Bill Text - HB593 (2009)

Authorizing the licensing and construction of destination resorts with gaming facilities including table gaming and video lottery machines, and authorizing gaming facilities at existing pari-mutuel licensees, including table gaming and video machines.


Revision: Feb. 19, 2009, midnight

HB 593-FN-A - AS INTRODUCED

2009 SESSION

09-0238

08/04

HOUSE BILL 593-FN-A

AN ACT authorizing the licensing and construction of destination resorts with gaming facilities including table gaming and video lottery machines, and authorizing gaming facilities at existing pari-mutuel licensees, including table gaming and video machines.

SPONSORS: Rep. Emiro, Rock 3; Rep. R. Holden, Hills 7

COMMITTEE: Local and Regulated Revenues

ANALYSIS

This bill:

I. Allows the construction of 2 destination resorts in the northern tier of the state and 1 destination resort in the southern tier of the state.

II. Allows table gaming and video lottery machines at destination resorts and pari-mutuel licensees.

III. Establishes the position of executive director of gaming facilities in the lottery commission.

IV. Establishes a bidding and licensing process for awarding gaming licenses.

V. Distributes proceeds from gaming facilities to the general fund, to the municipality where the gaming facility is located, to the alcohol and drug abuse treatment program, the department of resources and economic development, the department of transportation, and the gaming operator.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0238 08/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT authorizing the licensing and construction of destination resorts with gaming facilities including table gaming and video lottery machines, and authorizing gaming facilities at existing pari-mutuel licensees, including table gaming and video machines.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Purpose Statement. The General Court finds that for economic purposes the permitting of destination resorts and convention centers that include full gaming facilities in addition to video lottery terminals at the current licensed race tracks, would provide a much-needed economic boost to the areas surrounding the host community in addition to new revenue sources to the state, providing jobs, increasing income for local businesses, and increasing room and meals revenue.

2 New Chapter; New Hampshire Gaming Facilities. Amend RSA by inserting after chapter 284 the following new chapter:

CHAPTER 284-A

NEW HAMPSHIRE GAMING FACILITIES

284-A:1 Definitions. In this chapter:

I. “Applicant” means a person who has applied for a gaming license, a gaming work permit, or approval of any act or transaction pursuant to this chapter.

II. “Commission” means the state lottery commission established in RSA 284:21-a.

III. “Destination resort” means a new development which is issued a gaming license in accordance with this chapter. The destination resort shall include new hotel rooms, restaurants, entertainment facilities, and convention and meeting space which may provide support to businesses in the surrounding region.

IV. “Executive director” means the executive director hired by the commission under RSA 284-A:4.

V. “Gaming” means the dealing, operating, conducting, maintaining, or exposing for money any table game or any video lottery machine as defined, but excluding:

(a) Charitable bingo.

(b) Charitable gaming.

(c) Wagering on horse and dog races.

(d) Lottery games conducted by the state lottery commission.

VI. “Gaming area” is an area where table games, video slot machines or other methods or gambling are done as a general course of business.

VII. “Gaming device” means any mechanical or electrical contrivance or machine used in connection with gambling, gaming, or any game.

VIII. “Gaming employee” means any person employed at a gaming facility, empowered to extend credit or complimentary service.

IX. “Gaming facility” means those places where licensed gambling or gaming occurs as a course of legal business.

X. “Gaming license” means a license issued by the commission under authority of this chapter which authorizes a person to operate a gaming facility in the state.

XI. “Gaming licensee means any person who is issued a valid gaming license under this chapter.

XII. “Gaming operator” means the person who controls, directly or indirectly, the applicant or licensee who will operate the gaming facility.

XIII. “Gaming work permit” means a permit issued by the commission which authorizes the employment of the holder as a gaming employee at a facility licensed for gaming.

XIV. “Gross gaming revenues” means the total of all sums actually received by a gambling facility from gaming operations, less the total of all sums paid out as winnings to patrons.

XV. “Hearing examiner” means a commissioner or other person authorized by the commission to conduct investigative hearings.

XVI. “House profits” means gross revenues from the gambling facility in their entirety, less operating and administrative expenses and bond payments.

XVII. “Northern tier” means municipalities north of Concord and west of Peterborough.

XVIII. “Pari-mutuel licensee” means an existing facility licensed by the racing and charitable gaming commission and currently in operation as a betting facility wagering on horse or dog racing which may be issued a license to have video lottery machines at the existing facility in accordance with this chapter.

