It isn’t often that a veteran politician steps in it this bad but Sen. Bakk just stepped in it bigtime with this statement:
If the state’s financial contribution to a new Vikings stadium comes from allowing electronic pull tabs, a choice Gov. Mark Dayton, a DFLer, seems to prefer he could “probably” provide 12 votes. If the state’s financial contribution comes from racino, allowing slot machines at the state’s horse racing tracks, there probably will not be 12 votes.
Racino is a threat to the Indian gaming monopoly. MIGA, aka the Minnesota Indian Gaming Association, has traditionally been the biggest contributor to DFL campaigns. The DFL can’t afford to get on their bad side.
Charities that would be hurt by e-tabs, on the other hand, aren’t major donors to DFL campaigns. Gov. Dayton and Sen. Bakk don’t care as much about them as they care about their special interest contributors.
It’s disgusting that Gov. Dayton and Sen. Bakk are willing to throw charities under the DFL campaign bus. It’s disgusting that Gov. Dayton and Sen. Bakk are willing to protect the Indian gaming monopoly and the contributions that come with pandering with their monopoly.
Financially speaking, it’s important to note that charitable gambling profits are falling off a cliff. In 2000, the after tax profits from charitable gambling was $1,500,000,000. In 2008, that figure dropped to $1,032,000,000. The figures haven’t stopped dropping:
More than $893 million was spent on the game in Minnesota in fiscal year 2010, according to Minnesota Gambling Control Board figures released Friday.
That represents a 40% drop in a decade with no end in sight.
As bad as that is, it gets alot worse:
Site employees, usually bartenders, collect the money when a pull tab is bought and pay out prize money. More than 82 percent of money spent on pulltabs is paid out in prizes, state figures show.
The remainder, called gross profits, is turned over to the organizations. They can use the funds on allowable expenses, such as paying gambling managers and buying gambling equipment, and lawful purpose expenditures, which include state taxes and charitable donations.
Ultimately, about 4 percent of charitable gambling money is donated to philanthropic causes.
Charitable gambling receipts were $893,000,000 in 2010. If 4% of that total ultimately makes its way to charitable organizations’ hands, that’s less than $36,000,000 a year. That’s if that total doesn’t continue dropping, which is a definite possibility.
The state needs approximately $72,000,000 a year in revenue of whatever sort to pay off the Vikings Stadium bonds. Charitable gaming wouldn’t even account for half of that.
It’s unthinkable that the Vikings would agree to a deal involving industrial revenue bonds. It’s almost certain that they’ll insist that the state issue general obligation bonds, which are backed by the full faith and credit of the state of Minnesota. That means that state taxpayers would be on the hook for over 50% of the loan.
That means Gov. Dayton and Sen. Bakk would have to insist on raising taxes to pay for a Vikings stadium. That proposal wouldn’t make it to the House or Senate floor.
The most important question that Gov. Dayton and Sen. Bakk haven’t answered is why they’re making such a risky proposal. Another important question is why they’re proposing a plan that hurts charities but protects the biggest gambling interests.
Is it that they don’t care about the charities? That isn’t likely. What’s likely is that they care more about their special interest contributors than they care about charitable organizations.