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Charities cry foul on pull-tab gambling taxes

28 Aug 2017 11:43 | Anonymous

This article was written by Delane Cleveland and originally appeared on CCX media on Aug. 25, 2017. View the original article and video here.

At many American Legions and bars across Minnesota, the multi-colored assortment of pull tabs, along with the lure of big cash prizes, are an immediate draw. 

In fact, fiscal year 2017, which ended June 30, was a record year.

"We increased our sales by $194 million," said Al Lund, executive director of Allied Charities of Minnesota.

Lund's organization represents all 1,200 of Minnesota's licensed gaming charities. 

"As I am very fond of saying, we are good people doing great work," Lund said.

What people may not realize is that examples of charitable gambling are everywhere. The electronic sign in Osseo along County Road 81, for instance, was funded in part, with $10,000 in charitable gambling money.

"What we have done in this community is outstanding," said Bill Johnson, a member of Osseo's American Legion Post 172.

Thanks to charitable gambling money, Johnson helped make the electronic sign in Osseo happen -- along with projects related to schools and veterans issues.

"So we are a true asset to also our fellow veterans, but to our community as a whole," Johnson said.

But industry experts are concerned because it looks like for the first time that the state will benefit more than the charities. As sales volume increases, so do the taxes.

"The average charity in Minnesota realized $800 more for their communities and missions, the state realized $8,000 more on each of those charities," Lund said. "So it was basically a 1 to 10 split and we think that's very wrong."

The reason for the discrepancy is the 2012 stadium bill passed by the state legislature, which changed the way the state taxes charitable gambling. The money raised by the state helps pay for U.S. Bank Stadium. In the meantime, charities take a hit. 

"What's happening today is our groups are having to turn down more and more donations, or reduce the amount requested," Lund said.

Now, people in the charitable gambling industry are making pleas to the legislature for a change. 

"If we as a community say, 'we want this done' they will pay attention to our needs," Johnson said.

Meanwhile, the Minnesota Gambling Control Board said final numbers for fiscal year 2017 won't be available until late November.

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