XIX. “Person” means any corporation, association, operation, firm, partnership, trust, or other form of business association, as well as a natural person.

XX. “Southern tier” means municipalities along the Massachusetts border.

XXI. “Table game” means any banking or percentage game in which there is an opportunity for the player to use his or her reason, foresight, or other strategy to increase the expected return including: roulette, twenty-one, blackjack, baccarat, chemin-de-fer, dice, any game of poker, and any video representation of such a game. For the purposes of this chapter, “table game” shall not include charitable bingo, any charitable gaming, or betting of any sort upon sports events or other activities not conducted in a licensed gaming facility. The term “table game” shall not include video lottery machines.

XXII. “Video lottery machine” means any mechanical, electrical, or other device, contrivance, or machine which, upon insertion of a coin, token, or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the machine to receive cash, premiums, merchandise, tokens, or anything of value, whether the payoff is made automatically from the machine or in any other manner.

284-A:2 Authority. Gaming as defined in this chapter shall be lawful in the state subject to the reasonable licensing, regulation, and oversight of the commission.

284-A:3 Commission Authority. The commission shall license, regulate, and oversee gaming facilities including the establishment of video slot facility at existing pari-mutuel licensee locations and the establishment of destination resort facilities with amenities including gaming at appropriate locations. The commission shall administer this chapter and may adopt rules pursuant to RSA 541-A consistent with this chapter, to carry out the powers and provisions of this chapter.

284-A:4 Executive Director and Assistants. The commission may appoint an executive director and such other assistants as deemed necessary to administration and policing to carry out the purposes of this chapter. The executive director shall serve at the commission’s pleasure and shall be paid from gaming proceeds. No person shall be eligible for nomination and appointment to such office unless he or she has had at least 5 years of responsible administrative experience in public or business administration. The executive director shall be responsible to, and under the supervision and direction of the commission, for the administration of this chapter and for enforcement of the rules adopted by the commission.

284-A:5 Commission Duties; Investigators. The commission shall:

I. Establish and oversee the bidding process, review such bids, and select suitable and qualified gaming operators.

II. Establish and oversee the process of making applications for gaming licenses, and making the decision to grant or not grant a gaming licenses as requested in the applications.

III. Regulate, oversee and police the gaming operations within the state.

IV. Collect, monitor, and administer the revenues distributed from gross gaming revenues in accordance with this chapter.

V. Monitor, police, and investigate the circumstances surrounding any act or transaction for which commission approval is required.

VI. Monitor, police, and investigate the conduct of all persons having a material involvement, directly or indirectly, with the operation or management of the gambling facility to ensure that there shall be no material involvement directly or indirectly with the management or operation of the gambling facility by:

(a) Unqualified or disqualified persons.

(b) Unsuitable persons.

(c) Persons whose operations are conducted in an unsuitable manner, or in an unsuitable place or location.

284-A:6 Licensing, Bidding, and Location.

I. The commission may award a maximum of 3 gaming licenses for gaming facilities at destination resorts, awarding no more than one gaming license in the southern tier and no more than 2 gaming licenses in the northern tier. Such gaming licensees shall be at least 60 miles apart. The commission may award gaming licenses to existing pari-mutuel licensees.

II. The bidding and licensing process for awarding gaming licenses to a destination resort located in the southern tier shall:

(a) Require a license fee of $50,000,000 upon being selected and approved for a license, of which sum 95 percent shall be paid to the state’s general fund and 5 percent shall be paid to the municipality.

(b) License locations that provide significant economic opportunities for the surrounding region including job creation, increased revenue for local businesses, and increased room and meals revenue.

(c) Require a minimum capital investment of $300,000,000 in the land, infrastructure and new construction for the facility to be completed within 3 years of issuance of a license.

(d) Include, as required construction, a minimum of 150,000 square feet of new building space where a minimum of 33 percent of the space is used for non-gaming purposes such as food, entertainment, and meeting.

(e) Include as required construction as part of the new buildings there shall be a minimum of 50,000 square feet of convention and meeting space.

(f) Include an 18 hole championship golf course associated with the facility and other outdoor recreation facilities which together comprise a minimum total of 150 acres of land.

(g) Include authorization to operate table games and video lottery machines.

(h) Memorialize the representations and commitments made by the applicant during the bidding and licensing process including:

(1) A minimum capital investment.

(2) An estimate of the minimum first year’s distribution to the state’s general fund.

