Charitable Gaming’s Money Trail by Jamee Larson
Games of chance have been a part of American society since the 18th century, when colonists used lotteries to raise revenue for infrastructural elements like schools and universities. Today, many state agencies and charitable organizations rely on the funds from legally sanctioned gambling to provide the majority of their operating budgets.
Charitable Gaming:
Charitable gaming has been a fixture in Minnesota since 1945, when the State Legislature gave non-profit organizations the ability to utilize the game of bingo to raise revenue. In 1978, paddlewheel, tipboards, and raffles were added to the list of authorized gaming activities. Pull-tabs were approved within the state in 1981, followed by the lottery in 1989. The State of North Dakota was a bit slower to utilize charitable gaming; approving bingo, raffles, pull-tabs, jars and punchboards in 1977 and the lottery in 2004.
According to the Minnesota State Gambling Control Board, organizations authorized to procure revenue from gaming activities are limited to bona fide nonprofit veterans’, charitable, educational, religious, or fraternal organizations; civic and service clubs; or such other public-spirited organizations when the entire net proceeds of the games are devoted to educational, patriotic, fraternal, religious, or other public-spirited use.
The state of Minnesota enjoys higher revenues from charitable gaming than any other state. There are currently over 2,800 gambling sites across Minnesota, many of them responsible for direct funding to a non-profit organization. As of June 30, 2012, 1205 non-profit organizations in Minnesota held licenses to conduct gambling activities at permitted premises. 28% of these organizations are Veteran’s groups, 18% are fraternal organizations, 3% are of a religious affiliation, and 51% are made up of groups representing youth programs and civic clubs. The Moorhead Youth Hockey Association is one of the biggest charitable gaming organizations in the area, bringing in net receipts of over $556,000 during fiscal year 2012.
Individual gaming locations are free to contract with the non-profit organization of their choice. Dave’s Southside Tap in Moorhead, for instance, has aligned itself with Moorhead Youth Hockey. Rooters in Fargo has teamed up with the Special Olympics. Each gaming location should clearly identify the recipients of gambling proceeds.
State Lotteries:
In addition to gaming activities such as bingo and pull-tabs, billions of dollars are spent each year on the lotto. North Dakota currently sponsors five lottery related games: Powerball, Mega Millions, Hot Lotto, Wild Card 2, and 2by2. The state is only authorized for multi-district games, which does not include scratch off games. North Dakota is currently the only mainland state that does not offer instant tickets.
Where does all of that money go? According to the Office of the Attorney General, which oversees gaming in North Dakota, for every $1 spent on a lottery ticket in North Dakota:
52 cents go to player prizes
23 cents goes into the state’s general fund
10 cents pays for contracted services
5 cents is paid to the retailer
4 cents cover administrative and operative expenses
2 cents are used to pay for marketing / advertising
2 cents go to the multi-jurisdictional drug task force grant fund
1 cent is put into the compulsive gambling prevention and treatment fund
1 cent is put into the prize reserve pool
In Minnesota, where the state sponsors seven lottery games, the numbers are similar. For every $1 spent on a lottery ticket in Minnesota:
61.6 cents go to the players
24.2 cents goes to the state. This number is further broken down as:
13.3 cents to the General Fund
6.1 cents to the Environmental and Natural Resources Trust Fund
4.8 cents to the state’s Environmental Fund
2.4 cents to the Game and Fish Fund
2.4 cents to the Natural Resources Fund
8.2 cents in used to pay for ticket, lotto, vendor, and administrative expenses
6 cents goes to the retailer
As of June 2011, over $1.2 billion dollars has been allocated to the General Fund, which covers K-12 education, health care, aid to local governments, public safety, and gambling treatment programs. $552.2 million has been raised in the Environmental and Natural Resources Trust Fund.
Electronic Gaming:
In 2012, the state of Minnesota authorized expanded charitable gaming throughout the state in the form of electronic pull-tabs and electronic linked bingo. The proceeds of the expansion have been earmarked to help the state pay its $398 million contribution to the new Vikings football stadium. To date, the electronic games, which are run on iPads, are only available at one location in the region. Rick Cariveau, owner of Mill’s Lounge in Dilworth, believes that “electronics are the wave of the future.” Mill’s currently offers electronic pull-tabs on five gaming devices, a number that could increase in the future. Although locations are mandated to continue to provide paper pull-tabs, Cariveau believes that paper will soon go by the wayside.
Electronic gaming is certainly more attractive that paper gambling. With bright lights and upbeat, exciting music, electronic pull-tabs have a slot machine feel to them. Gamblers can choose from a variety of games, with more sure to make an appearance in future models. According to Cariveau, the state has made it as easy as possible for venues to participate in the new systems. “It really was a no-brainer,” he said, adding that a portion of the proceeds benefit the Lions Club in Dilworth. Additional organizations in the area will likely follow suit in the near future. Kathy Fischer, gaming manager for Moorhead Youth Hockey, believes that her organization will be doing electronic gaming when it becomes available through their distributor. In the meantime, however, Mill’s Lounge is the only place in the region where such an experience is available.
Check out next week’s edition of the FM Extra for more information on the new Vikings stadium.
Gambling Addiction:
Gambling, like many other recreational activities, should be done in moderation. The North Dakota Department of Human Services estimates that between six and ten million adults in the United States struggle with moderate to severe gambling problems. In North Dakota, those needing more information about gambling addiction can go to www.gamblingnd.com or call 2-1-1 for assistance. In Minnesota, people can consult www.minnesotarecovery.info or call 800-333-HOPE for more information.