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House committee mulls tighter charitable gambling regulations

Members of the House Ways and Means Committee questioned yesterday whether adding new regulations to charitable gambling would drive smaller operators out of business and limit the number of charities benefiting from it.

The bill before the committee yesterday was drafted by the Gaming Regulatory Oversight Authority, established to study expanded gambling as well as what already exists. In 2012, New Hampshire charities made more than $13 million through gambling halls run by licensed operators that offer table games, bingo and Lucky 7 tickets. But two consultants from WhiteSand Gaming hired to work with the authority found the state lacks tight enough laws to ensure charities are getting a fair cut of the money they’re owed. Charitable gambling is regulated by the New Hampshire Racing and Charitable Gaming Commission.

The bill, sponsored by Rep. Richard Ames, a Jaffrey Democrat and chairman of the oversight authority, would impose stricter standards for handling and recording money, require the attorney general’s office to conduct background checks on primary gambling operators and limit fees, such as rent charges, that operators can levy on charities. It would also establish a commission to further study charitable gambling. The committee will now address questions and concerns in work sessions on the bill.

More than 50 percent of charitable gambling statewide happens between Rockingham and Seabrook parks, which are owned by the same company.

Ed Callahan, Rockingham’s general manager, spoke in support of the bill and said those operations could handle the increased regulations. But smaller operators might not absorb the costs so easily, said Rick Newman, representing the River Card Room in Milford.

There is already a long line for charities waiting to get gambling nights (Rockingham has more than 100 charities on its waiting list), and some committee members questioned what it would mean for charities if smaller halls shut down.

Deputy Attorney General Ann Rice spoke in support of the bill. The attorney general’s office would have to add more staff to conduct the necessary annual background checks for the more than 100 operators, she said. But the operators themselves would pay the fees, meaning the proposal would be revenue-neutral for the attorney general’s office.

Newman said this could put too great a burden on small operators.

“Broad, expansive background checks will put the little guys out of business,” he said.

Many smaller operators charge charities up to $300 a night in rental fees, which is allowed under the law passed in 2006. Rockingham and Seabrook will start charging rent for the first time this year. This bill, however, would limit that practice in an effort to ensure charities get the 35 percent of profits they’re entitled to under the law. Newman also said these rental fees are crucial sources of funds for the operators.

In response to a question from Rep. Thomas Schamberg, a Wilmot Democrat, Newman said charitable gambling needed more regulations in certain areas. He suggested the committee add a requirement that two people, including the operator, must count and sign off on money earned to better ensure charities are getting the proper cut.

The two consultants, Maureen Williamson and James Nickerson, said there are no other states that operate charitable gambling the way New Hampshire does. Regardless of whether gambling is charitable or not, participants should expect operators to act with a level of integrity and fairness, Williamson said, and legitimate gambling enterprises should expect to be regulated. With charities pulling in $13 million in 2013, operators brought in roughly $40 million.

“This is not charging the church to have a bingo game in the hall, this is a different scenario,” she said.

The committee has a March 3 deadline to act on the bill.

(Kathleen Ronayne can be reached at 369-3309 or kronayne@cmonitor.com or on Twitter @kronayne.)

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