Casino money is fool's gold
The smart bet is to walk away from the seduction of ‘easy money’
How we raise money to fund government’s priorities and what we believe to be the so-called “New Hampshire Advantage” goes to the heart of a reasonable debate that is long overdue.
But the proposal to expand gambling is more than just a quick revenue fix or a blemish on what makes New Hampshire special. It is about economic reason and an adequate reckoning of almost-certain negative consequences.
That is why I have added my support to a growing group of passionate volunteers and legislators committed to defeat Governor Hassan’s and a group of powerful lobbyists’ expanded gambling proposal.
Appointed as an adviser to the New Hampshire Department of Resources and Economic Development by the last three governors and Executive Council, I appreciate how one could be lured by the promises of Senate Bill 152: “... promoting economic recovery, small business development, tax relief, and job creation, as soon as possible ... in order to preserve the quality of life for New Hampshire residents.”
It’s pretty much the same language found in legislation in other states when they first take the gambling plunge. Who could be against “economic recovery, small business development, tax relief, and job creation, as soon as possible”?
But no matter how you dress it up, “regulated gaming” works against these goals in a number of insidious ways.
Foremost, expanded gambling threatens the long-term economic viability of our state. A highly refined method of economic cannibalization, casino gambling is designed to suck up disposable income and return up to 60 percent of profits to out-of-state investors. This means less money is spent at local businesses — businesses that provide real goods and services, employ our neighbors, and pay the taxes that fund our state.
Expanded gambling could also harm state government by unleashing widespread corruption on a scale never before seen. Think it can’t happen here? New Hampshire’s dainty and disjointed regulatory framework has made us a ripe host for two multimillion-dollar Ponzi schemes -- all within the past two years.
While I appreciate the seductive power of what looks like “easy money” from gambling, our political leaders need to look beyond the seduction of a quick fix. The process has become all the more hurried because our neighboring states all have casinos on the drawing board or under construction. But since when did New Hampshire base so much of its soul on what Massachusetts, Rhode Island or Maine do?
Perhaps more importantly, why are we ignoring counsel from the bipartisan New Hampshire Gambling Commission, which in its 2010 report insisted that a robust regulatory framework was necessary prior to the expansion of gambling in our state? It is no wonder our anti-gambling attorney general is not seeking reappointment.
Yes, the state does get some revenue and yes, some temporary jobs are created. But it’s hard to imagine a more regressive tax and tax collection method on New Hampshire residents. Make no mistake about it — very few people from neighboring states are going to make Salem a must-stop gambling destination.
By getting in bed with the casino industry, the state will depend on revenue from residents betting against the proverbial house. And as revenues drop, the casino owner will insist that to stay in business, the state will have to take smaller and smaller cuts and it will likely be necessary to add a casino or two to maximize profits.
That’s what has happened in Pennsylvania and West Virginia, two states that in are in a death spiral of competition for gambling revenue. In recent years, too many casinos in Rhode Island and Atlantic City have gone bankrupt. The most recent casino bankruptcy occurred in New Jersey just 10 months after its opening. And in Connecticut, there have been double-digit revenue drops at the state’s two vast casino complexes, Mohegan Sun and Foxwoods, in part due to increased competition from Rhode Island Twin River Casino.
Yes, people gamble, and they always will. But expanding gambling in New Hampshire is as slippery a slope as it gets. We will become a poorer state with greater social ills, and casinos will do nothing to help the state’s long-term economic vitality.
We will risk the unique quality of life advantage that sets us apart from other states.
The House Finance Committee smartly crafted a biennium budget without one–time gambling revenue. We should all insist the final budget is equally wise in rejecting the fool’s gold from expanded gambling.
Tom Sedoric of Rye serves as chair of the advisory commission to the State of New Hampshire Department of Resources and Economic Development.