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Berlin and Lincoln betting on gambling


June 11, 2009
As New Hampshire moves closer to legalizing gambling to balance the state's budget, Berlin and Lincoln have emerged as the two locations most likely to win a coveted gaming license. Last week, the state Senate passed a budget that included a measure to allow casino-style gambling at the state's horse and dog race tracks and two "undetermined" locations — one in Coös and another in Grafton County. Both North Country locations would be permitted have as many as 2,000 slot machines.

Sen. John Gallus of Berlin, who has long championed gambling, said the proposal "would be a boon to the North Country," providing much needed jobs, economic activity and income to the local governments. The budget balancing initiative, which won broad support in the Senate, even from members long opposed to gambling, may become an imperfect solution to a perfect storm of economic calamity. Spiraling revenues have left the state with a $650 million shortfall just weeks before the end of the fiscal year. Even veteran state budget writers, like Colebrook's Fred King, a former Senator and Representative, admit that "there is no fluff left in this budget." He contends the Senate has passed a responsible budget that recognizes, as he says, "the minimum needs of the state without shifting costs to cities and towns or finding additional revenues. This is the worse budget situation that has ever raised its head."

Few disagree with Mr. King's assessment, but the fight over how to fund the budget is far from over. The House, which has a history of opposing gambling, did not agree with the Senate and a conference committee has been appointed to hash out a budget. Sen. Gallus has been appointed as one of the 10 conferees and one of only two Republicans. The group must come to a unanimous decision and the final agreement will need to be approved by both houses and the governor.

There remains strong opposition to expanded gambling. Rep. Kathleen Taylor, of Franconia, who is the vice chair of the House committee that studied and rejected the gambling bills this session, ridiculed the last minute Senate maneuver to add gambling to the budget. "They never even had a public hearing on a 25 page amendment," she said. Proponents of gambling feel the tables have turned and the opponents of gambling must come up with an alternative solution, and it is easier to criticize gambling, they say, than find $180 million, which is the amount of revenue gambling would bring to the state coffers.

Some are betting that gambling will pass and are scrambling to win favor, but it won't be easy or cheap. A licensee must apply through the state, win approval from the local governing body, and pay a one-time fee that ranges from $50 million at Rockingham Park to a $10 million fee at the two North Country locations.

Berlin and Lincoln were a buzz of speculation as word spread of the Senate's surprising move.

Berlin has long had affection for gambling. The city council has endorsed the idea and several legislators have promoted the idea locally. James Rafferty, President of New Hampshire Charitable Gaming, is building support among civic leaders and the public for his plan to build what he terms a "modest casino project." This week Mr. Rafferty, who is also an adjunct Professor at UNH's Whittemore School of Business, released plans including architectural renderings for small-sized casino in downtown Berlin that will resemble "a sports bar, entertainment center with slots, table games." It is likely that this project will have less than the allotted 2,000 slot machines. A leader in the gaming industry for 30 years, Mr. Rafferty, a resident of Rye, has held prior positions with Harrah's Casino Hotels and Delaware North, the company that most recently managed The Balsams Resort in Dixville. His company has found a niche in the gambling business by partnering with charitable organizations, which share in the proceeds.

Berlin Mayor David Bertrand welcomed the proposal, but was quick not to overstate its impact. "Gambling could be a component, but not a focal point in redeveloping Berlin," he said. "Let's try it out on a small level."

Lincoln seems to be an obvious choice for the Grafton county location. It is a prominent tourist community with the infrastructure and the proximity to the interstate highway and major population centers. The community also has a persistent advocate in the state legislator. Rep. Edmond Gionet has introduced legislation calling for a casino license for Berlin and Lincoln and has spearheaded a local movement to entice an operator to partner with a local enterprise. Without assurances that the state would adopt gambling, few investors have taken up Rep. Gionet's offer, but that may soon change. With nearly 90 percent of Lincoln and Woodstock's land mass consumed by the White Mountain National Forest, this leaves few large tracts of land available for development. Most observers point to the Indian Head Resort as the logical choice for a gambling destination. "It is an ideal location," Rep. Gionet said, "right at the beginning of the notch and the interstate goes almost to their door." The resort also boasts 180 acres and, more importantly, interested owners.

Peter Spanos, who along with his wife Pauline have own the Indian Head resort since 1962, would welcome gambling. "I don't have that kind of money or expertise," he insists, but "If a casino operator came to me I'd be open to a discussion." Over the years, Mr. Spanos has seen his bus tour business decline as a result of customers being lured away by gambling destinations. "Foxwood has been real aggressive (going after the bus tour business). They pay for their transportation, food and give them $20 in quarters." He said he can't compete. What about concerns of gambling causing a decline in quality of life in the area or an increase in crime? Mr. Spanos laughs and said that, "These people are retired and on fixed income. They're pretty well behaved. They have one drink and go to bed."

Rep. Gionet enthusiastically added that if gambling is approved, "Lincoln will become the Las Vegas of the north."

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