Casino Could Bring N.H. More Costs Than Revenue, New Report Finds

Emily Corwin / NHPR

Charity gaming at Rockingham Park in Salem -- the most likely location for a high end Casino.

A new report finds that a casino may create more social costs than tax revenue, mostly because of the 30 percent tax rate included in the Senate bill supported by Governor Hassan.

“The tax rate set at 30% puts us in a situation where the social costs outweigh or come close to outweighing the revenue benefits to the state,” says Steve Norton, the director of the Center for Public Policy Studies, which produced the report.

The so-called “social costs” include unemployment benefits; welfare; arrests; corrections; divorce; health problems and bankruptcy resulting from an increase in problem and pathological gamblers.

Increasing the tax rate proposed in the bill would make a casino more profitable in the long term. However, Norton says, a casino developer would likely only agree to a higher tax rate if the initial license fee were reduced from the $80 million proposed in the Senate bill.

But New Hampshire’s bargaining power with casino developers may decrease as competing casinos open in Massachusetts, as would a casino’s profitability.  While Massachusetts passed legislation authorizing three resort-style casinos and one slot machine parlor in 2011, that state doesn’t expect to license any casinos until at least 2014.

In a statement, Governor Hassan says the study fails to recognize that when Massachusetts opens its own casinos, New Hampshire will bear those social costs anyway – due to problem gamblers who live in New Hampshire but gamble in Massachusetts. She adds that “the study also fails to recognize other benefits of a high-end casino in the form of local and state tax revenues and economic development opportunities.”

Senator Chuck Morse (R-Salem), who co-sponsored the Senate bill with Senator Lou D’Allesandro (D-Manchester), disputes the Center’s findings further, despite having served on its board. “As they have done in past studies on this issue, I believe the Center has significantly overestimated the social costs of gaming while underestimating the revenue benefits to the State of New Hampshire,” he says in a separate statement. Like Governor Hassan, Morse urges the state to move quickly with Casino legislation, suggesting New Hampshire could “reap revenue benefits” by getting a casino built before Massachusetts.

This post has been updated to reflect developments throughout the day.