Is Gambling Good for Minnesota?
To: Clint Harris, Executive Director, Minnesota State Lottery; Andrew Westerberg, Chair, Gaming Division, Regulated Industries Committee, Minnesota House of Representatives; Michael Campion, Minnesota Commissioner of Public Safety; Norm Pint, Acting Director, Alcohol and Gambling Enforcement, Minnesota Department of Public Safety:
I am writing because I have questions about the role of gambling in Minnesota.
Mark Twain once admonished people to rob their churches, noting that the poorest people lived in the shadows of the largest churches. Apparently, what many of those people were doing in those shadows was gambling. And of course, that’s how gambling came to Minnesota.
Right after World War II, the Minnesota Legislature allowed nonprofit organizations to begin making money from bingo. By 1978, the legislature allowed gambling in liquor establishments, as long as it, too, was for “charitable” purposes.
Gambling was off to the races in 1982, when the people of Minnesota amended the state constitution to legalize pari-mutuel horse betting. More amendments followed. The state now has every form of gambling imaginable, including 18 Indian casinos and lottery games in every convenience store.
These gambling schemes were sold to the public as ways to accomplish a social good. The argument for horse racing, for instance, was that the vast proceeds would be used to reduce taxes and build up the horse business in Minnesota. Correct me if I’m wrong, but I don’t recall taxes ever going down as a result of pari-mutuel betting (it netted $400,000 for the state in 2003), nor have I been impressed by the number of horse farms dotting our landscape.
The state lottery, authorized by an amendment to Minnesota’s constitution in 1988, was also sold as a way to reduce taxes, and to pay for an environmental trust fund and fund the Greater Minnesota Corporation. Do any of you know what happened to the Greater Minnesota Corporation or the money spent on it?
The State of Minnesota received approximately $136 million from all forms of gambling in 2003. The Environmental and Natural Resources Trust Fund got 40 percent of lottery net proceeds, or about $22 million. The lottery pays out more than 60 percent of its gross proceeds to those who buy tickets (efficient taxation!). Do I have these facts about right?
The lottery Web site includes a long list of Environmental Trust Fund projects. Many are efforts to do “surveys,” to “study,” and to “coordinate” or “collaborate with demonstration projects.” Many projects also involve purchasing land and preserving natural habitat. Does anybody ever audit these projects? Are there reports from credible third parties who do not receive trust fund dollars to assure Minnesotans that the money has been carefully and well spent?
Finally, why did the long-time executive director of the Minnesota State Lottery commit suicide the day after meeting with the state auditor? Why has the lottery’s long-time general counsel been placed on administrative leave? And why did the owner of a PR firm that received huge fees from the lottery also commit suicide?
Many of us know examples of theft and embezzlement whose perpetrators claim compulsive gambling as the cause. Of the many millions of dollars received by the state as the wages of gambling, roughly $1.8 million is spent annually on treatment programs for compulsive gamblers. Yet, no state gambling Web site contains a single testimonial or story indicating that the money spent on treatment has had any effect. Why?
These are the questions that many of us have about the growth of gambling in Minnesota. I bet we won’t like the answers.
Vance K. Opperman
Taxpayer and Non-Buyer of Lottery Tickets