III. The bidding and licensing process for awarding gaming licenses to a destination resort located in the northern tier shall:

(a) Require a license fee of $50,000,000 dollars upon being selected and approved for a license of which sum 95 percent shall be paid to the state’s general fund and 5 percent shall be paid to the municipality.

(b) License locations that provide significant economic opportunities for the surrounding region including.

(c) Require a minimum capital investment of $200,000,000 in the land, infrastructure and new construction for the facility to be completed within 3 years of issuance of a license.

(d) Include, as required construction, a minimum of 100,000 square feet of building space of which a minimum of 33 percent shall be used for non-gaming purposes such as food, entertainment, and meeting space, and room for use as public functions such as weddings and family gatherings conducive to the tourism themes of the northern tier.

(e) Include a minimum of 150 rooms on site for guests.

(f) Include amenities associated with the tourism in the north country on site as well as other outdoor recreation facilities within a 20 mile radius of the facility which together comprise at least 150 acres of land.

(g) Include authorization to operate table games and video lottery machines.

(h) Memorialize the representations and commitments made by the applicant during the bidding and licensing process including:

(1) A minimum capital investment.

(2) An estimate of the first year’s distribution to the state’s general fund

IV. The bidding and licensing process for awarding gaming licenses to pari-mutuel licensees shall :

(a) Require a license fee of $30,000,000 upon being approved for a license.

(b) Be at the locations of existing pari-mutuel licensees under RSA 284.

(c) Require a minimum capital investment of $100,000,000 in the land, infrastructure and construction for the facility to be completed within 3 years of issuance of a license. Be limited to existing licensed business and 2,000 new video lottery machines. No table games shall be allowed under a video slot facility license.

(d) Memorialize the representations and commitments made by the applicant during the bidding and licensing process including:

(1) A minimum capital investment

(2) An estimate of the first year’s distribution to the state’s general fund.

(e) No license holder shall be a major investor or participant in a second site be it a destination resort with gaming as licensed under this provision or a pari-mutuel licensee licensed under this provision. No person may hold management positions nor be in a controlling position in more than one licensed under this provision of law under any circumstances.

284-A:7 Revenues from Gaming Licensees at Pari-Mutuel Licensees; Distribution. Gross gaming revenues at video slot facilities shall be distributed as follows:

I. Forty-three percent of the gross gaming revenues generated by video lottery machines shall be paid to the general fund of the state.

II. Two percent of the gross gaming revenues from video lottery machines shall be paid to the municipality in which the operator licensee operates video lottery machines.

III. One percent of the gross gaming revenues shall be paid to the alcohol and drug abuse treatment program as established in RSA 172 to treat problem gambling.

IV. Two percent of the gross gaming revenues from video lottery machines shall be paid to the state treasurer to be credited to the department of resources and economic development, division of travel and tourism development for purposes of promoting tourism in the state.

V. One percent of the gross gaming revenues from video lottery machines shall be paid to the state treasurer to be credited to the department of transportation for the purposes of meeting transportation needs including rail transit and mass transit which are not eligible for state highway funds.

VI. The balance of the funds from the gross gaming revenues from video lottery machines shall be retained by the gaming operator.

284-A:8 Gross Gaming Revenues from Destination Resorts; Distribution. Gross gaming revenues at destination resorts shall be distributed as follows:

I. For the first $75 million of gross gaming revenues:

(a) Forty-three percent of the gross gaming revenues shall be paid to the general fund of the state.

(b) Two percent of the gross gaming revenues shall be paid to the municipality in which the gaming licensee operates.

(c) Two percent of the gross gaming revenues from video lottery machines at destination resorts shall be paid to the state treasurer to be used by the department of resources and economic development, division of travel and tourism development for purposes of promoting tourism and economic development in the state.

(d) Three percent of the gross gaming revenues shall be paid to the state treasurer to be credited to the department of transportation for the purposes of meeting the region’s transportation needs including rail transit and mass transit which are not eligible for state highway funds.

(e) The balance of the funds from the gross gaming revenues shall be retained by the gaming operator.

II. For the second $75 million of gross gaming revenues:

(a) Fifteen percent of the gross gaming revenues shall be paid to the general fund of the state.

(b) Two percent of the gross gaming revenues shall be paid to the municipality in which the gaming licensee operates.

(c) Two percent of the gross gaming revenues from video lottery machines generated shall be paid to the state treasurer to be credited to the department of resources and economic development, division of travel and tourism development for purposes of promoting economic development in the region.

