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Minnesota Considers Expanded Gambling Measures to Plug State Deficit

Posted on April 28th, 2011

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Measures to promote expanded gambling in the Twin Cities of Minneapolis-St. Paul and the while state in general remains in play, this according to District 22 Republican Senator Doug Magnus who says lawmakers continue to look into measures that can be implemented to address major budget deficits faced by the state. He adds that there are currently two independent and separate proposals that both suggest expanded gambling of some form and both are catching the eye of lawmakers in the state Senate.

The first measure aims to add casino-style slot machines at existing horse racetrack facilities in Columbus and Shakopee which would effectively create the first racino in the state. Supporters are keen on having the bill rescheduled as soon as possible as they believe it will help to stabilize Minnesota’s weakening horse racing culture. The bill was originally scheduled for review Tuesday but was postponed to an as yet unidentified date. Based on historical precedence, this measure could face a similar fate of related bills that in years passed trotted to the legislature promising millions of dollars in taxation revenues, only to be shot down by lawmakers who argue otherwise.

A second measure is backed by a group called Profit Minnesota and seeks to add charitable gaming options to bars and restaurants across the state as a form of additional revenues for these businesses. Profit Minnesota is a coalition consisting of more than 4,900 bar and restaurant businesses and would want to have video lottery terminals or slots-like machines including electronic pull-tabs and bingo. Said Magnus, “I think everyone wants to keep all options on the table. A lot of this stuff will all be in play; there are so many things that I would classify as in play – racinos (are) in play, the possible expansion of gambling in bars is in play. Several issues are in play for the end game. We need to sit down with both parties and come to an agreement for the ending.”

To this, a spokesman for Profit Minnesota said expanded gambling measures, if approved, could raise more than $600 million in tax revenues that would be sufficient to either finance government programs or provide tax relief to citizens. The same spokesman also argued that job creation, as a consequence of the expanded gambling measure, would boost local economies as well as promote support for charitable organizations that benefit certain marginalized sectors within the state. To that end, another estimated $230 million in revenues, per year, is expected to be raised.

Predictably so, the proposals were met with opposition from the Minnesota Indian Gaming Association who represents a good majority of the Indian gaming tribes in the state. They argued that expanded gambling would only cannibalize revenue from existing Indian facilities and will not really raise new funds but will simply divert the income generation to other forms. The group plans to launch a protest rally at the State Capitol on Tuesday to air their claims. They will be joined by other anti-gambling protestors who raise different concerns such as the un-tenured nature of these new revenue generating forms or the potential inadequacy of these projects to sustain long-term projects such as the Vikings’ new stadium.

But Magnus said that the population was still hungry for gambling outlets and saturation of the market is far from being a reality. “A significant amount of people like to gamble, so I think that’s the premise you start with,” said Magnus who is a known racino legislation supporter based on previous legislative session’s voting records. Rep. Andrew Falk (DFL-Murdock) questions the potential beneficiaries of gambling revenues and has repeatedly warned against the state’s reliance on gambling profits. Instead, he wants specific projects or areas to be targeted by gambling revenues in order to better use the profits. “I’m not overly fond of the current racino legislation or that from Profit Minnesota,” said Falk. “I’m not a huge proponent of either of those proposals. And I do have some aversion to using gambling proceeds to fund the general fund programs because gambling proceeds vary from year to year.”

It remains to be seen, if approved, whether the measures can do anything to plug the state’s deficit.