NH Gaming Study Projects Ups and Downs of Expanded Gambling
The paper, published in February 2013 by NH Center for Public Policy, examines how gaming would effect New Hampshire.
Expanded gaming is a hot topic everywhere in New Hampshire, including Nashua, where just this week, the question of whether the city should put forth an official position was raised by Alderman Dan Moriarty.
Mayor Donnalee Lozeau said she is not in favor of casino gambling in New Hampshire, and "in particular," not in Hudson, Nashua's next-door neighbor.
Below are excerpts from "Expanded Gambling in New Hampshire: An update on options New Hampshire Center for Public Policy Studies" published in Feb. 2013. The full report is uploaded here. It's an easy read.:
- It is difficult to accurately predict when the state would see any new revenue from a license fee or casino operations. Experience in other states suggests that it could take at least two years before any tax revenues from casino operations would be available to the state. While up-front license fees paid by developers might come sooner, that will depend on several factors: the speed with which local communities allow expanded gambling through a referendum, and the state’s ability to set up a regulatory structure, among other factors.
- While expanded gambling will yield revenue to the state, our model’s estimates of the social costs of problem gambling suggest no long-term net state benefit when the tax on casino operations is set at 30 percent or less. That calculation changes as the tax rate is increased. Our model indicates that at a tax rate of 40 percent, a casino with $300 million in investment would provide an annual net benefit of roughly $32 million, while a $500 million facility would provide roughly $51 million in net benefit for the state.
- While expanded gambling would result in job increases, the number of long-term jobs depends on the size of the investment. Our estimates range from 540 jobs (at a $100m facility) to 2,700 jobs (at a $500m facility). Further, some portion of these jobs will likely replace other jobs. The extent of this so-called “substitution” will be driven by how many visitors to the casino come from outside the market.
- Our model still does not account for a number of factors, including the potential positive or negative effects of expanded gambling on New Hampshire’s “brand” (as a tourist destination and place to do business), the potential private costs associated with pathological gambling (so-called “abused dollars”), nor the benefit to the community where the facility is located in the form of increased property tax revenue.
- Gambling revenues continue to decline locally and nationally, and our assumptions have been updated to reflect those trends. Our May 2010 report used 2009 as a base year, and therefore we have reduced our revenue estimates to account for this decline. Gaming revenue is reduced by 15 percent in our model, compared to our May 2010 report, based on declines seen in Connecticut slot machine revenue and New Hampshire lottery income from 2009 to 2012.
- Figure 9 (pictured with this story) shows the potential state revenue of such a larger facility in southern New Hampshire, the impact of expanding gambling in Massachusetts on revenues from that facility, additional social costs to New Hampshire, and the net state benefit after social costs are subtracted from potential revenue. Allowing for recent declines in gambling revenue in New Hampshire and at other facilities across the country, we estimate that such a large casino could potentially generate $138 million in annual revenues to the state of New Hampshire, assuming a 30 percent tax rate. An operating casino at Suffolk Downs would lower potential revenues to $68 million. Private and public New Hampshire social costs would total to about $68 million, leaving no net benefit to the state.
Figure 9
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