Committee probes VLTs, tax split, charity payouts and safeguards in wide SB 83 work session

The New Hampshire House Ways and Means Committee spent a lengthy work session discussing Senate Bill 83, which would expand gaming options in the state to allow video lottery terminals (VLTs) and make multiple related changes to oversight, tax rates, and distributions.

The bill drew extensive questions from committee members about wagering limits, machine-to-table ratios, charity distributions and how state revenue would be split. Charlie McIntyre, executive director of the New Hampshire Lottery Commission, and other agency staff answered technical questions and described operational and regulatory issues related to VLTs, wide-area progressive jackpots, “free play” accounting and enforcement.

Committee members said the bill bundles several distinct topics — VLT operations and definitions, tax and distribution structure, renaming and a voluntary self-exclusion database — and urged the committee to parse them carefully. Some members recommended additional fiscal modeling and phased implementation before the committee takes a formal position.

McIntyre said several mechanics of the proposal would be managed by the commission but that many operational choices would remain business decisions for operators. On the question of “no maximum wager” language that appears in one section of the bill, McIntyre noted that accepting extremely large single-person wagers at a VLT would be “remarkably difficult” in practice because New Hampshire does not allow credit on the floor; patrons must present cash. He also said operators themselves could impose lower limits even if statute sets no cap.

On wide-area progressive jackpots — pooled prize pools that aggregate play across machines or sites — McIntyre said such systems are technically feasible but would increase back-office complexity because operators and equipment manufacturers would need to coordinate shared systems, reporting and audits. Operators pushed for lower required payout rates on those linked progressive pools; the committee discussed the effect on player odds and prize sizes if operators proposed an 80/20-style payout rather than the higher payout percentages currently associated with standalone HHR (historic horse racing) machines.

Members pressed on tax-rate choices. The committee compared the House-passed HB 2 distribution model and the SB 83 proposal. McIntyre told lawmakers that, in his view, a higher state share than the 30 percent figure in HB 2 would be feasible and would produce substantially more revenue to the state. Several members responded that a sudden large change could affect operator investment choices and that phased approaches or more detailed financial modeling (including business profits tax impacts and operator cost structures) would be prudent.

Members discussed protections for charities and table-game floor space. The committee reviewed an existing regulatory approach — currently in administrative rule — that limits VLT (or HHR) floor space to no more than 70 percent of a facility’s gaming floor and ties machine/table revenue ratios to protect charity payouts. McIntyre said those rule protections were negotiated during implementation of HHR to prevent facilities from becoming “a movie theater with a thousand machines” and to preserve table-game revenue that historically produces larger shares for charities.

On “free play” (promotional credits), SB 83 would treat a portion of free play as an offset in revenue accounting; the committee compared a 12.5 percent free-play allowance in SB 83 with a 15 percent approach in HB 2. McIntyre said operators use free-play offers as marketing and that accounting for them monthly would be necessary to prevent distortions in charity or state revenue reporting.

Other operational details discussed included: the ability of the commission to remotely monitor machine activity with a central back-office connection; whether licenses can be transferred or sold (the bill would limit transfers and require suitability reviews of substantial investors); and the cost to convert existing HHR machines to VLT content (McIntyre estimated roughly $3,000–$4,000 per machine as a rule-of-thumb). Committee members asked for scenarios showing state revenue under different tax rates and machine counts, noting spectrum studies put a theoretical upper bound of roughly 6,000 machines statewide.

The committee did not hold a vote on SB 83. Several members said they wanted another work session to review proposed amendments and to receive fiscal estimates in dollars rather than only percentages. Chair Genigian said staff will schedule another session and encouraged members to propose amendments in advance.

Ending: The committee left SB 83 unresolved and scheduled follow-up work to translate percentages into dollar estimates, to resolve conflicting language between bills (HB 2 vs SB 83), and to consider phased or graduated tax approaches and protections for charities and local law enforcement involvement. No formal action or vote on the bill was taken at the session.