A consultant will study New Hampshire’s rapidly growing charitable gaming business model and analyze the state’s gaming laws and policies compared to other states.

With a budget of $175,000 allocated for this purpose, a committee overseeing the state’s gambling industry selected Spectrum Gaming Group, based in Pennsylvania, out of three competing bids.

The other two consulting firms that submitted proposals were Convergence Strategy Group from Louisiana and The Innovation Group from Florida.

This week, committee members Patrick Abrami and Charlie McIntyre, who also serves as the executive director of the state’s Lottery Commission, hope to secure approval from the Executive Council for the $77,800 and have the company begin working in two weeks.

“We are going to rely on the veterans. They have numbers from every state to compare ourselves to. So we feel comfortable that instead of us trying to dig and find data, they already have these numbers accumulated among these other states,” said Abrami about the consulting firm.

Spectrum Gaming Group will primarily concentrate on two areas – the revenue split between the state, casinos and charitable organizations and the oversight regulation, including aspects such as rent.

At present, the Lottery Commission lacks oversight on the rental fees casinos impose on charities for hosting games during their scheduled events. These fees are determined based on what is considered to be “fair market value,” but they vary greatly across the state.

This could soon change if House Bill 1203 becomes law, which would restrict casinos from charging rent to nonprofits and charities. It has already passed the House of Representatives.

Under the state’s charitable gaming model, casinos are mandated to allocate 35% of their revenue during game dates to the respective nonprofit or charity. But the rent charged to charities can significantly reduce the amount of revenue they receive, in some cases by half.

For example, in January 2023, the Friends of Merrimack River Greenway Trail was in line to receive the proceeds from a 10-day operating period at Concord Casino. During that stretch, Concord Casino made a total revenue of $35,991. A 35% payout specified by gaming regulations would have equaled $12,596. However, Andy Sanborn, owner and operator of the casino charged half that amount in the form of rent, keeping $6,275 for himself, ultimately leaving $6,321 for the nonprofit, according to public records from the Lottery Commission.

Another piece of legislation introduced this year related to charitable gaming is Senate Bill 472, which proposes allowing host municipalities to raise funds through charitable gaming.

Each charity is on a 10-day rotating schedule with a casino. However, if a municipality can identify days when no charities are scheduled for gaming, the town or city could receive donations.

For places like Nashua, which has three casinos, the payout could be significant. This bill has passed the Senate.

Casinos growing

The gambling scene in New Hampshire has progressed dramatically from its origins, with wagers as low as $4, to today’s industry where bets can go up to $50.

With 13 operational casinos and more in the pipeline, the state’s gambling industry is experiencing unprecedented growth, with casinos taking in more than $170 million in revenue last year, more than doubling the amount collected in 2022.

But, as the industry expands, regulatory bodies are facing the challenge of ensuring that regulations keep pace with the changing dynamics of the industry. Committee members are focused on not just updating existing regulations but also identifying potential loopholes in the law.

“It’s been an evolutionary process that started one way and has generated into something totally different,” said Senator Lou D’Allesandro at the study committee meeting on Monday. “I think the migration that’s taken place is really what we have to understand, look at and decide what the future is. What’s the saturation point?”

New Hampshire’s charitable gaming business model is unique compared with other states — without charities, the casinos can’t operate.

While charities reap the benefits from the charitable gaming model in the form of donations, Abrami suggested that there should be a limit on how much money charities can make as the gaming facilities grow larger.

Giovanna Bonilla, representative of charities involved in the charitable gaming business model, opposed the idea.

“I’m hesitant to add a ceiling, especially because we just doubled up the charities. So technically a lot are making less than they made prior to the machines being added,” Bonilla said. “The need is always there. So I can’t think to put a ceiling on it because there’s so much more every charity wants to do. I think that impact is important to take into account.”