Committee Hears Bill to Replace Historic‐horse‑racing Machines with Video Lottery Terminals

The House Ways and Means Committee opened a public hearing on HB 728 on May 20, a bill that would authorize video lottery terminals at charity gaming facilities and repeal licensing for historic horse‑racing (HHR) machines.

Proponents and industry observers told the committee the change would shift how gross gaming revenue is divided, reduce certain operating costs for facilities and produce a steadier revenue stream for problem‑gambling services and education. Supporters also described a multi‑year phase‑in and urged the committee to consider allocations for charities and the state pension fund.

Why it matters: HB 728 would convert the machines that now rely on a distinct HHR architecture into true video lottery terminals (sometimes called slots), which supporters say are cheaper to operate and draw from a broader market of manufacturers. Committee witnesses said the swap would change the split of gross gaming revenue and therefore the sums available to charities, the Lottery (which funnels money to the Education Trust Fund) and other beneficiaries.

What proponents told the committee Representative Jacob Ulm introduced HB 728, saying the bill would “authorize video lottery terminals at charity gaming facilities and repealing historic horse racing licensing.” Former state representative Pat Abrami — who chaired New Hampshire’s charitable gaming study commission — told the committee the bill reflects recommendations from the Spectrum Gaming consultant that studied the industry. Abrami summarized the commission’s findings and his reading of the bill: "Using HHR machines instead of slot machines cost the facility 12.18 percent more because of totalizer and historic racing fees to the tracks," Abrami said, and he noted that HHR machines are supplied by far fewer manufacturers than standard slot machines, limiting competition.

Abrami gave a rundown of the projected distribution under the bill as written: the operator share would fall from 75% of gross gaming revenue to 70%; the state share would rise from 25% to 30%. He listed how that 30% would be allocated on the bill’s face: charities would increase from about 8.33% to 10.5% (an increase of about 2.17 percentage points), the Lottery (ultimately the Education Trust Fund) from 16.67% to 18% (about +1.33 points), and a new 1.425% allocation to Group B retirement. Abrami also said problem‑gaming funding currently depends on “breakage” from HHR machines and that moving to VLTs would create a steadier stream of funds for problem‑gaming efforts.

Alicia Preston, representing the New Hampshire Charitable Gaming Operators Association, spoke in support: "We think this is kind of a natural progression in the industry," she said, and backed a 30% state tax rate because, she added, operating costs for HHR machines are higher than for VLTs.

Charlie McIntyre, director of the Lottery, told the committee the fiscal note for the bill should be revised upward to reflect recent openings and higher per‑machine revenue. "Based on our existing revenues, that is wildly low. Wildly low," McIntyre said of earlier revenue estimates, and he provided updated per‑machine figures: excluding two lower‑performing facilities, the state is seeing roughly $287 per machine per day on average and growing, he said — a figure that, in gaming practice, often triggers expansion by operators.

Questions and operational concerns Committee members asked about contract length and whether operators could be locked into HHR equipment leases. Abrami said leases are typically not long‑term and that the bill’s phase‑in period should let facilities replace machines as leases expire. Members asked whether game content would be a hardware or software change; director McIntyre said conversion is primarily a content/software change with associated costs per machine.

Committee members also pressed witnesses on problem‑gaming funding and whether the bill provides enough support for services. Abrami said the commission had engaged a second consultant focused on problem gaming and recommended the legislature and a follow‑up commission continue work on a funding and services plan. McIntyre said he would update the fiscal note and provide estimates of how much additional money would go to problem‑gaming services under the bill.

Timing and phase‑out Abrami read the bill’s effective‑date language and said his interpretation is the bill permits facilities to phase out HHR machines and phase in VLTs during a multi‑year transition; statutory text would take fuller effect on January 1, 2028. He recommended members and staff verify precise repeal and effective‑date lines.

What the committee heard against or as caution Speakers also raised concerns about problem gaming and market concentration: Abrami’s commission had recommended addressing potential market concentration among HHR manufacturers and suggested the legislature consider remedies consistent with Article 83 of the New Hampshire Constitution on free and fair competition.

Next steps The Lottery director offered to update the fiscal note quickly with revised revenue assumptions reflecting recent openings. Committee staff and members requested a revised fiscal note and more detail on the bill’s phase‑in schedule and contract implications before advancing policy recommendations.

Ending note: HB 728 was the subject of a full public hearing; no committee vote was taken at the May 20 hearing. The committee requested updated fiscal information and additional detail about effective dates and phase‑in mechanics before marking the bill for further action.