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With stadium plan, Dayton carries on unfortunate legacy of ‘gambling governor’

To help fund a new Vikings stadium, DFL Gov. Mark Dayton wants to borrow a page from the political handbook of the late Gov. Rudy Perpich – to expand legalized gambling in Minnesota.
Perpich, who gave Dayton his political start, was about as straight an arrow as they come. However, during his 10 years as governor, he presided over the greatest expansion of legalized gambling in state history. As biographer Betty Wilson noted, Perpich is remembered by some as “the gambling governor.”
Under Perpich’s watch, the state:
- Expanded charitable gambling in 1978 by permitting the use of paddle wheels, tip boards and raffles (he allowed the bill to become law without his signature).
- Enacted legislation in 1983 to allow the construction of Canterbury Downs and legalize racetrack betting, capitalizing on a constitutional change approved by the voters a year earlier.
- Approved a constitutional change in 1988 that allowed the creation of the Minnesota Lottery.
- Signed compacts with Minnesota’s11 Indian tribes in 1989 that allowed the tribes to go into the casino business and gave them a lucrative monopoly – no strings attached.
At the end of the 1989 legislative session, then-Sen. Dean Johnson of Willmar said, “The gambling floodgates are open.” By 1992, Minnesota was “the largest casino gaming center between Nevada and New Jersey,” according to a State Planning Agency report.
Electronic pull-tabs
Now Dayton and his legislative allies want to build on this unfortunate legacy, proposing the legalization of electronic pull-tabs to fund the state’s $398 million share of a $975 million stadium. The Minnesota Department of Revenue has estimated electronic pull tabs could bring in up to $42.7 million annually.
Questions about the expansion of gambling may be the least of the political hurdles facing the latest stadium proposal.
For much of the state’s history, legalized gambling consisted largely of low-stakes bingo games in church basements. In 1947, Gov. Luther Youngdahl made a political name for himself by passing legislation to drive out slot machines that had crept into Minnesota and become popular attractions in many resort communities.
However, over the last three decades, legal gambling increasingly has become a part of the state’s culture. It started with a 1981 law allowing nonprofit and charitable organizations to sell pull-tabs, which forged a regrettable link between gambling and youth athletic programs, among others.
Last year, pull-tabs generated nearly $1 billion in sales and the lottery sold another $500 million in tickets. As for the 18 tribal casinos, who knows how much they raked in? In 2007, the most recent year for which figures are available, these casinos attracted 24.6 million visitors, three times as many as people as Minnesota state parks.
Striking it rich
The unfortunate message, amplified in advertising for the lottery and Powerball: The way to get ahead is not through education and hard work, but rather by buying a ticket and striking it rich.
“How would you like a chance at a million big ones?” asked the Minnesota Lottery’s website. “ Check out our new Million $$ Match TV spot and see if any of these scratching styles could bring you a million dollars instantly!”
Perpich, who championed the lottery proposal, justified it as a way to generate money for economic development and conservation programs. Now Dayton and his allies see the electronic pull-tabs as they only way to build a football stadium and hang onto the Vikings.
If you’ve ever sat in a sports bar and watched patrons fill multiple baskets with the pull-tabs they’ve ripped through, it may be difficult to imagine electronic pull-tabs being any more seductive, if not addictive.
Addiction experts estimate that 160,000 to 214,000 Minnesotans struggle with compulsive gambling, which can threaten family relationships, empty retirement savings , lead to criminal behavior and ultimately destroy lives.
If you’ve followed the news even casually over the years, you know there are church staff members who have embezzled from their employers, elected officials who have written bad checks and law students who have robbed banks – all to support their gambling habits.
As for the state, it’s much like the problem gamblers within our borders. As a William Thompson, a professor at the University of Nevada, once observed, “What happens in gaming is that the government becomes hooked on gambling just like a compulsive gambler.”
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Comments (8)
How much?
$42 million? That's the third figure I've seen in two days. I've seen three estimates: $98 million, $72 million, and now $42 million. We're not just gambling on gambling, we're gambling that this will pay for a stadium, and if it falls short, who's on the hook?
Gambling
The political point of a gambling tax is that it is a tax about which many Republicans, committed to a no new tax policy, pretend to believe isn't one. That's why gambling tax proposals are not politically dead on arrival. The economic price we pay for enabling Republicans in their delusions, are that we are establishing a regressive tax, one that is inefficient and extremely expensive to collect, involving as it does the payment of a hefty vig to our de facto and de jure bookmakers. It's a reminder that whatever it's other merits, self delusion doesn't come cheap.
Republicans support voluntary taxation
In a free society you should have no problem with imposing a tax that the people can avoid by voluntarily avoiding that behavior. Democrats seem to have no problem with liquor taxes and other sin taxes, why the problem with a tax on gambling?
Disturbing
“What happens in gaming is that the government becomes hooked on gambling just like a compulsive gambler.”
This is really quite disturbing. I thought, perhaps naively, that we were a little smarter than this.
With regard to the DOR estimate of $43 Mill. gambling revenues, has anyone looked critically at these estimates? I've read that the amount of gambling revenue available is relatively constant so the amount obtained from one activity (pull tabs) is at the expense of some other activity, say casinos or horse tracks, etc.
Taxes
"In a free society you should have no problem with imposing a tax that the people can avoid by voluntarily avoiding that behavior."
Yes, that's the way the rationalization goes.
"This is really quite
"This is really quite disturbing. I thought, perhaps naively, that we were a little smarter than this."
We aren't very smart. After all, we gamble don't we? But actually, this is a very good point. By accepting gambling proceeds, we are aligning ourselves with gambling interests, and this can have an impact on subsequent policy making. I compare it to the tobacco settlement. Here we waged this long legal fight against the tobacco companies we were assured were dastardly and then, the tobacco settlement is reached, and suddenly we found we were in partnership with them. We in effect sold our souls to the tobacco companies, at a price those companies as it turns out found quite reasonable.
Expansion of Gaming
Concerned with the expansion of gaming? Check out the daily bus schedules that canvas the Twin Cities sponsored by the American Indian Casinos. Compare the number of machines in service at Mystic Lakes and Treasure Island today to ten years ago. There has been an exspansion in gaming and we have no control over it.
Pull tabs are a legal form of gaming in Minnesota, what is proposed is the exact same game (no slots) presented in a secure and technology enhanced form. Plus it's green, no paper.
Perpich should be known as the "bad deal governor" the state evens refunds all the sales tax
the Casino's pay back to them once a year.
Gambling
I fail to see what is wrong with legalized gambling. There has been gambling since time began, and outlawing gambling has been about as effective as prohibition. The state loses millions of dollars in revenue every year by not legalizing and taxing it. This is how stupid the state of MN gets. If I have Sunday afternoon football party, and my guests bet on the game, that is legal, however if I, the owner of the house bet and win, that is illegal. So if I want to make a friendly social bet, I better not do it at home.
A Wisconsin Study Shows Major Economic Impact of Indian Gaming. The major conclusions were:
The revenues to the gaming operations were $275 million.
Employment at the casinos totaled 4,500. A significant portion, 1,400, were unemployed prior to obtaining casino employment and 20 percent came from the welfare rolls. Tribal employment supported by casinos constituted 70 percent.
The multiplier effect led to another 1,500 jobs.
Employees paid $2 million in federal income taxes and almost $4 million in Social Security and pension funds.