Why We Oppose Slots

From our friends up north of Granite State Coalition Against Expanded Gambling --


Why We Oppose Slot Casinos in Any Location



1. Slot casinos will cannibalize existing New Hampshire businesses and damage our healthy, family-friendly "brand" image

· Gambling interests are proposing convenience (local market) casinos, because the New Hampshire and Massachusetts border populations are too small to justify the $1.5 billion plus investment required for a Foxwoods-type destination-resort casino. Because the market does not justify anything larger, the largest building investment proposed by any ANY New Hampshire casino developer is $300 million. Convenience casinos would drain consumer spending away from existing New Hampshire businesses, such as restaurants, hospitality, entertainment and retailers.

· Midrange estimates of this displacement or cannibalization effect are 50-60 percent. This means that the SB489 5 or 6 casino saturation plan would drain at least $400 million dollars annually out of existing New Hampshire businesses and the existing New Hampshire economy. A Federal Reserve Bank of Boston study conducted for the State of Rhode Island found that, “Casinos that cater to a local market generally do not bring outside money into the economy through the spending of its patrons … Residents patronizing such casinos may simply substitute gambling for other goods and services."

· Even destination-resort casinos fail to benefit local businesses. Said Ledyard, Connecticut's Mayor, “There has been no economic development spin-off from the [Foxwoods] casino ... Gamblers have one thing in mind: get to the casino, win or lose their money, get in their cars, and go home." Said casino developer Steve Wynn to Bridgeport, Connecticut business leaders, “There is no reason on earth for any of you to expect for more than a second that just because there are people here, they’re going to run into your restaurants and stores just because we build this [casino] here.” New York Times, September 13, 1992.

· Sally Stitt, President of Star Media of New Hampshire and who has played a critical role for over twenty years in helping protect and enhance the New Hampshire brand, told the NH Gaming Study Commission that gambling industry marketing and promotional activity would "dwarf" New Hampshire's aggregate state and individual company tourism marketing and would "drown out" the very healthy New Hampshire brand messages (by a ratio of up to 10 to 1). Total private, state, Joint Promotional Program and match money tourism marketing is now about $7 million annually. Six New Hampshire casinos would spend $40-80 million annually (applying typical gambling industry marketing budgets of 5-10 percent to the SB489 six casino gross revenue estimate of $800 million).

· Look at this Millennium casino website and ask yourself, is this the image and reputation we wish to cultivate for our state?



2. Gambling bills would hand out unconstitutional, no-bid monopolies to politically-connected individuals

Part 1, Article 10: “Government being instituted for the common benefit, protection, and security, of the whole community, and not for the private interest or emolument of any one man, family, or class of men…”
Part 2, Article 83: “… Free and fair competition in the trades and industries is an inherent and essential right of the people and should be protected against all monopolies and conspiracies which tend to hinder or destroy it …”


3. The New England gambling market is nearly saturated; gambling is a declining revenue source

· The Rockefeller Institute of Government examined gambling revenues in each of the 50 states over the period 1998-2009, finding that even continuous expansion into new forms of gambling have not provided states with long-term budget stability because gambling revenues “… do not keep pace with traditional tax revenues and government expenditures over time … [and] may add to, rather than ease, long-term budget imbalances.”

· The NH Education Funding Commission (compare scenarios 3 and 4) found that if Massachusetts were to legalize slots, New Hampshire slots revenue would decline by 52 percent.

· The American Gaming Association reports that the country's 450 casinos that are not owned by Indian tribes took in 5.6 percent less money in 2009 than the year before. This is the second straight year casino revenue has declined.



4. Gambling cannot be “limited.” Gambling-dependent states are under constant pressure to expand into new forms of gambling in more locations

· Revenue from Illinois’ nine casinos has plummeted in 2009 by almost 24 percent, forcing the state to permit over 45,000 additional slot machines in bars, restaurants, and social clubs throughout the state.

