Debate over SB489 crystallizes two fundamentally divergent approaches to restoring shared prosperity in our state:
Build our people’s skills and our economy’s capacity to innovate new products and services in vital growth industries such as healthcare and energy that support living wage jobs and tax revenue to support state services. Do this while protecting our state’s precious crown jewel: our safe, healthy, wholesome, and family-friendly social environment and image – for decades, the basis of our comparative prosperity. Or …
Grant no-bid gambling monopolies to politically-connected entities whose business model depends upon low-wage jobs, imposition of uncompensated social and economic costs onto government, existing business, and families, increasing debt loads on its customers with no corresponding increase in their assets (when households are already excessively indebted), and by destroying the lives of 10,000 of our neighbors by addicting them to slot machines purposefully designed to deceive gamblers about their actual odds of winning. This approach would sacrifice our crown jewel for a pittance of short-term front money, and is predicated on the absurd proposition that we can build a stronger economy by weakening our citizens.
The Coalition urges this committee to face the uncomfortable truth that slot casino gambling can raise tax revenue only by offloading its costs (aka uncompensated externalities). These costs include increased addiction and related problems, violent and property crime, damage to the state’s valuable brand image, revenues cannibalized from existing businesses, and the substitution of existing living-wage jobs for low-wage casino jobs.
The recently announced $50 million settlement by Loto-Quebec to compensate slot machine addicts should give committee members hard evidence that these costs are real and will pop back up to bite taxpayers. See the attached from Dr. Kevin Harrigan’s testimony to the gaming commission to understand how slots are purposefully designed to addict gamblers and why addicted gamblers are the source of 60 percent of slot machine profits.
Gambling industry promoters are seriously misleading this legislature about casino jobs. Millennium principal Bill Wortman claimed at his gambling road show in Rochester that 90 to 95 percent of Rockingham casino jobs would pay $42,000 per year (including tips), about $20 per hour. Here are the facts from independent sources:
The Bureau of Labor Statistics reports that the median (half below, half above) wage including tips for gambling industry workers was $10.92 per hour in 2008, about half of what Millennium is claiming. The median hourly wage for all New Hampshire occupations is $16.01 (2008 data). New Hampshire casino wages will be higher than the US median, but in a saturated, highly-competitive market, it is unlikely that any casino can pay wages nearly twice prevailing industry levels.
The New Hampshire Center for Public Policy Studies in its January interim report to the gaming study commission estimates that the typical casino cannibalizes (displaces) 50-60 percent of jobs and revenues from existing businesses. A North Country casino would cannibalize 70 percent of jobs and business revenue; a border casino, 30 percent.
The bottom line on jobs and casino economic impact: once construction is done, casino jobs are not living wage jobs; casinos will divert consumer spending from existing businesses.
And many casino jobs would not be filled by New Hampshire residents. A June, 2009, study by Spectrum Gaming Group for the State of Connecticut found that casinos there filled many of their low-wage jobs with immigrants, many of whom do not speak English. The low-wage casino job base was found to have imposed serious cost burdens on property taxpayers in neighboring towns, including sharply increased special education and infrastructure costs and overwhelmed regional affordable housing and transportation resources.
The Palmer, Massachusetts citizen casino impact study committee found that a casino there would impose on local taxpayers initial capital costs of $47 to $148 million and annual operating cost increases ranging from $18-40 million. These sums are several times the host community compensation provided in SB489. For neighbor community taxpayers – who are given NO say in SB489 in having a casino next door – the ratios of uncompensated costs are even more adverse.
The gaming study commission also heard testimony about the impact of casinos on one of our state’s most valuable assets: the New Hampshire brand. Sally Stitt, President of Star Media of New Hampshire, who has played a critical role for over twenty years in helping protect and enhance the New Hampshire brand, told the commission that gambling industry marketing and promotional activity would "dwarf" New Hampshire's aggregate state and individual company tourism marketing and would "drown out" our very healthy New Hampshire brand messages (by a ratio of 3 to 6 times). See the attached color page showing the incompatibility of New Hampshire and casino industry brands.
