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How NH allowed gaming to grow

Staff Report
February 08. 2014 10:19PM

As lawmakers debate the merits and pitfalls of bringing casino gambling to New Hampshire, the reality is that casino-style games of chance are already played nightly across the state.

On any given night, in small casinos from the Lakes Region to the Seacoast, you can play poker, roulette, craps or blackjack - not to mention bingo and Lucky 7 tickets.The difference is that, by state law, those games of chance are run on behalf of hundreds of New Hampshire charities, which get 35 percent of the gross revenues after prizes. That's why it's always been called "charitable gaming" here.

The charities that rely on games of chance for raising critical funds include groups that support the arts, social services, animals, law enforcement, youth sports, veterans and even religious organizations.

But gone are the days of Monte Carlo nights run at the local veterans hall. Today's games of chance are run by professional game operators in nine licensed gaming facilities in Belmont, Hampton, Hampton Falls, Keene, Manchester, Milford, Rochester, Salem and Seabrook.

According to Paul Kelley, director of the state Racing and Charitable Gaming Commission, charitable gaming raised more than $13.1 million for charities in the fiscal year that ended June 30, 2013. That includes more than $4.6 million from games of chance

According to the RCGC's 2013 annual report, those proceeds were driven by $75.6 million in betting on games of chance, $58.3 million in sale of Lucky-7 tickets, and bingo sales of $17.1 million.That gambling is already going on legally in New Hampshire.

Still, those involved in such businesses say there's a big difference between the nine "licensed gaming facilities" the state currently has and the grand casino envisioned by expanded gambling proponents.

The main distinction is that the current halls don't allow slot machines, the biggest moneymaker for the big casinos. And the state-mandated betting limits - $4 on table games - are a fraction of the big stakes wagered in Las Vegas, Atlantic City or Foxwoods.

If you visited one of the current gaming facilities, Kelley said, "you would see no slot machines. You would see no mini-skirted girls running around with cocktails."

"You will see hours that are much more curtailed ... and you'll see very low bets."

Attorney General Joseph Foster last week told lawmakers at a hearing on a House measure that would allow one high-end "destination" casino that the gaming New Hampshire has currently is "the minor leagues - maybe even the Little Leagues compared to what we have in this bill."

Kelley said the biggest changes in charitable gaming came in 2006, when the Legislature moved the authority for administering and regulating the games from the local chiefs of police and the Attorney General's Office to what was then the state pari-mutuel commission (now the Racing and Charitable Gaming Commission).

That same year, lawmakers also allowed charities, which had complained they were having trouble finding volunteers to run their "Monte Carlo" nights, to hire professional "primary game operators," Kelley said.

"That created a bit of a cottage industry, but it also allowed a lot more charities to participate in fundraising," he said.

So now, he said, "Instead of a charity looking to hire a professional, it's a professional looking for charities. The more charities the professionals have, the more money they make."

By law, the charities get 35 percent of the gross revenues after prizes.

The state also gets its share: 10 percent of the "rake" in games where tokens have monetary value and 3 percent in games where the tokens have no value, Kelley said.

In the fiscal year that ended last June 30, the state saw $1.6 million in revenue from games of chance (and about the same from bingo and lucky 7 sales). After deducting expenses, the state put $1.4 million in the education trust fund from games of chance. Over the years, the Legislature has amended charitable gaming laws many times.

The issue is back this year in House Bill 1630, which overhauls RSA 287-D, the games of chance law. The bill would bar game operators from charging the charities fees with the exception of rent. And it tightens regulation of so-called "redemption slot machines."

It also would set up a study commission "to determine the most appropriate system for sustaining ongoing resources to charities from gaming," including a determination of whether the continued existence of such games "is in the best interest of the citizens of New Hampshire."

Kelley, who said he considers himself the "advocate general" for the charities, said he's opposed to game operators charging any fees at all. "I think the charities should make 35 percent. That should be sacrosanct."

Charitable Gaming in NH chart

So how does the state make sure the charities are really getting 35 percent of the night's take? "It's very challenging because it's an all-cash industry," Kelley acknowledged.

But he said there are safeguards built into the games of chance law, including mandatory security cameras trained on all the tables and anywhere cash is handled; a $300,000 bond paid by each primary game operator; and state auditors who do field inspections and "follow the money."

Manchester developer Dick Anagnost owns licensed gaming facilities in Manchester and Keene. He started the latter operation when the dog track was still running in neighboring Hinsdale and moved it to a Keene hotel after the track closed in 2008.

And he took over the former Manchester Bingo Center operation in a former cinema complex he owns off South Willow Street, when the former tenant went out of business.

Anagnost said his company "pioneered" games of chance at the Manchester hall, under the name Granite State Poker Alliance. "It expanded the customer base and expanded the number of charities we could serve, and it was profitable at that time," he said.

After the state started taxing games of chance and guaranteed the charities 35 percent of gross revenues, he said, "the profitability really diminished, like 85 to 90 percent."

But he's stayed in the business, he said, because of the 200 to 300 charities that depend on the revenue from both games of chance and bingo/lucky 7 ticket sales. With state budget cuts, he said, many nonprofit organizations that used to get funding from the state have come to depend even more on charitable gaming.

He said his Anagnost companies give "significantly more" to charities than he makes through bingo and games of chance.

"The only reason I continue to do this is, what would happen to all the charities that I serve when I stop?" he asked. "That's truly why we do it."

Anagnost's two casinos run games for about 150 charities a year; he has a waiting list and rotates those into the mix. But he said most players probably couldn't tell you which charity is getting the proceeds on any given night.

"They're coming to play poker, not coming to support the charities."

He said getting a high-end casino in southern New Hampshire would put small operations like his out of business and hurt charities that rely on them.

"Charitable gaming as we know it would go out of business," he said.

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