There are many horses on Minnesota’s hyperactive gambling merry-go-round: racinos, video bingo and pull tabs in bars, a casino in downtown Minneapolis.
So, it was standing-room-only Thursday in Room 200 of the State Office Building at the first hearing in either legislative chamber this session on another attempt to add slot machines at the state’s two horse racing tracks, Canterbury Park and Running Aces.
The event was in such demand that, in a rare occurrence, Capitol pages handed out first-come, first-served tickets to supporters and opponents. Each group sat on opposite sides of the large hearing room, sort of like the bride’s family here and the groom’s family there. Except, this hearing before the House Committee on Jobs and Economic Development Finance was no royal wedding.
This was another battle over whether horse owners and breeders and the companies that own the tracks could add an attractive component to their businesses to, in their view, continue to survive and to revive a dying equine industry in the state. Slots at tracks would increase racing purses, boost horse owners’ revenues and bring more and better racing to Minnesota, racino advocates argue. Other states have done it.
This, too, was another stand by Minnesota’s American Indian tribes to protect their biggest economic development tool: 18 casinos of various sizes, with only one — Mystic Lake in Shakopee owned by the Mdewakanton Sioux — within the metro area.
Indeed, gambling revenues are the tribes’ tax base for their own sovereign budgets, and their casinos are restricted to the land they own, land — often the worst of the state’s land — ceded to them by greedy white guys years ago.
Even before the nearly two hours of testimony and questions-and-answers began, Rep. Bob Gunther, R-Fairmont, offered a spoiler alert. This, he said, was to be an “informational hearing” only. There would be no vote. His ostensible reason: He wanted to give both sides a full chance to offer their points of view.
But in Capitol-ese, “informational hearing” can be code for “Sorry folks, I don’t have the votes, but I might in a week or so.”
With only Republicans signed on as sponsors to his bill, and with Republican Party Chairman Tony Sutton weighing in again against gambling, this was going to be a tough race for Gunther to win.
The arguments for both sides have been longstanding, but the state’s budget crisis has given a boost to all gambling efforts, of which racino is but one. Indeed, a charitable gaming bill that would allow electronic pull tabs and bingo wagering games in the state’s bars and restaurants continued to progress in House and Senate committees this week.
Meanwhile, somewhere on the Capitol campus, lobbyists and lawyers for developer Bob Lux were putting together a bill to allow a big, honking downtown Minneapolis casino. That bill and hearings are expected any day now.
In this $5 billion deficit environment, no one wants to leave money on the table — pardoning the expression — and gaming expansion controlled by the state and not the tribes could, possibly, produce some cash for all sorts of statewide projects.
In the matter of House File 1480, the catcher of potential racino revenue would be an economic development program called “Minnesota Future.” As much as $125 million annually would go to programs to grow jobs around the state, create technology businesses and offer various small-business grants, proponents say.
It’s an attractive notion: link gambling proceeds to job creation.
Racino proponents say that subsidizing the horse industry with slots at Canterbury and Running Aces will, indeed, create more horse industry jobs and preserve the fun of horse racing.
It will also create competition for the Indian casinos. Racino advocates — such as Rep. Mark Buesgens, R-Jordan, and former Republican Sen. Dick Day, now the chief lobbyist for RacinoNow — say it’s time for the state to approve rival gambling sites.
Buesgens called slots at Canterbury “one more option,” told of his mother’s affection for gambling and wondered: “I don’t know why you’d be against fun?” He warned the lawmakers not to be scared off by “boogeymen,” presumably the fears raised by tribes that this market is already cluttered with gambling options.
Passionate Dick Day, who left the Senate to lobby for this cause, said adding slots at the tracks was a matter of “fairness,” and he warned the committee members, “Don’t be held up by 43 lobbyists,” the number he says are attached to tribal interests.
(By the way, the hearing room looked as if it was a brunch meeting of the Minnesota Lobbyists Club. One non-attached lobbyist scanned the room and counted 20 lobbyists working on the issue for various interests.)
