February 08. 2014 10:16PM

Casino bills geared to protect charities, but flaw cited

Staff Report

From the start, games of chance were only legal in New Hampshire if they were played for charities.

And supporters of expanded gambling have been careful to add protections for those charities in their proposals. But some say it won't be enough.

Sen. Lou D'Allesandro, D-Manchester, a leading proponent of expanded gambling, said he understands how important gambling revenues have become to New Hampshire nonprofits - to the tune of $13.1 million in the last fiscal year.

He inserted a clause in his latest casino measure, Senate Bill 366, that would make any charities that held charitable games during the 2012 fiscal year eligible to receive payments from a casino if they lose money because of the competition.

Essentially, the casino would have to pay the charities the difference between what they made in fiscal 2012 and what they make after the casino arrives.

"We've made every effort to preserve what the charities get, which I think is extraordinary, to be honest with you," D'Allesandro said. "We don't want the charities to lose out. They have been depending on this revenue, and we've made every effort to make sure that they continue to get the revenue."

Rep. William Butynski, D-Hinsdale, plans to propose a similar amendment to the House expanded gambling measure, House Bill 1633. And he said, "Frankly, I don't think the casino bill will pass without it ... because people care about charities and the good work that they do."

Butynski said the charities here should really be worried about what happens if Massachusetts puts a casino near the border, since there won't be the same protections New Hampshire lawmakers are proposing.

But Dick Anagnost, a Manchester developer who owns licensed gaming facilities in Keene and Manchester, said that protection for charities would most likely only last for a year or two, since it would only apply to those that are currently holding games.

Once a big casino comes in, he said, smaller facilities such as his won't be able to compete.

"When I go out of business, they're not going to be able to run (charity games) anymore," he said. "As soon as they don't run anymore, they don't get any money.

"They might pay it the first year, they might pay a smaller amount the second year, but by the third year, there won't be any more charitable gaming operators."

Anagnost said the only charities that would survive are those that currently have their games at Rockingham Park, if that's where a casino ends up sited. "But all the rest of the charities across the state will be impacted."

Indeed, under SB 366, if a charity stops engaging in charitable gaming, "such charity shall no longer be eligible to receive an annual charitable benefit."

D'Allesandro acknowledged if a licensed gaming facility went out of business, the charities that run their games there would no longer be covered by the hold-harmless provision. "That would be problematic," he said.

Anagnost is not the only one predicting doom for New Hampshire's unique system.

"Charitable gaming will be wiped out if there are casinos," said Jim Rubens, a former Republican state senator from Hanover who has been a leading opponent of expanded gambling.

"Because the casinos will have everything the charitable gaming operations have, with no bet limits, and they'll have slot machines and all kinds of free goodies subsidized by the profits from the monopoly slot machines," Rubens said.

"And that hurts a whole bunch of charities, hundreds of charities that depend on this system."

Rubens resigned his leadership role with the Granite State Coalition Against Expanded Gambling when he launched his campaign for U.S. Senate last year, and he said he is not campaigning on the issue.

Former Democratic state Sen. Harold Janeway of Webster has stepped into that role, along with Steve Duprey, a Concord businessman and former Republican Party chairman. The two now share the helm of Casino-Free New Hampshire, which Janeway said has "absorbed" the Granite State Coalition.

Janeway said the biggest difference between what the state has now for games of chance and the expanded gambling proposed is that the smaller casinos don't have slot machines. "This casino proposal is really just all about video slots," he said, "which are a totally different order of, I would call it, toxicity."

Today's slots, he said, "represent the work of both computer technicians and psychologists ... and it really boils down to having machines that will extract the greatest amount of money in the shortest period of time from the players."

Janeway said he does welcome increased scrutiny of charitable gaming, to make sure the charities are getting the 35 percent of gross revenues, after prizes, that's required by state law.

Charitable gaming in New Hampshire "evolved in a fairly free-form, unregulated or lightly regulated ... manner, without many people being aware of the totality of it," he said. "The oversight is certainly light and uneven."

But he wouldn't call it casino gambling. "It's sort of mom-and-pop. It draws on the neighborhood."And he said, "What goes on at those places, I don't think, is all that addictive."