Casino backers urge colleagues to consider need for new state revenue

Supporters of casino gambling are asking skeptical colleagues in the House of Representatives to consider the revenue that would come from a proposed bill to approve two casinos after a grueling House budget process that struggled to find new sources of cash.

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"All of us would have had a different budget if there would have been more revenue," said Democratic Rep. Katherine Rogers, a member of the House Finance Committee who supports the casino proposal. "This might not be the method that every one of us would choose as our favorite, but it's here now and it's real."

The House Ways and Means Committee took testimony Tuesday on the bill that has already passed the Senate. The House has never passed casino gambling, but supporters said an endorsement from the committee would help its chances this time around.

The bill would license two casinos, one large and one small, for 10 years with initial licensing fees of $80 and $40 million, respectively. A fiscal note prepared by the state lottery commission and attached to the bill says the larger casino, with 3,500 slots and 160 table games, would open by summer 2018 and bring in about $135 million in state revenue in its first year of operation. It does not include revenue estimates specific to the second, smaller casino.

But critics say casino revenue is unreliable and some outside groups predict much lower net revenues when outside competition or social costs are taken into account. The New Hampshire Center for Public Policy Studies, for example, has said the existence of nearby casinos in Massachusetts would cut into New Hampshire's revenue, but the lottery commission's revenue estimate attached to the bill does not take into account a casino currently being built in a nearby Boston suburb.

Of the $135 million projected in the first year, about $25 million would be split among all of the state's cities and towns, while additional, smaller amounts would go to the host city or town, county and surrounding communities. Another small portion of money would fund gambling addiction treatment programs. The remaining revenues, estimated in the fiscal note at around $90 million, could be spent at the discretion of the Legislature after reimbursing law enforcement and the gaming commission for certain expenditures.

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The House just passed an $11.2 billion state budget that does not raise taxes, and members of both parties said they were unhappy with some of the funding choices they had to make. Money from gambling would allow the state to better fund certain areas and keep costs from shifting to cities and towns, supporters said.

Clyde Barrow, founder of the New England Gaming Research Project, told the committee Tuesday that casinos opening in new market areas are doing well and that the industry has grown overall in the Northeast.

But critics of the casino proposal say lawmakers would be foolish to count on gambling to save future state budgets. Besides the coming casinos in Massachusetts, they point to states like New Jersey, where multiple casinos have closed, as evidence the industry is not sustainable.

Republican Rep. Neal Kurk, chairman of the finance committee, said that's not a risk worth taking.

"If your objective is to create a revenue source that grows with the economy, this is not the one for us," he said.

Gambling critics also said casinos will bring negative social costs, diminish New Hampshire's reputation as a family-friendly state and detract from other tourism attractions.

Democratic Gov. Maggie Hassan is a strong supporter of legalizing one casino but has not said whether she would sign a bill legalizing two.