The Folly of Funding with Overstated Gambling Revenues that never appear

Massachusetts included overstated Gambling Revenues to fund capital projects.

Doesn't take the brightest bulb to recognize the Folly!

Racinos solve problem

April 15, 2013

Fairmont Sentinel

 

To the Editor:

In an effort to solve the Minnesota Vikings stadium funding woes as well as to provide new revenue to state government, I support racino legislation that would allow slot machines at Minnesota's horse tracks.

Racino is our best hope of paying the state's portion of the Vikings stadium without tax increases. I was never interested in using tax dollars to pay for stadium construction, but Gov. Dayton wanted this to happen with e-pulltabs and didn't research how poorly they fared in Iowa. E-pulltabs didn't work in Iowa, and they aren't working in Minnesota either.

In Minnesota, e-pulltabs are approximately 95 percent short of projections we received during the stadium push. Previous estimates found that slots at Minnesota tracks would generate $150 million per year in Minnesota and create another $400 million in economic impact for the state.
In the past, racinos have been strongly opposed by Minnesota's Native American tribes, which have been successfully operating casinos for many years.

Nowhere in Minnesota's Constitution does it say our tribes should have an exclusive monopoly on gambling revenue.

This racino legislation would help our ag industry, give many Minnesotans a good paying job, and make the horse industry viable once again while solving our stadium's revenue collection problem.

State Rep. Bob Gunther,

R-Fairmont

http://www.fairmontsentinel.com/page/content.detail/id/524779/Racinos-solve-problem.html?nav=5044

 

Gambling on Gambling Revenues

Funding a 'public' project based on unpredictable Gambling Revenue might not be the best fiscal plan.

Vikings stadium: Lagging funds from gambling concern lawmakers

By Patrick Condon
Associated Press
Posted: 01/16/2013

A leading Democratic state lawmaker said Wednesday, Jan. 16, that he is growing more concerned about the reliability of tax revenue from electronic gambling machines that is supposed to help pay for construction of a new Minnesota Vikings stadium.

"I'm more concerned than I was before the hearing," said Rep. Joe Atkins, DFL-Inver Grove Heights, after the House Commerce Committee -- which he chairs -- met to review the recent rollout of the electronic pull-tab games in bars and restaurants.

Tax revenue from those games is supposed to fund the state's $348 million share of the $975 million Vikings stadium slated for downtown Minneapolis. But the tax revenue from the games, which started to become available in September, fell short of projections by about half through the end of 2012: While $35.2 million was projected to come in, the games returned only $17.2 million in tax revenue.

Backers of the new games said they need time to get more popular and expand to other bars.

"We would ask for your patience," said Allen Lund, executive director of Allied Charities of Minnesota. Legal gambling in bars is operated by Minnesota charitable organizations, from youth sports clubs to veterans groups.

"When all the distributors who want these products have it to sell, those numbers will go up exponentially. If we could get some patience, we would appreciate it," he said.

Atkins, who voted for the Vikings stadium plan when the Legislature approved it in the spring, pointed out that lawmakers have only a few months if it becomes necessary to retool the bill. He said it was still too early to make that call, pointing out that the stadium bill did include backup revenue sources in the form of a sports-themed lottery and a stadium suite tax.  But Atkins also said he believes that even recently downgraded revenue projections on the games still are too optimistic.

State gambling regulators initially had projected that the games would be available at 2,500 sites around the state by October. But today, they are available at only 120 sites; the 2,500 goal has been pushed to July.

"I think, at this point, that 2,500 by July seems very aggressive," Atkins said.

Tom Barrett, executive director of the state's Gambling Control Board, said charitable organizations have been slow to sign on to the electronic games because they are faithful to longtime distributors of paper games. He predicted that interest would accelerate once his agency approves more distributors for electronic games, beyond the two now allowed to operate.

So far, the availability of the electronic games has not lessened the popularity of traditional paper pull-tabs, which some had predicted. Barrett said sales of paper games rose in the last fiscal year and are on track to rise another 8 percent in the current one.

The groundbreaking for the new stadium is tentatively set for October, with opening hoped for by 2016.

Atkins instructed Barrett to apprise lawmakers on a regular basis of revenue collections on the games. He pointed out that the current session will end in May.

