1. 1 “Gaming in NH Today” Gaming Study Commission September 15, 2009 NH Center for Public Policy Studies

2. 2 Purpose of Presentation 1.Review Center’s Work 2.30,000 foot view of existing gaming activities in the state. 3.Gaming Revenues 1.Magnitude 2.Changes over time 4.Set stage for more in depth conversations.

3. 3 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

4. 4 Legal Wagering by New Hampshire Residents

5. 5 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)

6. 6 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

7. 7 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

8. 8 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)

9. 9 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)

10. 10 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.

11. 11 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.

12. 12 Gaming about 3% of Unrestricted Revenue

13. 13 Gaming Revenues as Percent of Total State Revenue

14. 14 ?