· The Pennsylvania legislature in October, 2009 legalized table games at its existing casinos and racinos, though backers of that state’s 2004 authorizing legislation promised table games would never be needed.

· Connecticut Governor Rell, facing sharp revenue declines from her state’s two tribal casinos, has proposed legalizing 1,000 keno slot machines in bars throughout the state.

· In Maine, Bangor’s Hollywood Slots management recently announced its desire to add table games, even though voters were promised that this would not be necessary when racinos were legalized in 2003.

· West Virginia legalized 3 racinos in 1994. In 2001, the state legalized video slots in bars and restaurants statewide. In 2007, the state legalized table games at racinos. West Virginia now has 72,000 at-risk gamblers.



5. The promised 39 percent tax rate will not hold

· As GSCAEG predicted, the earlier promised 49 percent casino tax rate was nothing more than a bait & switch to lure in revenue hungry legislators. Nor will the new 39 percent rate hold under competitive pressure in a market nearly saturated with casinos. Average slot casino tax rates in gambling states is 22 percent, well under the 39 percent rate SB489. Connecticut casino tax rates are 25 percent. The most recent Massachusetts casino proposal sets taxes at 25 percent.

· As in other states, if casinos are legalized here, the gambling industry will return to the legislature threatening not to build its promised flashy “phase II” casinos unless tax rates are reduced.



6. Political influence and corruption

· As in most other states, if casinos were legalized here, gambling interests would become New Hampshire’s dominating political force and the largest source of state-level campaign money.

· The National Institute of Money in State Politics (summary data, full report) found that in the eight states holding referenda on gambling expansion in 2008, the gambling industry outspent opponents of gambling expansion by 48-to-1. The gambling industry’s political modus operandi is to overwhelm opponents with money.

· A state-sanctioned gambling monopoly would give hundreds of millions of dollars to one or to a handful private interests which would be dependent upon the legislature for its tax rates, allowed number and location of machines, types of allowed gambling, operating hours, smoking and drinking regulation, and potential competitors. Gambling industry profits would depend upon heavy influence over our legislature.

· New Hampshire has a history of weak gambling regulation. The New Hampshire state auditor found in 2005 that the Pari-Mutuel Commission was stained by a multi-year pattern of self-dealing, evasion of legislative budget authority and sloppy recordkeeping (audit summary, full report).

· In 2005, the PMC failed to detect a $200 million, multi-year Gambino crime family illegal gambling and money-laundering operation at the Belmont track. Again, in 2009, the Racing and Charitable Gaming Commission failed to prevent the bankrupt owners of the Hinsdale track from taking money from customer gambling accounts.

· Pennsylvania Common Cause found that the gambling industry spent over $17 million in campaign contributions and lobbying over the 7 years ending 2008, 3 state Supreme Court judges being top money recipients, and most industry money not being reported.

· Read this editorial by Natalie Rogol, a research fellow with the Commonwealth Foundation, a Pennsylvania public policy research institute, recounting the exaggerated revenue promises and rampant corruption that mark the first five years of casinos in Pennsylvania.

· Massachusetts Senate President Therese Murray, an ardent casino supporter, was quoted in February expressing her concerns about corruption: “Every other state that’s done gaming, someone goes to jail because it’s done too fast, too sloppily.” Senator Murray also warned that gambling revenue from any newly-enacted legislation should not be included in the current Massachusetts state budget, because the necessary regulatory authority could not be set up in time. SB489’s approval timetables are dangerously rapid and its gambling regulatory structure insufficient.



7. Gambling addiction treatment and casino self-exclusion are not acceptable substitutes for prevention

· Nowatzki and Williams (page 8) found that only 0.4 to 1.5 percent of Canadian problem gamblers sign up for self-exclusion programs.

· The American Journal of Psychiatry study (page 299) found that – even when such services are available – only 7 percent of lifetime pathological gamblers sought or received treatment.

