Myths and Facts

Myth #1: We don't need more revenue or more taxes. What the Legislature needs to do is reduce spending and eliminate wasteful programs.

FACT: New Hampshire is a frugal and fiscally conservative state. Yes, you may find a few state-funded programs which are unimportant or unnecessary, but eliminating them won't save the state the amount of money it needs to make up for the current deficit. The total amount of state General Fund money needed in 2002 in the already passed House version of the State budget is $1.24 Million. Using existing taxes, the state has sufficient revenue to meet these spending needs for law enforcement, highway construction, environmental projects, and social programs.

However, the Legislature still needs to find more than $200 Million in additional revenue in order to meet the court-mandated obligation to fund the state’s share of public education costs and reduce the state tax on property. The New Hampshire Commission on Education, in its report released on January 8, 2001, states that the introduction of video gaming entertainment "will generate between $200 Million and $240 Million in additional government revenue." There is no reason to further tax New Hampshire citizens when there is a readily available and sustainable revenue source available with video gaming entertainment.

Myth #2: We don't need video gaming entertainment. There are other ways to raise revenue.

FACT: If there are creative new ways to raise more taxes, they have eluded the House of Representatives. Earlier this year, the House considered numerous new and old tax proposals to raise additional revenue, including a sales tax, an income tax, a value-added tax, an expanded business tax, and a new tax on the purchase of cars. The House members rejected each of these tax measures, including those measures supported by the Speaker of the House. At the end of the day, the only remaining idea that the House had left was a proposal to increase business taxes by eliminating a business tax credit and raise the rooms and meals tax by one percent. The House narrowly approved this tax measure by a single vote.

In late May, the Senate rejected the House tax measure as unacceptable, thus sending the Senate back to the drawing board to find a revenue source of more than $200 Million to fund the state’s public education obligation and keep the promise to reduce the state tax on property. NH Citizens Against More Taxation believes that video gaming entertainment will generate a sustainable source of revenue without imposing additional taxes on the people of New Hampshire.

Myth #3: Video gaming has no positive economic benefits for New Hampshire.

FACT: Video gaming entertainment does have positive and sustainable economic benefits which explains why 31 states, including middle America states like Indiana, Missouri, Illinois, Iowa and Colorado, now allow video gaming entertainment for their citizens.

Let's consider Joliet, Illinois and Lawrenceburg, Indiana, both conservative Midwestern cities, as two examples where the economic benefits have had the desired positive impact. In Joliet, thanks to the economic boost provided by the two gaming facilities in that community, the city is entirely debt free. Joliet has received more than $25 Million in local tax revenue in the last seven years. In Lawrenceburg, the gaming facility in that community has contributed $129 Million for improvements to roads, the local river front, and the restoration of historic buildings. In 1997, the gaming facilities entered into a revenue sharing agreement with the neighboring communities southeast of Lawrenceburg. In the last four years, those towns have received more than $23 Million.

In a recent nationwide study conducted by Christiansen Capital Advisors, the average wages for video gaming industry employees were $26,000 compared to $20,000 for employees in other recreation entertainment industry sectors. More than 355,000 individuals were employed by the gaming industry nationwide in 1999, resulting in more than $9.8 Billion in wages, tips and health care benefits.

In 1997, Coopers & Lybrand L.L.P. conducted a nationwide survey of employees in the gaming industry. The survey found that employees at gaming facilities enjoyed better access to health care, better access to day care, and better job training and promotional opportunities.

In addition, in 1999, the last year for which completed figures are available, the gaming industry paid more than $3 Billion nationwide in gaming tax revenues to states and local communities. The proposed legislation authorizing video gaming entertainment in New Hampshire requires that 44% of the daily average net income, that's $44 of every $100 of the net gaming revenue for video gaming, will be returned to the state as tax revenue. The gaming tax revenue for New Hampshire video gaming machines will be one of the highest, if not the highest, state gaming tax rates in the country. The New Hampshire Commission on Education Funding estimates that video gaming entertainment will generate between $200 Million and $240 Million in additional government revenue for the state.

Nationwide, last year the video gaming industry contributed more than $10 Million to local United Way campaigns, and they donated more than $58 Million to local charities, such as the YMCAs and the Boys and Girls Clubs. Elgin, Illinois Mayor Kevin Kealey said in his testimony before the National Gambling Impact Study Commission, "A fair assessment of [the gaming facility in our community] would not be complete without considering the Grand Victoria Foundation, a charitable organization funded by gaming profits. Since March of last year, the Foundation has contributed more than $3.5 Million to philanthropic causes throughout the region."

Myth #4: The social costs of video gaming entertainment far exceed the economic benefits.

FACT: Over the past five years, a small vocal group of anti-gaming critics has claimed that the social costs of gaming far outweigh the economic benefits. These critics, none of whom has credentials in economics, criminology, psychology or any background in or experience with gaming issues, have created what is referred to as the "Circle of Disinformation." They continually cite each other as sources to confirm their statements and conclusions about the social costs of gaming, but they rarely, if ever, cite original and unbiased studies for the conclusions they draw or predictions they make.

The National Research Council of the National Academy of Sciences had this to say in 1999 about the academic research of these critics. "There is a plethora of studies with implicit but untested assumptions underlying the analysis that . . . [is] likely to be misunderstood by those relying on the results." The Council report goes on to say that there are common failings in the current research, including reliance on estimates derived from other studies and simplistic before and after comparisons that attempt to attribute either positive or negative changes to gambling.