(d) Three percent of the gross gaming revenues shall be paid the state treasurer to be credited to the department of transportation for the purposes of meeting the region’s transportation needs which may not use state highway funds.

(e) The balance of the funds from the gross gaming revenues shall be retained by the gaming operator.

III. For combined gross gaming revenues greater than $150,000,000 and up to $300,000,000.

(a) Six percent of the gross gaming revenues shall be paid to the general fund of the state.

(b) Two percent of the gross gaming revenues shall be paid to the municipality in which the gaming licensee operates.

(c) Two percent of the gross gaming revenues from video lottery machines generated shall be paid to the state treasurer to be used by the department of resources and economic development for purposes of promoting economic development in the region.

(d) Three percent of the gross gaming revenues shall be paid the state treasurer to be used for the purposes of meeting the region’s transportation needs which may not use state highway funds.

(e) The balance of the funds from the gross gaming revenues shall be retained by the gaming operator.

IV. For destination resorts with gross gaming revenues exceeding $300,000,000, the total aggregate percentage of gross gaming revenues distributed to the general fund of the state of New Hampshire shall be 20 percent; all other distributive shares shall remain as set out in 284-A:8, III(b), (c), (d), and (e).

284-A:9 Payment of Revenues. The gaming licensee shall deliver the amounts payable to the state in immediately available funds of the United States on a weekly basis on the first business day of each week. At the time payment is delivered, the gaming licensee shall provide a written accounting of net income generated by the gaming licensee on an aggregate basis. The gaming licensee shall pay a penalty of $1,000 for each day that payment or the accounting is not delivered in a timely basis to the state and a penalty of $1,000 for each day that payment or the accounting is not delivered to the municipality.

284-A:10 Construction; Commencement of Operations.

I. Construction plans shall be approved by all appropriate local and state agencies and all necessary state and local permits shall be obtained before the commencement of any destination resort construction. The gaming licensee shall be selected by the commission, after receiving proposals and bids from applicants. The selected gaming licensee shall pay a fee of $100,000 to the commission to fund construction oversight and initial regulatory oversight. The selected gaming licensee shall apply for necessary construction permits within 6 months of selection by the commission and shall begin construction within one year of obtaining necessary permits.

II. Temporary operation prior to completion of construction may be permitted as agreed during contract negotiation.

284-A:11 Inspection. The commission and its agents, inspectors, and employees shall have the authority, without notice and without warrant, to:

I. Inspect and examine the premises on which gambling is conducted.

II. Inspect all equipment and supplies in, about, upon, or around such premises.

III. Seize summarily and remove from such premises and impound any such equipment or supplies for the purposes of examination and inspection.

IV. Inspect books, memoranda, and documents showing the receipts and disbursements of the casino.

V. Seize, impound, or assume physical control of any book, record, ledger, game, device, cash box and its contents, counting room or its contents, or casino operations. Any equipment, supplies, records, or other objects or documents seized, impounded, or physically controlled by the commission under this section may be held pending the filing and disposition of a complaint.

VI. Inspect the facility at any time during hours of operation and certify the accuracy of money and vouchers received by the facility, in order to ensure compliance with applicable statutes and the rules of the commission.

284-A:12 Subpoena; Service of Process. The commission shall have authority to issue subpoenas and compel the attendance of witnesses at any place within this state, to administer oaths, and to require testimony under oath. Any process or notice may be served in a manner provided for service of process and notice in civil actions.

284-A:13 Commission Records. The commission shall keep a record of all proceedings under this chapter. The commission may also maintain such other files and records as it deems necessary.

284-A:14 Enforcement.

I. The commission shall request the attorney general to proceed in any action or prosecution to enforce the provisions of this chapter.

II. At any time within 5 years after any amount of revenue required to be collected under this chapter becomes due and payable, the commission through the attorney general may bring a civil action in the courts of this state, any other state, or of the United States to collect in the name of the state of New Hampshire the amount delinquent together with penalties and interest. If the action is brought in this state:

(a) A writ of attachment may be issued and no bond or affidavit prior to its issuance shall be required.

(b) The records of the commission shall be prima facie evidence of the amount of the delinquency.

284-A:15 Rules. The commission shall adopt rules, under RSA 541-A, relative to:

I. Methods of identification of gaming employees.

II. The manner and method of collection of revenue under this chapter.

III. The games and devices permitted, and the method of operation of such games and devices.

IV. The practice of extending credit to patrons, including the authority to limit the circumstances and amount of credit.

