Gambling proposals get mixed reviews from business

No one seems to deny that expanding state gambling operations could bring significant revenue to the state and eliminate a projected biennial deficit of anywhere from $180 million to $300 million. But there appears to be no consensus among New Hampshire businesspeople on what kind of impact legislation to allow up to 2,700 video gaming machines at race tracks and grand hotels would have on either the business climate or quality of life in the state.

“We do not currently have a position on the gambling proposal,” said Brett St. Clair, vice president of the Business and Industry Association of New Hampshire. St. Clair said the BIA’s board of directors was scheduled to meet Feb 4 to discuss proposed legislation on a number of business related issues.

The New Hampshire High Tech Council is opposed to an increase in business taxes, but it too has not taken a position on expanded gambling, said President Fred Kocher. But Kocher doesn’t mind telling you where his personal convictions lie.

“I just don’t think that ought to be the way to fund government,” said Kocher, a marketing consultant for small and high-tech businesses. “Any law enforcement person will tell you gambling attracts undesirable types. The second reason is it tends to cause people who don’t have much in the way of financial resources to gamble away the little that they do have. I’m thinking particularly of retirees and people on fixed incomes. That’s just not a healthy situation.”

But Carol Stephens, the high tech council’s executive director, takes a more benign view of video gambling.

“As a businessperson, I think it’s fine,” said Stephens, president of a marketing and communications firm in Peterborough. “We’re seeing money going out of the state right now,” she said, with many New Hampshire residents making frequent trips to the Foxwoods and Mohegan Sun casinos in Connecticut. “Do we want to let all that money leave to support tourism down there? People are going to gamble if they want to, whether we’ve got it here or not.”

Proposed locations

Under a bill being drafted in the Legislature, the state would authorize a total of 900 video gaming machines at the three dog tracks, at Seabrook, Hinsdale and Belmont, and 1,200 machines at the horse track at Rockingham Park in Salem. Another 600 machines would be available for three grand hotels.

“Right now, we’re looking at the Mt. Washington (in Bretton Woods), the Mountain View Grand Hotel (Whitefield) and The Balsams (Dixville Notch),” said state Sen. Lou D’Allesandro, the prime sponsor of the measure.

D’Allesandro said the bill would require approval by local referendum before the machines could go in. But if they were approved at all the proposed locations, they could bring the state $200 million a year in new revenue, he said. D’Allesandro sponsored a similar measure two years ago that was endorsed by the Ways and Means Committee but never did come to vote before the full Senate. He recognizes that there remains strong opposition to proposals for expanded gambling, but notes that the state’s current gaming activities were once opposed on the same grounds.

D’Allesandro doesn’t deny there are social problems associated with gambling, but notes the same may be said of other activities the state promotes to raise revenue.

“There are problems with alcohol, but we’re not shutting down our liquor stores,” he said. “I think most people who participate will be reasonable.”

What businesses would participate remains an open question.

In fact, the president and managing partner of one of the grand hotels that would be eligible for the video machines under the D’Allesandro plan said he remains opposed to the idea.

“I don’t really believe it’s a prudent way for government to raise money, despite the relative ease,” said Steve Barba at The Balsams. “It’s the antisocial problems — personal bankruptcy, increased divorces, those kind of issues.”

Rusty McLear, president of the Inns at Mill Falls in Meredith, agreed. “I think having it at the race tracks is one thing, but taking one brand of hospitality property and giving that small group of properties a tremendously substantial competitive advantage for business is wholly unfair,” he said.

McLear, like Barba, thinks it would be better not to bring in the video gambling anywhere. “I don’t think expanded gambling is a great idea,” he said. “That seems to me to be a way for some of the politicians not to have to make the difficult choices.”

But Scott Labnon said his Town and Country Motor Inn in Gorham would be interested in exploring the possibilities of video gambling if the opportunity were there.

The gambling business could help draw more visitors to the North Country, particularly in slow seasons like mid-autumn or early spring. It also could capture business from the “locals” who are now traveling some distance for their gambling.

“There are 20 or 30 buses everyday that go down to Foxwoods,” said Labnon. “Hell, let’s keep them here.”

Mixed response

Paul Hartgen, executive director of the New Hampshire Lodging and Restaurant Association, said a survey of the association’s 700 members found that 66 percent of those responding were opposed to expanded gambling.

“When you think of New Hampshire, you have a good view, be it lakes, trees, ocean, mountains or skiing. When you start throwing in expanded gambling, it kind of erodes that brand.” Members also are concerned that gambling “kind of creates an uneven playing field if some properties have it and others don’t,” Hartgen said. “It changes the market dynamics for the properties. Your goal is to keep people in the building and at the machines, so you can discount the food and the price of the rooms so more people are enticed to stay and gamble.”

The 600-member New Hampshire Automobile Dealers Association has not endorsed D’Allesandro’s plan, but has looked favorably on similar proposals in the past, said President Dan McLeod.

“We would not be an organization that would lead the parade, but we wouldn’t oppose any effort, if we need the revenue, to reach into that pocket,” said McLeod.

The main reason, he said, is what the alternatives might be. “The business profits tax is at a very high rate (8.5 percent) and the business enterprise tax, even though the rate (0.75 percent) is low, has nothing to do with the profitability of the business. It actually taxes debt, something we are very offended by.”

“There’s no question that slots would be good for revenue,” said Concord lobbyist Rick Newman, whose clients include Lakes Region Greyhound Park in Belmont, one of the tracks that would get the slot machines under the D’Allesandro plan. Newman argues that problem gamblers will gamble whether or not the state gets involved.

“We live in a world where you can gamble to your heart’s content, in living color on a Web site,” Newman said.

Sen. John Gallus, R-Berlin, tried unsuccessfully to get the Legislature to authorize a casino for Berlin two years ago. Then, he said, his interest was in bringing more employment to the city and surrounding towns. His motive for supporting D’Allesandro’s plan is to try to balance the state budget without raising taxes.

“The state’s not going to have a sales or income tax — the people have told us that hundreds of times. The new governor is also opposed to an income or sales tax, so what are you going to have?” asked Gallus, who also is wary of Gov. John Lynch’s proposal to increase the tax on cigarette sales by 15 cents or more per pack. That could raise $30 million, he said.

“Guess what? It’s not enough. And if you raise it too much, you get diminishing returns, when people don’t come across the border anymore to buy cheap cigarettes in New Hampshire.”

So what will the Legislature do if it turns down the expanded gambling solution?

“We’re going to have a bake sale,” Gallus said. “You’re invited.”