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Gambling Expansion in New Hampshire

David Lumbert

Boyd Lever

Andrew Newcomb

Is it a Gamble?


• New Hampshire Gaming Study Commission

– Cannibalization of Lottery Revenue

– Gambling and Crime

– Social Impacts


The Fiscal Impacts of Casino Legalization

Cannibalization of State Lottery Revenue?

VS.


- 43 States with Lotteries

- Contributing $70 to $2500 Million to State

Budgets

The United States: A Nation of Lotteries


What About Introducing Casinos ?

NEED TO EDIT HERE

In Theory:

- “Significant Cannibalization” of Lottery Revenue

- Fink, Rork… what did he say

- Navin… what did he say

But models are specific; Not universally applicable.

Empirical Evidence from the 10 states with both


- 10 States with Lotteries &

Casinos

- The Research Targets to Determine

the Degree of Cannibalization of Lottery Revenues

States with Casinos and Lotteries


On Average, No Decrease in Lottery Revenue post-Casino

State Years Δ Revenue Percent Increase

Colorado 2001-8 44.8 Million 44.3 %

Illinois 2002-8 490 Million 31.0 %

Indiana 2001-8 275 Million 50.1 %

Iowa 2001-8 74.1 Million 42.4 %

Louisiana 2001-8 89.3 Million 31.4 %

Missouri 2001-9 460 Million 90.0 %

New Jersey 2001-8 500 Million 25.0 %

Pennsylvania 2000-8 1.4 Billion 87.5 %

South Dakota 2001-8 118 Million 20.0 %


Casinos and Employment Trends:

Counties Warren, MS

Tunica, MS

Massac, IL

Lee, IA

St. Clair, IL (URBAN)

St. Louis, MO

(URBAN)

Casino Employment

2,443 12,689 883 367 1,184 2,050

# Casinos 4 9 1 1 1 1

County Employment

25,030 5,636 7665 16,708

108,270 540,981

County Population

49,343 9,635 15081 33,313

256,599 1,015,417

Unemployment, pre-casino

8.8% 10.7% 9.5% 3.7% 9.4% 3.1%

Unemployment, post-casino

4.2% 7.1% 4.4% 3.3% 5.9% 3.9%

State Unemployment, pre-casino

8.2% 8.2% 7.5% 3.7% 7.5% 4.2%

State Unemployment, post-casino

5.5% 5.5% 5.4% 3.3% 5.4% 4.7%


Findings and Future Directions:

- Fear of Lethal Cannibalization Not Generally Realistic

- Tax Rate on Commercial Casino ?

-- Compare Revenues in 10 States immediately pre- & post- Casino

- Tease out the magnitude of cannibalization

- Quantify Fiscal Impacts of Changes in Casino-related Employment

- Money is Not Everything: What are the other Impacts of Gambling Expansion ?


Gambling and Crime

Will expanding gambling in New Hampshire lead to an increase in crime?


AC

B

D

E

2008 Crime Rates in NH and United States

NH is safest

state in country


Tourism-Crime Connection

No specific link between gambling and street crime (Miller and Schwartz, 1998)

As population density increases, crime rate increases

Tourists particularly vulnerable

Nongambling resort complex constructed in Kohala, Hawaii and saw crime rise 300 percent in five years


Casino-Crime Connection Casino patrons are

different from patrons to other tourist destinations

More incentives to commit crimes around casinos

Areas that legalize gambling will almost certainly see increases in crime

Per

cent

age

Rep

ortin

g


Casinos Cause Crime8% of crime in casino counties would not be there if the casinos were not there

Crime in casinos remains stable for three years following establishment, but increases after three years

First ten years of casinos operating in Atlantic City crime rose 258%

Casinos are associated with an increase of crime in Wisconsin, 6.7% of major crimes caused by casinos


Casinos Don’t Cause Crime Some riverboat casinos in Indiana

did not see crime raise

Crime in the community does not increase, only crime in the hotels and casinos increases(Curran and Scarpitti,1991)

Casino patrons carry large amounts of cash and drink free alcohol, but actual casinos do not cause crime (Walker, 2008)

2003 Study: Half of cities with casinos saw crime increase, half saw crime decrease


Findings on CrimeNo clear consensus exists on whether or not casinos actually cause crime, but very likely that property crimes in and around the casino will increase

If tourism increases, New Hampshire must be prepared to allocate adequate resources to fighting the crime associated with gambling

Avoid “boomtown” phenomenon (Peak, 1993) where bringing a casino to a rural area causes shock to law enforcement

Further research is needed in determining actual costs of crime, effect gambling has on tourism, and evaluating current crime rates


What are the other social impacts of gambling?


Who areProblem and Pathological

Gamblers?•Comprise 2-5% of total adult population

•Contribute 25-50% of all casino revenues

• Cost $10,000 per pathological gambler in costs annually


Business and Employment Costs Loss Productivity on Job $1,082.00 Lost Time and Unemployment $2,913.00

Bankruptcy $316.00

Suicide N/A

Illness $700.00

Social Service CostsTherapy/Treatment Costs $189.00Unemployent and Other Soc. Svc. $442.00

Family Costs Divorce, Separation $111.00

Abused Dollars $3,834.00

Total$9,587.0

0

Annual Social Cost per Pathological Gambler


Links to Problem Gambling?

Proximity Age

Type of Gambling


Gambling and Loss of Social Capital?

Social Capital is Already Declining…

So?

Casino Gambling Expedites the Loss


Economic Transformation


Findings and Future Directions


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