Impact of Expanded Gambling in New Hampshire Understanding Markets, Revenues, Social Costs and Economic Impact What’s At Stake Discussion Guide Materials See: http://whatsatstake.unh.edu

1. 1 Board of Directors Todd I. Selig, Chair John B. Andrews John D. Crosier, Sr. William H. Dunlap Sheila T. Francoeur Chuck Morse Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos Martin L. Gross, Chair Emeritus Staff Steve Norton, Executive Director Ryan Tappin Cathy Arredondo Impact of Expanded Gambling in New HampshireUnderstanding Markets, Revenues, Social Costs and Economic ImpactWhat’s At StakeDiscussion Guide Materials “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

3. New Licensing fees

4. New taxes on gambling income

5. Increases in Business Profits Tax and Business Enterprise Tax

6. Increases in Meals and Rooms Tax

7. New revenues to local communities from property tax on new facilities

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10. 5 Massachusetts Matters Given that markets – at least in the Southern part of the state – cross-state borders, future decisions by Massachusetts will significantly affect the impact of gambling in NH

11. 6 The Extent of Gambling: Propensity to Gamble National Data Gallup (2007) – 66% of the population ‘gambled’ in some fashion in the last 12 months. Lottery Ticket: 46% Visited Casino: 24% ESRI Data Gambled at a Casino: 17% New Hampshire New Hampshire (Barrow)—56% of the population ‘gambled’ in some fashion in the last 12 months Lottery Ticket: 42% Visited Casino: 21% ESRI Data Gambled at a Casino: 17.3%

12. 7 Legal Wagering by New Hampshire Residents Estimate NE Casinos data based on analysis by Barrow (University of Massachusetts Dartmouth) Remainder from NH Lottery, Pari-Mutuel Commissions

13. 8 Role of Gambling in Funding State-Sponsored Activities

14. 9 Understanding Revenues to New Hampshire with Expanded Gambling Assumptions have a big impact on the projections of revenues Examples of assumptions impacting revenue estimates How much revenue will come from new license fee agreements? How many Massachusetts residents who currently gamble will change their preferred location and come to NH? What types of facility will be created? How nice is the facility? (How much capital investment will gambling corporations be willing to spend?) Resorts and casinos have a broader draw than racinos What will other New England states do in the future re: legalized gambling? Will there be changes in federals law regarding internet gambling? Other Revenue Issues Impact on Meals and Rooms Property Tax impact

15. 10 Problem Gambling: Pathological Gambling is the Primary Vehicle Through Which Social Ills Can Occur. National estimates (NORC, 2000; Schaeffer and Hall, 2001) Pathological gambling—an impulse control disorder that interferes with normal functioning– 1.2% - 1.7% of those who gamble Problemgambling that causes harm to one’s self or others—1.5% - 3.7% of those who gamble Those who are At-Risk for pathological or problem gambling—6.1% - 7.7% – New England estimates (Barrow, 2007) Pathological: 0.6% Problem: 1.0% At-Risk: 6.1%

16. 11 Geography Matters Dense casino markets like Las Vegas and Atlantic City: 8-10% of casino patrons are “problem gamblers” (NORC, 2000) A person is not going to have a problem unless they have access to gambling Proximity to a casino impacts propensity to gamble Proximity to casino (e.g. within 50 miles) increases risk of pathological problems (NORC, 2000) Problem gambling will impact the communities closest to the gambling venue and decrease the further you are away

17. 12 Estimating Social Costs of Expanded Gambling Requires … An understanding of the NEW problems created by expanded gambling An understanding, and estimate, of what a social cost is (NORC, 2000) Employment-related impacts Addiction treatment costs, health care, mental health Bankruptcy, debt, unemployment, welfare Family stress, divorce Demographic changes Who will bear the burden of these social costs? Local Economy? Government? Massachusetts or New Hampshire? Other states? It is important to recognize that research on crime, community, and social impacts of tribal casinos, racinos, and other venues have only emerged over the past decade

18. 13 What Analyses Suggests About Job Creation and Economic Development A casino benefit or harm to a local economy hinges on whether the casino is likely to attract tourists to the region (NEPPC, 2006) Economic development from a new casino is weak, but does increase as population density decreases (Wenz, 2007) Casino gambling adopted by economically struggling counties can be a successful development strategy (Rephann, 1999) No causal relationship between real casino revenues and real per capita income at the state level (Walker, 2007)

19. 14 Critical Assumptions in Understanding Impact of Expanded Gambling on Economy How much capital investment will occur with a new facility? This is the primary driver of construction job creation (short term) What type of facility will it be? Large vs. small; card games vs. no card games; new facility vs. renovated facility  these are the primary factors impacting the operating phase economic implications (long term) How much of current economic activity is displaced? Displacement – the degree to which someone is simply spending money that would have already been spent on other entertainment