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State House Memo: New rules for charity gambling, casino

Six months ago, lawmakers created the New Hampshire Gaming Regulatory Oversight Authority with a two-part assignment: research existing gambling and offer recommendations for its appropriate regulation; and recommend a best practices regulatory system for expanded casino-based gambling.

Our job was not to answer whether a casino would be good or bad for New Hampshire; rather, it was to figure out what rules would best serve New Hampshire residents if the state decided to move forward with casino-based gambling.

Authority members immediately recognized the need for outside expertise. So, in August, as we began gathering information, we created a competitive bidding process and hired a leading national expert on gambling regulation to help us explore options and seek the best answers.

Perhaps most surprising was what we learned about the extent and characteristics of charity gambling in New Hampshire: about 260 table games and $75 million wagered each year. Yet there are glaring deficiencies in the regulation of this gambling. In response, the authority is proposing aggressive new financial and operational reviews of charity gaming, with a particular focus on ensuring the games are being played fairly and the dollars are being tracked accurately. We are recommending new standards for internal controls over financial reports and the handling of money as well as new restrictions on staffing and supervision of employees. We also propose clear and concise reporting of the 35 percent of gaming revenue that operators must pay to participating charities. And finally, our proposed legislation creates a new commission to determine the most appropriate system for sustaining ongoing resources to charities from gambling.

The philosophy is simple: You protect the public interest by strictly regulating the gaming operators. The same concept applies to any expansion of gambling in New Hampshire.

To complete the task given to us by lawmakers, we built a new regulatory system for casino-based gambling. The result of our work is a lengthy and complex bill. We took from the best practices and standards used in about 40 other states and created new rules to match the unique needs of New Hampshire. Highlights include:

∎ A new, five member state gaming commission with responsibility for all legal gambling in New Hampshire.

∎ Clearly defined roles for the attorney general, the state police and local law enforcement authorities in investigating and enforcing casino operations at all levels.

∎ Establishment of a high-level director of problem gambling and research and robust problem gambling regulation to maximize understanding, treatment and prevention. (I have just written a memorandum on the “Social Impacts of Expanded Gaming in New Hampshire”; write to me at amesinjaffrey@gmail.com to receive a copy.)

∎ Local control to guarantee a potential host community’s residents the right to say no.

∎ Clear mandates on the development and cost of a casino, including minimum investments, workforce development for locals, green technology and local oversight.

∎ To protect existing cultural centers, there is language regarding potentially affected nonprofit and municipal entertainment venues. Casino applicants must attempt to reach an agreement with these venues to mitigate impacts on local sites.

∎ There are penalties for missed deadlines, a prohibition on any ability to “flip” a license to another owner, and all proposed regulations are merged with current state laws to avoid loopholes and confusion. There are also new civil and criminal offenses to deal specifically with casino operations.

The authority reviewed the casino landscape in New England and concluded that a single mid-size casino in southeastern New Hampshire would be viable and would likely produce $100 million annually in new state revenue. We offered suggestions on tax rates and license fees in order to ensure casino viability while maximizing potential state revenues, but we offered no recommendations on what to do with those funds. Any costs of casino regulations and oversight, including the cost of local law enforcement, must be paid for by specified license and other fees and by the revenues of casino operations.

I’m proud of the efforts of the Gaming Authority. The excellence of our work product exceeded expectations. The process we followed was even more significant. We worked hard to step back from emotional arguments, focused on facts, and brought in experts as needed to develop a truly best practices regulatory system designed to meet New Hampshire’s unique needs.

I look forward to continuing with a reasoned debate leading to a final resolution of the casino issue in the months to come.

(The Authority’s work products are available online at nh.gov/groa/publications/index.htm.)

(Democratic state Rep. Richard Ames of Jaffrey is chairman of the New Hampshire Gambling Regulatory Oversight Authority.)

Citizens of NH should be asking why a "new, five member state gaming commission with responsibility for all legal gambling in New Hampshire" should be formed when there is already an existing 7 member NH Racing and Charitable Gaming Commission? If this existing commission is doing so poorly that all these new things are needed why are they not being replaced now, regardless of new proposed gambling? Sounds like just another single task group being formed.

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