N.H.’s $54 Million Question: Will Lawmakers Pass A Casino Bill This Year?

Emily Corwin / NHPR

As the next legislative session approaches, expanded gambling is certain to be a hot topic. At least two bills are certain to surface that would allow for at least one casino in the state, both sponsored by Manchester lawmakers: one sponsored by Republican Representative Steve Vaillancourt, another by long-time expanded gambling proponent, Democratic Senator Lou D’Allesandro.

Vaillancourt’s bill will likely propose “state-run, state-controlled facilities,” which would be leased to private gambling entities through a competitive bidding process. That’s in contrast to D’Allesandro’s bill, which is likely to propose that the state sell licenses to private developers. D’Allesandro says he is working closely with Governor-Elect Maggie Hassan to shape a bill she will support. While Hassan campaigned on the creation of “one well-regulated high-end casino,” D’Allesandro says he is hoping to convince her to support multiple casino licenses. He advocates what he calls the “Delaware model,” with which the state licenses several private racetracks and casinos.

In recent years, the Senate has voted in favor of expanded gambling. Meanwhile, the 400-member House has consistently rejected it — with both Republican and Democratic majorities.  Opposition in the House will likely be the biggest challenge for casino advocates this session.

For her part, Maggie Hassan says it is still her understanding the New Hampshire would benefit most from a single high-end casino near the Massachusetts border. However, as she told WKXL earlier this month, “I think what’s most important now is to hear from people about how they think we should go about doing this, and then we’ll make our decisions accordingly.”  Hassan may choose to convey her commitment to passing a casino bill by including revenue from one or more casinos in her budget proposal.

Making the case

Proponents of gambling legislation have two weapons in their arsenal: the struggling economy, and competition from Massachusetts.

Massachusetts

Meanwhile, the rollout of Massachusetts’ casinos has been unusually slow.  Appointing the Massachusetts Gaming Commission took the state nearly five months. Hang-ups have included lawsuits over native tribes’ access to gaming licenses; a sex scandal surrounding an interim commissioner; hesitation from Massachusetts towns;  and what the Boston Globe has called gaming developers “apathy” toward Massachusetts.

All of this has given hope to New Hampshire casino advocates that swift action could allow the state to open a facility before Massachusetts does.

Millennium Gaming, which holds an option to buy the Rockingham Park racetrack in Salem, is “as committed now to the Rockingham Park project as they ever have been,” says Rich Killion, a spokesperson for Millennium Gaming. “Without question,” Killion says, “there’s a first entrance to the marketplace advantage to either state.”

Is there really a “first mover’s advantage?”

Economists agree that people choose an expensive, elaborate casino over a more modest one no matter which goes up first. But if there are two similar casinos to choose from, whichever goes up first would likely reap some benefits. First, there are the profits from those first years without competition. Then, according to Clyde Barrow — a political scientist who does research in expanded gambling at UMass-Dartmouth — people would get familiar with the facility, join player rewards systems, and spend a year or two at the first casino before trying out another facility.

But customer loyalty isn’t the only benefit to being first, Barrow says. First-comers who capture the market can reduce their competition’s access to capital, he says, and “financiers are going to be reluctant to build an equally sized facility.”

Could a casino really help New Hampshire’s economy?

The Center for Public Policy Studies has a report — updated about a year ago — in which they model some of the many possible scenerios under Massachusetts’ new casino law.

One model assumes New Hampshire builds one $500 million casino in Southern New Hampshire – and Massachusetts does the same at Suffolk Downs in East Boston. Taking into account about $65 million annually in social costs, the state would end up with a net benefit of about $54 million each year. To put that in perspective, that’s about one tenth the amount the state collects in business taxes each year — or four times the amount the state collects in beer taxes.

A casino would also likely create a net total of 2,000 long-term jobs in the state, and bring in a one-time licensing fee of another $50 million.