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.