Don’t bet on a gambling pot of gold

In his inaugural address, Gov. John Lynch warned that the state’s financial difficulties could not be solved by “a mythical pot of gold at the end of a magical rainbow.” Whether intended or not, his statement directly repudiates the media hype currently being orchestrated by pro-gambling interests advancing the latest, bad ideas for casinos and slot parlors in New Hampshire.

The proponents of expanded gambling – out-of-state gambling operators, their well-paid lobbyists and legislators – would have you believe that casinos and slot machine racinos are the painless, trouble-free cure-all to the fiscal shortfalls projected for the coming two years. Nothing could be further from the truth.

They are not painless. They will bring a raft of problems with them, and the cash flow they promise in time to address our budget concern is as mythical as the Wizard of Oz.

On the last point, let’s look at the facts. Contrary to the representations of the pro-gambling special interests, no massive introduction of casinos like that proposed by Sen. Lou D’Allesandro and others has come online and generated meaningful revenue in this country in less than two years. The law legalizing slot machines at racetracks in New York was enacted in October 2001. The first – and only – race track casino opened in Saratoga Springs in January 2004 – 27 months later. A bill authorizing 60,000 slot machines in Pennsylvania was signed into law in July 2004, the first casino opened in November 2006, 27 months later. And even last month, 52 months later, only one- quarter of the authorized slot machines are in place. 

What does that tell us about New Hampshire? First, assuming the most optimistic time line, a bill enacted in June 2009 will not start generating a revenue stream until at least September 2011. Even then, it will only be a start-up dribble.

Why? Because under Senator D’Allesandro’s 22-page bill, the State Lottery Commission (which has no experience with video lottery slots and casinos) must first adopt rules to implement the bill – rules concerning license applications and licensing, background and criminal investigations, hearings, standards and “a reasonable fee structure” for licenses, technical standards for the slot machines, even standards “for reviewing any structure” at the six projected casinos.

The attorney general is required to conduct criminal, financial and business background checks of all applicants — “direct and indirect owners” and “key employees.” Finally, the Department of Safety must establish an entirely new “Gaming Enforcement Unit” to investigate alleged violations of the expanded gambling statutes and rules, and enforce the criminal laws within the casinos. 

In the ordinary course of events, setting up and effectively administering such an important, complex, multi-departmental regulatory and enforcement framework would require far more than a year to draft, review, revise and vet in public hearings and then finalize. This is particularly true in New Hampshire, where no one in government has the slightest experience in such a massive new undertaking. Yet the gambling interests and the bill’s sponsors would impose a straitjacket of deadlines to unreasonably and dangerously speed up this process – requiring the Lottery Commission to adopt “interim rules” within 90 days, act on any license application within 180 days, and then require every municipality in which a casino is proposed to vote on that within 75 days.

Even this artificial, impossibly truncated “rush to judgment” timeline would result in a one-year delay before any preparations for construction and operation could start. So much for contributing to the projected budget shortfall in the next biennium. 

Rep. David Hess, R-Hooksett, is deputy House Republican leader.