Lynch, speaking on New Hampshire Public Radio's "The Exchange," said he was "almost" certain he wouldn't support pro-gaming legislation.
"It's not going to happen this year," he said, "there is not the political will for it to happen."
Local lawmakers responded yesterday with frustration and resignation - gambling legislation has been largely seen as the only way to revitalize Salem's Rockingham Park horse-racing track, and Lynch's support has been viewed as key to getting that legislation passed.
"It's very, very unlikely that the Democrats would buck the governor on an issue like that," said Rep. Jason Bedrick, R-Salem.
Sen. Michael Downing, R-Salem, agreed.
"I honestly believe nothing will get passed unless the governor comes out publicly to support it, as Gov. (Deval) Patrick did in Massachusetts," he said.
But both lawmakers expressed frustration that Lynch wouldn't support some sort of gambling measure.
"There already is gambling at Rockingham Park," said Bedrick, referring to the charity poker tournaments and horse racing at the track.
Advocates of an expanded gambling operation have argued that the state should legalize video slot machines. The state would make about $147 million a year in tax revenue from those slots, according to an analysis by The Innovation Group, an economic forecaster hired by Millennium Gaming.
Millennium owns a 20 percent stake in Rockingham Park and hopes to expand gambling there. A representative for the company could not be reached late yesterday afternoon.
Last week, Millennium hosted a presentation for town and state officials - arguing that gambling legislation should pass.
Rep. Mary Griffin, R-Windham, said after the presentation that the state didn't have much choice but to pass some kind of pro-gambling legislation.
"We need the revenue," she said. "You going to tax the people? I don't think so. They don't have any money as it is."
Local voters have also voiced their support for video gambling at Rockingham Park.
Salem voters have twice approved slots in nonbinding referendums. The last time, in March 2003, 72 percent of Salem voters said they approved of video slot machines at Rockingham Park.
In Seabrook, home to Yankee Greyhound Racing Park, state Rep. Mark Preston, a sergeant on the local police force, said he would like to see video gambling introduced.
"I think it would be great," Preston, D-Seabrook, said yesterday. "I'd love to see it happen. It would help our town. It would rejuvenate the dying dog racing industry here."
Preston said gambling would be a boon to the economy and have no serious impact on the quality of life in town.
The racetrack was already open when he became a police officer in Seabrook, but the park has not contributed to the local crime rate, Preston said. The largest impact has probably been increased traffic, he added.
Preston said the money spent by those who gamble in Seabrook would benefit not only the state economy, but the local economy as well.
"I think it would be a boon to the local hotels, restaurants, gas stations and retail sales," he said. "And when people stay in our hotels and eat in our restaurants, they'd pay state rooms and meals tax. When they'd buy gas here, they'd pay state gas (tax). I think the pros outweigh the cons."
Preston said he understands there are people who have gambling addictions, but there are those who are addicted to alcohol as well and the state still sells beer, wine and liquor.
In addition, he said having video gambling machines at the state racetracks would keep the money in New Hampshire that residents are spending out of state when they travel on bus tours to Foxwoods in Connecticut and Atlantic City to gamble.
As a law enforcement officer, Preston sees another plus to allowing video gambling machines at venues approved and regulated by the state.
"Right now, there's a lot of social clubs that have illegal video gambling machines," Preston said. "In those establishments, the machines don't have any regulated odds. They can keep 99 percent of the money and pay back 1 percent to the people playing. If video gaming was legalized at racetracks, the odds would be regulated by the state. That would put the illegal games out of business."
Staff writer Angeljean Chiaramida and The Associated Press contributed to this report.