Arena, theater, hospitality officials say casino will 'cannibalize' their businesses, revenueStaff Report
May 02. 2013 4:59PM
CONCORD -- Key executives in the state's entertainment and hospitality industries warned House lawmakers Thursday their businesses will suffer big losses and may be driven out of business in some cases if a casino opens in southern New Hampshire.
Casino "cannibalization" of entertainment dollars will hurt the Verizon Wireless Arena, smaller nonprofit theatre venues such as the Capitol Center for the Arts, as well hotels and restaurants throughout the region, the officials told a House subcommittee investigating the "community impact" of opening a $425 million casino on the Massachusetts border.
Three House subcommittees reviewing separate aspects of Senate Bill 152, which would legalize a facility with 1,500 slot machines and 500 table games at a single facility, are scheduled to report their findings to a full House Finance and Ways and Means "supercommittee" on May 9. A vote by the full House on casino gambling is expected later this month.
Senate Bill 152 has already passed the state Senate and has the strong support of Gov. Maggie Hassan.
Thursday, Manchester Alderman and Democratic state Rep. Patrick Long formally proposed an amendment to the casino bill that would protect the Manchester arena. His proposal would limit a casino's entertainment venue to 1,500 seats.
Arena general manager Tim Bechert told the lawmakers that without the protection of allowing no more than 1,500 seats at a casino complex, the Manchester facility would be affected "in an incredibly negative way."
Casinos, he said, have no problem paying much bigger dollars for top acts and charging less for tickets than conventional arenas because they are willing to accept having their entertainment venues taking losses.
"It's simply a means to get people to drive to that destination to spend time at their tables," Bechert said.
Bechert said the arena, which is owned by the City of Manchester, "is thriving currently but will be threatened with serious jeopardy" without the protective amendment. The arena's seating capacity ranges from 2,700 to 10,400, Bechert said.
But the arena's proposed amendment "would mean I'm out of business," said Nicolette Clarke, executive director of the Capitol Center for the Arts in Concord, which has a seating capacity, she said, of 1,300.
She said nonprofit, community-backed "presenting houses," such as the Capitol Center, the Music Hall in Portsmouth, the Colonial Theater in Keene and the Lebanon Opera House "operate on the thinnest of margins.
She said the Capitol Center, which is vital to the Concord economy, cannot afford to match the payment made for acts by a casino.
"We are the face of what's going to happen with a casino," Clarke said. "We are operating on the very edge."
Tom Boucher, past chairman of the New Hampshire Restaurant and Lodging Association and owner of seven locations of T-Bones, Cactus Jack's and the Copper Door, warned that gambling revenue in New Jersey, Connecticut and Delaware has dropped sharply since the middle of the last decade and will not be the panacea promised by supporters.
He said the bill allows for a small casino in comparison to the destination resorts elsewhere. The New Hampshire casino, he predicted will be "totally geared to the local market and local consumers," which, he said, will be potentially devastating to the hospitality industry, which, he said, is the state's largest industry and revenue producer.
Also Thursday, University of New Hampshire hospitality management professor-emeritus Raymond Goodman said his review of gambling in other states has shown that "there is a big bang" in economic activity "when you first build, but after about five years, it begins to deteriorate.
He said an economic downturn leads to a drop in business at casinos. The facility then "begins to degenerate. It gets less attractive."
He said a $425 million casino at Rockingham Park, the likely site for a New Hampshire casino could not compete with the more than $1 billion casino resorts in Connecticut, for instance, for people from throughout the country looking for a "destination" in which to gamble.
A New Hampshire casino, he said, will become a site for "convenience gaming," attracting people only from nearby areas, which he said, will result in "a tremendous amount of social costs locally."
At the same time, a casino in New Hampshire will "degrade" the state's "squeak clean" image and brand, he said.
Former state university system board chairman Andy Lietz, who headed former Gov. John Lynch's Gaming Commission from 2009 to 2010, said the panel found after 10 months of study that there are social costs that come with the revenue from casino gambling.
Lietz said he was "agnostic" on gambling when he began his chairmanship of the commission and remains so, but he said he personally believes that gambling should be examined as a stand-alone public policy issue, not in the context of the budget debate, as it is this year.
Based on that report Lynch continued his long opposition to against expanded gambling, concerned that there was no way to prevent proliferation and that it would have a negative impact on the state's quality of life.
Lietz said Thursday a state cannot prevent proliferation with any law because any law can be changed. The only way to prevent proliferation, he said, would be to write such a provision into the state constitution, which is highly unlikely to occur.
Lietz said the commission visited towns in Connecticut near the Foxwoods and Mohegan Sun casinos, and officials there told the panel members the facilities brought positives and negatives.
The positives are the revenues, which helped fund education. But the down side was the extra costs brought to the schools by the addition of what Lietz called "a different mix of students" requiring, for instance, English as a second language courses and teachers.
Lietz said the commission held community meetings, where people "were concerned about the influence of outside lobby groups" associated with gambling.
Some felt, "I'm an adult and I ought to be able to decide what I want to do for entertainment and I don't need the state telling me what to do," he said.
Others had no problem with gambling "as long it was not in my backyard," he said.
Lietz said that as chair of the commission, he sought to view "the long-term implications of what we do as opposed to the short-term reaction."
But he also said, "Gambling is the ultimate voluntary tax, but it comes with societal costs."