Expanded Gambling April 25, 2013

1. Expanded GamblingApril 25, 2013 Board of Directors Sheila T. Francoeur, Chair David Alukonis William H. Dunlap Eric Herr Dianne Mercier Richard Ober James Putnam Stephen J. Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Mike Whitney Martin L. Gross, Chair Emeritus Todd I. Selig Kimon S. Zachos Directors Emeritus “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

2. Putting It All Together Markets? Standard Economic Development Models Standard Retail Gravity Model Adjusted to Reflect NH Experience Long Term (Operation of Facility) # of Gamblers and Intensity Short Term (Construction) # of New Problem /Pathological Gamblers New Gambling Tax Dollars Direct/ Indirect Direct/ Indirect Costs of Problem/ Pathological Gamblers Meals and Rooms, Lottery Impact Displacement Societal Costs (Govt and Non-Govt) Net Impact Net Impact 2

3. Fundamental assumptions of NHCPPS models The placement of a casino in New Hampshire (or close to New Hampshire) will increase the number of people who gamble. The farther individuals have to travel, the less likely they are to go to a casino in New Hampshire. And … the closer you are to a casino, the more likely you are to go to a casino. Gravity of a facility – attractiveness, size, amenities – and the competition in the market affects gambling behavior. For a small share of the population, exposure to gambling results in pathological behavior. This creates a set of social issues which – if they can be quantified -- are offsets to the potential benefits. 3

4. What We Did? • Reviewed literature on gambling pathology, co-morbidity with alcohol and other drug issues, behavioral impacts (including crime) • Reviewed data on prevalence of problem and pathological gambling • Reviewed estimates of the costs of problem and pathological gambling. • Developed a model which provided ‘prudent policy maker’ with a measure of the potential community impacts.

5. Estimating Community Impacts • Requires four steps • Estimating gamblers with our gravity model (Page 41, 2010 report) • Estimating new problem and pathological gamblers (Page 41, 2010 report) • Identifying which costs should be included (Gaming Commission) • Developing quantifiable estimates of those costs (Page 51, 2010 report)

6. Measures of Problems and Pathology • Shaffer et al 1999 • Pathological  .9% to 2.0% of population • Problem  1.81% to 2.5% of population Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) identifies a set of disorders which in combination create ‘problem’ or ‘pathological’ gambling behavior.

7. New Problem Gambling Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) identifies a set of disorders which in combination create ‘problem’ or ‘pathological’ gambling behavior. Estimate the number of new problem or pathological gamblers from Schaffer and Hall literature assessment. Account for proximity and frequency as having an impact on the number of gamblers Provide a conservative (high) estimate based on precision of Schaffer and Hall analysis.

8. Geography impacts the distribution of community impacts

9. Types of Community Impacts

10. Estimating the costs • General agreement of impact: • Regulatory framework • Treatment (DHHS) • Other Government (unemployment) • Private • No agreed upon methodology creates significant difference in efforts. • National Opinion Research Center at the University of Chicago estimated the costs across multiple dimensions • Multiple estimates of cost available, settled on NORC for per-problem and pathological gambling cost

11. Estimates of Costs CPI adjusted

12. Estimated social costs per gambler with a problem Excludes treatment costs – as these were estimated by DHHS Excludes ‘abused’ dollars 12

13. Other Community Impacts • Timing • Economic Development and the Substitution Effect • Measures of Crime (including embezzlement) • Other issues identified by Commissioners • Demographic shifts • Social capital • Infrastructure/Natural Resources

14. New Hampshire Center for Public Policy Studies Board of Directors Sheila T. Francoeur, Chair David Alukonis William H. Dunlap Eric Herr Dianne Mercier Richard Ober James Putnam Stephen J. Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Mike Whitney Martin L. Gross, Chair Emeritus Todd I. Selig Kimon S. Zachos Directors Emeritus Want to learn more? • Online: nhpolicy.org • Facebook: facebook.com/nhpolicy • Twitter: @nhpublicpolicy • Our blog: policyblognh.org • (603) 226-2500 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”