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“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”
Board of DirectorsTodd I. Selig, Chair
David Alukonis
Michael Buckley
William H. Dunlap
Sheila T. Francoeur
Stephen Reno
Stuart V. Smith, Jr.
Donna Sytek
Brian F. Walsh
Kimon S. Zachos
Martin L. Gross, Chair Emeritus
John D. Crosier, Sr., Emeritus
Gambling in New Hampshire – September 2011 Update
Steve Norton, Executive DirectorNH Center for Public Policy Studies
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Fundamental Assumptions of models
• The placement of a casino in New Hampshire (or closer to New Hampshire) will increase the number of people that gamble.
• The farther individuals have to travel, the less likely they are to go to a casino in New Hampshire. And … the closer you are to a casino, the more likely you are to go to a casino.
• Gravity of a facility – attractiveness, size, amenities – and the competition in the market affects gambling behavior.
• For a small share of the population, exposure to gambling results in pathological behavior.– This creates a set of social issues which – if they can be
quantified -- are offsets to the potential benefits.
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Center’s Model of Expanded Gambling
• Take as Inputs– Location– Size– Type– Massachusetts Action
• Produce as Outputs– Economic (jobs, product)– Net Revenue – Crime– Social Costs to NH and local
communities
5 Sites
• North Woods• Southern NH• Ski Country• Southwestern NH• Lakes Region
Sites IDed by Commission to give a sense of the impact of location.Model can be used to simulate other sites.
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Drive time analysis used as the foundation of a gravity model which assumes the more amenities, the greater the attraction.
Adjusts for NH specifics: Tourist multiplier
Allows us to simulate Massachusetts impact
Tested models against existing markets
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Markets?
Standard Economic Development Models
Short Term(Construction)
Long Term (Operation of Facility)
# of Gamblers and Intensity
# of New Problem/Pathological Gamblers
Societal Costs (Govt and Non-
Govt)
New Gambling Tax Dollars
Meals and Rooms, Lottery
Impact
Standard Retail Gravity Model Adjusted to Reflect NH Experience
Costs of Problem/ Pathological
Gamblers
Net Impact
Direct/Indirect
Direct/Indirect
Net Impact
Displacement
Putting It All Together
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Testing Our Approach
• Market Development Tested and adjusted model against existing markets in Middle Atlantic.
• Economic Development Tested RIMS models against REMI model results.
• Social Costs Evaluate against multiple options.
• Peer review of our report.
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What Has Changed? Lots
• The Center’s prior estimates of net benefit to the state $89m with a $500 facility (including slots and table games) in Southern NH.
• Three factors have changed – Massachusetts will act– Gambling revenues have declined– Inflation has increased the costs of managing
the social costs.
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Map Source: Boston Globe
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Markets, Borders and Drive Time: Palmer, MA
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Markets, Borders and Drive Time: Suffolk Downs, MA
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NH Lottery Revenues – Actual through August 2011
Sweepstakes Net Income
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Jul-9
9
Jul-0
0
Jul-0
1
Jul-0
2
Jul-0
3
Jul-0
4
Jul-0
5
Jul-0
6
Jul-0
7
Jul-0
8
Jul-0
9
Jul-1
0
Jul-1
1
Mill
ion
s
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Connecticut Casinos Have Seen a 16% Decline in slot Revenue Since the Peak
Connecticut Casino Slot Machine Revenue(Foxwoods + Mohegan Sun)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Mill
ion
s o
f D
olla
rs
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Changes to Original Study
• Gaming revenue reduced by 15%, based on CT casino and NH Lottery experience.
• Same job creation (economic development)
• Social costs– Increased Regulatory 3% (general inflation)– Increased other social costs 10% (medical
services inflation rate)
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Estimating the Marginal Increase in Problem Gambling
Low and High Estimates of Gambling Disorders Among Induced Gamblers Associated with a $500 Million facility with VLTs and Table Games
6,988
1151
3445
1030227
14,253
2348
7025
2101
464
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Southern NH Southwestern NH Lakes Region Ski Country Great NorthWoods
Induced Gambling Disorders(Low Estimate)Induced Gamblers (HighEstimate)
Original Results
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Economic Benefit Is Local, but Social
Implications Are Not
Low HighSouthern NH
0-30 minutes 1,946 3,96930-60 minutes 4,532 9,24360-90 minutes 510 1,041
Southwestern NH0-30 minutes 142 290
30-60 minutes 700 1,42960-90 minutes 309 629
Lakes Region0-30 minutes 633 1,291
30-60 minutes 2,793 5,69660-90 minutes 19 38
Ski Country0-30 minutes 111 226
30-60 minutes 319 65160-90 minutes 600 1,224
Great North Woods0-30 minutes 78 160
30-60 minutes 37 7660-90 minutes 112 228
Market Area, Large Casino with Table
Games
Gambling Disorders among Induced
Gamblers
Original Results
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Net Benefit: Southern NH
Sept 2011 Update
Calculating Benefit to the State of Expanding Gambling, Large Facility ($500m Investment, 5,000 VLTs and Table Games) in Southern NH
Including Only Revenue and Social Costs
$184
$114
$24$48
$41
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Revenue to State Revenue to State(Assuming
MassachusettsExpands)
Social Costs Net State Benefit
In m
illio
ns $
Govt
Private
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Investment Amount/Size Matters: Economic Development
New Jobs: Operations, Direct and IndirectVLTs and Table Games
190
443 452316
190
949
2,215 2,262
1,582
949
0
500
1,000
1,500
2,000
2,500
The Great NorthWoods
Southwestern NH Southern NH Lakes Region Ski Country
Small Facility ($100mInvestment)
Large Facility ($500mInvestment)
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We Did Not Model Timing
The Costs and Benefits of expanded gambling do not all accrue at the same time and an economic analysis could use a net
present value approach
Economic DevelopmentConstruction (18 Months)Operations
RevenuesLicense FeesNet State (Gambling, M&R, Lottery)
Social CostsNet Benefit to Lowered UnemploymentPathological Gambling BehaviorImpact of Pathological Gambling
Hypothetical Description of Time's Role in Understanding Impact of Gambling
FY 2011: July 1, 2010 FY 2012: July 1, 2011 FY 2013: July 1, 2012 FY 2013 FY 2014
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NH: Overlapping Markets of Existing Proposals (30 Min.)
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Maps of Markets
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What’s Going on in Maine?
• Fall of 2010 Maine voters passed a referendum (by a narrow margin) that would allow a casino at Pigeon Hill, in Oxford County, Maine.
• Maine voters will be asked this November to approve two additional casinos, including one near the southern border, at Scarborough Downs in Biddeford and another at Calais.
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Casino in Oxford, ME will draw NH residents (and tourists!)
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Lowell, Massachusetts: How Would this Compete with
Connecticut?
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Gaming Facilities in the Northeast