Nonprofits worried about reduction in gambling revenue
ST. PAUL — They said it wasn’t going to happen. Then it happened.
A bill amendment to scale back e-pulltabs came out April 17. The same amendment took the long-sought-after tax cuts to charitable gambling and reduced them from reasonable to barely anything.
The author of the amendment was Rep. Aisha Gomez of Minneapolis, chairwoman of the House Tax Committee.
“Are there no high school sports teams, no food shelves, no nonprofits in her district?” asked Kristy Janigo, chairwoman of the Department Legislative Committee. “I have been to Lake Street. I know there are charitable causes in her district that her proposal would harm. Many people fail to realize the nonprofits that raise funds with charitable gambling make donations to nonprofits not involved with gambling at all. It’s a team effort.”
Gomez could not be reached for comment.
Gomez’s measure would remove the “open all” feature of e-tab games with the goal of making play slower for customers, thus lessening e-tab revenue. The issue has been covered by Twin Cities TV stations.
Some fear the proposed language could be interpreted to bring e-tabs back to the 2012 level, when they were very basic and didn’t generate much player interest.
The House Tax Committee heard comments on the proposals April 19 and, despite objections from The American Legion, Allied Charities of Minnesota, Protect Our Charities and others, went ahead and approved the amendment on April 20 anyway. The measure presently exists as part of the House Omnibus Tax Bill.
“They filed it late in the legislative session so that the people of Minnesota have little time to be aware of what is going on,” said Minnesota American Legion Department Service Officer Ray Kane.
Press conferences, social media campaigns, email marketing and in-person speaking with lawmakers have brought awareness to the matter.
“It’s amazing how many lawmakers totally do not understand how charitable gambling quietly helps their local communities on a daily basis,” Janigo said. “Local taxes don’t just fund everything. Nonprofits step in and help.”
An effort on the House floor to remove the language from the bill failed. See the vote above.
Commander Jennifer Havlick sent out a statement via email to all Legion members in Minnesota. It is printed on Page 4.
She wrote: “We can’t let them do this to our local communities! State lawmakers want to take steps that devastate charitable gambling, which in turns hurts Minnesota veterans, food shelves, homeless shelters, youth sports, children’s activities and many good community-based nonprofits. They know it is wrong.”
E-tab manufacturers estimate the decreases could be anywhere between 5 to 50 percent, but the best guesses say 20 to 30 percent losses in e-tab revenue. This would be more than would be offset by the small tax cuts, Havlick said.
E-pulltabs have been around since 2012 and helped pay off bonds that built a pro football stadium in downtown Minneapolis. Casinos have been behind efforts to scale back e-tabs. Courts have twice ruled that the 2012 agreement with the Dayton administration regarding e-tabs has not been violated.
Gomez regularly tells the media a recent court ruling is why state lawmakers need to change the law. However, she fails to grasp or conveniently omits that ruling only dealt with email explanations from the Gambling Control Board. The actual 2012 agreement has been supported by the courts.\
Two years ago, the House actually passed a bill to get rid of e-tabs. It was killed by the Senate. A state fiscal note said charities would lose $33 million a year, wages would be reduced by $35 million and bars and restaurants would lose $30 million. It was widely agreed upon, at the time, that nobody would up and suddenly leave their favorite bar or restaurant and go to casinos instead.
Instead, the revenue would be lost, at a time when nonprofits already struggle to raise funds, Janigo said.
She encouraged people to call their lawmakers, especially state senators, and show them how charitable gambling donations help Minnesotans everywhere.
Charitable gambling has been part of the Minnesota landscape since 1945, with the bingo law, with the notion of preventing commercial gambling. Now, it would seem commercial gambling is out to harm charitable gambling.
