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Friday
Apr232010

Your Honorable Compromise Plan For Expanded Gambling

By Rep Steve Vaillancourt

Interesting stuff here.  Here's the way the ITL on HB489 broke down.  If I'm off by a number with this quick count, please let me know.

Overall 212-158, 57.3 percent (my prediction was 210-160).

Dems 119-84, 58.6 percent

GOP 93-74, 55,8 percent.

Three counties for expansion--guess what--the three that would most benefit by slots.

Coos 4-7

Rockingham 39-43

Hillsborough 57-58

Least for gambling

Grafton 21-3 (D Butynski, D Robers, D Lerandeau)

Cheshire 21-3 (R Gionet, R Maybeck, D Laliberte)

Others

Carroll 8-4

Sullivan 7-4

Merrimack 26-15

Strafford 20-13

Nahua 12-14 (D 8-13, R 4-1)

Manchester 9-21 (D 3-20, R 6-1)

Hudson district 12-1 (Gandia)

Your Honorable Gambling Compromise is being drafted as an amendment to SB450.

It'l be 6000 machines (4 locations of 1200 each, 2 of 600 each), totally state run with six facilities bidding to simply host the machines (minimum bids of $12 million times four  and $6  million times two for $60 million up front money to state; 25 percent ($15 million)  to commission to establish administration, 75  percent ($45 million) to general fund.  

Facilities get to keep 15 percent of revenues, state gets 60 percent, 1 percent for host community, the other 24 percent for administration costs (16 percent to staff facilities, 6 percent for machine suppliers, 2 percent for central computer). 

****

Addendum Received via email 4/23

 ++

Your Honorable Compromise Plan for Expanded Gambling

 

In answer to numerous questions, Senator Gatsas put bullet points together for his expanded gambling bill (SB169) last year.  I’ve updated them for you here.

§       When the plan was first advanced, Senator Gatsas had it critiqued by then Attorney General Phil McLaughlin, and his concerns were addressed.

  • The plan establishes a Gaming Oversight Authority (GOA) comprised of the Commissioner of Safety, the Commissioner of Revenue Administration, and the Commissioner of the Department of Resources and Economic Development.  The Commissioner of Safety will serve as Chair.  This is especially important now that the Governor’s Commission is stressing that better oversight is needed.
  • The plan authorizes a maximum of four 1200 machine facilities and two 600 machine facilities for a maximum of 6000 machines statewide.
  • To minimize state control, this is a partnership with the six facilities which will be chosen to lease space to the state (in exchange for a 15 percent share of proceeds).  It is also a partnership with a centralized computer system provider (two percent); and video lottery terminal (VLT) providers (six percent).
  • The 16 percent designated for the Gambling Oversight Authority will be used to hire personnel to handle all money and machines at the six facilities.  There is enough money herein for proper managers to be hired (at the appropriate salary to run the program) and to ensure strict enforcement of all regulations.
  • The six facilities will hire all personnel dealing with food and beverages and will keep all the profit from these ancillary functions (with the state getting the usual rooms and meals tax, of course).  The six facilities will also be responsible for maintaining the space, including hiring all cleaning personnel.  They will pay for this from the 15 percent fee to facilities licensee.  They will also be responsible for the heat, electricity, water, sewer, and any other maintenance of the facility. 
  • The GOA will certify net machine income (NMI) and establish a centralized computer system linking all video lottery machines to ensure the control of the machines (two percent of revenues is set aside for this)
  • The GOA will enter into lease agreements with up to three technology providers to provide leased video lottery machines to the state. Providers will receive six percent for this service.  Thus the better the machines, the more the providers will make. Thus, the incentive to provide the most modern and “best” machines.
  • No person under the age of 21 will be allowed to play at VLT.  If they are caught violating this provision, the penalty will be a fine of no more than $1000.  If a state employee knowingly allows someone under the age of 21 to play, he or she will be subject to a $1000 fine and an administrative penalty of $50,000.
  • The video lottery machines will pay out at least 92 percent on an annual basis (this was 87 percent in the original Gatsas plan, but all indications are that 92 percent is more of an industry norm).
  • The GOA will grant 6 facilities licenses.  These will go to the highest bidders from any location in the state with a $12 million minimum bid for a 1200 machine facility and $6 million minimum for a 600 machine facility.  25 percent of this up front money (at least $15 million) will serve as seed money for the GOA.  75 percent (at least $45 million) will go to the state general fund.  Ten percent of the bid money must accompany the bid but is refundable should the applicant not be granted a facility.  Beyond that, to prevent a pre-existing casino (a lobbyist suggested Foxwoods) from gaming the system by bidding for a facility it never intends to operate, an organization granted the bid will have 30 days to pay in the remaining 90 percent.  If it fails to do so, the GOA will offer the facility to the next highest bidder.
  • The original Gatsas plan called on the GOA to consider these criteria in awarding facility licenses.  The language remains in the bill (in the case of tie bids).

1.     Evidence provided that local approval has been granted.

2.     The regional location of the prospective facilities licensee (an earlier incarnation that only one facility be granted per county has been dropped).

3.     A detailed economic plan for the municipality and surrounding region including:  unemployment in the area, direct and indirect employment gain, effect on tourism based economy, effect on regional economic development.

4.     A business plan to support the video lottery machines.

5.     Qualification of those who own or manage the prospective license facilities.

6.     Regional population.

7.     Vehicle traffic.

8.     Total square footage of the facility and the total acreage of the facility.

9.     Availability of suitable infrastructure.

10.  Availability of adequate parking.

11.  Other information as the GOA may require.

  • An extensive investigation will be carried out by the office of the Attorney General; a report of results will be presented to the GOA within 90 days.  The final decision will also be based on the applicant providing evidence of financial stability to the GOA, and are of good character and integrity as it pertains to their business activities and financial affairs.
  • The application will include the full name, residence, date of birth, and other personal identifying information of the applicant, and if a corporation or other form of business enterprise exists, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 5% of the legal or beneficial interests of the entity.
  • In order to apply, a prospective facility must pay a $150,000 non-refundable application and investigation fee.
  • A facilities license will be granted for five years although the GOA has the right to suspend or revoke the license at any time.  A facilities license cannot be assigned, transferred or sold. 
  • Before an applicant can apply for a facilities license from the state to operate video lottery machines, it must have the approval of its local community.  The community may approve this operation at a town meeting or by voting on an official ballot during a municipal election per RSA 39:3.
  • A Division of Gaming Enforcement will be established to operate the video lottery machines located in the six facilities.  The Director will hire and manage employees for the day to day operations ensuring the integrity of the program.
  • The host community (city of town) will receive one percent of revenues generated from that facility.  No other dedicated funds are established in this plan.

 

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