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Battle Over Gambling Resumes

Concord — A fierce two-front war over casino gambling will be hard-fought in the Legislature over the next five weeks.

The first battle is over whether the House of Representatives will vote to legalize betting on slot machines or poker tables after having rejected more than three dozen expanded gambling bills over the last generation.

The second will come about only if the first is won, and it’s what to do with the bounty — dedicate it to popular state programs such as higher education and highway construction, as two powerful state senators want to do, or spread it throughout a two-year, 1,300-page state budget, as Gov. Maggie Hassan proposed to do last week.

Rep. David Hess, R-Hooksett, a former state prosecutor, called it “ludicrous” for Hassan to presume the Legislature would embrace a casino and then spend $80 million from a licensee fee for it in her proposed $11 billion budget.

“If the governor wants expanded gambling, I would suggest she craft a budget on known revenue first, then make her case for gaming revenue in the form of a separate bill,” Hess said.

“I thought it was a brilliant political strategy on her part,” said lobbyist Robert Clegg, of Hudson, who represents the owners of Green Meadow Golf Club in Hudson, whose owners have unidentified private investors who would turn the property into a destination resort casino.

“She loads her budget up with very appealing spending and that gets past opponents of casinos looking at this whole proposition in a very different way.”

In the last two decades, Clegg is the only Republican who has been in the upper leadership echelon in both the New Hampshire House and Senate.

“What she needs to worry about is whether, particularly in the House, there are Republicans who might be willing to look at gambling now and see a vote for this as approving of her budget,” Clegg said. “The Republican theme on the Hassan budget is it spends too much money, and she can’t let voting for a casino get in the way of that.”

This is a very long process,” said Scott Spradling, who lobbies for Millennium Gaming, the casino developer that holds an option to build a $450 million casino at Rockingham Park in Salem. “But having a governor who gets it, who sees the economic and spinoff benefits of a first-rate development like this, is the game changer in this debate.”

Many observers view Millennium as the front-runner to win the one competitively bid casino, and its executives have already publicly said it’s more than willing to fork over $80 million to state government to get in the game.

Former Gov. John Lynch ultimately became a vocal opponent of expanded gambling after at least keeping an open mind during his first three terms in office. His creation of a blue-ribbon commission in 2009 to explore the pros and cons of a full-blown casino led many advocates to think he might ultimately embrace one.

Hassan isn’t the first New Hampshire chief executive to support the idea.

U.S. Sen. Jeanne Shaheen, a former New Hampshire governor, voted for big slot machine parlors at the state’s racetracks several times while serving in the state Senate.

Ultimately, Shaheen threw the gambling revenue overboard as not big enough when her own hand-picked commission concluded a low-rate sales tax would raise more money and be more stable than profit from a casino would be.

Politically, it proved to be an unstable concoction, as less than a year later in 2002, voters rejected Shaheen for a U.S. Senate seat after she had dropped her pledge to veto a broad-based tax. She got revenge six years later, defeating Republican Sen. John E. Sununu for the same Senate seat.

And Hassan is by no means the first governor to propose a budget that relies on money that can’t be raised legally in the present day.

In 2009, at the height of the recession, then-Gov. Lynch turned to raiding $120 million in surplus from the Joint Underwriting Association, a medical malpractice and liability insurance collective, to try to balance the books.

The Democrats running the Legislature loved the idea until the state Supreme Court ruled it would amount to an unconstitutional taking of property and forced them to back off.

But there are many gambling opponents who question whether it’s feasible to expect — even if Hassan convinces the Legislature to pass it — that the state can collect $40 million by July 1, 2014, and another $40 million a year later from the casino developer.

“Governor Lynch’s Gaming Study Commission found that New Hampshire’s gambling regulations are insufficient even for the gambling we now have,” said Jim Rubens, a former state senator from Etna who is now chairman of the diverse Granite State Coalition Against Expanded Gambling.

“Casinos cannot be highly regulated, as Governor Hassan has promised, when at least two years are not allowed to carefully design regulations, select carefully among competing bidders and complete background checks.”

Attorney General Michael Delaney, an opponent of casinos along with his seven predecessors, has said it would take a year to complete a background check.

