Facts Tell the Story: Charitable Gaming is the Right Solution for Charities, Communities and Minnesota Taxpayers

There has been a lot of misinformation about charitable gaming and particularly the new electronic games that are just starting to come online in a handful of venues around the state. With the issue of charitable gaming and funding for the Vikings stadium potentially returning to the legislature, its important to separate fact from fiction.

Fiction :
There is a shortfall in charitable gaming revenue.

Fact :
There is a shortfall in the projections for implementation timeline of the new e-games. The projected timeline for rolling out the new games didnt consider the challenges that come with Minnesota being the first in the nation to approve these egames. Consistent rules, efficient approval processes and sufficient staff to manage applications are just now being developed. The result? The revenue forecast for the first year was based on electronic games being in 2,500 sites as soon as last fall. According to a news report from Minnesota Public Radio, they were in only 140 bars by early February.

Fiction :
Even when new games are approved and in operation, charitable gaming revenue will continue to fall short.

Fact :
Charitable gaming will generate $45-to-$50 million in tax revenue this fiscal year, largely from traditional games. The $73 million in taxes projected in last years legislation is within reach once the new games are in place. For example, Electronic Games Solutions, Inc., placed electronic bingo games in five veterans clubs in Pennsylvania. These clubs had a maximum of a single $1,000 daily jackpot and total maximum prizes of $4,000 per day. Even so, the sites averaged $86.47 per unit per day. Minnesota which will link the games across sites statewide will generate payouts of between $25,000 and $100,000 every day. Even with the greater participation these higher-payout games will generate, EGS is basing its revenue projections on only $90 per unit per day just slightly more than Pennsylvanias. With realistic projections and reasonable time, Minnesota will hit its targets.

Fiction :
Charitable gaming is on the decline. Even e-games wont save it.

Fact :
Charitable gaming is stronger than it has been in years even without the e-games. Paper pulltabs sales have totaled $5 billion in the past five years. Pulltab sales increased 7.6 percent last year and are on pace to do at least as well this year.

Fiction :
Charitable gaming operations have been slow to incorporate the new e-games.

Fact :
The games havent been available. Only two of the five electronic manufacturers that want to do business in Minnesota are approved and only three of the 10 electronic distributors that will eventually do business in the state are currently able to do so. Charitable gaming operations are ready for the future; approval of the new games has been the biggest barrier.

Fiction :
Charities lobbied to be part of the Vikings stadium bill last year and now want to blame others for their own failure.

Fact :
Charities were dragged into a marriage of convenience that worked better politically than practically. Charitable gaming operations didnt seek to become part of the Vikings stadium bill and, in fact, werent even included in the most important conversations around the roll-out of the new e-games. Over the years, charities have sought e-games and tax relief (the average Minnesota charity pays $33,000 annual in taxes; the average Minnesota business pays $2,000) to better support our missions. We arent opposed to a new stadium, but it never was our intention to provide the states share of funding.

Fiction :
The state would be better off creating a new system of gaming for example, expand the state lottery or allow new devices in bars.

Fact :
Changing course now will just create more confusion and provoke well-funded opponents to fight an expansion of gambling. Even if something new could be approved, it just sends the state back to square one in creating a bureaucracy to approve and regulate games. The roll-out of charitable egames has been slower than we would like, but the signs are that regulators now are creating consistent rules and approval processes. Even without a significant contribution from egames and especially the high-jackpot bingo charitable gaming is growing and paying more and more in taxes. Starting over makes it more likely that Minnesota taxpayers will end up paying an even greater share of the Vikings stadium not out of new gaming revenue but from the same fund that supports education, roads and other vital public services.

Fiction :
Its too late to correct the problems with the roll-out of egames. The state will just have to hope for the best.

Fact :
There are good solutions that could jump-start charitable egaming: Strengthen the approval process. Minnesota is the first in the nation to host these games. Lets do it right, but lets also do it fairly and quickly. Making approval a top priority and having consistent rules and sufficient staff to manage applications all are necessary. Focus on approving the new e-bingo games. Games linked electronically to venues across the state will generate the kind of jackpots that will attract new players and the kind of revenue needed to meet expectations. Be creative. The slow roll-out has made it difficult to generate excitement among charitable operations and players. Lets set a goal of having a critical mass of operations in place by Sept. 29 when the Vikings travel to England to play the Steelers. Make this Minnesotas eKick-Off Day and put some resources into marketing the event.