Gambling not off the table for MN budget

The expansion of gambling is an attractive tool to quash the budget deficit.

by James Nord

Odds are good Minnesotans will hear about gambling expansion when the Legislature meets next year.
A group of hospitality and bar associations began campaigning Tuesday to install video lottery terminals, or slot machines, in bars and restaurants throughout the state.
The group, Profit Minnesota, said nearly $750 million per year in new state revenue could be generated by upgrading gambling equipment. It used estimates from Minnesota State Lottery and the Minnesota Gambling Control Board.
Profit Minnesota is just one of a variety of proposals from legislators, gubernatorial candidates and the private sector to help the state out of the projected $5.8 billion budget deficit.
“I suspect you’re going to have a lot of dialogue on gambling this coming session,” John McCarthy, executive director of the Minnesota Indian Gaming Association, said.
The expansion of gambling is an attractive tool to quash the deficit when the alternatives are tax increases and budget cuts.
“We’re at a crossroads as far as budgeting goes in the state of Minnesota,” said Sen. David Tomassoni, DFL-Chisholm, who proposed gambling legislation last session.
Rep. Tom Rukavina, DFL-Virginia, also supports Profit Minnesota’s proposal. It could begin helping the state “almost instantly,” he said.
Sen. Dan Sparks, DFL-Austin, proposed a “racino” bill in March, which would allow racetracks to install slot machines.
Although the bill didn’t make it out of committee, Sparks said he will propose it again this session.
The added support of a new governor could tip the balance in the favor of legislators like Sparks and Tomassoni.
Two of the three main gubernatorial candidates have proposed plans including different forms of gambling expansion, while one has said he would consider proposals.
Independence Party candidate Tom Horner included a racino in his budget proposal, estimating that it could earn the state $250 million per biennium.
Horner would use the money for a “rainy day” fund to stop the need for short-term borrowing or to finance a new stadium for the Minnesota Vikings.
“There is a public cost to gaming, and some of that revenue ought to be shared with the state,” Horner said.
Mark Dayton, the DFL gubernatorial nominee, proposed a state-run casino near the Mall of America or the Minneapolis-St. Paul International Airport to raise revenue.
His campaign estimated revenues ranging from $250 million to $360 million per biennium, using statistics they updated from 2003 Minnesota Department of Revenue data.
Revenue generated by a state-run casino would be used to reduce the state’s budget deficit, according to Dayton’s budget proposal.
But detractors aren’t convinced.
 “The reality is that those numbers probably will never appear and the cost is going to far outweigh the gain,” McCarthy said.
For instance, a House of Representatives report estimated adding slot machines to bars and restaurants could raise between $245 million and $447 million per year, significantly less than Profit Minnesota’s goals.
Proponents of gambling expansion don’t often take a serious look at the numbers, McCarthy said, and they don’t acknowledge the good tribal casinos do for the state.
Gambling expansion would also significantly harm tribal casinos, which spur local economies and employ about 20,000 people, McCarthy said.
Proponents are adamant they’re not trying to target the tribes.
“I support the basic fundamental purpose of tribal casinos,” Horner said.
But to McCarthy it’s not only a matter of money. “We think there’s a lot more at stake here than just the tribal casinos. There’s a culture value in the state of Minnesota at stake.”