By GARRY RAYNO, InDepthNH.org
CONCORD — After a fitful beginning, the Commission to Study the Effect of Recent Changes Made to Charitable Gaming Laws chose a new chair and outlined areas of concern in the ever-growing industry.
Former state Rep. Pat Abrami, R-Stratham, was chosen as the new chair of the commission over state Sen. Timothy Lang, R-Sanbornton, on a 7-5 vote.
The commission originally chose Rep. Laurie Sanborn, R-Bedford, as chair, but she resigned after her husband, former state Sen. Andy Sanborn, R-Bedford, was accused of fraud for misusing federal COVID-19 recovery funds leading to state and federal investigations.
He holds the operating license for the Concord Casino in the Draft Restaurant building he owns with his wife and has city approval for a larger facility on Loudon Road, but that is being litigated by neighbors.
At Tuesday’s organizational meeting, state Lottery Commission officials outlined the types of gambling the agency oversees, as well as how the charity gaming facilities operate in the state, including bingo halls, Lucky 7 tickets, gaming rooms that include table games and some with video games using historic horse racing events as draws.
After becoming chair, Abrami said the committee needs to discuss proposals to guide the legislature going forward.
“What should charitable gaming look like,” he said, noting, “It started as Mom and Pop (operations) and now the big gaming companies are coming in.”
State Sen. Lou D’Allesandro, D-Manchester, who has long been an unsuccessful advocate for large casino gambling in the state, said the commission needs to understand if everyone is playing under the same rules and are they being applied uniformly across the board.
“Is the security in place for this to work today?” he asked. “Charitable gambling is a huge entity in our state with at least 12 facilities and how many more under preparation.”
Lottery officials said there are currently 14 facilities in the state and three others under consideration, while others noted there is currently a moratorium on any additional facilities and on applying for historic horse racing licenses.
The state’s legal charities can sponsor gambling up to 10 days a year with some earning as much as $100,000, officials said.
The charities receive 35 percent of the gross, while operators retain 65 percent which includes the state’s 10 percent assessment.
However, facilities charge charities rent — supposedly a negotiated flat fee — for use of the gaming halls, which effectively lowers the percentage of gross revenues charities receive.
John Conforti, Lottery Commission chief compliance officer, said the fee should not change, but would be lowered if the take on a given night is below what the charity earned.
Several members of the commission asked questions about the rent and how that impacts what charities earn from the total amount of money bet.
Conforti said on average a charity pays about 10 percent, but he noted it has to be a fixed rate.
Abrami said a local charity approached him and said it received its first check from the operator and later a bill for rent, but had never talked to the operator about rent.
“This is something we really need to address,” Abrami said. “We need to get to the heart of this with an example of … how the money flows.”
He asked Lottery officials for a list of all the charities that participate, with individual facilities, and the rents they are charged.
He also wanted an example of how the money is handled in a gaming room between expenses and what charities receive.
Abrami also wondered if lawmakers should limit the number of locations for the gaming halls.
When the legislature was working on casino bills in the old days, he noted, they proposed one or two, maybe three facilities and now there are 14.
“We want to get more charities involved so they get more,” he said, “but consolidation is going to limit the number of charities (that can participate).”
With bigger facilities, what does that look like, Abrami said. With larger facilities, all the regulations and rules are based on smaller facilities, but the world has changed, Abrami noted.
He wondered if the work done by committee member Rep. Dick Ames, D-Jaffrey, in 2015 to develop a regulatory structure for casinos may be helpful.
Ames said his commission developed a lot of material that may be able to help, but noted it hired a consultant and they were addressing a very large casino, not the smaller facilities the state has now.
Abrami said there are certain principles in that work that could match up what the commission could consider for new regulations.
D’Allesandro said Ames’ work dealt with large facilities which appears to be the direction the industry is moving.
“If you look at television,” he said, the ads are for “a large casino in Manchester that offers everything.”
But Lang said what they are seeing now is a consolidation of ownership not necessarily of facilities, although Lottery Commission Executive Director Charles McIntyre noted there is a consolidation proposal in Nashua to merge two facilities into one large one at the Pheasant Lane Mall.
The commission members were also told the video historic horse racing games have been much more profitable than anticipated.
Conforti said in August there were 1,618 machines in use, and the next count they expect the number to be 1,800 which is still well below the 3,500 machines in the Twin Rivers Casino in Rhode Island.
Ames questioned why the rules say the commission could be up to 12 percent for the operator for historic racing and wanted to know what factors determine that number.
McIntyre said that is essentially the operator’s decision, noting if they have little competition they could collect 12 percent commission, but if they have competition, they could lower their take.
He noted the figure is very competitive with Rhode Island.
The commission was told nationwide the percentage falls into the 8 to 12 percent range.
Conforti said the percentage is taken off the top, and the remainder of the bets go into a pari-mutual fund like at a race track.
Ames noted people playing the historic horse racing machines are losing from 8 to 12 percent.
McIntrye said he would bring a comparison of charitable gaming in the New England states for the commission to review at its next meeting.
The commission will meet again Nov. 6 at 10 a.m. in Room 100 in the State House.
Garry Rayno may be reached at garry.rayno@yahoo.com.