N.H. Senate Casino Bill Goes to House

Proposal Includes Precautions  To Prevent Political Corruption

In Pennsylvania, public officials, party leaders and their immediate family members are prohibited by law from having a financial interest in a casino or working for one.

In New Jersey, it’s illegal for casino owners and their principal employees to contribute to a political party, candidate or group. The same is true in Massachusetts, under regulations written in anticipation of casinos being approved now.

The idea is to prevent what happened in Alabama in December 2010: A casino owner and two casino lobbyists there pleaded guilty to bribing legislators to support pro-gambling legislation.

In New Hampshire, those protections are in the state Senate’s casino bill headed to the House. Still, regulations — and the alleged lack of them — are sure to be among critics’ main complaints during the coming House debates on the Senate’s bill.

Those complaints have been center stage every time the House has considered and defeated prior casino bills. To bolster their arguments, critics often point to a 2010 report from the Gaming Study Commission put together by former governor John Lynch, which said the state should put regulations in place before licensing a casino. The problem with the Senate bill, critics say, is that it tries to write regulations and approve a casino at once. The rush, they say, leaves too many regulation questions unanswered.

“What is surprising to me is that (the bill’s sponsors and writers) don’t learn,” said Rep. David Hess, a Hooksett Republican who’s led the House fight against casinos. “There are the same defects and the same omissions year after year, despite the fact that we point this out in committee (discussions) and on the House floor.”

The casino bill passed the Senate, 16-8, this month with little debate, largely because opponents knew they were outnumbered. One of the bill’s main sponsors, Sen. Lou D’Allesandro, D-Manchester, knows it won’t go so easily in the House. When asked how he and his co-sponsors could satisfy regulation concerns of their opponents, D’Allesandro laughed.

“We have a new division in state police to monitor (a casino),” D’Allesandro said. “The attorney general is doing these investigations (of casino license applicants). The (state) Lottery Commission is looking into it. What else do they want? You will never quiet them. If you put every concern in the bill, they’d think of another one.”

As it’s written now, the Senate bill contains a number of limitations on lawmakers and would-be casino regulators. The chief regulator would be the Lottery Commission, which exists now and consists of three members appointed by the governor.

Under the bill, a casino operator cannot get a license if a lawmaker or state employee involved in casino oversight has worked for the casino within two years or has a financial interest in the company.

Commissioners and employees cannot accept discounts, gifts, travel, lodging or anything else of value from a casino license holder or anyone applying for a casino license.

Commissioners must recuse themselves if they have a potential conflict of interest.

Neither commissioners nor employees of the commission can gamble at a casino licensed by the state.

The commissioners and their immediate family members are prohibited from having a financial interest in a casino or a business that holds a casino license.

The bill prohibits a commissioner or employee who holds a major policy-making position from going to work for a casino interest within three years of leaving their position with the commission.

Only the commission can award a casino license, and its decision is “final (and) binding” and can be appealed only by a competing license application whose application was denied.

Joseph Kelly, a professor at Buffalo State College in New York, has written internet gambling regulations for the Virgin Islands and South Africa. He’s also considered an expert in casino regulations.

He had not read the Senate bill when reached last week for comment. But he said the most important thing a state can do to protect itself from corruption is to appoint highly regarded people to the Lottery Commission and then give them sole authority to make decisions.

“A lawmaker shouldn’t have any influence over the regulation of casinos,” he said.

Kelly also said state regulations should prohibit campaign contributions from casino interests and hold license applicants to a thorough background check.

“When you apply for a gambling license, it’s as if you surrender your Constitutional rights,” he said. “They want to know everything about you. What I always tell people is that if you are applying for a gambling license ... tell them everything.”

Just last week, a casino developer pulled out of an application for a license in Massachusetts because company executives did not want to go through the background check, according to the Boston Globe.

During a 2010 House debate on proposed casinos, Rep. Mary Beth Walz, D-Bow, used a prop to illustrate her concerns about a casino bill’s lack of regulations. She stood at the front of Reps Hall with three stacks of paper. The thickest was New Jersey’s gambling regulations. Next came Massachusetts’s casino bill, which was slightly thinner. The New Hampshire bill was thinner yet.

“This fatally flawed bill lacks all kinds of regulation,” Walz said then.

That bill failed, but the Legislature did go on to create the Gaming Regulatory Oversight Committee to research other states’ regulations and recommend a model for New Hampshire. Lawmakers approved up to $250,000 for the committee’s work. The committee met eight times and solicited bids from gaming consultants to help it produce recommended regulations and rules. The winning bidder wanted $40,000 for the work, and the committee sought approval for the expense from the Executive Council.

At the recommendation of Councilor Christopher Sununu, R-Newfields, the council denied the contract. Sununu did not return a message last week, but according to a news account of the meeting, Sununu thought it was premature to spend money on a study before the state had approved a casino.

Walz disagreed then and still does.

“The experience I know from other states ... is that you have to have an extensive system that’s solidly in place and put in place without the influence of pro-gambling people ... and that has not been done,” Walz said last week. “I think for us to pass any type of gambling legislation without ... regulation in place is shortsighted.”

Millennium Gaming, which hopes to build a casino at Rockingham Park in Salem if the bill passes, has had a team of lobbyists and spokespeople working for legalized gambling for nearly six years. One of its spokesmen said last week that it welcomes a conversation about regulation and believes those concerns are answered in the bill.

“Behind the nuclear power industry, casinos are the second-most regulated entities in the country,” said Rich Killion in an email. “This legislation provides a careful and specific regulatory structure that defines levels of responsibilities and duties for clear enforcement of these activities by three state agencies. The staffing for agencies to carry out these responsibilities, and the funding for it, are addressed in the bill.”

He continued, “We welcome such regulation for it provides the public and the state with the necessary sense of confidence and accountability in what an operator would do.”