CONCORD, N.H. — New Hampshire’s net benefit could be zero if a proposed casino is built in the southern part of the state once social and regulatory costs are counted, according to a study released Thursday.

The New Hampshire Center for Public Policy Studies released its analysis on what would happen if the state authorizes one casino to be built requiring a $500 million investment and authorizing 5,000 video slot machines.

The center estimates the state would break even at best if a casino is opened at Suffolk Downs in Massachusetts as planned. The center estimates the New Hampshire casino would generate $138 million in revenues without a casino at Suffolk Downs but only $68 million with the opening of the nearby Massachusetts facility. The study estimates the social and regulatory costs would be $68 million, leaving the state with a net benefit of zero.

“While allowing a casino to operate in New Hampshire will undoubtedly result in tax revenue to the state, the amount of the revenue depends on the established tax rate and license fees charged to developers,” concluded the study.

But the center added that “the regulatory and social costs of expanded gambling could very well cancel out the benefits of increased state revenue.”

The study said competition from Maine and particularly from three planned casinos and a slot parlor in Massachusetts will have an impact on the state’s revenues.

The study said a mid-sized casino with 3,000 video slots, an investment of $300 million and a 30 percent tax on proceeds combined with the opening of a facility at Suffolk Downs could mean a minus $2 million net state benefit. If the state charged a 40 percent tax, the net state benefit rises to $32 million, the study concluded.

Gov. Maggie Hassan is supporting construction of one high-end, highly regulated casino and testified in support of a Senate bill that would legalize up to 5,000 video slot machines and 150 table games. The proposal would tax the proceeds at 30 percent and require a $425 million investment.

Hassan said the center’s study reinforces that one high-end, highly regulated casino can generate an $80 million licensing fee to pay for spending in her proposed budget and will create jobs and produce revenue for the state.

“And while the study appropriately notes the impact of social costs, it fails to recognize that with gambling already taking place in our communities and with Massachusetts moving forward with casinos, costs will be felt with or without a New Hampshire casino. The study also fails to recognize other benefits of a high-end casino in the form of local and state tax revenues and economic development opportunities,” Hassan said in a statement.

The study notes that under that proposal the $425 million investment could be much less because the bill allows the developer to count the $80 million licensing fee and the cost of purchasing or leasing land in the total investment required.

The study said the casino jobs are tied to the size of the investment. It estimates 2,400 people would be employed if $500 million is invested. The center said if the $80 million license fee is included in the $425 million investment required under the Senate proposal, the net minimum investment would be $345 million. That equates to about 1,700 jobs, it concluded.

The center said it calculates 70 percent of the casino’s visitors would be from out of state. The New Hampshire casino visitors would be shifting their dollars from other discretionary purchases.

“Thus even if 1,300 people were employed at a New Hampshire casino on the Massachusetts border, only about two-thirds (858 out of 1,300 jobs) could be considered new jobs, assuming that two-thirds of the spending at the casino would be coming from outside New Hampshire,” the study concluded.

The study also said it was difficult to predict when the state would see new revenue from a license fee or casino operation. Hassan has included $80 million in license fees in her budget, but the center says how soon that might be paid would depend on the speed with which the local voters agreed to allow gambling in their communities and the state’s ability to set up a regulatory structure.

The study noted that higher licensing fees might be possible if the tax rate on proceeds was smaller.


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