“New Hampshire is now, in large measure, the epicenter of the gambling world,” declared Lottery Commissioner Charles McIntyre last week, “It’s the first state folks think of now, which is remarkable given our size.”
For the first time the state legislature seeks to be serious about both sports betting and casino gaming.
The commissioner, quoted by Seacoast Online, made his remarks at a forum on sports betting at the University of New Hampshire School of Law in Concord. The forum was attended by lottery leaders from New Hampshire, Massachusetts and Rhode Island, attorneys, lawmakers and others in the industry.
The day before the forum the House passed HB 480, a bill legalizing sports book by a lopsided 269-82. If the Senate follows suit and Governor Chris Sununu signs the bill, the Granite State would join eight other states that have legalized betting on live professional sports and some college sports, except for those involving Dartmouth and the University of New Hampshire. Previously the Senate approved Keno 603.
Last week the Senate narrowly approved of a bill, 13-11, that would authorize two casinos in the state. That bill now heads to the House, where its chances are considered iffy.
Sununu expressed support for a sports betting bill during his budget address earlier this year. “This budget increases our education revenue streams by legalizing sports betting, which will bring in an additional $10 mm in annual revenue beginning in fiscal year 2021,” he said on Valentine’s Day. “Given our new opportunities to legalize sports betting in a responsible and reliable way, and capture more revenue for our education system, I say we go all In and get it done!”
The betting, which would include brick and mortar gambling and wagers from mobile devices would be overseen by the Lottery Commission, which would add a Division of Sports Wagering. No one under 18 would be allowed to wager. Customers could create betting accounts either remotely online or in person. ID’s would be verified “through secure online databases or by examination of photo identification,” according to the bill’s wording.
Towns would be able to approve by majority vote sports betting “lounges” with TVs for watching games and places to make bets. Such retail locations would need to be part of an existing business such as a tavern or resort. Or a casino if they are eventually authorized. Up to ten such locations would be allowed in the state. According to the bill, they “may be co-located with other commercial businesses or general commercial retail locations.”
The lottery would by competitive bidding process choose a sportsbook operator, or even more than one since the bill uses “vendors” in plural.
Currently the state offers Scratch cards, PowerBall, Megabucks and Mega Millions through the lottery.
Supporters argue that they are legalizing what is already taking place completely unregulated. McIntyre observed, “If you think about a bracket pool, or Super Bowl squares, those are essentially lottery products.” He added, “Now that they’ll be regulated, they’ll be transparent, outside the shadows, everybody will get a fair product. Illegal conduct doesn’t have that level of consumer protection.”
He added that the lottery provides consumer protection. “We want to make sure everyone gets paid,” adding “You know where our office is. You can come to us if you have a complaint. The illegal market doesn’t have that level of consumer protection.”
State Rep. Richard Ames agrees. He told the New Hampshire Union Leader. “The magnitude of this black market is staggering. This bill would bring much of this black market activity to the surface, where it would be legal and regulated.”
UNH Law Associate Dean Michael McCann agrees. He told the Valley News that a legal sports betting market would allow an open discussion of issues associated with it.
“I think the legalization of it will likely help address some of those concerns because it will come out in the open,” he said.
The bill provides no solace for professional sports leagues in that it includes no “integrity fee” or royalty for leagues such as the NFL or MLB.
Supporters believe that sports-betting under the auspices of the state will be able to raise funds for education, perhaps as much as $7.5 million by 2021 and $13.5 million two years later. Last year the New Hampshire Lottery passed the $2 billion mark in how much it has raised in its history.
Critics such as education activist and NH Executive Council member Andru Volinksy discount those figures as inflated and says lottery revenue accounts for 2.5 percent of school funding in the state. Last week he called the lottery “a sham,” adding, “It’s not nothing, 2.5 percent, but the commercials will lead you to believe all of our education expenses are taking care of by the lottery. That is deliberately intended to deceive the public.”
Some money in the House bill includes funding for treatment of gambling addiction, with an emphasis on education, prevention and treatment. Sports-gaming expert and attorney Daniel Wallach calls the state a “pace setter” in the way it approaches problem gambling. Ten percent of revenue is earmarked for treatment and prevention with the other 90 percent directed toward schools.
He told Seacoast Online, “Not that many other states mandate a percentage of tax revenues to go to help problem gamblers. There are no compulsive-gambling safeguards when dealing with off-shore (gambling) sites. I don’t believe some states have done nearly enough to ensure that proceeds — cash money — be directed into programs under state law.”
Lottery Commissioner Charles McIntyre isn’t one hundred percent Pollyannaish, however, warning that if the state loses its federal lawsuit over the Justice Department’s new interpretation of the federal wire act aka the Interstate Wire Act of 1961, it stands to lose millions of dollars. That includes $5 million in online lottery sales the state expects this year.
DOJ recently issued an opinion that all online gaming, not just sports betting online, violates the Wire Act. That reverses the 2011 guideline taken by the Obama administration. The state challenged it and will get its first hearing next month.
McIntyre warned “In the worst case scenario you’d have no lottery. And actually, there are other revenue streams as well. So actually, it would be more than 192 million, significantly more.”
Granite State Casinos
The bill, SB 310, that would allow two casinos appears to be on less firm ground than sports betting bill, although it would certainly put more money in the state’s coffers. One estimate is $60 million in licensing fees and more than $100 million in taxes annually.
It authorizes two kinds of casinos, a “category one” and a “category two.” The former would require a $40 million license fee and could deploy 3,500 video lottery terminals (VLTs) and 160 tables. The latter’s license fee would be $20 million, which would allow for 1,500 VLTs and 80 tables. One entity could not hold more than one license.
The casinos could generate $134 million by 2023 and $194 million by 2024 according to the legislative analyst.
Although the Senate has supported such bills before, they have usually faced quick death in the House, although in 2014 the House came within one vote of passage. Nevertheless Senator Lou D’Allesandro, the dean of the Senate, who has introduced such bills to each session for about 20 years, remains sunny about its chances—and of its ability to generate jobs for the state.
For a while, the bill seemed on the verge of losing in the Senate. Then D’Allesandro persuaded three colleagues to switch votes and take the bill off the table, where it passed narrowly.
D’Allesandro, who has been in the Senate longer than anyone, told WMUR 9 “I think I convinced them that it did have economic value.” He thinks the winds of public opinion may finally be blowing his way. “I think there’s a growing consciousness of the reality that the gaming business has settled in around us and this may be our last chance to take part if we want to enjoy the economic pluses that can come from this,” he said.
He points out that Massachusetts has already opened the MGM Springfield and will soon open the Encore Boston Harbor, and that his state’s residents will most likely travel to play there. “Why not keep them in New Hampshire?” he asks.
Senator Martha Fuller is the yin to D’Allesandro’s yang on this proposal, and she retorted last week, “We will never be able to see a casino to compete with the Wynn in Everett, Mass.” She told WMUR, “We will only see New Hampshire people at these New Hampshire casinos and it will be like robbing Peter to pay Paul, taking money out of the pockets of our citizens and putting it into government in a process that will have a major impact on tourism and our reputation as a family-friendly state. In the end we will only lose more than will gain.”
