Draft study: video gambling revenues could vary widely

Tuesday, Oct. 3, 2000 | 9:47 a.m.

The net take for the state could be as high as $242 million a year or as low as $23 million, reseacher Ronald Mendoza wrote in a draft report for Gov. Jeanne Shaheen's tax study commission. The commission is studying a dozen options for raising money for schools.

Shaheen launched the study to help the next Legislature evaluate revenue sources to pay for schools. Pending results of the study, her first choice is video gambling at the state's four race tracks, which she says would bring in at least $145 million a year.

Mendoza, who is studying use of the machines at the tracks and two grand hotels - the Balsams and the Mount Washington - estimated gross revenue would be $541 million a year. But when economic and social costs are factored in, net revenue would drop to $67 million to $178 million, he wrote.

If Massachusetts followed New Hampshire's lead in legalizing video gambling, net revenue to New Hampshire eventually could slide to $23 million a year, Mendoza wrote.

Mendoza said video gambling accounts for 60 percent of gambling revenues in the major casinos of Las Vegas and New Jersey. Five other states also have video gambling: South Dakota, West Virginia, Oregon, Rhode Island and Delaware.

Key to the study are several assumptions:

- Each of 5,000 machines would bring in $2,000 a week. The study examines per-machine revenue in other states and uses Delaware to predict results in New Hampshire. Delaware, the closest to New Hampshire in population and income of the seven states with video gambling, has the highest per machine revenue, $2,079. The lowest per-machine yield is $248.

- Forty-one percent of patrons would come from Massachusetts, 17 percent from New York, 14 percent from in-state, and 11 percent from Connecticut.

- Actual revenues to the state would be $200 million to $240 million. But revenues from state lotteries, pari-mutuel betting and other forms of entertainment would drop somewhat. Social costs - job losses, bankruptcies, arrests, jail costs and poor health - would cost the state another $14 million.