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Editorial: Casino bill must not favor some businesses over others

Will existing New Hampshire businesses suffer financially if the governor and Legislature allow a large casino to open on the Massachusetts border? Some or even most might, but lawmakers would be wrong to pass legislation or draft rules that protect some existing businesses but not others from the potentially deleterious economic impact of expanded gambling.

Manchester lawmakers, including Rep. Peter Ramsey, president of the Palace Theatre, clearly believe a casino would be bad for their business, and they want limits placed on the size of any concert hall a casino could build. Their primary target for protection is the 10,000-seat Verizon Wireless Center, which draws hundreds of thousands of people per year. But any entertainment venue on casino grounds will mean less business for existing concert halls, including the Capitol Center for the Arts, the Hampton Beach Casino Ballroom and Meadowbrook in Gilford. Smaller concert venues would be hurt as well, since money lost to a casino is money not spent elsewhere.

Recently, a group of restaurateurs threw their support behind expanded gambling. An in-state casino, they say, will mean fewer New Hampshire residents leave the state to gamble while more nonresidents will journey north.

Who’s right depends on a host of factors, including what the winner of a casino license would decide to build. Some casinos have large concert venues, others don’t. Some have multiple restaurants, but Millenium Gaming says it would have just one in its planned casino at Rockingham Park in Salem.

Some casino owners, including Millenium, in what we presume is a bid to win business support, reward patrons with discount coupons redeemable at existing businesses. That can minimize the impact of the displacement of disposable income a casino creates. But caution is called for. Lawmakers should put more stock in analyses of what’s happened in other states than in the dreams of restaurant owners who hope a casino will steer business their way.

In 2006, when billionaire casino owner Steve Wynn met with local business owners to discuss his opening a casino in Bridgeport, Conn., he told them that, “There is no reason on Earth for any of you to expect for more than a second that just because there are people here, they’re going to run into your restaurants and stores just because we build this building here.”

Wynn’s statement was cited in a 2006 Federal Reserve Bank of Boston report on the impact of a casino on existing businesses. Whether a casino benefits or harms a local economy hinges on who gambles there: tourists or locals. Tourists, the study said, bring new money to the area though, as Wynn admitted, they don’t spend much except at the casino. Yet by providing jobs and buying supplies locally, a casino can boost the local economy.

When most of a casino’s business comes from people who live nearly, the effect on local business is minimal or negative. In 1978, the year before casinos opened, Atlantic City had 311 taverns and restaurants, the study said. “Nineteen years later, only 66 remained.”

Big dreams of an economic boom created by a casino in southern Hampshire are almost certainly pipe dreams. Massachusetts has approved the building of three casinos. One, which is likely to be a huge destination resort, will almost certainly be north of Boston. At a Salem casino, more customers could come from the north than from the south, and that would mean money flowing out of the parts of New Hampshire that need it the most.

Corrections

Sunday’s editorial referred to a plan to build a 240-bed women’s prison. That plan has been reduced to 224 beds. Yesterday’s editorial incorrectly referred to funds raised by the Regional Greenhouse Gas Initiative; it should have referred to the Renewable Energy Fund, money generated from a penalty paid by utilities that fail to purchase enough power from renewable energy sources.

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