Are there social costs to gaming? Yes. However, these costs are more closely associated with casino gambling operations in large population centers. Unlike these large casino operations, the proposed New Hampshire video gaming entertainment legislation restricts video gaming machines to the four pari-mutuel race tracks in the state.

Myth #5: When video gaming is introduced in a community, the gaming industry succeeds at the expense of other businesses located there.

FACT: Local businesses do, in fact, benefit from video gaming entertainment. Certainly, in any competitive free-market business environment, some companies will succeed while others will fail. However, a recent Arthur Anderson study demonstrated that new consumer spending on video gaming entertainment has not replaced spending for other recreational activities or industries. Video gaming entertainment facilities generate an increase in tourism, as well as new employment opportunities.

Experience has shown that the introduction of video gaming entertainment will expand the economic pie and help strengthen the economy statewide. For example, in 1995 the first year that Missouri legalized gaming in the state, the gaming entertainment industry purchased $98 Million in materials and supplies, the majority of which were purchased from Missouri-based companies.

In a 1999 economic data report on gaming, conducted by Peter D. Hart Research Associates and The Luntz Research Company for the American Gaming Association, every one of the 31 states which currently allow video gaming entertainment has seen a net increase in jobs and business development. The video gaming entertainment industry has generated more than 500,000 new indirect jobs outside of the gaming facilities themselves. In New Hampshire, the design, construction, and renovation work to accommodate video gaming entertainment at the four pari-mutuel race tracks is expected to generate more than $100 Million in indirect income.

Myth #6: Compulsive gamblers are the main source of income for video gaming entertainment facilities.

FACT: Video gaming is a social activity enjoyed by adults who chose to play. According to a survey conducted in 2000 by Peter D. Hart Research Associates and The Luntz Research Companies, 94% of the people who visit gaming establishments do so with their spouse, friends, or as part of an organized group. And, when they do enjoy this adult entertainment, more than 80% set a budget limit for themselves before they go.

While the overwhelming majority of people gamble for entertainment and experience no adverse consequences, we do know that there are people with a gambling problem. However, there is conflicting information about the number of people who suffer from gambling problems. Opponents of gaming have put the number as high as 11% of the adult population, but taxpayer funded studies put that number far lower - closer to 1% of the population. In 1999, the National Research Council of the National Academy of Sciences reported that by its estimate about 1.2% of the U. S. adult age population has a pathological gambling problem. In context, this percentage is much less than the percentage of Americans with alcohol or drug addiction problems. It is fundamentally unfair to 98% of the people living in New Hampshire to deny them the freedom of choice to enjoy video gaming entertainment because an estimated 1.2% of the population has a gambling problem.

The video gaming industry is committed to responsible gaming and assisting those who do have a gambling problem. The industry has committed itself to fund programs to increase public awareness of problem gaming and to encourage responsible gaming. The video gaming entertainment bill currently proposed for New Hampshire contains provisions which mandate that a percentage of the video gaming proceeds support programs to help problem gamblers.

Myth #7: If we allow video gaming in New Hampshire, there will be an increase in crime and prostitution.

FACT: There is no credible evidence of an increase in crime in communities after they permit video gaming facilities to open. In a report prepared by Jeremy Margolis Altheimer & Gray called Casinos and Crime: An Analysis of the Evidence, the study "found little evidence to support the notion that the presence of casino gaming in a community has any meaningful impact on crime rates. It appears that crime rates are a reflection of the complex interplay of demographics and social factors and not due to the presence or proximity of legalized gaming."

Opponents of video gaming use confusing and misleading statistics to make their case. Moreover, the criminal activity that opponents cite as evidence of increased crime occurred in those large metropolitan areas which allow multiple casino gaming operations. The so-called "Casino Factor Theory" holds that the mere presence of casino gaming entertainment in any community will cause an increase in crime. The report cited above found that "the Casino Factor Theory did not hold up when tested against actual experiences in any of America’s gaming communities."

Police Chief Jim Druuin of East Peoria, Illinois said that ". . . Par-a-Dice (the gaming facility in that community) has presented itself as just another business with respect to calls for service. . . They have demonstrated on numerous occasions that they are a good neighbor for all who live and work in East Peoria."

There are fundamental differences between casino gaming facilities in large metropolitan areas and the state-regulated and controlled limited video gaming proposal for New Hampshire. The New Hampshire legislation specifically restricts the gaming machines only to the four existing pari-mutuel racetracks and prohibits them from building and operating casino-like gaming facilities.

Myth #9: Legalizing video gaming entertainment will just lead to the expansion of gaming throughout the state.

FACT: The proposed legislation being considered this year regulates and restricts both the number and types of video gaming machines which will be licensed and made available in New Hampshire. The bill prohibits casino table games like 21 and Roulette. Unlike the legislation last year which permitted two video gaming facilities in the North Country, this year the bill restricts video gaming entertainment to the four pari-mutuel race tracks in Hinsdale, Salem, Seabrook and Belmont. Any attempt to expand video gaming in the future will be controlled by the citizens of New Hampshire through their elected state officials.

New Hampshire Citizens Against More Taxation support this video gaming entertainment legislation for these three reasons:

• It is limited to the four pari-mutuel race track locations;
• It prohibits the introduction of casino-like table gaming; and
• It raises the necessary revenue without taxing the people of this state

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