· In a literature review, Petry et al found that “only 8 percent of [Gamblers Anonymous] attendees achieve a year of abstinence.”

· An analysis of a U.S. National Epidemiological Survey found that only 9.1 percent of gambling addicts used either GA or other treatment programs.

· The Australian Government found that 8-15 percent of Australian problem gamblers seek treatment. “Internationally, around 6-15 per cent of people experiencing problems with gambling are reported to seek help from problem gambling services.” (page 5.3) “People experiencing problems with their gambling often do not seek professional help until a ‘crisis’ occurs - financial ruin, relationship break down, court charges or attempted suicide - or when they hit ‘rock bottom.’” (page 5.4).



8. Slot casino taxes are taxes and a massive tax hike on consumer spending

· Millennium Gaming has blanketed our state with ads making the Orwellian claim that slot casinos are an alternative to taxes. At the proposed 39 percent rate on gross profits, the casino tax would be the highest rate on any activity in our state. Moreover, casino taxes would be imposed on consumer spending cannibalized from lower-taxed economic activity such as dining, retail, and entertainment ... in essence a massive, thinly concealed tax hike on the New Hampshire consumer and business economies.

· For this and other reasons, every New Hampshire anti-tax group opposes slots casino legalization.


9. Slot casino taxes are highly regressive
· Problem and pathological gambling prevalence is ten times higher in low as in high income communities (Welte, page 418).

· Gambling addiction is twice as high and effective casino tax rates are at least 2-4 times higher among lower income groups (sources).

10. Slot machines are predatory on the unfortunate; casino tax revenues are not voluntary

· Video slot machines are the source of 70-80 percent of the gross profits at most casinos.

· The Ontario Problem Gambling Research Centre (Table 17) found that about 60 percent of casino revenue and therefore tax revenue comes from problem and pathological gamblers for whom gambling is not voluntary.



11. Slots are electronic loaded dice: a deceptive consumer product specifically designed to hasten problem gambling and addiction onset

· See leading machine design researcher Dr. Kevin Harrigan’s presentation to the Governor’s gaming study commission on the deceptive design and purposefully addictive features of slots machines.

· Using “virtual reel mapping,” “unbalanced reels,” near misses, rapid play speed, play in isolation, hypnotic sound, and ergonomics, slot machines are purposefully designed to trick gamblers into consciously and subconsciously thinking that their odds of winning are several times greater than reality and to keep gamblers playing (in the words of the gambling industry) until “extinction,” i.e., when they have lost all their money.

· Here is a video and written testimony of MIT's Dr. Natasha Schull before the Massachusetts legislature on the purposefully addictive features of video machine design.

· Here is a 2009 study published in the journal, Neuron, showing the brain science explaining how near-misses promote addiction. Our brains perceive a near miss as equally rewarding as a win.
· This feature story by Jonah Lehrer, author of Proust Was a Neuroscientist, explains the science behind why slot machines are so addictive.

· Dr. Robert Breen, director of the Rhode Island Gambling Treatment Program, explains the greater addictiveness of slot machines: “Frequently, patients reported that they developed [problem gambling] rapidly and severely after beginning involvement with machines. This was true despite that, in many cases, they had gambled regularly on other forms of gambling for many years without problems. However, the addictive qualities of video gambling transcend mere speed and continuity. The use of virtual reel mapping in the design of such devices creates an illusion of near misses and misrepresents the true odds of winning.”
· The New Hampshire Medical Society opposes slots casinos for these and other reasons.



12. Slot machines are several times more harmful than any other form of gambling

· Gambling addiction onset is over 3 times more rapid with slot machines compared with table games (Breen Table 1).

· The Australian Government Productivity Commission, in its 630-page draft analysis of gambling cost/benefit, found that slot machines are between 6 and 18 times more risky than lotteries (see page 4.31 of the report). Video slot machines, rather than other forms of gambling such as lottery or table games, “account for around 75-80 per cent of ‘problem gamblers’ and are found to pose significant problems for ordinary consumers.” (page xxiii)

· 69 percent of problem gamblers seeking treatment at the Rhode Island Gambling Treatment Program cite video slot machines as their primary problem. Lottery problems constitute 8 percent.