V. Standards for exclusion or ejection of persons from the gambling facility.

VI. Internal fiscal procedures and periodic financial reports.

VII. Security procedures used in the operation of the gambling facility.

VIII. Application and licensing fees and forms.

284-A:16 Financial Reports; Internal Fiscal Procedures.

I. The commission shall by rule require periodic financial reports and shall:

(a) Specify standard forms for reporting financial condition, results of operations, and other relevant information.

(b) Formulate a uniform code of accounts and accounting classifications to assure consistency, comparability, and effective disclosure of all financial information.

(c) Determine the intervals at which such information shall be furnished.

(d) Require audits of the financial statements which shall be made not less frequently than once each year.

II. The commission shall by rule prescribe minimum procedures to be followed in the exercise of effective control over its internal fiscal affairs including, but not limited to:

(a)(1) The safeguarding of assets and revenues, and the recording of cash and evidences of indebtedness. No credit shall be extended on behalf of the gambling facility to any patron without a written memorandum of credit. Such memorandum shall be filed with the daily receipts and preserved until satisfied or canceled pursuant to rules of the commission.

(2) No member of the general court, appointed or elected state official, or their immediate family members shall be granted credit or favors in any manner different than credits or favors that are extended to the general public.

(3) Violation of this subparagraph shall be a class B misdemeanor.

(b) The adoption and use of internal audits, whether by qualified internal auditors or by accountants holding a license to practice public accounting.

284-A:17 Conduct Prohibited.

I. It shall be unlawful for any person:

(a) To deal, operate, conduct, maintain, or expose for play in the state of New Hampshire any game or video lottery machine, except as provided by this chapter and rules adopted by the commission, and except as provided for entertainment purposes.

(b) To receive, directly or indirectly, any compensation, reward, or any percentage or share of the money or property played for keeping or running any game or video lottery machine except under the provisions of this chapter, except that dealer tips are permitted.

II. It shall be unlawful for any person to lend, let, lease, or otherwise deliver or furnish any service including service in managing the gaming facilities, or any equipment for any gambling game including video lottery machines, for any interest or any percentage or share of the money or property played for with respect to such equipment, or for any interest however defined in the revenues, profits, or earnings of the gaming facility, other than pursuant to the terms of a written agreement, which agreement shall not be effective unless approved by the commission.

284-A:18 Agreements; Prohibition.

I. The commission may require an application for approval of any agreement regarding the realty of, or any business or person doing business on the premises of the gaming facility, in order that the commission may determine whether said agreement or person should be approved to be associated with the gaming facility in accordance with this chapter. If the commission does not approve such an application, the commission shall require the termination of such association. Any agreement which entitles a business other than a gaming facility to be conducted on such premises shall be subject to commission approval of the business or of any person associated with the business. Every such agreement shall be deemed to include a provision for its termination without liability on the part of the business, if the commission disapproves of the business or of any other person associated with the business, by reason of a finding that the business or person is unsuitable to be associated with the gaming facility. Failure to expressly include such a condition in the agreement shall not constitute a defense in any action brought to terminate the agreement.

II. It shall be unlawful for any person to sell, purchase, lease, assign, hypothecate, borrow, or loan money upon, or create a voting trust agreement or any other agreement of any sort with respect to the gaming facility, except in accordance with the rules of the commission.

284-A:19 Prohibited Acts.

I. Any person who knowingly fails to report, pay, or truthfully account for and pay over any revenue received under this chapter, or who knowingly attempts in any manner to evade or defeat such payments shall be guilty of a class A misdemeanor, and shall in addition be liable for a fine in the same amount as the revenue owed, paid, collected, or paid over subject to the maximum fine amounts set forth in RSA 651:2, IV.

II.(a) No person shall permit any gambling game, video lottery machine or device to be conducted, operated, or dealt, in a gambling facility by a person other than by a person employed under this chapter and any gaming device, video lottery machine, or related equipment used contrary to this paragraph shall be seized by appropriate state and local enforcement authorities.

(b) No games or video lottery machines shall be put into play or displayed without the authority of the commission.

(c) No person shall work as a gaming employee in a gaming facility without obtaining a gaming work permit.

(d) Any person who violates this paragraph shall be fined pursuant to RSA 651:2, IV, and shall have any gaming device, video lottery machine, or related equipment seized by appropriate state and local enforcement authorities.

III. Any person with 2 or more violations of paragraph II within a 2-year period shall be guilty of a class B felony.

IV. This section shall not prohibit machines used for amusement only.

284-A:20 Cheating; Penalty.

