1 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors Sheila T. Francoeur, Chair David Alukonis William H. Dunlap Eric Herr Dianne Mercier Richard Ober James Putnam Stephen J. Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Mike Whitney Martin L. Gross, Chair Emeritus Todd I. Selig Kimon S. Zachos Directors Emeritus Expanded Gambling April 25, 2013

22 Markets? Standard Economic Development Models Short Term (Construction) Long Term (Operation of Facility) # of Gamblers and Intensity # of New Problem /Pathological Gamblers Societal Costs (Govt and Non- Govt) New Gambling Tax Dollars Meals and Rooms, Lottery Impact Standard Retail Gravity Model Adjusted to Reflect NH Experience Costs of Problem/ Pathological Gamblers Net Impact Direct/ Indirect Direct/ Indirect Net Impact Displacement Putting It All Together

33 Fundamental assumptions of NHCPPS models The placement of a casino in New Hampshire (or close to New Hampshire) will increase the number of people who gamble. The farther individuals have to travel, the less likely they are to go to a casino in New Hampshire. And … the closer you are to a casino, the more likely you are to go to a casino. Gravity of a facility – attractiveness, size, amenities – and the competition in the market affects gambling behavior. For a small share of the population, exposure to gambling results in pathological behavior. –This creates a set of social issues which – if they can be quantified -- are offsets to the potential benefits.

4 What We Did? Reviewed literature on gambling pathology, co- morbidity with alcohol and other drug issues, behavioral impacts (including crime) Reviewed data on prevalence of problem and pathological gambling Reviewed estimates of the costs of problem and pathological gambling. Developed a model which provided ‘prudent policy maker’ with a measure of the potential community impacts.

5 Estimating Community Impacts Requires four steps –Estimating gamblers with our gravity model (Page 41, 2010 report) –Estimating new problem and pathological gamblers (Page 41, 2010 report) –Identifying which costs should be included (Gaming Commission) –Developing quantifiable estimates of those costs (Page 51, 2010 report)

6 Measures of Problems and Pathology Shaffer et al 1999 –Pathological .9% to 2.0% of population –Problem  1.81% to 2.5% of population Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) identifies a set of disorders which in combination create ‘problem’ or ‘pathological’ gambling behavior.

7 New Problem Gambling Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) identifies a set of disorders which in combination create ‘problem’ or ‘pathological’ gambling behavior. Estimate the number of new problem or pathological gamblers from Schaffer and Hall literature assessment. Account for proximity and frequency as having an impact on the number of gamblers Provide a conservative (high) estimate based on precision of Schaffer and Hall analysis.

8 Geography impacts the distribution of community impacts

9 TypeBearer of CostsDescription Crime Local communities, law enforcement, individuals, courts, corrections Increase in crime associated with the introduction of a gambling facility. Majority of crime is monetary in nature (theft, burglary), but violent crimes may be associated as well. Business and Employment Costs Individual, family, economy, businesses Increase in lost work days, lost productivity, and employment termination. Bankruptcy Individuals, banks, legal system, creditors Bankruptcy as a result of gambling debts. Mental Illness Health insurer, treatment provider, family Gambling is associated with mental illness such as depression and anxiety. Suicide Family Problem and pathological gamblers have a higher risk for suicidal thoughts and committing suicide than the general public. Social Services Government, Service Agencies These are the costs related to unemployment, welfare, and treatment costs due to individuals with problem gambling. Regulatory Costs Government Government expenditures to operate a gambling regulatory agency. Family Costs Family This includes costs associated with divorce, spousal separation, and child abuse and neglect, and domestic violence. Abused Dollars Family, Friends, Employers These costs are those associated with money lost gambling that was taken from family, friends, or employers that is never reported as a crime. Social Connections Individuals, family, friends, communities Reduction of social capital Political Government, Local communities Increasing concentration of economic power could result in disproportionate political influence Types of Community Impacts

10 Estimating the costs General agreement of impact: –Regulatory framework –Treatment (DHHS) –Other Government (unemployment) –Private No agreed upon methodology creates significant difference in efforts. National Opinion Research Center at the University of Chicago estimated the costs across multiple dimensions Multiple estimates of cost available, settled on NORC for per-problem and pathological gambling cost

11 Estimates of Costs CPI adjusted

12 Estimated social costs per gambler with a problem Excludes treatment costs – as these were estimated by DHHS Excludes ‘abused’ dollars

13 Other Community Impacts Timing Economic Development and the Substitution Effect Measures of Crime (including embezzlement) Other issues identified by Commissioners –Demographic shifts –Social capital –Infrastructure/Natural Resources

14 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” New Hampshire Center for Public Policy Studies Want to learn more? Online: nhpolicy.org Facebook: facebook.com/nhpolicy Our blog: policyblognh.org (603) Board of Directors Sheila T. Francoeur, Chair David Alukonis William H. Dunlap Eric Herr Dianne Mercier Richard Ober James Putnam Stephen J. Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Mike Whitney Martin L. Gross, Chair Emeritus Todd I. Selig Kimon S. Zachos Directors Emeritus