New Hampshire’s evolving gambling industry, though on par with other states’ regulations, raises the question of whether it’s fair that many charities continue to miss out on the benefits of the state’s charitable gaming model.

Casinos are allowed to operate in New Hampshire with the promise of supporting charitable and nonprofit organizations. But many groups still struggle to secure a spot on the rosters of the state’s 12 active casinos, where donations are doled out.

A recent evaluation by the Spectrum Gaming Group, a Pennsylvania-based consulting firm, has affirmed that the regulatory framework of New Hampshire’s gambling sector is generally sound.

Even the current revenue split — casinos are required to donate a portion of their earnings to charities and the state lottery commission — is functioning well and doesn’t need adjustment, the firm said.

“In the big picture, we think New Hampshire is on a good track,” said Joe Weinert, executive vice president of Spectrum Gaming Group. “You are experiencing growing pains, I don’t think which is a surprise to anybody.”

The consultancy group did, however, offer several recommendations, such as raising betting limits on historical horse racing, implementing a statewide self-exclusion policy to address problem gambling, vetting gaming vendors, and preventing excessive economic concentration among casino owners.

But the study did not address the persistent disparities affecting organizations in charitable gaming.

Norman Cloutier, president of the Mount Washington Valley Adult Day Center, is frustrated, particularly about what he said are inequities in the system.

Like many others, his center has struggled to secure a place on any casino’s limited rotating schedule, which is required to receive donations.

Even for those who do, funding varies greatly, depending on factors like casino size and player turnout, or the specific day of the week a charity is scheduled, which can draw in larger or smaller crowds.

In 2023, The Brook in Seabrook donated over $6.5 million to charities through table games and historical horse racing, while the much smaller Aces & Eights casino, in Hampton, contributed just over $55,000.

This difference doesn’t imply that one casino is more generous than the other. State law requires casinos to donate at least 35% of their table game revenue to charities and nonprofits. Of the remaining revenue, 10% goes to the state, with the rest kept by the casino.

Historical Horse Racing (HHR) offers casinos a more lucrative arrangement, allowing them to keep 75% of the total amount wagered, with charities receiving just 8.75%.

“The troubling disparity in the size of awards is similar to the concerning disparity in recipients,” Cloutier said at the public meeting on Tuesday, held by the state commission studying recent changes in charitable gaming.

Cloutier cited Iowa’s gaming model, which through the County Endowment Fund, a portion of the state’s gaming tax revenue is allocated to community foundations in counties without state-issued gaming licenses.

These foundations grant 75% of their funds to charitable projects within their counties and invest the remaining 25% in a permanent endowment fund to attract additional donations and ensure ongoing support for charitable causes.

For counties with licensed casinos, a minimum of 3% of gross gambling revenue must go to charitable organizations, and each commercial casino must share its license with a qualified nonprofit, which then reinvests its portion of the revenue into local charitable and civic needs.

“It is unreasonable to assume that casino owners – most of whom are out-of-state corporations – are qualified to jointly evaluate, prioritize and award 35% of their revenue tax-free to charities and nonprofits throughout New Hampshire if casinos have unchecked authority to select participating nonprofits from the pool of interested organizations,” said Cloutier.

Slot machines for New Hampshire?

With current revenue trends and at least four more casinos in the pipeline, the industry is projected to become a $1.1 billion market in just three years.

If New Hampshire shifts from historic horse racing machines to slot machines, revenue could potentially rise even higher, according to the company’s study

Currently, neighboring states like Massachusetts and Maine already feature slot machines, while New Hampshire is competing with historic horse racing machines, which are generally slower. This slower pace affects the number of games played per hour and can impact revenue.

Sen. Tim Lang, a member of the gaming commission, raised concerns about the speed of play.

He stressed that if New Hampshire shifts to slot machines, they must match the pace of the current historic horse racing machines to maintain consistency in responsible gaming practices.

“I think we kind of hit a speed of play level everybody’s comfortable with, with Historic Horse Racing,” said Lang.“If we increase that speed of play, we might actually create more opposition within the legislature.”

Big casino chains

New Hampshire doesn’t have a cap on how many casinos can operate here and lacks some regulations that exist elsewhere.

There are no guardrails to prevent a single company from dominating the casino market. For instance, ECL Entertainment, a major player from Las Vegas, owns The Lucky Moose, The River Casino & Sports Bar, and is set to open the 130,000-square-foot Nash Casino in Nashua. Meanwhile, Peninsula Pacific, through NH Group LLC from Los Angeles, owns two casinos and has plans to add two more.

Steven Ingis of Spectrum Gaming Group recommended that the commission consider implementing regulations to address economic concentration in the industry.

“You don’t have, by statute, a finite number of casinos,” said Ingis. “There may be an opportunity for a single operator to dominate the market.”

When charitable gaming legislation was introduced in 2006, it was intended to be small, locally-owned mom-and-pop operations. Yet today, none of these casinos are locally owned, a shift from the original vision.

The only casino that was locally operated was Concord Casino on South Main Street in Concord. It was ordered to shut down and be sold earlier this year after its owner, Andy Sanborn, was found unsuitable for charitable gaming.

An investigation found that Sanborn fraudulently obtained and misused $844,000 in pandemic relief funds meant for small businesses, not casinos.

Sanborn faces a looming deadline of Sept. 30 to finalize the sale of his casino. If he fails to meet this deadline, his game operator license will be revoked for two years.

The state is also unique for lacking a statewide self-exclusion program with defined criteria, duration, and review processes to address problem gambling — a measure that all other New England states with casinos have adopted. But individual casinos in the state have their own self-inclusion lists.

Spectrum’s review also highlighted New Hampshire’s distinction in that the lottery commission does not vet vendors who supply essential gaming equipment, including Historic Horse Racing machines, table gaming devices, and blackjack dealing mechanisms.

But New Hampshire’s Lottery Commission has earned praise for its regulatory efforts.

From interviews with casino operators and staff, the consultancy has heard that the Lottery Commission has been great to work with.

As more casinos come online, there will be a need for increased investment in staff to keep operations running smoothly.

With two months remaining to finalize recommendations on charitable gaming legislation, the commission will decide on which proposals to accept. They will also consider whether additional regulations are needed for how charities spend their funds and explore ways to increase charitable participation in gaming.

Meanwhile, Spectrum Gaming will prepare a report on problem gambling, assessing the effectiveness of current funding and strategies.

“Looks like we’ve got our clean bill,” said Patrick Abrami, chair of the commission. “Other than we got to keep up as the industry grows. We got to be sure that we properly keep up with it.”

Sruthi Gopalakrishnan can be reached at sgopalakrishnan@cmonitor.com.