· 80 percent of gamblers seeking treatment at the West Virginia Problem Gamblers Help Program report video slot machines as their primary problem. Lottery problems constitute 7 percent.

· 66 percent of gamblers seeking treatment at the Ontario Problem Gambling Helpline name slots at their primary gambling problem, card games 25 percent, lottery 5 percent.

· 70 percent of Delaware problem gamblers seeking treatment identify slot machines as their primary gambling problem. (Breen and Zimmerman, page 5)



13. Slot machines sharply increase gambling problems and gambling addiction in surrounding communities; resort casinos are not protection

· The Connecticut Council on Problem Gambling (summary data, full report) found that residents living within 15 to 20 miles of the Foxwoods and Mohegan Sun resort casinos have a 5 times greater risk of suffering gambling addiction or gambling problems compared with persons living more than 60 miles distant.

· The National Gambling Impact Study Commission (page 28) found that casinos double gambling addiction within a 50 mile radius.

· Welte, et al (data, page 419) found that problem and pathological gambling frequency more than doubled to over 7 percent of the population within 10 miles of a casino.

· The Australian Government Productivity Commission, found that, “[b]eyond the powerful example provided by the early liberalisation experiences of Australia, there is a broad range of evidence suggesting a link between accessibility [proximity] and harm.” (page 10.3 of the draft report)

14. Serious crimes would increase by about 10 percent within 5 years
· New Hampshire is ranked the safest state in the nation, Nevada the least. Public safety is among the most desired goods provided by state and local government.

· Dr. Grinols peer-reviewed casino-crime study is, by far, the most rigorous and widely-cited on the topic. This study shows the link between casinos and increases in aggravated assault, rape, robbery, larceny, burglary and auto theft in counties hosting casinos.

· Extrapolating from the Grinols study, if the Senate's six casino gambling saturation plan were to pass, within five years’ of opening, New Hampshire would suffer an additional annual 5,800 robberies and thefts, 480 aggravated assaults, and 50 rapes.

· Florida Council on Compulsive Gambling helpline data show that, among problem gamblers seeking help, 64 percent are subject of civil actions for failure to pay debts, 62 percent admit to committing fraud, writing bad checks, or forgery, 21 percent to embezzling money from their employers, 21 percent to larceny against friends, family, or strangers.

· For these reasons, the New Hampshire Association of Chiefs of Police and every New Hampshire Attorney General for the past thirty-four years strongly oppose legalized slot casinos.



15. Slot casinos would impose grievous and irreparable harm on New Hampshire residents

· The Senate's current (SB489) six casino gambling saturation plan would roughly double baseline problem and pathologic gambling among New Hampshire residents, and would …

· Create 10,000 additional pathological gamblers living in nearby communities …

· Each of whom will impact the lives of 5-10 (Australian Government report, page xxii) additional family members, workplace associates, friends, and crime victims. The Ontario Problem Gambling Research Centre found that 1-in-8 Ontario adults are negatively affected from someone else’s gambling problems, usually taking form as being manipulated into lending money or not having money repaid.

· Increased addiction-related social and economic costs include divorce, domestic violence, child abuse, child death by abuse, rape, assault, suicide, drug abuse, psychiatric and personality disorders, physical illness, bankruptcy, work absenteeism, lost workplace productivity, embezzlement, insurance fraud, arson, and increased police, civil justice, social services costs.

· The National Gambling Impact Study Commission found that prevalence of these problems among pathological (addicted) gamblers compared to non-gamblers increases by up to several times: past year unemployment benefits by 3.3x, past-year welfare by 2.4x, bankruptcy filing by 4.6x, arrests by 7.2x, divorce by 2.9x, long-term illness by 2.0x, depression by 4.2x.

