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Racino Bill Slowed Down by Issues

Posted on May 8th, 2011

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Minnesota State Office Building’s Room 200 was jam-packed as key players and stakeholders attended on Thursday the first hearing on yet again another shot to lobby for slot machines to be installed in two state-run racetracks. In fact, the number of interested parties who wished to attend the session was so big that first-come, first-served tickets had to be distributed. However, prior to the start of the discussions, Rep. Bob Gunther clarified that the gathering is going to be merely an “informational hearing”, and was arranged in order to give both sides equal opportunities to argue their respective stands. Hence, Gunther said that there would be no vote. Some hypothesize that the so-called informational hearing was conducted because the number of votes needed to confirm the bill has yet to be secured. The gambling industry does not sit well with some Republicans, which explains why there are those who are against the proposed legislation. Still, Gunther remains optimistic as many Democrats have expressed their support for the bill.

As discussions began, previously articulated points were once again raised. In the supporters’ side, racetrack owners, along with horse breeders and owners resumed in presenting their proposal to turn Canterbury Park and Running Aces into racinos. Before members of the House Committee on Jobs and Economic Development Finance, they argued that, as experienced by other states, such move will undeniably boost business by increasing revenue which shall improve the ailing industry. Also, income from racinos, pegged to reach $125 million annually, shall also sustain the Minnesota Future, an economic development program designed to create jobs and technology businesses, as well as give grants for small enterprises.

Such arguments seem in perfect timing as the state currently battles serious problems with a budget deficit amounting to $5 billion. Thus, expanded gambling may very well provide a steady amount to finance different public policies and programs. In fact, another gaming bill that consents to bingo wagering games and electronic pull tabs in food and beverage establishments is moving comfortably along both House and Senate committees. In addition, a separate bill that plans to convert Block E into a multimillion dollar casino complex is on the drawing board. With income from gambling as the primary source of the tribes’ tax revenue, American Indian tribes’ representatives were also present in the hearing to safeguard their respective casinos, which may end up in competition with racinos. Rep. Mark Buesgens and former Republican Sen. Dick Day, both advocates of racinos, say the time is ripe for rival gambling sites. This shall be made possible if the state shall financially support the horse industry through racinos.

Conversely, a few members of the committee posed the question on why the state should subsidize a problematic business like the horse industry. Those who support American tribes saw the opportunity to highlight how the Indian casinos have been providing employment more than one thousand jobs even to those who are not members of the tribal communities. Angela Heikes, Mdewakanton Sioux corporate vice president for gaming, said that racinos may take away from Indian casinos’ revenue and, in the process, have negative repercussions on a number of jobs. In the end, a bill that was originally intended to create more jobs may end up putting current occupations on the line.

Aside from these counterarguments, Gunther and racino supporters also need to address the statements issued by Tony Sutton, Minnesota Republican Party Chairman, against Dayton. In the notorious statement, Sutton likened Dayton to Don Corleone of The Godfather, describing his support for racinos as a way to benefit on “a piece of the gambling action”. Sutton also criticized Dayton’s justification that state revenues from gambling shall be used for job creation, as well as to finance education. According to Sutton, “Funding education is a constitutional obligation of state government. As such, education funding should be built into the existing tax structure”. Notwithstanding all these challenges and the fact that Speaker Kurt Zellers and Senate Majority Leader Amy Koch have yet to extend their support, Gunther claims that lawmakers want the bill to have its day in the Statehouse. He also hints that plans to construct a Vikings stadium, as well as proposals on charging licensing fees, may help in pushing the racino bill.