I. No person playing a gambling game at a gaming facility shall:

(a) Use bogus or counterfeit chips, or substitute and use in any such game cards or dice that have been marked, loaded, or tampered with.

(b) Employ or have on their person any device to facilitate cheating in such games.

II. It shall be unlawful for any person playing or using a video lottery machine designed to receive or be operated by legal tender of the United States of America:

(a) To knowingly use any tender other than legal tender of the United States of America, or to use coin not of the same denomination as the coin intended to be used in such slot machine, except that in the playing of any video lottery machine it shall be lawful for any person to use tokens or similar objects which are approved by the commission.

(b) To use any cheating device, including but not limited to tools, drills, wires, coins attached to strings or wires, or electronic or magnetic devices, to facilitate the alignment of any winning combination or removing money or other contents from any video lottery machine.

III. It shall be unlawful for any person, except a duly authorized employee of a gaming facility acting in furtherance of such employee’s scope of employment, to have on his or her person or in his or her possession while on the premises of the gaming facility, any cheating device, including but not limited to tools, wires, drills, coins attached to strings or wires, or electronic or magnetic devices to facilitate removing money or other contents from any video lottery machine.

IV. It shall be unlawful for any person, except a duly authorized employee of a gaming facility acting in furtherance of such employee’s scope of employment, to have on his or her person or in his or her possession while on the premises of a casino any key or device known to have been designed for the purpose of and suitable for opening or entering any video lottery machine or drop box.

V. It shall be unlawful:

(a) To conduct or operate, or allow to be conducted or operated any cheating game or device.

(b) To conduct, operate, or expose for play any game or games played with cards, dice or any mechanical device, or any combination of games or devices, which have in any manner been marked or tampered with, or placed in a condition, or operated in a manner, the result of which tends to deceive the public or tends to alter the normal random selection of criteria which determine the result of a game.

(c) To use or possess any marked cards, loaded dice, plugged or tampered-with machines or devices.

VI. Any person who violates this section shall be guilty of a class B felony.

284-A:21 Minors Prohibited; Penalty. No person under 21 years of age shall be employed by or allowed to enter a gambling area unless they are accompanied by an adult who is responsible for their welfare. Any gaming employee who knowingly allows a minor to enter a gaming area shall be guilty of a violation, provided, however, that the following facts established by a person allowing any such minor to enter the gaming area shall constitute an affirmative defense:

I. The minor falsely represented that such minor was 21 years of age or older.

II. The appearance of the minor was such that an ordinary prudent person would believe the minor to be 21 years of age or older.

III. Admittance was made in good faith, relying upon such written representation and appearance, and in reasonable belief that the minor was actually 21 years of age or older.

284-A:22 Declaration of Limited Exemption from Operation of Provisions of 15 U.S.C. section 1172. Pursuant to section 2 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce”, approved January 2, 1951, being Chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, the state of New Hampshire, acting by and through the duly elected and qualified members of its legislature, does hereby, in accordance with and in compliance with the provisions of section 2 of that act of Congress, declare and proclaim that section 2 of that act of Congress shall not apply to any gambling device in this state where the transportation of such a device is specifically authorized by and done in compliance with the provisions of this chapter and any rules adopted pursuant to it, and that any such gambling device transported in compliance with state law and rules shall be exempt from the provisions of that act of Congress.

284-A:23 Legal Shipment of Gaming Devices into New Hampshire. All shipments of gaming devices into this state, the registering, recording, and labeling of which has been duly had by the manufacturer or dealer in accordance with sections 3 and 4 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce, approved January 2, 1951, being chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, shall be deemed legal shipments into this state.

3 Compensation of State Officers; Salaries. Amend RSA 94:1-a, I(b) by inserting in grade II:

II. Lottery commission executive director, gaming facilities.

4 New Subparagraph; Gaming Facilities Permitted. Amend RSA 647:2, V by inserting after subparagraph (c) the following new subparagraph:

(d) Gaming facilities established under RSA 284-A.

5 Application of Receipts; Division of Travel and Tourism Development. Amend RSA 6:12(b)(21) to read as follows:

(21) The money received under RSA 230:52, II, RSA 284-A:7, or RSA 284-A:8 which shall be credited to the division of travel and tourism development, department of resources and economic development.

