Column: Anti-casino rhetoric makes some invalid assumptions
The anti-casino forces are hard at work. My telephone has been ringing. Lengthy emails and letters are coming in. Meetings have been convened. Dire predictions of bad outcomes include these: 14,000 N.H. residents becoming gambling addicts; a wave of irreversible corruption and crime; one ‘high end’ casino morphing into multiple cheap ‘slot barns’; ‘cannibalization’ of local restaurants, stores, theaters and charities; regressive taxation; minimal net casino tax revenues, offset by adverse governmental and social costs; market saturation leading to casino failure, blight and bankruptcy.
Curiously, although I entered into this process with a lifelong anti-gambling bias, I have not been persuaded by this impressive anti-casino effort. Nor have I been persuaded by the equally impressive pro-casino lobby.
In thinking about this issue, I begin with the knowledge — deepened and reinforced after three months as a member of the House Ways and Means Committee — that there is a large and growing gap between the state’s revenues and the state’s responsibilities. And I am convinced that irreparable harm flows from our collective failure to meet those responsibilities. I think of the child whose downward spiral into lifelong addiction and failure could have been caught. I think of the family forced to move because the property tax burden is too high. I think of the damage to our economy and environment, and thus to all of us, as infrastructure, research and smart investment are neglected. And I think of all whose life prospects are irreparably dimmed by the state’s abdication of its responsibilities.
Will a single “high end, highly regulated casino,” such as that called for by Gov. Maggie Hassan, provide new revenues sufficient to start closing this gap? And will it do so without intolerable side effects? I think there is a good chance that it will, but I have many questions.
SB152 proposes a single casino consistent with the governor’s specifications. The regulatory structure called for by the bill is impressive. On the financial side, a successful casino applicant must invest at least $425 million (including a nonrefundable $80 million licensing fee). The tax on the casino’s operations will be 30 percent of slot machine revenue and 14 percent of table gaming revenue. The nonpartisan N.H. Legislative Budget Assistant has estimated that net annual tax revenue on a fully operational SB152 casino could be between $85 million and $152 million.
Massachusetts has recently received nine applications for three high-end casino licenses. Each applicant paid a $400,000 fee. Clearly, each of these applicants think that the casino market is not “saturated” and expect a solid financial return from an upfront investment of at least $500 million. Massachusetts will benefit proportionately from that return – and so, it seems, could N.H. if SB152 application requests spark a similar response from casino developers.
Regarding problem gambling, my research tells me that the “14,000 gambling addicts” prediction is both a worst-case scenario and derived from scant data. And as we think about this part of the casino issue, we should also recognize that problem gambling is already present in N.H. and that there will be more of it as Massachusetts implements its plan for three large casinos. Regarding ‘regressive’ taxation, my research tells me that casino revenues derive from a relatively higher income population, so that the casino tax may be less regressive than the lottery and many of N.H.’s other revenue sources. And regarding “cannibalization,” perhaps regulatory restrictions can avert some of this and perhaps there will be off-setting benefits from new visitors to N.H.
There are many issues to be explored in the upcoming SB152 Ways and Means hearing. Should the minimum investment and/or the tax on operations be higher? Are the revenue predictions realistic given warnings of market saturation? Is the application and regulatory timetable too rushed? Will predictable adverse side effects outweigh the benefits?
In sum, I remain undecided on SB152. My vote for or against will be decided after the upcoming Ways and Means review and after possible revision of the bill.
Rep. Dick Ames, a Democrat from Jaffrey, represents Cheshire District 9.