The state of Minnesota is well-known for its charitable contributions. In fact, residents of Minnesota are often among the most active charitable givers in the country. Many state politicians are on a quest to keep more of their money within the state. They want to change the tax structure on charitable gaming. They also want to slash the taxes on charitable gambling, which they say actually prevents more charities from raising money.
Gambling in Minnesota
Minnesota has several forms of gambling. There is horse racing and pari-mutuel betting on races. There is also a state lottery, which has a variety of games and offers in-state and multistate opportunities to play. One of the horse racing tracks at Canterbury Park offers a card club. Here, people can play card games, such as poker and blackjack. Several tribal casinos operate in the state as well. These casinos offer residents and visitors more casino offerings than the card club at Canterbury Park.
Perhaps, the most profitable form of gambling in the state is charitable gambling. There are many forms of charitable gaming in the Land of 10,000 Lakes. For example, pull tabs, which are very similar to scratch-off tickets from lottery companies, are very popular. Many charities also run bingo parlors, which are big draws. Paddle wheels are also very popular in charitable gaming. Much like a roulette wheel, paddle wheels have prizes on the board that people spin to win. The prizes usually change from game to game. The more money it costs per spin, the more the prize is worth.
The Problems with Taxation of Charitable Gaming
The grumbling started in the state with the construction of the new U.S. Bank stadium in 2016. Charitable gambling funded half the estimated $1.1 billion cost of the new stadium for the Vikings. Charitable gaming contributed around $498 million to the project. However, while that money came from all over Minnesota, it only went to St. Paul and the stadium. St. Paul, residents say, represents a fraction of the population of the state. Rural areas argue they are not being treated equally.
Figures from the Minnesota Gambling Control Board seem to support the grumbling. Research from the board found that 30 percent of the charitable gambling organizations are paying a lot of money. The charities pay more money to the state in taxes and fees than they keep for their own programs. The figures project the state government in St. Paul will receive $95 million in charitable gambling revenue alone. Six years ago, the figure was half that.
Several state representatives have proposed a bill to slash the amount of money charities that offer gambling have to pay. There are currently six bills addressing charitable gambling the Minnesota Legislature will have to consider. One proposes a gradual reduction in the amount of taxes charities have to pay on gambling. Legislators believe this gradual decrease would be kinder to the state. Another bill offers different tax rates based on the size of the charity. This bill also offers the option to tax a charity based on the amount of revenue it generates. Some bills make distinctions between the types of gambling offered by the charities.
Whichever bill manages to clear the house, the charities will be happy. They have said for years they felt their tax burden was too high. The amount of taxes they have had to pay was higher than the taxes paid by any other gaming franchise. Franchises, such as commercial race tracks, the Minnesota Lottery, and tribal casinos, pay far less in taxes. It appears the charities will be able to keep more of their money heading into the 2020 fiscal year.
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