· These are among the reasons that almost every New Hampshire faith organization opposes slot casinos.

16. Slot casinos increase suicide and attempted suicide

· The Nova Scotia Gaming Foundation (page 27) found in its literature review that attempted suicide ranges from 17-24 percent of pathological gamblers; that pathological gamblers have a suicide rate 5-10 times higher than the general population; and that their spouses have suicide attempt rates three times higher than the general population. Joe Harding, director of New Hampshire's bureau of drug and alcohol services, estimates that New Hampshire would have nearly 1,000 "actively suicidal" residents as a result of gambling addiction (testimony of Gaming Study Commission, 3/16/2010).


17. Predatory slot casinos would harm New Hampshire children

· There is no means to confine the impact of legalized slot casino gambling to adults.

· Rutgers University found that teens are twice as likely to be heavy gamblers if their parents gamble (Table 2.14). Teens are one-third more likely become level 3 (pathological) gamblers if their parents gamble (Table 3.5).

· The University of Delaware found that almost one-third of 8th and 11th graders in that casino state had gambled in the past year. Those Delaware teens gambling over the past month were two to three times more likely than non-gambling peers to smoke, binge drink, steal, or use illegal drugs. Student test scores drop. High school drop out rates increase. Slots are, literally, anti-education.

· The Australian Government found that 60 percent of Australian teens gamble on video slot machines by the time they complete their 18th year. Over 60 percent of Aussie teens have gambled in some form before they reached 18 years. (page 6.23)

· Gambling addiction and, thereby, nearby casinos are linked to substantial increases in divorce (NORC page 49), family violence, child physical abuse, childhood attempted suicide, and childhood depression.

· At least 10 percent of the children of gambling addicts suffer physical abuse at the hands of the addict (NRC page 159).

· These are among the reasons that the Children's Alliance of New Hampshire and the National Education Association of New Hampshire oppose casinos.



18. Slot casinos degrade social capital and quality of life in host and surrounding communities

· This peer-reviewed study found that casinos degrade “social capital” in communities within 15 miles radius. Social capital is a quality of life index measuring prevailing levels of trust, civic orientation, volunteerism, group participation, charitable giving and service, and meeting the needs of family and friends within a community.



19. Casino economic costs exceed tax revenues

· Economic costs of casinos include reduced workplace productivity and increased rates of white collar and violent crime, bankruptcy, embezzlement, suicide, illness, and state and local civil justice, law enforcement, highway, school, and social welfare costs.

· Dr. Grinols estimated in his presentation to the Governor's gaming study commission that the casino cost/benefit ratio (slides 26-27) is about 3:1 and that the approximate cost of casino introduction per adult resident is $200 per capita per year above benefits.

· The Australian Government finds that gambling in all forms costs Australian society $4.5 billion dollars per year, with over 75 percent of these costs deriving from video slot machines. These costs exceed benefits when abused dollars (or "excess" losses) by problem gamblers are included (page 3.22). Cost per year for slots allocated across all adults in the Aussie population is US$225.

· A substantial hidden cost of the typical casino results from the fact that 30-50 percent of gambling industry workers receive near-minimum wages, (the 2008 median wage including tips for all industry workers is $10.92 per hour), necessitating increased budgets for subsidized housing, public transportation, social services, and increased school budgets for services such as ESL, special education, subsidized meals.