6 Effective Date. This act shall take effect upon its passage.

LBAO

09-0238

Revised 02/19/09

HB 593 FISCAL NOTE

AN ACT authorizing the licensing and construction of destination resorts with gaming facilities including table gaming and video lottery machines, and authorizing gaming facilities at existing pari-mutuel licensees, including table gaming and video machines.

FISCAL IMPACT:

      The Lottery Commission states this bill increases state general fund revenue, state restricted revenue, and local revenue by an indeterminable amount in FY 2010 and each year thereafter. The Lottery Commission states bill will increase state expenditures by an indeterminable amount in FY 2010 and each year thereafter. The Department of Resources and Economic Development, Department of Transportation, and the Department of Health and Human Services state this bill increases state restricted revenues and state expenditures by an indeterminable amount in FY 2011 and each year thereafter. The New Hampshire Municipal Association states this bill will increase local revenues and expenditures by an indeterminable amount in FY 2011 and each year thereafter. The Judicial Branch, the Judicial Council, the Department of Justice, and the Department of Corrections state this bill may increase state expenditures by an indeterminable amount in FY 2011 and each year thereafter. The New Hampshire Association of Counties state this bill may increase county expenditures by an indeterminable amount in FY 2011 and each year thereafter. This bill will have no fiscal impact on county revenues.

METHODOLOGY:

    The Lottery Commission states this bill authorizes the licensing and construction of destination resorts with gaming facilities, including table gaming and video lottery machines (VLMs), and the licensing of existing pari-mutuel facilities, including VLMs. This bill allows the construction of two destination resorts in the northern tier of the state and one destination resort in the southern tier of the state. This bill establishes the position of executive director of gaming facilities at the lottery commission. This bill establishes a bidding and licensing process for awarding gaming licenses. This bill distributes proceeds from gaming facilities to the general fund, to the municipality where the gaming facility is located, to the alcohol and drug abuse treatment program, the Department of Resources and Economic Development (DRED), the Department of Transportation (DOT), and the gaming operator.

    This bill authorizes the Commission to require a license fee of $30 million upon each pari-mutuel facility approval for a license, of which sum 95% will be paid to the state’s general fund and 5% will be paid to the municipality in which the resort operates in FY 2010. With three pari-mutuel facilities that would be licensed the commission would collect $90 million, $85.5 million paid to the general fund and $4.5 million paid to the municipalities in which the resorts operate in FY 2010. This bill states gross gaming revenue from gaming licenses at pari-mutuel licensees facilities will be distributed as follows: 43% will be paid to the general fund, 2% will be paid to the municipality in which the facility operates, 1% will be paid to the alcohol and drug abuse treatment program as established in RSA 172 to treat problem gambling, 2% will be paid to the state treasurer to be credited to Division of Travel and Tourism within DRED for purposes of promoting tourism in the state, 1% will be paid to DOT for the purposes of meeting transportation needs including rail transit and mass transit which are not eligible for state highway funds, and the remaining balance of funds (51%) will be retained by the gaming operator. The Commission estimates each pari-mutuel location will have 2,000 VLMs totaling 6,000 VLMs. The Commission estimates each VLM will generate $108,040 of net machine income (gross revenue less winning paid out to patrons) per year beginning in FY 2011. Yearly gross gaming revenue for 6,000 VLMs totals $648,240,000 of which $278,743,200 will be paid to the general fund, $12,964,800 will be paid to the municipality, $6,482,400 will be paid to the alcohol and drug abuse treatment program, $12,964,800 will be paid to DRED, $6,482,400 will be paid to DOT, and the remaining $330,602,400 will be retained by the gaming operators in FY 2011 and each year thereafter.

    This bill authorizes the Commission to require a licensing fee of $50 million upon each destination resort’s selection and approval for a license, of which sum 95% will be paid to the state’s general fund and 5% will be paid to the municipality in which the resort operates. With three destination resorts authorized the commission would collect $150 million, $142.5 million paid to the general fund and $7.5 million paid to the municipalities in which the resorts operate in FY 2010. This bill states gross gaming revenue from destination resorts will adhere to the tier revenue distribution guidelines as described in the table below:

 

$0 - $75 Million

$75 - $150 Million

$150 - $300 Million

$300+ Million

General Fund

43%

15%

6%

20%

Municipality

2%

2%

2%

2%

DRED- Tourism

2%

2%

2%

2%

DOT

3%

3%

3%

3%

Retained by Operator

50%

78%

87%

73%

Total

100%

100%

100%

100%

    The Commission has no information to estimate the revenue potential for table gaming, however, the Commission estimates that each of the three destination resorts will have 2,000 VLMs, similar to the pari-mutuel locations noted above, and will also bring in revenue totaling $648,240,000 per year in FY 2011 and each year thereafter.