Our comments on the cost of gambling-related crime will be limited to this: the Center for Public Policy Studies has carefully reviewed studies from all sources, and has identified the Grinols study – cited by the Attorney General – as the best. Casinos are associated with an 8-10% increase in host and surrounding communities of the most serious crimes, including physical assault, rape, robbery, breaking and entering, auto theft, and workplace embezzlement. SB489 offloads the cost of these crimes onto the innocent victims, creating rape victims to fund state services.
SB489 finally abandons previous claims that gambling in New Hampshire would be limited or restricted. By legalizing six casinos, 17,000 slot machines, and 900 table games, New Hampshire would become one of the top four most highly-saturated slot machine states in the US, with residents of all New Hampshire communities within easy drive time. Given the impact data found in other states, the degree of slot machine saturation contemplated in SB489 must be classified as reckless in its disregard for public safety and the general welfare of New Hampshire citizens.
In defense of easy statewide access to slot machines and casinos, the Senate Ways & Means Committee heard last year that only one percent more New Hampshire citizens would become gambling addicts, as if this were a small number. Research shows that each of these 10,000 new addicts would impact the lives of five to ten family members, workplace associates, friends, and crime victims. The Ontario Problem Gambling Research Centre found that 1-in-8 Ontario adults are negatively affected by someone else’s gambling problems, usually taking form as being manipulated into lending money or not having money repaid. Because most gamblers do not have problems does not mean that gambling addiction would not be a widespread problem reaching into and imposing costs onto all our communities.
Gambling industry promoters justify damaging and destroying thousands of lives each year to raise taxes by allocating funds for addiction treatment and promising that casinos would offer self-exclusion programs. Both these programs are very helpful. But only 8-15% of gambling addicts even attempt to use treatment services. In a study of Canadian problem gamblers, only 0.4-1.5% sign up for self-exclusion.
Perhaps the most disturbing cost of legalized casinos is unquantifiable: the immense political influence the gambling industry would wield over this legislature. As they have in every casino state, overwhelming sums of gambling industry lobbying and campaign money would overwhelm our citizen legislature, making the gambling industry the state’s dominant political force. The gaming study commission has taken testimony about the types of serious political corruption seen in casino states.
Massachusetts Senate President Therese Murray, an ardent casino supporter, was quoted two weeks ago expressing these concerns: “Every other state that’s done gaming, someone goes to jail because it’s done too fast, too sloppily.” Senator Murray also warned on Tuesday that gambling revenue should not be included in the Massachusetts state budget, because the necessary regulatory authority could not be set up in time. SB489’s approval timetables are dangerously rapid and its gambling regulatory structure insufficient.
The Governor’s gaming study commission heard testimony on Tuesday from multiple experts, warning that casinos have extensive regional impacts on schools, infrastructure, and housing, and that New Hampshire lacks a means assess, plan for, and mitigate regional casino impacts, as NH does for bulk energy facilities under RSA 162-H, first adopted in 1971. The commission was warned repeatedly, including by casino supporters, that there is no way to rectify failure to plan in advance and that such planning and potential zoning changes take 3 years for a host community. SB489 simply fails to give regionally-impacted towns effective time or means to protect their interests. The approval pacing, regulatory preparation, and disregard for regional impact in SB489 are objectively reckless.
This committee should not recommend passage of this bill before the Governor’s gaming study commission issues its report. Our Coalition is alarmed that SB489’s prime sponsor told the Concord Monitor that there is no need to wait until the Commission completes work, saying, “We’ve had many studies in the past. We’re studied out.” In fact, the state has not once conducted or had the benefit of an independent cost/benefit study, allowing legislators to weigh the facts specific to New Hampshire. Premature action by this committee would justify the cynical conclusion that the legislature does not feel it necessary to weigh the independently-verified costs and harms of predatory gambling.
Even without having the Commission’s findings in hand, this committee has access to substantial and highly objective new reports on the impact of video slot machines and casinos on the State of Connecticut, in Australia, and other nations. Having seen ten years’ impact of slots and casinos on their communities, 80 percent of Australians think that widespread legalization was a serious mistake they would prefer to reverse. After its experience with legalization, Norway banned all slot machines of the type proposed in SB489. Having seen record numbers of its citizens fall into debt and bankruptcy in nearby casinos, Russia last year banished all casinos to four highly remote locations.
Our Coalition urges this committee to act in awareness of the impact data and to recommend a no vote on SB489.