Portsmouth, Capitol Center for the Arts in Concord, Palace Theatre in Manchester and Colonial Theatre in Keene, would face the same issues as his facility.

Several unions backed the bill, saying the new casinos will provide both construction jobs and permanent positions once they are operating.

“The fact is, New Hampshire will be experiencing the downside of casino gaming whether or not we build a new casino within our borders,” said Mark MacKenzie, president of the AFL-CIO NH. “Our state already has a $75 million-per-year casino industry under the guise of charitable gaming and there will soon be several casinos just over the border in Massachusetts. Without SB 366, we’ll leave thousands of jobs and hundreds of millions of dollars on the table,” he said.

The committee holds a work session on the bill on Wednesday and will vote on the bill Thursday.

Last month, the committee voted 13-11 to kill HB 1633.

 

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