1 1 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors Todd I. Selig, Chair David Alukonis Michael Buckley William H. Dunlap Sheila T. Francoeur Stephen Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos Martin L. Gross, Chair Emeritus John D. Crosier, Sr., Emeritus The NH Center for Public Policy Center’s Model of Gambling Behavior Steve Norton, Executive Director NH Center for Public Policy Studies
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1 11 …to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshires future. Board of Directors.
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“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”
Board of DirectorsTodd I. Selig, Chair
David Alukonis
Michael Buckley
William H. Dunlap
Sheila T. Francoeur
Stephen Reno
Stuart V. Smith, Jr.
Donna Sytek
Brian F. Walsh
Kimon S. Zachos
Martin L. Gross, Chair Emeritus
John D. Crosier, Sr., Emeritus
The NH Center for Public Policy Center’s Model of Gambling Behavior
Steve Norton, Executive DirectorNH Center for Public Policy Studies
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NH Commission on Gaming asked: What Constitutes a Prudent Calculation of Cost
and Benefit?
• Positive Impacts – Revenue to State:
• License fees• Tax on gambling winnings• BPT and BET• Increase in Meals and Rooms
(sales tax)– Revenue to Local:
• Property Tax?• Additional (fees)?
– Economic Development (short term)
• Local and non-local: construction jobs
– Economic Development (long term)
• Jobs associated with additional/new industries and wealth creation
• Negative Impacts – Revenue to State: Decrease in
Meals and Rooms (cannibalization) – Revenue to State: Gambling/
Lottery Substitution– State Expenditures: New
Regulatory structures– State Expenditures: Competition
for funds– Economic Development: Branding– Economic Development:
Displacement– Gov Expenditures: Policing– Social Costs: New Crime– Social Costs: Pathological/
Problem Gaming– Political Concerns– Additional infrastructure costs to
local communities
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Fundamental Assumptions
• The placement of a gambling facility where one does not currently exist (or closer to New Hampshire) will increase the number of people that 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.
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Drive time analysis used as the foundation of a gravity model which assumes the more amenities, the greater the attraction.
Adjusts for NH specifics: Tourist multiplier
Allows us to simulate Massachusetts impact
Tested models against existing markets
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Center’s Model of Expanded Gambling
• Take as Inputs– Location– Size– Type– Other state action
• Produce as Outputs– Economic (jobs, product)– Net revenue to state– Crime– Social costs to states and local
communities• Other Outputs not estimated?
– Local infrastructure (roads, schools)– Local revenue (property tax, fees)
5 Sites
• North Woods• Southern NH• Ski Country• Southwestern NH• Lakes Region
Sites IDed by Commission to give a sense of the impact of location.Model can be used to simulate other sites.
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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
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Testing Our Approach
• Market Development Tested and adjusted model against existing markets in Middle Atlantic.
• Economic Development Tested RIMS models against REMI model results.
• Social Costs Evaluate against multiple different studies.
• Peer review of our report.
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Assumptions Matter
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Map Source: Boston Globe
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Markets, Borders and Drive Time: Palmer, MA
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Markets, Borders and Drive Time: Suffolk Downs, MA
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Overlapping Markets
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Lowell, Massachusetts: How Would this Compete with