"Our window of opportunity, if changes become necessary, closes in four months," Atkins said.


http://www.twincities.com/politics/ci_22389677/vikings-stadium-lagging-funds-from-gambling-concern-lawmakers

Metro casino getting little political support

Reminiscent of Bread and Circus instead of sound fiscal policy.

Metro casino getting little political support
Scout.com
By JOHN HOLLER
VikingUpdate.com

With the Vikings stadium bill remaining in a holding pattern as politicos continue to hem, haw and harrumph their way into inaction, a new player in the game has come up with a stadium funding proposal -- but one that isn't being received in the spirit in which the offer was made.

For years, the State of Minnesota and resident Native American tribes have maintained a hard and bitter peace when it has come to gaming in the state. In terms of state-run casinos, the battle has been ongoing for years. The Native American tribes were granted casino rights as part of a reparation process that was a concession to the crimes committed against Minnesota Indians over time.

There are currently 20 casinos dotted throughout Minnesota, but none of them are located in Minneapolis -- the largest city in the state and a natural tourist attraction for outstate Minnesotans heading to "The Cities." It is a prime piece of gambling real estate that has yet to be tapped. There are casinos in Prior Lake that draw millions of people every year, but, a downtown Minneapolis casino has been the prized property that remains untapped for a big-time casino that would be likely be the biggest thing casino gaming in Minnesota has ever seen.

The White Earth Indian Nation made an offer this week to pay the state's entire $400 million commitment to construct a new stadium on the current Metrodome site. One of the poorest tribes in the state, the White Earth proposal comes with a hitch. In exchange for the payment of the state's share of the stadium cost, the state would grant the White Earth Nation a metro casino.

There are 20,000 members of the White Earth Nation and, being located in far northern Minnesota, the gaming profits other tribes have enjoyed thanks to their proximity to the population centers of the state haven't been afforded them. However, the reception to the plan, unveiled by tribal chairwoman Erma Vizenor, isn't being well-received by the state.

As big a hot potato as the stadium issue has been for Minnesota lawmakers, putting a casino in Minneapolis has been molten political lava. House Speaker Kurt Zellers (IR-Maple Grove) quickly denounced the plan, as did Senate Majority Leader David Senjum (IR-Rochester).

At a time when Vikings fans are praying against hope that somehow the current stadium bill that appears to be life support will pass, it would seem that if someone wants to get the state off the hook (again) from paying for a stadium, perhaps the White Earth proposal shouldn't simply be dismissed as impractical.

The White Earth proposal is a long shot at best -- even its staunchest supporters would admit that -- but it's something. At a time when "nothing" appears to be more of a buzzword than "something" on the stadium issue, any proposal that offers something that meets the wish of the state to not using any state tax money on a stadium would seem like a positive for stadium supporters. Instead, it would appear the idea has been shot down before the ink on the paper being distributed to legislators has even dried.

Vikings stadium: The high price of rolling the dice

Vikings stadium: The high price of rolling the dice
Gambling’s toll obscured in stadium push
By: Patrick Condon, Associated Press

VADNAIS HEIGHTS, Minn. — Quarter by quarter, Randy Ringaman incessantly fed the casino slot machines and numbly nourished a gambling addiction that drained his nest egg, jeopardized his home and nearly cost him his life.

Now the retired pharmaceutical worker watches with alarm as Minnesota lawmakers eye a raft of expanded gambling options as a way to pay for a new Vikings football stadium. While stadium plan sponsors see a way to raise hundreds of millions of dollars without general tax hikes, Ringaman is part of a competing chorus singing the ills of gambling as anything but pain-free.

His own addiction started innocently enough, playing pull-tabs with friends at a neighborhood bar. Later it escalated to nearly daily casino trips. Rock bottom came on Feb. 29, 2004 when Ringaman swallowed a bottle of pills only to be discovered by his wife, whom he begged not to call an ambulance.

“I purposely did it on Leap Year because that way nobody would have to think about me except every four years,” the 65-year-old recounted recently from the basement of a suburban St. Paul home he refinanced three times to stay on top of his gambling debts.

