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“Gaming in NH Today”Gaming Study Commission

September 15, 2009

NH Center for Public Policy Studies

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Purpose of Presentation

1. Review Center’s Work

2. 30,000 foot view of existing gaming activities in the state.

3. Gaming Revenues1. Magnitude

2. Changes over time

4. Set stage for more in depth conversations.

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What is Gaming?

• Lottery (Powerball/ Megabucks)

• Scratch tickets• Poker games• Games of chance• Dog and Horse Racing• Pari-mutuel wagering• Casinos• Bingo/Lucky 7 • ‘Gray Machines’ – Poker• Office Betting Pools

Issues to Consider:• Legal/Illegal• In/Out of State• On-Line• Authority and ability to

control• Accuracy of Data

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Legal Wagering by New Hampshire Residents

$261

$225

$128

$80

NH Lottery NH Racing NH Charitable NE Casinos

Millions o

f 2008 D

ollars

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State Lottery

• The games run under the direction of the NH Lottery Commission brought in $261 million in FY2008 (total sales).

• Prizes were $155 million and total expense were ($31 million).

• $75 million ($261-$186) was distributed to education trust fund in FY2008.

• Change over time? • NH Lottery Revenue declined by 1.1% from 2007 to

2008. • Instant game revenue was down $4.5 million, Hot

Lotto down by $1.1 million, but Powerball was up by $2 million. (Source: NH Lottery CAFR2008)

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State Lottery

• Breakdown of $261 million in Lottery receipts in FY2008 by major game (excludes NH residents purchasing out of state):• Instant Games (scratch tickets) $184 million• Powerball $46.4 million• TriState Megabucks $10.5 million• Tri State Daily Pick 3 Pick 4 $10.5 million• Tri State Other Games $5.8 million• Hot Lotto and MUSL Games $3.5 million

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Racing/Charitable Gaming Wagers in 2008

• Live dog and horse racing, pari-mutel:– Live racing: $4.5 m– pari-mutuel wagers: $220.5 m

• Gaming for Charitable Organizations– Bingo: $ 17m– Lucky-7 Tickets: $ 64 m– Charitable Games of Chance: $45m

• For a total of: $352 million in racing and gaming wagers

Source: 2008 Racing and Charitable Gaming Commission report

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Racing/Charitable Gaming: Revenue

• State revenue after expenses collected.• Simulcast wagering - $2.1m• Live Racing - $0.2m• Bingo - $1.3m• Games of Chance – $0.6m

• Change? • Racetrack pari-mutuel activities 2007-2008 20%

reduction. • State revenue from gaming activities for the year 2008

increased from 2007 by 33% mainly due to the new Games of Chance assessment fee that impacted the second half of the year.

• New Hampshire charities received over $11.6 million dollars to further their causes in 2008 from all charitable gaming. (Commission report)

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NH Residents gambling outside of

NH• In 2007 New Hampshire residents spent

$79.3 million at New England’s gaming facilities, indirectly paying $11.3 million in gaming and sales taxes to CT, RI and ME (source: UMASS/Dartmouth 9/16/2008)– $46 million at Foxwoods– $30 million at Mohegan Sun– $2.5 million at Twin River (RI)– $0.2 million at Newport Grand (RI)– $0.8 million at Hollywood (ME)

• Does not include gaming outside of New England (Atlantic City, Las Vegas)

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Estimates of Gambling Winnings

• In the 2009 session the Legislature imposed a new tax of 10 percent on:– (a) Gambling winnings of New Hampshire residents from anywhere

derived. (based on IRS form W2G)– (b) Gambling winnings of nonresidents of New Hampshire derived

from New Hampshire entities.• DRA = The Gambling Winnings tax is estimated to yield $5.9

million in FY2010, $7.9 million in FY2011 (from HB1)• ‘Base’ gambling winnings in NH are estimated at $59 million in

2010 and $79 million in 2011.• Assume that reported winnings represent 5-10 Percent of all

(legal) wagers, according to DRA estimate total (legal) wagers by NH residents could be as high as $1billion.

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Summary

• State relationship to wagering varies considerably. • Lottery (State run – keep the difference between revenue and

expenses)• Racing (Private enterprise – state keeps a percentage of

activity)• Charitable Gaming (Private enterprise – state keeps a

percentage of activity).

• Legal wagering by NH residents estimated at $750 million to $1 billion per year - not including non New England gambling, and illegal wagering (online, office pools, ‘gray’ club machines etc.)

• State takes in about $80 million per year, most of that from the NH Lottery.• Represents 3.2% of unrestricted revenues.

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Gaming about 3% of Unrestricted Revenue

2008 NH Unrestricted Fund Revenue Sources

Business Profits Tax17%

Business Enterprise Tax10%

Statewide Property Tax16%

Tobacco Tax7%

Other Revenues4%

Interest and Dividends Tax5%

Estate and Legacy Tax0%

Dog & Horse Racing Revenue

0%

Liquor Revenue6%

Transfer from Lottery3%

Meals and Rooms Tax9%

Beer Tax1%

Board and Care1%

Insurance Taxes4%

Court Fines & Fees1%

Securities Revenue2%

Communications Taxes4%

Real Estate Transfer Tax5%

Net "Medicaid Enhancement"

5%Total:

$2,367 million

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Gaming Revenues as Percent of Total State Revenue

0

1

2

3

4

1999 2001 2003 2005 2007 2009

Percent of Unrestricted Revenue

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