Apr.04, 2010

GAMBLING will take the spotlight again this week.

On Tuesday, a House committee starts debate on whether to pass Senate Bill 489, which would allow up to 17,000 slot machines in six casinos. Outright approval there is doubtful, but the full House can ignore the committee's opinion when it votes on the bill later this month.

By Friday, Gov. John Lynch will bring out his plans for closing a projected $140 million budget deficit. New revenue ideas from the Lottery Commission and other agencies could well be in the mix along with cuts and consolidations. But given the fact it's hard to use a credit card to buy something as innocent as a Powerball subscription, serious money from online gambling in any form seems out of the question, at least for the near future.

SB 489, at the Local and Regulated Revenues Committee holds the promise for plenty of revenue, but the money would not start flowing until after background checks were done, applications were approved and licenses awarded.

License fees would bring up to $60 million from each full-fledged casino and up to $220 million if all six possible sites jumped in. After that, supporters say roughly $200 million would flow to the state each year.

The bill provides the first $50 million to Health and Human Services to offset budget cuts. The money would bring a bonus of roughly $50 million in federal matching funds.

It also doles out money to every county and town in which slots are installed, to police and firefighter training, live racing purse enhancements, commuter rail, and gambling addiction services.

Without a state budget deficit we probably wouldn't be having this conversation. Estimates are red ink will hit $140 million by June 2011. Gov. John Lynch will present a series of cuts to lawmakers a week from tomorrow, roughly double the $47 million the House put on hold two weeks ago.

Lynch has said he opposes the bill, sponsored by Sen. Lou D'Allesandro, D-Manchester, and a group of lawmakers from both parties. He wants to postpone any gambling action until his commission on gaming makes its findings in late May.

Rep. Jane Clemons, D-Nashua, is among the bill's co-sponsors. With cuts already a tough sell in the House, she said the state needs to do something. She called on Lynch to suggest changes that will make the bill acceptable to him. He has criticized it for lax regulation and enforcement, and for spreading gaming too far.

"It's not enough to say he's worried, but then to offer nothing that will make him comfortable," she said.

Amendments to the bill could include tougher regulation and enforcement, fewer slot machines and slot locations, or the addition of New Hampshire Motor Speedway as a possible casino/hotel site.

The committee work session will be in a House hearing room with all of about 20 seats for the public, so it will be standing room only.

The committee has until April 15 to vote on the bill. There are a few possible outcomes -- a vote to kill the bill, which is most likely; one to pass it, which is unlikely, and one to send it to interim study.

A full House vote on April 22 for interim study would be a polite way of killing D'Allesandro's bill, but it would keep the gambling option alive, just in case it's needed before the Legislature closes shop in June.

The House vote is shaping up to be the closest ever on gaming. Party leaders have turned all their representatives loose to choose for themselves. If the bill passes this month, it goes to the House Ways and Means Committee and starts the hearings process all over again.

MARATHON HEARING: The public hearing Tuesday was a long one, stretching nearly 11 hours. Lawmakers testified for the first four hours, followed by a long line of interested parties, consultants and advocates on both sides of the issue.

Attorney General Michael Delaney, who opposed the bill, provided a history lesson, pulled from his files on gambling. He retraced an investigation around a woman who tried to buy into the Belmont dog track in the 1970s. She was eventually rejected because of her ties to money laundering operations the Cleveland mob was running.

The episode included an all-star cast, led by Attorney General Warren Rudman, who went on to the U.S. Senate, and assistant AG David Hess, now in his 10th term in the New Hampshire House.

A lawsuit against Rudman over his refusal to let the track deal close was defended by other members of his office at the time: David Souter, now a retired U.S. Supreme Court justice and former AG, and Tom Rath, former Republican National Committeeman and former AG.

Whether to legalize slot machines has been a nearly annual debate since Gov. Jeanne Shaheen's day, when critics derided the idea as "slots for tots" because revenues were to fund education.

In Delaney's opinion, this year's gambling bill is a worse threat than having the Cleveland mob knocking at the door with a money laundering operation. "That's nothing compared to 17,000 slot machines," he said.

RAMMING ONE THROUGH: If you think an 11-hour long public hearing is a punishment, try the opposite extreme -- having a bill rammed through with no hearing at all.

Massachusetts House Speaker Robert DeLeo has decided that his gambling bill, which adds slots at four tracks and two casinos, will have no public hearing. Period.

DeLeo's argument is that the issue has been debated before and lawmakers are ready to vote. He'll push for a House vote next week, according to a report Friday in The Boston Globe.

If the $200 million a year revenue estimate in New Hampshire seems a bit high, Massachusetts gambling enthusiasts predict more than $1 billion in revenue.

If Massachusetts passes gambling, there's the question of how it will impact the New Hampshire debate. Will it help New Hampshire's pro-gambling crowd, who will want to act fast to lock up the market? Or the anti-crowd, who will argue that Bay State gamblers will stay home, and cut too deeply into gambling revenue, and make it not worth doing.

POWERBALL DROP-OFF: Lottery Commissioner Paul Holloway said Massachusetts has already inflicted pain on the state, with its entry into the Powerball lottery market.

"We are missing the Massachusetts and cross-border sales, and the drop-off was significant. We are having difficulty even hitting a reduced budget number this year," he said. Jackpots typically have to hit $200 million to drive strong sales. With more players in more states, they don't get that high very often.

Subscriptions would be another good way to boost Powerball sales, but there's a problem there, Holloway said. On-line credit card purchases are all but blocked.

Maura McMann, Lottery spokesman, said the federal Unlawful Internet Gambling Enforcement Act law makes it illegal to use credit cards to gamble. Visa and MasterCard are being extra careful about compliance, even though the law exempts state lotteries, she said.

To buy a subscription for 26, 52 or 104 draws per year, the best bet is to do it at a local retailer, or mail in a downloaded form with a check, she said.

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FANTASY SPORTS BETTING: Local and Regulated Revenues chair Rep. Mary Beth Walz, D-Bow, raised eyebrows at the hearing when she asked a gambling addiction expert about fantasy sports betting. Sports betting itself is the top addiction among gamblers, Joanna Franklin had said.

She told Walz that the fantasy variety is too new for her to quantify.

It turns out the only state that offers fantasy sports betting is Montana. The game is offered there through Intralot Inc., New Hampshire's new lottery system provider. Montana runs the game to benefit the state board of horse racing. It has run two football seasons and is now running a NASCAR game. A bettor picks a set of real athletes from a variety of teams. Depending on a weekend performance, one wins or loses.

It's not exactly a gold mine, though. Most of the money goes to jackpots and the horse racing industry, Montana Lottery spokesman Jo Berg said.

The state gets "next to nothing," she said, The game was launched in 2008. In 2009, it produced $4,900 net revenue for the state.

"It's a niche product, and it's doing what it was intended to do -- support horse racing," Berg said.

Intralot has been in discussion about fantasy betting here, too, the New Hampshire Sunday News has confirmed.

Holloway said the company gave the commission "a very tree-top presentation," and promised more detail soon.

"Intralot does not have this thing filled out, diagrammed or anything else -- and we don't have the resources to put one dime into it. Every dime we make has to go toward education," he said.

Holloway said his focus is on seeing Intralot do a good job on converting to the new lottery sales system, which will put new terminals at 1,300 retail locations. "We can't afford to have a hiccup here. It won't be tolerated," he said.