1 “…to raise new ideas and improve policy debates through quality information and analysis on...
TRANSCRIPT
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“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”
Board of DirectorsDonna Sytek, Chair
John B. Andrews
John D. Crosier, Sr.
William H. Dunlap
Sheila T. Francoeur
Chuck Morse
Todd I. Selig
Stuart V. Smith, Jr.
Brian F. Walsh
Kimon S. Zachos
Martin L. Gross, Chair Emeritus
StaffSteve Norton, Executive Director
Ryan Tappin
Cathy Arredondo
Gaming Commission Update12-1-09
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Prudent Calculations: Cost-Benefit
• Positive + Revenue to State: License
Fees+ Revenue to State: Tax on
Gambling+ Revenue to State: BPT
and BET+ Revenue to State:
Increase in Meals and Rooms
+ Revenue to Local: Property Tax
+ Economic Development Local: Construction Job
+ Economic Development: New Jobs
• Negatives – Revenue to State: Decrease
in Meals and Rooms (cannibalization)
– Revenue to State: Gambling/ Lottery Substitution
– State Expenditures: New Regulatory structures
– State Expenditures: Competition for funds
– Economic Development: Branding
– Economic Development: Cannibalization
– Gov Expenditures: Policing– Social Costs: New Crime– Social Costs: Pathological/
Problem Gaming
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Gaming as a Field of Study
• Focus on gaming has intensified during the 90s a ‘young’ literature.
• Attempt to find peer reviewed work in journals with no specific ties to pro- or anti-gaming interests.
• In the end, will have to rely on triangulation method, using multiple sources, not always peer reviewed.
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The Extent of Gaming in New Hampshire
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Propensity to Gamble
National Data• Gallup (2007) – 66% of
the population ‘gambled’ in some fashion in the last 12 months. – Lottery Ticket: 46%– Visited Casino: 24%
• ESRI Data– Gambled at a Casino: 17%
• Propensity to gamble seems to have declined over the past 4 years.
New Hampshire• New Hampshire
(Barrow)– Any in last 12 months:
56%– Lottery Ticket: 42%– Casino: 21%
• ESRI Data– Gambled at a Casino
in last 12 months: 17.3%
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Who’s Gambling?
• Slots– Female (61% of all)– 50 to 59 (21% of all);
21 to 29 (20% of all); 40 to 49 (16% of all)
– Some high-school education (35%)
– $75,000 to $150,000 (29%); $45,000 to $75,000 (28%).
• Table Games– Males (85%)– 21 to 29 (28%);
30 to 39 (24%)– Bachelors + (43%)– $75,000 to $150,000
(39%); $45,000 to $75,000 (20%)
Clyde Barrow: “Playing the Odds II”
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Average Visits to ‘Local’ Casinos
• Massachusetts– 1,133,564 visitors to Foxwoods (3.3 visits per
year)– 850,173 visitors to Mohegan Sun (2.7 visits
per year)
• New Hampshire– 95,667 people to Foxwoods (1.7 visits per
year) – 105,233 people to Mohegan Sun (2.0 visits
per year)
Barrow: Playing the Odds II
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NH Residents gambling outside of NH
• In 2007, estimates suggested that New Hampshire residents spent $79.3 million at New England’s Gambling facilities, indirectly paying $11.3 million in Gambling and sales taxes to CT, RI and ME (source: UMASS/Dartmouth 9/16/2008)– $46 million at Foxwoods– $30 million at Mohegan Sun– $2.5 million at Twin River (RI)– $0.2 million at Newport Grand (RI)– $0.8 million at Hollywood (ME)
• Does not include Gambling outside of New England (Atlantic City, Las Vegas)
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Legal Wagering by New Hampshire Residents
$261
$225
$128
$80
NH Lottery NH Racing NH Charitable NE Casinos
Millions o
f 2008 D
ollars
NE Casinos data based on analysis by Barrow (University of Massachusetts Dartmouth)Remainder from Lottery, Pari-Mutuel Commissions
Estimate
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Estimate of Existing Problem Gaming
• Pathological, Problem, At-Risk primary vehicle through which social ills occur.
• NORC (2000)– National estimate– Pathological: 1.2%– Problem:1.5%– At-Risk 7.7%
• Schaeffer and Hall (2001)– National estimate– Pathological: 1.7%– Problem: 3.7%
• Barrow (New England, 2007)– Pathological: 0.6%– Problem: 1.0%– At-Risk: 6.1%
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Current Gambling Revenues
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Revenues to State
• NH Lottery• $75 million ($261 wagered -$186 in prizes and expenses)
was distributed to education trust fund in FY2008.• NH Lottery Revenue declined by 1.1% from 2007 to 2008.
• Charitable Gaming/Racing after expenses collected.• State: Simulcast wagering - $2.1m; Live Racing - $0.2m;
Bingo - $1.3m; Games of Chance – $0.6m • New Hampshire charities received over $11.6 million
dollars (including Bingo and Lucky 7) to further their causes in 2008 from all charitable gaming.
