By PAULA TRACY, InDepthNH.org
CONCORD – It’s a good bet there will be changes and possibly new revenues coming from and to charity casinos after a gangbuster report of the opening of The Nash casino this past week by the state lottery commissioner.
He spoke to a legislative committee on a bill related to the phasing out of historic horse racing and the advent of video lottery terminals on Monday.
Gov. Kelly Ayotte is also looking at this growing revenue source as a number of casino bills fly around Concord to help charitable organizations, the Education Trust Fund and the Group II retirement fund among others in a new, two-year budget.
It comes as revenue estimates for the state overall are trending downward.
There is demand and capacity to grow video lottery terminals but limits as well said Charlie McIntyre, executive director of the New Hampshire Lottery.
He testified on HB 728 which would phase out historic horse racing machines and replace their software with that of video gaming terminals in the next three years.
While opening nights have their predicted fanfare, McIntyre said he was really impressed by what he saw in Nashua last week.
He said he was there when Nash opened the doors for a “so-called soft opening” at the Pheasant Lane Mall in Nashua and that it was “packed” in an hour and people were waiting in line to use the machines.
He said based on that and other market conditions he sees, his revenue estimates for the bill were “wildly low” in January and new projected revenue numbers will be made available this week.
He told the House Ways and Means Committee about a third party report for a commission to look at gaming by the company Spectrum Gaming. It showed the market capacity for New Hampshire is 6,000 machines and with 3,600 operating as of this coming week, there would still be capacity to grow.
The state has capped the number of casino licenses at 18 for the next seven years but the law did not specify a number of machines as that is dictated by individual business demands, the Spectrum report reads.
He said while the previous revenue estimates were pegged for each machine at $150 a day “Based on our existing revenues that is wildly low. Wildly low. If you take out the two Hampton facilities and Belmont (from statewide revenue statistics) the average per room is $287 per machine and growing rapidly. That is the reason, for example, why The Brook is expanding,” he said, referring to the Seabrook casino.
“The rule of thumb in gaming is if you are over $250 a machine you add, if you are below $250 a machine you subtract,” McIntyre said. He said the state should expect to see facilities adding machines “sooner rather than later.”
The report showed the current addressable market for the state is $1.1 billion and while still “nascent” as a new casino state, they expect it to grow significantly, particularly in the south where the regional population is large.
A copy of the report is here https://spectrumgaming.com/reports/
McIntyre did not care to wager when and how the state would reach saturation for such machines though he said new openings like The Nash impact existing casinos, but “there is only so much money to go around with discretionary income,” he said, but he predicted competition among casinos and those in Massachusetts could lead to more build-out.
He took no position on the bill that would authorize video lottery terminals at charity gaming facilities and repeal historic horse racing by 2028.
State Rep. Fred Doucette, R-Salem sponsored House Bill 728-FN but was not there to testify or answer questions of the committee.
Members said he “took a new job,” but did not state if that meant he was stepping down from his elected post.
(Later in the day, House leadership confirmed that Doucette resigned Monday as House Speaker Pro Tem. He had been an early supporter of Donald Trump for President in 2016 and 2020 but in 2024 was state co-chair for the campaign of Vivek Ramaswamy. He was named to become Region 1 Administrator for FEMA.)
There was no opposition at the public hearing.
Alicia Preston of the New Hampshire Charitable Gaming Operators Association, spoke in favor of the bill noting it was the outcome of a study commission’s recommendations from a third-party consultant (Spectrum) which found that the state should make changes.
“We think this is kind of a natural progression in the industry. We also support the 30 percent tax rate while that is five percent higher than historic horse rating, as noted there is more of a cost to run the HHR machines than video lottery terminals,” she said.
Gov. Kelly Ayotte is also looking at the changes and under her plan, unveiled February 24, the governor’s proposed budget included a plan to allocate revenue from proposed Video Lottery Terminals to support New Hampshire nonprofits and other key state initiatives.
“Under the current proposal, 35 percent of gross VLT revenue will be distributed to charitable organizations, ensuring ongoing support for nonprofits. Additionally, each VLT licensee will be required to partner with two licensed charitable organizations for every game date,” the governor wrote.
Beyond charitable funding, the proposal directs additional VLT revenue to the Education Trust Fund, Group II pension reform, and the state’s general fund, the governor said.
There are only a few states that have continued with historic horse racing machines and there is no manufacturing competition compared to video gaming making it more expensive, advocates for the bill said.
Because the play involves videos from horse racing, horses are not named; players are more often choosing a random option of win place or show compared to the old days when people would do the research, the committee was told. It is more like a slot machine than based on knowledge of the horses to play.
The machines themselves will stay if passed but the technology inside them to go to VLT would cost about $3,000 a machine, McIntyre said.
The bill looks to complete the changeover from HHR to VLT by January, 2028
McIntyre said the fiscal note on the bill was delayed but noted it would have been outdated when the deadline for the bill was due.
“I’d like to revise our revenue estimates dramatically upward, given the opening this past weekend,” he said.
It is not just The Nash, which will level out a bit in revenue over time but is in a unique and excellent population location but “…what’s to come. The facilities that will be opening soon,” in other southern locations which he said are expanding.
He said facilities in the Lakes Region and the Seacoast which are summer seasonal are not doing as well as the border areas at this time of year and he said the department does its revenue projection based on all the state.
He said there is another gaming facility opening Monday night in Rochester.
Under the proposed bill the tax would break down this way under RSA 287-J:5
I. Each person, association, or corporation licensed to conduct wagering on video lottery terminals shall collect a sum equal to 30 percent of video lottery terminal revenues. Each licensee that conducts wagering on video lottery terminals shall distribute the amount collected under this paragraph as follows:
(a) 35 percent of the amount collected to charitable organizations with whom the licensee contracts on each licensed game date;
(b) 1/4 of one percent of the amount collected to the lottery commission for payment for problem gaming services;
(c) 4 3/4 percent of the amount collected to the group II retirement system under RSA 100-A; and
(d) The remainder of the amount collected to the lottery commission for use according to the special fund established under RSA 284:21-j.
There were questions about problem gaming and what the state is doing and not doing and McIntyre said it is hard for him to be both lottery director and head of that and that he is looking for someone to take on that role.
State Rep. Susan Lamy, D-Lebanon, lamented that the committee did not hear from the sponsor of the bill and expressed concern these facilities prey upon those who are addicted.
“We are just depending on addicts,” she said, finding that “distasteful.”
Others also asked about the revenue and program for problem gamblers and McIntyre said this bill would increase the fund.
Currently there is $150,000 annually budgeted for problem gaming services from Lottery revenues as a budget item.
He said he would add that information to the fiscal note on what additional revenue would be, which the committee could consider along with the bill.
McIntrye noted more competition with the Bay State could occur.
“I would guess a lot of folks are tired of driving to Boston. I grew up in Quincy, outside of Boston and Everett is not easy to get to and Foxwoods even less so,” he said. “I would imagine you are driving a lot of traffic from the northern Middlesex, Essex counties. But my information is only four days old,” McIntyre said.
Rep. Tim Horrigan, D-Durham, said he is in favor of the bill. He said the historic racing machines don’t have a lot to do with horses.
After the meeting, Kathleen Reardon, chief executive officer for the NH Center For Nonprofits said charitable gaming has become an important source or revenue for nonprofits across New Hampshire “that provide a diverse array of essential services.”
The organization did not testify on the bill but is tracking it.