New Hampshire rejects casinos

March 14, 2014 11:14 am

The casino industry almost always gets its way in state capitals - once the lobbyists and campaign contributions roll in. But a majority of House members in New Hampshire voted down a plan yesterday to legalize casinos in the Granite state.

The 173-144 vote against adding one casino in New Hampshire was rebuke for Gov. Maggie Hassan, the main backer of more gambling. Other proposals to allow six slots parlors were also rejected.

It would be nice to say the vote signals that the tide is turning against casinos, which have failed to deliver on many of the promises in other states. But it is more likely the vote is a testament to the truly democratic way New Hampshire’s House is structured. The members are only paid $100 a year and many are retirees. Unlike other states, New Hampshire’s House members are not slick career politicians beholden to special interests.

Most important, the House members understand that a public policy built around inducing residents to gamble away their hard-earned money is a bad way to fund the government.

Delaware props up faltering casinos

March 14, 2014 9:52 am

Here is a peak at the future for other states that get into the casino game.

Delaware used to generate millions in tax revenue from its three casinos. But competition from surrounding states killed the golden goose.

So now, Delaware lawmakers – who are beholden to the gambling industry - are scrambling for ways to help the casinos make money. Last year, Gov. Jack Markell gave the casinos an $8 million bailout. Then he appointed a panel to come up with other ways to help the casinos. Here is some of what the panel is recommending:

* Eliminate the annual $3 million table games fee paid by the casinos.

* Slash the tax rate the casinos pay on table game revenue from 29.4 percent to 15 percent.

* Split 75 percent of the costs for slot machine vendors and fees, rather than have the casinos continue to pay the full amount.

The moves are expected to cost the state $20 million. What other businesses could get such concession from the government once profits dropped? Only when you give large enough campaign contributions will lawmakers do what you want.

The concessions underscore what other states face once their casino revenues drop – as in happening in many states now that the gambling market has become saturated. Once states get hooked on gambling, the lawmakers are forced to do whatever it takes to help prop up the casinos. Just goes to show that the House always wins.

Ohio’s $1 billion casino shortfall

March 12, 2014 9:22 am

In 2009, Ohio residents were told the four proposed casinos would generate $1.9 billion in annual tax revenue for the state. The figure helped convince slightly more than half of the state’s residents to approve a referendum legalizing casinos.

But after the first full year of operation for all four casinos, the actual revenue was $839 million, according to this report. Turns out the state’s projection was off by $1 billion. To quote Texas Gov. Rick Perry: “Oops.”

Of course, the $839 million figure does not take into account any of the social and economic costs that also come with casinos. Nor, does the figure consider the drop in spending at area businesses. After all, not only are the revenue figures well below the projection, the Ohio casinos are not generating much new spending. That’s because casinos divert spending that would have gone to buy cars, clothes, food and other goods and services in the state.

But since the casinos are taxed at a higher rate, the state pockets more tax revenue. Usually casinos experience solid growth at first, but then revenue figures level off and begin to drop. Ohio’s weak start does not bode well since the numbers came in low and are likely to keep dropping in future years. Ohio’s revenue problem underscores a broader industry concern: so many other states have legalized casinos recently the market is getting saturated. (Shocked – just shocked – that gamblers are not flocking to the casino in a former department store in downtown Cleveland.)

The casino shortfall in Ohio should serve as a cautionary tale for other states, like Florida and New Hampshire, considering whether to legalize casinos. The casino hype rarely lives up to the reality.