But, during testimony, some committee members wondered why the state should prop up an ailing business. Later, tribal backers pointed out how slots at the tracks would eat into their casinos revenues.
Angela Heikes, corporate vice president of gaming for the Mdewakanton Sioux, was the most eloquent in stating how many rural jobs Indian casinos have created, and mostly for non-tribal members.
Calling the gambling market “mature,” she warned that any new state-backed casinos would “shift gamers, rather than attract new gamers.”
Meanwhile, Stephen Hallan, a Pine County commissioner supporting the Mille Lacs Band of Ojibwe’s two Grand Casinos, said the tribe pays about 10 percent of all of his county’s property taxes and employs more than 1,100 of the county’s 29,000 residents.
Thus, the irony, opponents say: This is a bill intended to use gambling money to create jobs, but it’s a bill that could reduce jobs in some cases, or merely replace jobs in most cases.
GOP not on board
Gunther had some other worries. He was in a hospital last week with pneumonia and an infected kidney. Then earlier this week, he bit on a cough drop and broke some of his front teeth. In a post-hearing interview, the friendly House member bore a striking resemblance to a retired minor- league hockey player.
Getting votes was as difficult as munching on a sandwich for him these days.
“We have many Republicans that are anti-gambling and many Republicans against the bill,” he said of the majority party in both chambers. “But we have many Democrats who are for the bill,” he said.
Gunther and racino backers had one other problem. If the DFLers were still mostly going to side with the tribes — which have traditionally contributed campaign funds aplenty to the DFL — Minnesota Republican Party Chairman Tony Sutton was going to take a whack at Gov. Mark Dayton for saying gambling proceeds, if any, should go to job growth and education funding, including early childhood education.
Sutton issued a statement Thursday afternoon, calling Gov. Dayton, “Don Dayton,” as in Don Corleone in “The Godfather.” Sutton’s press release was headlined: “Gov. Mark Dayton Plays Don Corleone and Muscles in on a Piece of the Gambling Action.”
“These gambling proposals are simply another proxy for garnering more state revenue to avoid spending reductions and structural reforms necessary for an honestly sustainable budget going forward,” Sutton said. “There is nothing ‘free market’ about expanding gambling as a scheme to garner more revenue for the state — especially when Gov. Dayton marks gambling revenue for ‘economic development,’ which means government picking more winners and losers in the market place based on politics and not productivity … Funding education is a constitutional obligation of state government. As such, education funding should be built into the existing tax structure, not dependent on whether or not ‘baby needs a new pair of shoes.’ “
Still, Gunther said GOP legislative leaders want the bill to get to the floor, but Speaker Kurt Zellers and Senate Majority Leader Amy Koch haven’t given it full-throated public support.
As for hallway scuttlebutt that racino backers have been talking up a major coordination of all the gambling bills, Gunther shot that down. “I don’t think so,” he said of some sort of global gambling solution.
But then he raised a few notions that could give the racino bill legs.
One: the Vikings stadium. A marriage long predicted by Capitol watchers in the know.
“Where do you find money enough to build a Vikings stadium, and is a Vikings stadium economic development? ” he asked. “If the members passed an amendment to appropriate money to a Viking stadium, I’m not God, I can’t say no.”
The other issue not now in Gunther’s bill but one he mentioned: charging a licensing fee to the tracks. Last year, Canterbury’s owners offered $100 million upfront to gain a racino license in Shakopee.
But Rep. Gunther had to move on. It was past noon and, believe it or not, the National Day of Prayer event was scheduled for the front lawn of the Capitol within minutes.
And, yes, Gunther opined, his racino bill still had a prayer.
“I have it on fairly good authority, that even if the bill fails here, it isn’t done yet,” Gunther said of his committee. “Nothing dies in St. Paul.”
Not until the merry-go-round stops on or about May 23.