“This is not an overnight proposition, setting what would have to be a gaming enforcement unit in the state police,” said Rep. Mary Beth Walz, D-Bow, who chaired the House committee on gaming issues three years ago when it rejected expansion, first and foremost because it concluded New Hampshire couldn’t possibly regulate the games.

“We shouldn’t even be talking about legalizing a casino until we’ve got that very long and hard job done.”

While Massachusetts waits for its first dollar in licensing more than 15 months after its Legislature legalized betting at three casinos and a slot machine barn, Spradling said Millennium can meet this tight timetable.

There are three casino bills, but the one Hassan will support tomorrow is from Sen. Chuck Morse, R-Salem, and Sen. Lou D’Allesandro, D-Manchester.

It allows for one casino with 5,000 slot machines and 500 table games and splits the profits for the state among state aid for the two- and four-year college system, Interstate 93 widening, and other transportation projects and economic growth in the North Country.

Also tucked into the 42-page bill would be a commission of seven officials who would explore whether “additional licenses” for casinos should be awarded after this initial one.

Clegg said Hassan wisely didn’t spell out her own casino program in the budget or its companion trailer bill, but will leave the details and fine print of the program to the Legislature.

“You don’t want to get bogged in net machine income, how much goes for addicted gamblers or how much the state gets from a technology provider,” Clegg said. “Let the legislators legislate, and she’s pretty comfortable doing that, since after all, she was a very good legislator herself before getting this job.”

Morse said he doesn’t believe Hassan’s inclusion of the casino in the budget generally and not just for his pet programs will doom the effort.

“We’ll work it all out,” Morse said. “The Senate will have its position, and we’ll wait on word from the House if they agree with us. At the end of the day, the budget has always been the place where this will be fought.”

Senate Majority Leader Jeb Bradley, R-Wolfeboro, says the outcome for casinos is not in doubt in the Senate.

“The votes are there in the Senate. The hard work getting that support has already been done,” said Bradley, who has opposed some gambling bills in the past.

While New Hampshire Republican State Chairman Jennifer Horn, of Nashua, blasted relying on casinos in Hassan’s budget, not a single Republican senator echoed that support.

In fact, Sen. David Boutin, R-Hooksett, became a convert, declaring Thursday he would go from opponent to supporter because he’d go for legalizing a casino before voting for a gasoline tax increase or auto registration fee for highway work.

“I think that is a much more practical way to address than burdening working families with an increase in the gas tax or a surcharge on registrations,” Boutin said.

D’Allesandro said his message to the House is to embrace gambling revenue as a politically safe move in the wake of a University of New Hampshire-WMUR poll last week that showed 62 percent support for it.

“Look what Democrats in the House came up with the last time they ran the place,” he said. “An LLC tax, a campground tax, a tax on gambling winnings, all of which were later repealed and had a lot to do with the voters throwing them out in the next election. Learn from your history.”

House Majority Leader Steve Shurtleff, D-Concord, a past gaming opponent, said Hassan giving more money for education, health care and public safety in her budget makes the casino more appealing.

“I think at the end of the day, Democrats will get behind the governor and support her,” Shurtleff said.

A House panel will take testimony Thursday on competing bills from Rep. Edmond Gionet, R-Lincoln, and Rep. Steve Vaillancourt, R-Manchester.

Gionet wants two casinos, including one in the North Country. Vaillancourt would permit up to six privately leased sites, but he wants the state to own and run them through a Gaming Oversight Authority.

House Speaker Terie Norelli, D-Portsmouth, has voted against expanded gambling in the past, but remains neutral and looks forward to House budget and tax bill writers exploring the issue.

“I really have no sense of where the House is on this issue in part because close to half of my caucus is new and hasn’t voted on it,” Norelli said.

The House is made up of three camps that will determine the fate of a casino, she said.

“The first camp are those for which it’s a vote of conscience, they are either strongly for or strongly against expanded gambling, and nothing that happened this week will change them,” Norelli said.

“The second camp are those who philosophically might not be keen on it, but could go along with it under certain circumstances.

“The third are the fresh faces coming to this issue for the first time. That’s the camp I believe will be under siege by both sides.”