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Study: With Mass. competition, a N.H. casino could create more social costs than state revenue

New Hampshire Gov. Maggie Hassan, listens to panel discussion on “education and workforce: growing school leaders and teachers” at the National Governors Association 2013 Winter Meeting in Washington, Sunday, Feb. 24, 2013. (AP Photo/Manuel Balce Ceneta)

New Hampshire Gov. Maggie Hassan, listens to panel discussion on “education and workforce: growing school leaders and teachers” at the National Governors Association 2013 Winter Meeting in Washington, Sunday, Feb. 24, 2013. (AP Photo/Manuel Balce Ceneta)

A new report says the casino proposal backed by Gov. Maggie Hassan and senators from both parties could create more “social costs” for New Hampshire than it would generate in state revenue, assuming Massachusetts’ plan to open three casinos includes a competing facility at Suffolk Downs.

The New Hampshire Center for Public Policy Studies, a nonpartisan think tank in Concord, released a report this morning on expanded gambling in the state. Hassan, a Democrat, has proposed using $80 million in licensing revenue from a single casino to balance the next two-year state budget, and has backed legislation that would establish such a facility, Senate Bill 152.

The bill’s sponsors are led by Manchester Democratic Sen. Lou D’Allesandro and Salem Republican Sen. Chuck Morse, the chairman of the Senate Finance Committee. The Senate in the past has supported proposals to expand gambling in the state, while the House has traditionally opposed such legislation.

The center said it’s “difficult to accurately predict” when licensing-fee revenue or revenue from casino operations would begin to come in. It said predicting the fee — and so, saying if the $80 million figure is realistic — is also difficult.

But under the center’s model, what it considers the likely scenario for a casino under the Senate bill (a $300 million facility with 3,000 slot machines in southern New Hampshire, taxed at 30 percent on net earnings) could generate $91 million in revenue for the state.

(The bill calls for at least a $425 million capital investment, but that total could include the $80 million fee, the land purchase and related infrastructure, the center said.)

If a casino opened at Suffolk Downs in East Boston, Mass., it would siphon off $46 million in annual revenue, according to the report. And “private and public New Hampshire social costs are calculated at about $46 million, leaving a net estimated loss to the state of about $2 million,” the report said.

Such social costs associated with a casino include crime, bankruptcies, lost work productivity and increased treatment and welfare expenses associated with problem gambling.

The revenue picture could change, the center said in the report, if the casino were taxed at a higher rate, or if a larger facility were built.

“Policymakers should pay particular attention to these variables in considering whether to legally expanded gambling in the current legislative session,” the center said.

For full coverage of the center’s report and reaction from key players in the gambling debate, see tomorrow’s Monitor.

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)

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