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More regulation for charitable gaming urged

State House Bureau

January 21. 2014 9:14PM

CONCORD — Tightening regulations and controls over the charitable gaming industry would result in greater transparency and the assurance of integrity for those playing the games, the beneficiaries and the state, a committee was told Tuesday.

Consultants hired by the Gaming Regulatory Oversight Authority said the current regulatory scheme is not sufficient to determine how much is bet at the 10 charitable gaming facilities around the state.

And they said the state lacks controls to determine if the games are run fairly or if charities and the state receive all the money due.

Several authority members introduced House Bill 1630 to provide greater oversight over the industry, to control video gaming machines now regulated by local communities or "gray machines" and to establish a commission to take a greater in depth look at the industry and the state's regulatory roll.

"(The consultants) identified some very specific shortfalls and their recommendations are in the bill before you," said the bill's prime sponsor, Rep. Richard Ames, R-Jaffrey, who chaired the authority. "We couldn't do it all at once because we didn't really know what's out there."

The bill would require the Attorney General's Office to do background and criminal records checks for charitable gaming operators, facility owners and senior staff.

Contracts would receive greater scrutiny, equipment vendors would need to be licensed and greater financial controls and reporting requirements would be put in place.

Paul Kelley, director of the Racing and Charitable Gaming Commission, noted the concern his agency that does not provide much oversight over the industry, but noted the commission lacks the staffing and technology to truly regulate charitable gaming.

He noted he and his agency have tried for years to tighten regulations and requirements but lawmakers have failed to agree on the bills.

"I hope the perception that we are not regulating the industry settles down and we have more people on site," Kelley said. "What we have here is a cash business."

The bill had the backing of the Attorney General's Office as well as the largest charity operator in the state Rockingham Venture Inc., who operates facilities at Rockingham Park and Seabrook Yankee Greyhound Park in Seabrook.

However, several small operators opposed the bill focusing on the background checks and their expense.

"What is going to be the impact on the small gaming operators," asked committee member Rep. Laurie Sanborn, R-Bedford.

Rick Newman, representing River Card Room and the former operator of the Belmont charitable gaming facility, said many of the operators of the 10 state facilities cannot afford the $50,000 it will cost for background checks. The bill caps the cost of background checks at $50,000.

People who would need background checks are floor supervisors who make $9, $10, or $11 an hour, he said.

"That's going to be a significant hardship," Newman said. "I can't imagine another operator in the state who can afford the fees."

Earlier Ed Callahan, president of Rockingham Ventures, Inc., called background checks necessary.

He also supported a provision that would end fees facility operators charge charities for such things as administration, accounting and rent. "The intent of the Legislature was 35 percent (of net earnings go to the charities)," Callahan said, "In many cases today that is not the case."

When the law was changed to allow facilities to host charity gaming events, the charities were to receive a guaranteed 35 percent of the net earnings, but that has eroded over time.

Maureen Williamson of WhiteSand Gaming LLC said reputable gaming operators expect to be regulated. From an integrity prospective, she said, there is no valid distinction between charity gaming and a private commercial casino.

People who frequent them "are entitled to the same fairness," she told the committee.

What state would not want to "ensure accuracy of the financial statements and the integrity of the games," Williamson said. "Globally, that is in the best interest of New Hampshire citizens, but also in the best interest of charities."

The committee did not make an immediate recommendation on the bill and will work with the stakeholders on revisions.


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