This article originally appeared in the Fargo Forum on May 22, 2017. View the original article here.
A bill (H.F. 1415) licensing and regulating Daily Fantasy Sports (Fan Duel, Draft Kings and others) recently was heard in committee in the Minnesota House of Representatives. The legislation is seven pages.
By comparison, Minnesota's community-based, non-profit charitable gaming organizations - the operators of bingo, raffles and pull tab games that invest directly in their local communities - have at least 200 pages of statutes and rules that regulate everything they do.
The organizations the Legislature believes need more regulation than the secretive, billion-dollar fantasy sports industry include Moorhead Youth Hockey Association, a group raising money to make the expensive sport of hockey affordable for local kids.
In addition to the excessive regulation, Moorhead Hockey is taxed at a rate of 30 percent and now pays $53,036 more in taxes to the state than it is able to spend on its core charitable mission. The Legislature's treatment of the Moorhead Youth Hockey Association and other non-profit charities working to make our communities better places to live and work is unfair and here's why: Fantasy sports will be the fourth group of for-profit direct competitors to charitable gaming (card rooms, horse racing and casinos being the other three). They are all being regulated and taxed at a fraction of charitable gaming. We would take their deal in a heartbeat. These other gaming organizations are taxed at only the corporate rate of 9.5 percent. If charitable gaming organizations had that rate, we would have had another $35 million to help our communities and missions. Charities are paying up to seven times the rate of their for-profit competition. That is an insult to everything that we do and stand for.
The two behemoths in daily fantasy sports, Fan Duel and Draft Kings, have not paid any tax or provided any social benefits to Minnesota. Charitable gaming is paying $60 million in taxes this fiscal year and putting another $60 million into our communities. Add to that the fact that we are employing thousands of people and paying $25 million in local rents, helping to keep our sites in business.
Allied Charities of Minnesota, the organization representing charitable gaming, supported legislation in this year's session to provide relief to charities. The bill stalled with no sign of resuscitation. Despite a $1.6 billion state surplus, a bipartisan agreement on the need for tax reform for over-burdened groups and a clear message from the 2016 elections that voters in Greater Minnesota are feeling left behind, most legislators refused to even listen to us.
Perhaps the greatest irony and slap in the face is that community-based charities are paying tax rates of up to 36 percent in order to pay for the billion-dollar NFL stadium. Meanwhile, fantasy sports couldn't exist without taxpayer-funded stadiums and ship all the benefits out of state.
We're not giving up. ACM plans to redouble its efforts in the coming legislative sessions to gain regulatory and tax relief for charities. We hope everyone who cares about the future vitality of Moorhead will urge their legislators to support us.
Lund is executive director of Allied Charities of Minnesota