Editorial: State must professionalize its regulators
Maybe it’s a small matter. But coming, as it does, while the House is preparing to vote on legalizing casino gambling, and in the middle of yet another battle involving the state liquor commission, the gaming commission’s order that the Lakes Region Casino shut down its slot machines raises a bigger question:
Is New Hampshire, a state that relies heavily on amateur regulators, up to the task of controlling big-money gambling?
We think not, at least not yet, which is one more reason why lawmakers should say no to Gov. Maggie Hassan’s casino plan.
The Belmont casino has just 96 slot machines that are, according to its general manager, there more for atmosphere than profit. Players, by law, can earn only 2.5 cents per point for every win, and Lakes Region paid out just a penny. The casino shares the money raised with charities. The problem came when the casino decided to pay slots winners who accumulated enough points with a Visa gift card instead of points redeemable for merchandise. The latter gives the whole enterprise the feel of an arcade whose winners trade in their points for stuffed animals and trinkets; the former, well, it’s just too much like real money.
The casino immediately agreed to switch to a merchandise payout, but the timing of the Racing and Charitable Gaming Commission’s decision surprised Rick Newman, the casino’s general manager. He says he had told the commissioners, whose annual pay barely breaks five figures, that he was making the switch to Visa cards and got no complaints.
Call it what you will – an error, an oversight, a misunderstanding – but no harm appears to have been done. Unfortunately, that’s not always the case. In 2005, the previous owners of the Belmont establishment were indicted on charges of laundering drug money, and the federal government seized the proceeds of the sale of the casino. That money was eventually returned, but several people either pleaded guilty or were convicted of money laundering and illegal gambling.
The bill to license a single, large casino, which the Senate passed, calls for it to be regulated by the lottery commission rather than the charitable gaming commission. But when it comes to regulating a giant enterprise with the buying power to influence legislation, lottery commissioners, too, are, amateurs – more public servant than hard-nosed regulator. One comes from financial management, another is a successful auto dealer, and the third is a dairy farmer and veteran legislator with budgeting experience. Regulatory expertise can be hired, but it’s also required to assess expert advice.
In 2010, the Gaming Study Commission appointed by then-Gov. John Lynch emphatically recommended that the state develop and adopt tough and comprehensive regulations before licensing a casino. That didn’t happen, so once again, the House must decide whether to buck that advice and do two things at once: approve regulations and award a license. The state’s history of regulating small gaming operations suggests that to do so would be a mistake lawmakers would come to regret.
Before approving any significant expansion of gambling, the Legislature should adopt regulations with a proven track record, professionalize the state’s ability to regulate the industry and start by combining the lottery and racing commissions.