April 30. 2013 10:19PM

Expert explains how Mass. casino would pull from NH casino revenue

State House Bureau

CONCORD - Competition from a Massachusetts casino in the Boston area would reduce New Hampshire revenue from slot machines by up to 45 percent, a House committee was told Tuesday.

Senate Bill 152 would allow one casino along the state's southern border and require an investment of $425 million, with up to 5,000 video slot machines and 150 table games. The bill passed the Senate on a 16-8 vote and has the backing of Gov. Maggie Hassan, who included $80 million from casino licensing fees in her proposed budget.

The committee asked the New Hampshire Center for Public Policy Studies to determine the impact on Granite State revenues of a resort casino like the one proposed for the Boston area. Many assume the New Hampshire casino would be located at Rockingham Park Race Track in Salem, although it will be competitively bid.

Steve Norton, the center's director, told the committee that without competition, each video slot machine would produce about $229 a day; the state and local communities would take 30 percent.

With a casino at Suffolk Downs similar in size to the New Hampshire facility, he said, the revenue would be reduced by 36 percent, to $149 a day per machine.

A Bay State resort or destination casino three times the size of the one proposed for New Hampshire would mean each Granite State machine would produce $126 a day - 45 percent less.

Revenue Committee Chairman Rep. Neal Kurk, R-Weare, said that would be a substantial impact on state revenues.

Suffolk Downs proposal

Norton said under the scenario of a 3,000-slot facility in Salem, total state and local revenue from the casino would be $49 million with a similar facility near Boston - $41.5 million if Massachusetts opens a resort facility.

Norton said how far someone has to drive and the facility's amenities will determine whether someone goes to one casino or the other.

He said no one is sure what will be built at Suffolk Downs, where Wynn Resort has proposed a $1.2 billion resort-style casino with a 500-suite hotel, restaurants and retail stores. Norton said with environmental clean-up costs and higher construction costs in Massachusetts, he did not know if a true destination casino could be built for $1.2 billion.

And Norton said the Massachusetts facility may not be more attractive than the New Hampshire site.

Committee member Rep. Lynne Ober, R-Hudson, said the casino near Boston and all its amenities would be more attractive to many people than a facility in Salem. She said the developer intends to draw people to conventions and other events.

But she said neither the Massachusetts or New Hampshire casino would be like the ones in Las Vegas.

"All we are going to get is what we get from gambling," Ober said.

Saturation point

The committee pushed Norton for the state's highest possible casino revenues, but he said that is difficult to determine.

What lawmakers are really asking is, "What is the saturation point?" Norton said.

He said information from Rhode Island indicates that the return per slot machines peaked at about 5,000 machines.

He said Rhode Island currently has 7,000 machines and the revenue per machine has dropped considerably.

Casino revenue estimates vary widely, with supporters saying about $140 million a year; Norton says it would be far less.

May 16 deadline

The three subcommittees studying SB 152 have to complete their work by next week and present their findings to the Joint House Finance and Ways and Means Committee May 16.

The House is scheduled to vote on the bill by the end of May.