Financial centerpiece

In recent weeks, the Vikings’ two chief legislative allies — Sen. Julie Rosen and Rep. Morrie Lanning, both Republicans — affirmed that expanded gambling revenue is likely to be a financial centerpiece of a stadium funding bill they could unveil next month.

The Vikings are seeking up to $650 million in state money to help build a replacement to the Metrodome, with the total price tag likely to fly north of $1 billion.

With general tax increases an impossible sell at the Capitol these days, stadium supporters see gambling as the path of least resistance. Democratic Gov. Mark Dayton is on board, disappointing fellow liberals who have seen him as an ally in pursuit of social justice.

“In a democracy, a free society, people get to choose what they want to spend their money on,” Dayton said earlier this month when asked whether he was concerned that gambling could fall hardest on people of modest means. “That’s why people work, is to have disposable income they can use for whatever entertainment or social activity they choose.”

State lawmakers are mulling a menu of new gambling options: allowing bars and restaurants to upgrade their pull-tab offerings to an electronic version of the game; authorizing two Twin Cities-area horse-racing tracks to install 2,000 video slot machines each; or letting a Minneapolis real estate developer open a brand new casino in that city’s downtown. The state’s cut would come through taxes on the gambling proceeds or licensing fees.

All three ideas potentially offer enough new revenue to fund the state’s stadium share; the latter two proposals would likely leave money to spare for other priorities.

Backers of all three proposals will get a chance to make their pitch directly to lawmakers at the Capitol Tuesday, when two Senate committees hold a hearing on stadium financing options.

Nothing new

Proposals to expand gambling are nothing new at the Capitol, and tapping such revenue to help build a football stadium is not a fresh idea either. But it took on new life in recent weeks, thanks to Dayton’s vocal backing of the Vikings’ stadium push, and fears the team could leave Minnesota when its Metrodome lease expires at season’s end.

Previous efforts have met resistance from an eclectic coalition of casino-owning Indian tribes, religious and social advocacy groups and others who frown on state reliance on gambling dollars for any purpose.

“We think the social costs definitely outweigh any benefits,” said Tom Prichard, president of the conservative Minnesota Family Council. “It encourages indebtedness, family problems. You’re really targeting a narrow range of people who do a significant amount of the gambling.”

Experts on compulsive gambling said there’s no proven link between greater gambling options and increases in the number of compulsive gamblers, which is pegged at 1 to 3 percent of adults. At the same time, Don Feeney, research director at the Minnesota State Lottery, said it’s “intuitive that availability and addiction go hand in hand.”

Paying for the problem

Minnesota currently spends $2.2 million a year on problem gambling treatment, funded by state lottery proceeds. Wealthy, casino-owning tribes like the Shakopee Mdewakanton also donate to such programs.

Ringaman first sought treatment for his own gambling compulsions in the early 1990s, but had a hard time taking it seriously. Over the years, he shifted from playing pull-tabs with friends after work, to playing alone nearly every night, then to trips to the casino once a week or so, to multiple casino trips per week.

For a while his wife joined him, and he learned a trick that convinced her he was uncommonly lucky: “She’d be on a slot machine and losing, so I’d point to the other side of the room and say, ‘Why don’t you go try over there?’ She’d leave, and I’d run to the cash machine and take out a couple more twenties. When she came back, I’d say, ‘Look, I won!”

Besides the home refinancing, Ringaman amassed credit card debts and raided his retirement fund. The suicide attempt came when he started to think about cashing out his 401(k) entirely, knowing he and his wife would be wrecked for good.

After his wife thwarted that February attempt, Ringaman went back to treatment and she took control of their finances. But she didn’t know he was expecting a work profit-sharing check.

“That was the end of April,” Ringaman said. “I went one more time, and the suicidal thoughts came right back. That’s when it finally bothered me enough to go really seek help. And that was the last time.”

Today, Ringaman serves on the board of directors for the Northstar Problem Gambling Alliance, funded by state treatment dollars. He said he’s not anti-gambling. But, asked what he thought of the state using gambling money to pay for wish-list items like a stadium, he had a harsh appraisal.

“Geez, I did that same thing. When I did win, I would buy electronics, jewelry for the wife,” Ringaman said. “I don’t see a difference. I think our state has a gambling problem. I think our country has a gambling problem.”