Senate Committee OKs Online Casino Bill in New Hampshire

SB 104 doesn’t specify a tax rate or the number of operators for an online casino contract, but a fiscal analysis attached to the bill assumed a 35% tax rate and three to five operators.
Senate Committee OKs Online Casino Bill in New Hampshire
By
February 28, 2023

A bipartisan proposal to launch online casino gaming and use the proceeds for community college scholarships is making its way through the state legislature in New Hampshire.

Senate Ways and Means Committee lawmakers voted to advance an amended version of SB 104 with their 13-11 vote on February 22. The bill must next clear the Senate Finance Committee.

The bill would allow at least one operator to provide online casino gaming in NH. How many more than one is unclear.

Under SB 104, the New Hampshire Lottery Commission (NHLC) would be tasked with establishing a comprehensive bidding process for a gaming contract before selecting “one or more bidders” from a variety of factors — including experience, mobile and internet capabilities, contribution to economic development within the state, and commitment to preventing problem gambling.

The NHLC is also directed to award a gaming contract to the operator “whose bids provide the state with the highest percentage of revenue” from online casino gaming. But since the law’s verbiage instructs the agency to select “one or more bidders,” and it’s possible that more than one operator could bid at the same rate, there could be more than one online casino operator ultimately selected.

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State Predicts $90M in Tax Revenue in FY 2026

Although SB 104 doesn’t specify a tax rate, an analysis conducted by the NHLC and included in a fiscal note attached to the bill used a 35% tax rate as a tool for its estimates.

“Tax rates in iGaming jurisdictions range from 15% to 50%, and based on Lottery’s experience with competitive bidding, it is expected the revenue share in New Hampshire would be on the higher end and have set an expectation of state revenues as 35% of gross gaming revenues,” the fiscal note said.

The NHLC assumed the bill would take effect on January 1, 2024, and it would take the agency nine months to conduct its bidding process and promulgate online casino gaming rules. The agency also assumed online casinos would launch on April 1, 2024.

Using a 35% tax rate, the NHLC estimated that operator(s) would gross $15 million during the first year of online casino, which, for the analysis, was listed as fiscal year (FY) 2024.

Gross gaming revenue would jump to $60 million in FY 2025, according to NHLC’s projections. It would climb to $90 million in the market’s third year, FY 2026.

“The iGaming market for New Hampshire will not initially be as strong as established in New Jersey, Pennsylvania, and Michigan, as there is only a limited established player database for casino customers in the state,” the note said. “It is assumed that the New Hampshire iGaming market will be roughly on par with those markets on a per capita basis in approximately three years.”

The NHLC also assumed there would be between three and five online casino operators in the Granite State.

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Gaming Industry Split Over Online Casino Bill

According to a Senate Ways and Means Committee report, two gaming industry representatives spoke at a hearing last month on SB 104 — one in favor of the legislation and one against.

Rebecca London, government affairs manager for DraftKings, told the Senate panel that the bill “opens a new door to fund priorities” and that “legalizing online gaming doesn’t cannibalize other forms of gaming.”

She also added at the January 25 hearing that “those most likely to participate in online gaming are not doing so at the expense of existing markets,” according to a summary of her comments in the report. DraftKings provides mobile and retail sports betting through an exclusive partnership with the Lottery.

Meanwhile, Peter Bragdon, a former New Hampshire Senator who now works as a lobbyist for Churchill Downs Incorporated (CDI), told the panel that the company is concerned that the bill “will have a negative effect” on land-based gaming properties in the state, including Chasers Poker Room, a charitable gaming facility CDI owns in Salem.

Bragdon argues that the state should study the effects of legalizing historical horse racing (HHR) on charitable gaming before launching online casino gaming. “It is too soon to pursue another broad change to gaming in New Hampshire,” Bragdon said, according to a summary of his comments from the hearing.

SB 104 was introduced in the state Senate by Sen. Timothy Lang (R-Sanbornton) on January 5. It was co-sponsored by six lawmakers — Sens. Kevin Avard (R-Nashua), Lou D’Allesandro (D-Manchester), Bill Gannon (R-Sandown), Rick Ladd (R-Haverhill), Howard Pearl (R-Loudon), and David Watters (D-Dover).

The state legislature, aka the General Court of New Hampshire, adjourns on June 30.

If you or someone you know has a gambling problem and wants help, call the Virginia Council on Problem Gambling (VACPG) helpline at 1-888-532-3500

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