New Hampshire’s 13 legal gaming halls – with hundreds of employees serving thousands of gamblers – took in more than $170 million in revenue last year, more than double the amount collected in 2022.

As revenue hits record highs and the number of casinos continues to grow, so does the tension between advocates pushing for further expansion of gambling and opponents who argue the industry operates with minimal restrictions, preying on those least able to afford losses.

The supervision of these mini-casinos falls under the jurisdiction of the New Hampshire Lottery Commission, which is responsible for licensing, enforcement of rules, and financial auditing to ensure state laws are followed.

The auditing and inspection divisions each have five employees, which makes daily oversight of each establishment impossible. Instead, auditors review financial reports submitted by the casinos, make occasional spot visits and try to determine if the state and local charities are receiving their required cut of winnings.

“Auditing is multilayered,” said John Conforti, chief compliance officer at the Lottery Commission. “Auditors really are in the facilities frequently throughout the year.”

Occasionally, the Lottery Commission conducts surprise inspections.

The enforcement unit is tasked with conducting those inspections and overseeing the approval process for new games and gaming systems. These inspections include reviewing licensing paperwork, surveillance and internal control systems, administrative regulations, payment methods and compliance with state law. Their stated goal is to work with the casino operators, not punish them.

“Investigators act as a resource to assist the various groups and gaming facilities with achieving compliance through a collaborative regulatory approach,” the Lottery Commission website states.

Inspections can result in corrective action plans, written or verbal warnings, fines, or, in extreme cases, license revocation, as seen with Concord Casino owner and operator, Andy Sanborn, who was deemed unfit to be associated with charitable gaming in the state.

During audits conducted by the Lottery Commission in both 2021 and 2022, discrepancies in Sanborn’s financial records were uncovered, prompting a joint investigation by the commission and the Attorney General. 

The agencies said Sanborn had unlawfully acquired $844,000 in federal COVID relief funds and used the money to support his lavish lifestyle, which included purchasing luxury sports cars for himself and his wife, State Rep. Laurie Sanborn.

He exploited loopholes by concealing the registered trade name “Concord Casino” on his application, using the name “Win Win Win LLC” instead and listing the business activity as “miscellaneous,” the agencies said. These funds were not intended for casinos.

While discrepancies in financial reports are not uncommon in gaming establishments statewide, the enforcement action against Concord Casino was the exception, not the norm.

Inspection reports

The Lottery Commission keeps information on each casino publicly available on its website. For example, it regularly publishes monthly revenue reports showing the money generated from games of chance and historical horse racing. These reports outline the gross revenue generated by each game room, the funds allocated to charities, and the revenue received by the state.

Other records, like audits and inspection reports, aren’t posted online.

Inspection reports obtained by the Monitor through a Right-to-Know request show that routine visits to each of the 13 casinos occur at least biennially. Investigators are looking to make sure signage is properly posted, internal controls and policies are adhered to, and proper surveillance systems are in place, among other things.

One example from these records is the routine inspection at Ocean Gaming in Hampton. Investigators identified a concern regarding improperly angled surveillance cameras, potentially compromising security protocols and accurate prize payouts.

“It was impossible to identify the individual removing the cashbox,” the incident form stated.

During inspections at facilities, investigators can receive complaints from players.

At a routine inspection at the Lakes Region Casino, a man who had previously played in a poker tournament at the Concord Casino said the advertised prize of approximately $700 to be split by the winners was not given as promised. Instead, he reported that Andy Sanborn informed him and the other winners that the prize to be divided was only $300.

The state’s unique model of charitable gaming mandates that 35% of the casino’s gross revenue goes to charities, with an additional 10% allocated to the state’s lottery commission for public education. Donations to charitable organizations are made on a seven- to 10-day rotation cycle. Throughout the period, 35% of the gross revenue from games of chance will be donated to charitable organizations.

Records show that the enforcement team conducts checks to ensure that gaming halls comply with state regulations while hosting charities or nonprofits.

Complaints, compliance

Investigators fill out a compliance checklist, verifying correct wager amounts, employee licensure and the wearing of New Hampshire Lottery Commission badges as well as monitoring for any instances of underage gambling.

In addition, the commission regularly review financial reports submitted by casinos operating under the state’s charitable gaming business model. This includes donations made to charities, rent charged to charities and also the profits received.

In July, Dewey Auger, an enforcement agent, made an unannounced visit to Wonder Casino in Keene, focusing on responsible gaming practices.

During the inspection, Auger noted that problem gambling information was prominently displayed on gaming machines, and the casino’s cage area had brochures readily available addressing signs of problem gambling.

Additionally, patrons had access to self-exclusion forms.

When the commission receives a complaint, investigators are expected to conduct field inspections and devise a plan of action. These issues encompass a range of concerns, such as inaccurate prize payouts, discrepancies in charity donations, and errors made by dealers in table games.

For example, a complaint lodged against the floor manager at Concord Casino was investigated by the Lottery Commission.

According to the allegation, the floor manager named Sarah was “rude to employees and customers.” She was also seen to “force employees to falsify their timecards” when they were on break.

The field report also notes that the complainant said that when a customer informed General Manager Rick Galucci about a drunk player touching a fellow card player, Galucci did not ask him to leave until the player had run out of chips.

The field officer recommended that while the allegations against the floor manager seemed credible, they are best addressed as internal personnel issues by the employer. However, the officer advised that the timecard violations would be reviewed by the state Department of Labor.

While the Lottery Commission oversees various facets of casino operations, the rental fees that charities must pay for hosting games within the premises are beyond the Commission’s oversight.

Charities are required to pay rent to casinos during their scheduled donation events. Fees can fluctuate significantly, ranging from $250 to $750 across New Hampshire’s casinos.

However, with House Bill 1203 making its way to the Senate, this could soon change. If the legislation passes, it will prohibit casinos from charging rent to charities who use their premises for donation events, resulting in a considerable increase in revenue for organizations that partner with casinos.

Meanwhile, the growth of gambling is ballooning, with total revenue in 2022 coming in at $73.8 million. A year later it was nearly $100 million more.

“We are evolving along with the game,” said Conforti. “As gaming expands, we expand our training, we expand our staff. So we are constantly making sure we know what’s happening in the facilities and trying to understand what the risks are and mitigate those risks as best we can. It’s an ongoing process.”