• Gambling Tax (2009) - The Gambling Winnings tax is estimated to yield $5.9 million in FY2010, $7.9 million in FY2011 (from HB1)
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Charitable: Games of Chance
LIC. NUMBER GAME OPERATORTOTAL
WAGERINGRETURNED TO
PLAYERSSTATE
REVENUE CHARITIES
OPERATOR FEES AND
OTHER EXPENSES
E0005 GRANITE STATE POKER $20,270,970 $15,132,389 $332,420 $1,805,541 $3,010,680E0002 SEACOAST FUNDRAISING $14,147,047 $10,167,166 $245,438 $1,395,451 $2,341,191E0009 UNIVERSAL GAMING $6,652,903 $4,285,863 $114,857 $857,011 $1,421,214E0010 NEW HAMPSHIRE CHARITABLE GAMING, LLC $1,572,481 $1,018,337 $37,659 $197,860 $328,175E0003 CASINO GAME RENTALS $1,467,492 $1,068,263 $23,596 $139,853 $235,280E0001 BELMONT GAMING $1,210,653 $750,367 $29,733 $161,388 $269,165E0006 LOCAL YOKEL $124,149 $72,285 $2,383 $34,022 $15,509E0018 NEW ENGLAND GAMING & CONSULTING, LLC $113,214 $74,188 $4,315 $13,679 $21,033E0011 VAL'S VEGAS VISIONS $74,445 $57,925 $974 $10,960 $4,586E0016 NH POKER, LLC $1,856 $881 $104 $341 $531
OTHERS $153,164 $88,717 $2,035 $21,289 $6,206 Total $45,788,374 $32,716,381 $793,514 $4,637,395 $7,653,570
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Gaming Revenues
NH State Revenue from Gambling
0
10
20
30
40
50
60
70
80
90
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
Mill
ion
s o
f $
LotteryRacing
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Gaming Revenue as a % of State Unrestricted Revenue
New Hampshire Lottery and Racing Revenue as Percent of Total Revenue
10.6%
9.7%
8.6%
7.1%
7.9%
6.9%
7.6%7.6%
5.5%
6.1%6.4%
7.0%7.0%
5.9%5.9%
4.5%
5.3%
6.6%6.6%6.2%
6.6%
3.7%3.5%3.6%3.4%3.6%
3.4%
3.9%3.7%
3.4%3.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
Education Trust Fund Created
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Stability of Revenues in New Hampshire
Year Over Year Change in Revenue Sources (By Month)
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Jul-0
6
Sep-0
6
Nov-0
6
Jan-
07
Mar
-07
May
-07
Jul-0
7
Sep-0
7
Nov-0
7
Jan-
08
Mar
-08
May
-08
Jul-0
8
Sep-0
8
Nov-0
8
Jan-
09
Mar
-09
May
-09
Jul-0
9
Sep-0
9
Month
% C
ha
ng
e R
ela
tive
to P
rio
r Y
ea
r's M
on
th
General FundsBusiness TaxesMeals and RoomsSweepstakes
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The Northern New England Market
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Future Revenues
• Industry methods for generating revenue estimates are sophisticated.
• Recent declines reflect market saturation or economic decline? • New vs. Old gambling: NH’s ability to cannibalize existing
gambling in Mass, etc…• What’s the market?
– Varies depending on the type of facility• How nice is the facility Capital investment • Casino vs. Racino Casino’s have a broader draw
– A function of action of other players (Massachusetts)– Implications of possible change in federal law regarding
internet• Impact of ‘Less Aggressive Machines’ • Impact on Meals and Rooms (cannibalization)
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Gaming Facilities in the Northeast
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• Total population in circle is 2.6 million.
• Total NH population in circle is 678,000. (about half state’s total population).
• ~26% of total population in circle is NH residents.
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Drive Times From Salem, NH
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Drive Times for Berlin, NH
Lincoln, RI
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Drive Times for Seabrook, NH
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Overlapping Markets of Existing Proposals (30 Mile)
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Further Work
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Social Costs
• Crime– Grinols and Mustards is the gold-standard though not without
methodological issues as noted by Walker. – Triangulate?
• Grinols and Mustards (8% increase)• Edmonton study (4% increase)
• Social Costs – What is a social cost and who bears the burden of that social
cost (family, economy, community, government)– Pathological gaming increase occurs– Geographically isolated
• Who bears the burden? – Massachusetts and New Hampshire (and VT and Maine)
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Economic Development
• How big? – Hosp? – Manufacturing?– Gaming ?
• Short term– Simulations a function of initial capital investment
• $130 m fewer jobs• $250 m more jobs
• Long term– More jobs– 75% not high paying
• Cannibalization of other (retail) activities– Direct competition (e.g. new restaurant)– Indirect competition (e.g. competing for each discretionary dollar)
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NH’s Brand
• More information needed.
• What effect would a 5% increase in crime have on the quality of life in NH? – Move us from #1 to #2? Or from #1 to #10?
• Is it possible to have Casinos without losing NH’s brand?
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Regulatory Environment
• Local Referendums: (only town or surrounding towns)? • Existing Regulation
– What rules are there about restriction on political contributions? – Lottery Commission– Pari-Mutuel Gaming Commission
• New Structures– State owned– Is the existing regulatory structure sufficient
• Regulation of slot machines– ‘Less Aggressive’ machines
• Controlling Proliferation
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Critical Variables
• Economic activity, discretionary spending and consumer confidence.
• Decisions made by Massachusetts and Maine
• Phasing
• Do we really have sufficient information to estimate cost/benefit?