Editorial: Casino questions

Andy Sanborn and his wife, current Rep. Laurie Sanborn, decided to open Concord Casino because they wanted to find a way to give back to the community.

Andy Sanborn and his wife, current Rep. Laurie Sanborn, decided to open Concord Casino because they wanted to find a way to give back to the community. GEOFF FORESTER

Published: 10-02-2023 12:34 PM

New Hampshire Republicans expended some time and effort last month trying to gin up alarm over the purported threat of crime posed by people illegally crossing the northern border from Canada. Of this proposition there is scant evidence. But the party could profitably turn its attention to a substantive threat to public integrity much closer to home: charitable gambling.

Actually, “charitable” gambling in New Hampshire is a bit of a misnomer. It harks back to a time when charities rented a local hall periodically and offered roulette or blackjack, with the charity keeping the proceeds. In 2006, the rules were overhauled to allow for-profit casinos to operate year-round, with 35% of the table-game proceeds going to a rotating roster of charities and the state taking a 10% cut. The casinos keep the other 55%.

The predictable result has been the rapid expansion of an increasingly professionalized industry. The Concord Monitor reported in August that New Hampshire’s 14 charitable gaming halls grossed $54 million in 2022, up about $10 million, or 24%, from the prior year. The historic link between gambling and various unsavory activities being a well-established one, we suggest that this development bears close watching.

And it is alleged that charity began at home for one casino operator, Andy Sanborn, a former Republican state senator. Attorney General John Formella and the New Hampshire Lottery Commission recently deemed Sanborn, who owns and operates Concord Casino, unsuitable to be associated with charitable gambling in the state, citing “compelling evidence” that Sanborn fraudulently obtained a $844,000 federal COVID-relief loan. He is alleged to have used $181,250 of these taxpayer dollars to buy two Porsche race cars for himself and a Ferrari for his wife; $45,000 for auto parts and services; $183,500 in cash distributions disguised as rent payments to affiliates he wholly owns; and $28,800 for engineering services for a second casino he proposes to open in Concord. Formella has made a criminal referral to the U.S. Attorney’s office and opened a criminal investigation himself, while the Lottery Commission has moved to revoke Sanborn’s casino license.

Sanborn says everything was on the up-and-up, and he looks forward to explaining why. “I welcome the examination ahead as I have full confidence our actions were transparent and in complete accordance” with the law, he said. While awaiting resolution, Sanborn is certainly entitled to the presumption of innocence.

But a complicating factor is that his wife, Laurie, the recipient of the Ferrari who helps operate the casino, is also a seven-term Republican state representative who chairs the powerful House Ways and Means Committee, which considers, among other things, all bills related to raising money by state taxes and fees — including charitable gambling. For instance, the New Hampshire Bulletin reported that the committee voted unanimously this session to kill a Senate bill that would have legalized online casino games, a measure that was opposed by the state’s charitable gaming interests.

If that apparent conflict were not enough, House Speaker Sherman Packard, R-Londonderry, also appointed Laurie Sanborn to a new commission infelicitiously named the Commission to Study the Effect of Recent Changes Made to Charitable Gaming Laws. At its first meeting, in August, the commission promptly elected Sanborn as chairwoman. Rep. Fred Doucette, R-Salem, a commission member who nominated her as chair, told the New Hampshire Journal he saw no problem: “Anything can seem like a conflict of interest, depending on how you look at it.”

The way we look at it, the conflict was egregious, and the rest of the commission membership is skewed toward representatives of the charitable gambling industry and charities themselves, despite the presence of Formella and New Hampshire Lottery Commission Director Charles McIntyre. In any case, Laurie Sanborn stepped down once the allegations against her husband became public, which Packard deemed “appropriate.” A spokeswoman for the Speaker did not respond when a reporter asked whether he had asked for her resignation. And she remains chair of Ways and Means.

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Beyond conflict of interest, other aspects of the state’s gambling industry need scrutiny. How are charities are selected for participation? How are licenses awarded and on what basis? And casinos are allowed to charge “rent” to the charities, who often sign seven- or 10-day contracts, which is then deducted from the 35% of the proceeds to which they are legally entitled. How are those rents set?

The entire regulatory structure of the industry needs to be examined and modernized to keep up with its rapid expansion. And while gambling interests should certainly have a voice, they should not be a controlling one.