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Editorial: Shrinking Payout; State’s Share of Gambling Revenue

Those looking for hard and fast numbers for how much revenue New Hampshire might rake in if the Legislature approves Gov. Maggie Hassan’s proposal to build a single casino will be frustrated by the report issued last week by the New Hampshire Center for Public Policy Studies. Yes, the think tank’s analysis does make projections based on a number of scenarios, but it’s clear that there are just too many moving parts to feel supremely confident about any of the estimates.

But the report does strongly bolster the case of those who argue that it doesn’t take much scrutiny before gambling loses its luster as a potential generator of tax revenue and economic growth. Among the relevant factors: spending on gambling has been on the decline nationwide; the jobs created by gambling don’t pay particularly well; some of those jobs would just supplant other employment opportunities that might otherwise be created were gamblers spending their money on other entertainment activities; competition from nearby casinos, particularly those planned for Massachusetts, will significantly reduce the revenue potential for New Hampshire. The most eye-opening finding was the possibility that covering the huge costs of dealing with the myriad problems created by gambling (crime, divorce, mental illness and bankruptcy among them) might make a casino nothing better than a break-even proposition.

To the extent that the report heightens skepticism about the advisability of expanding gambling in New Hampshire, it also intensifies a dilemma for lawmakers. Hassan has proposed a budget that restores or increases spending on some services that clearly need it, including higher education and mental health. But her spending plan incorporates $80 million that she predicts the state can collect in licensing fees if casino gambling is approved this session. Embedding that revenue in the proposed two-year budget raises questions in addition to those regarding the overall desirability of a casino: Is it wise to rush the process? Is it practical to expect that amount of money that quickly?

Any acceleration of the process that amounts to a dash for cash is transparently foolhardy; if the state is going to take this step, it should do so deliberately. Moreover, the report makes clear that the state faces long odds if it hopes to corral the licensing fee money in time to make a difference for the budget under discussion. (Massachusetts approved casino gambling in late 2011 and may not issue a license until May 2014.)

For those reasons, it makes all the sense in the world for House Finance Chairman Mary Jane Wallner, D-Concord, to instruct legislative leaders to put together an alternative budget without the $80 million in licensing-fee revenue. Gambling proponents believe that will only help their cause.

“Let’s watch them try to do without the $80 million,” said Sen. Lou D’Allesandro, D-Manchester, vice chairman of the Senate Ways and Means Committee, which endorsed the one-casino proposal yesterday on a 4-1 vote. “How will the University System fare? How about mental health? What about local aid?”

Well, OK. But if lawmakers support Hassan’s laudable spending priorities yet are wary about gambling, might they not find other sources of increased revenue or savings? We certainly hope the alternative budget will explore the possibilities. The policy center’s report might not provide definitive answers about what the state can expect in revenue, but it does make a strong case that the jackpot is likely to be much smaller than many gambling supporters hope.