    Gross gaming revenue will be distributed as follows:

 

$0 - $75 Million

$75 - $150 Million

$150 - $300 Million

$300+ Million

Total

General Fund

$32,250,000

$11,250,000

$9,000,000

$69,648,000

$122,148,000

Municipality

$1,500,000

$1,500,000

$3,000,000

$6,964,800

$12,964,800

DRED- Tourism

$1,500,000

$1,500,000

$3,000,000

$6,964,800

$12,964,800

DOT

$2,250,000

$2,250,000

$4,500,000

$10,447,200

$19,447,200

Retained by Operator

$37,500,000

$58,500,000

$130,500,000

$254,215,200

$480,715,200

Total

$75,000,000

$75,000,000

$150,000,000

$348,240,000

$648,240,000

    The Commission estimates the annual leasing costs for the VLMs to be $29,172,000 (6,000 VLMs * $4,862 annually per machine). During the construction and commencement of operations phase the commission will require gaming licensees to pay a fee of $100,000 to fund construction oversight and initial regulatory oversight. The Commission will appoint an executive Director and any assistants deemed necessary to the administration and policy of carrying out RSA 284-A. The Commission states this bill will have an indeterminable increase in state expenditures.

    The Department of Resources and Economic Development, Department of Transportation, and the Department of Health and Human Services have no information to determine the potential state revenue and expenses related to the proposed legislation. Each Department will receive a percentage of revenue as allocated by this bill to facilitate programs related to the implementation of casino gambling. This bill increases state restricted revenues and expenditures for each Department by an indeterminable amount in FY 2011 and each year thereafter.

    The New Hampshire Municipal Association states this bill will increase local revenues by 2% of gaming revenues collected in destination resorts and pari-mutuel locations. This bill may increase local expenditures by an indeterminable amount due to increased demand for safety services.

    The Judicial Branch states this bill adds a new chapter RSA 284-A relative to casino gambling. The Branch has no information to estimate how many charges would be brought as a result of the changes contained in the bill to determine the fiscal impact on expenditures. The per case or per charge costs for fiscal year 2010 and beyond, without consideration of any salary increases that may occur, are as follows: a complex equity case in superior court is $506.50, a complex civil case in superior court is $559.43, a class B misdemeanor is $36.89, a class A misdemeanor is $51.14, and a class B felony is $335.98. If a single case were to be appealed to the New Hampshire Supreme Court, the fiscal impact would be in excess of $10,000.

    The Judicial Council has no information to predict the number of individuals that may violate sections of proposed chapter RSA 284-A. The Judicial Council states this bill may result in an indeterminable increase in general fund expenditures. The Council states if an individual is found to be indigent, the flat fee of $275 per misdemeanor or $756.24 per felony is charged by a public defender or contract attorney. If an assigned counsel attorney is used the fee is $60 per hour with a cap of $1,400 for a misdemeanor charge and $4,100 for a felony charge. The Council also states additional costs could be incurred if an appeal is filed. The public defender, contract attorney and assigned counsel rates for Supreme Court appeals is $2,000 per case, with many assigned counsel attorneys seeking permission to exceed the fee cap. Requests to exceed the fee cap are seldom granted. Finally, expenditures would increase if services other than counsel are requested and approved by the court during the defense of a case or during an appeal.

    The Department of Justice states the criminal offense and potential appeals created by this bill will increase the Department’s expenditures by an indeterminable amount. The Department is unable to estimate how many cases would be prosecuted by the Department or appealed to the Supreme Court.

    The Department of Corrections states this bill may increase state expenditures by an indeterminable amount, but is unable to predict the number of individuals that might be impacted. The Department states the average annual cost of incarcerating an individual in the general prison population for the fiscal year ending June 30, 2008 was $32,753. The cost to supervise an individual by the Department’s division of field services for the fiscal year ending June 30, 2008 was $779.

    The New Hampshire Association of Counties states to the extent an individual is prosecuted, convicted, and sentenced to incarceration, the counties may have increased expenditures. The Association is unable to determine the number of individuals who might be detained or incarcerated as a result of this bill. The average cost to incarcerate an individual in a county facility is $30,165 a year.

    The Racing and Charitable gaming commission states this bill will have no fiscal impact on the Commission.

None