Casino-style slot machines are one step closer to replacing Historical Horse Racing (HHR) machines in New Hampshire. On March 27, the Senate passed a bill allowing casinos to offer slots, described in the bill as “video lottery terminals,” which it says could generate $63.8 million in additional tax revenue for the state and additional funds for state charities. The bill still needs House approval to become law.
New Hampshire does not have full-scale casinos. The 12 gambling establishments in the state operate under charitable gaming laws and offer HHR machines, bingo, poker, roulette, and the blackjack variant Spanish 21. Last year, the state began exploring changes to charitable gaming, forming the New Hampshire Charitable Gaming Study Commission to assess the impact of current gaming laws. The commission’s report, filed on November 1, recommended replacing HHRs with video slots. It cited a Spectrum Gaming study that found New Hampshire casinos capture only 16% of their potential gaming revenue, estimated at $1.1 billion.
HHR machines visually resemble slots but operate differently. They generate results using data from thousands of past horse races and fall under parimutuel betting. Some of the disadvantages of HHRs are that they operate slower than slots and have higher operating costs.
Considering these findings, Sen. Timothy Lang introduced Senate Bill 83 in January, proposing the switch to video slots. However, the bill does not include a commission-recommended speed reduction for slots to mitigate problem gambling risks. Instead, it focuses on establishing a statewide self-exclusion database to support responsible gaming.
The bill has now been moved to the House for consideration.
State and charities to split 40% of slot revenue
Switching to slots will significantly increase funding for both the state and charitable organizations. Currently, casinos keep 75% of the proceeds, while charities receive 8.75% and the state 16.25%. Under SB 83, 40% of total slot revenue will go to charities and the state, an increase of 15%.
Out of that, 35% (14% of the total revenue) would go to charities. Each casino licensee must partner with two charitable organizations per game date. The remaining 65% (26% of the total revenue) would be distributed as follows:
- Lottery Special Fund: 25%
- Elderly-Disabled-Blind-Deaf Exemption Reimbursement (EDBDER) Fund: 25%
- Group II retirement system (Police & Fire): 50%
Slots will generate over 30% more revenue
The New Hampshire Lottery Commission projects that slots will generate about $300 per machine per day, an increase of over 30% from the $230 HHRs bring in. This shift will result in an annual gross revenue of $470.8 million from slots, compared to $361 million from HHRs.
With the increased state share under SB 83, New Hampshire will receive $122.4 million annually from slot revenue, more than double the current $58.7 million from HHRs. The estimated $122.4 million will be distributed as follows:
- Lottery Fund: $30.6 million
- EDBDER Fund: $30.6 million
- NH Retirement System (Group II – Police/Fire): $61.2 million
The bill also specifies that unclaimed VLT vouchers will expire after 180 days. The proceeds will go to the EDBDER Fund. To oversee the expanded gaming operations, the Lottery Commission would need to hire additional personnel, costing $147,000 in 2026, increasing to $311,000 in 2028.
The bill’s allocation to the New Hampshire Retirement System will reduce unfunded liabilities by $26 million per biennium and lower employer contributions. The estimated $470.8 million in annual revenue from slots would reduce contribution rates by 1.54% for Police and 1.88% for Fire members starting in 2030. Additionally, the bill could provide property tax relief by reimbursing municipalities for elderly, disabled, blind, and deaf exemptions. In 2023, these exemptions removed $1.24 billion from tax rolls, shifting $24 million in tax burdens.
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