20. North Country business leaders do not want casinos

· “We're not in that business … I don't see any opportunity for it.” David Ritchie, director of sales and marketing, Omni Mount Washington Resort, NH Business Review, 9/9/2009

· “During our three years of studying across the four states in our Sustainable Economy Initiative plan there was never a mention of gaming … It's being pushed from another area. It's not really high on the list up here.” Jim Tibbetts, president and chief executive, First Colebrook Bank, NHBR, 9/9/2009

· “Gambling is a solution to a short-term problem … [we should not] underestimate the long-term consequences … We’re a family-oriented resort and residential community. [Gambling] is not compatible.” Pat Corso, former GM, Mount Washington Resort, NHBR, 1/30/2009

· “[Gambling] is not even a consideration.” Chris Diego, general manager of the Mountain View Grand, asked if casinos fit into his resort’s plans, NHBR, 1/30/2009

· “It (gambling) is not even on the radar screen.” Peter Riviere, Executive Director, Coos Economic Development Corp., NHBR, 1/30/2009

· “A false panacea.” Peter Powell, Co-chair, Coos County Economic Development Council, NHBR, 1/30/2009

· According to Hudson casino consultant Clyde Barrow's March, 2010 New England Casino Gaming update, 96 percent of the gamblers at the Bangor, Maine casino are Maine residents. A total of two percent of gamblers drive in from either Massachusetts or New Hampshire. The North Country casinos proposed in SB489 will attract very few out of state tourists, but will instead suck money from existing North Country businesses. A North Country casino would be an unmitigated economic black hole for the North Country.

21. Labor should not trust gambling industry promises

· Quoting from AFL-CIO’s 3/16/09 and 7/7/08 blogs: “Two years ago, 80 percent of casino dealers at Caesars Atlantic City voted in favor of UAW representation. Full- and part-time dealers and slot techs at Tropicana Casino and Resort, Trump Plaza and Bally’s also have voted to form their own unions, but casino operators have either refused to bargain or stalled the negotiating process. The same situation exists in Las Vegas, where casino dealers at Wynn and Caesars Palace voted for TWU by an overwhelming margin within the past two years after management tried to grab their tip money and cut their pensions and other benefits, but casino executives there also have failed to meet their responsibilities to bargain fairly with workers… [Connecticut casino] workers also have filed 35 unfair labor practice charges with the NLRB against the casino.”



22. Casinos of any type would open the tribal casino loophole
· Legalization of slots or casinos under ANY model (state-owned or licensed, racino, resort, neighborhood) triggers federal law requiring that the state permit any recognized tribe to conduct the same types of gambling on tribal and tribal trust lands. See Marty Honigberg, Esq’s memo on the subject.

· While there are now no recognized tribes in New Hampshire, legalization in other states usually generates gambling industry solicitation, sponsorship, and funding for tribes that could be recognized.

· Tribal casinos are not subject to state or local environmental and land use regulation.

· A study of the Connecticut tribal casino experience is warranted.


23. New Hampshire gambling opinion polls do not reflect informed public opinion

· Since 1995, slot machine gambling and casinos have been widely available throughout Australia. Australians are now informed by 10 years’ experience about both the harms and benefits of slots and casino gambling. The Australian Government reviewed all opinion polling, finding that about 80 percent of the public wants to see video slot machines removed or their numbers reduced (page 10.9).

· In response to its experience with widely accessible video slot machines, Switzerland banned slot machines outside of casinos in 2005. Norway banned all slots nationwide in 2007. Russia banished all gambling to four highly remote locations in 2009.

· In continuous 2003-2004 polling in Maine relative to a casino legalization – where millions were spent by BOTH pro- and anti-gambling organizations – public opinion turned from pro- to anti-casino. (Chart)

· The UNH opinion poll contracted by the NH Gaming Study Commission was conducted while Millennium Gaming was running a blanket TV, radio, web, and print ad campaign. There was zero simultaneous advertising and little editorial coverage about gambling costs and harms. WMUR-TV9 has provided significantly favorable news coverage of casino legalization during all of 2009.

· A March, 2010 UMass Dartmouth poll, administered by Hudson casino consultant Clyde Barrow, shows the extent to which the public has been misinformed about the negatives of predatory gambling: 37 percent believe that slot casinos will NOT increase gambling addiction; 45 percent believe that slot casinos will NOT increase political corruption; 53 percent believe that slot casinos will NOT increase crime; 65 percent believe that slot casinos will NOT hurt small, local businesses.