Gambling has become more popular around the world and in the United States. Some states are even participating in charitable gambling. Aside from the state lottery, which benefits local educational systems, there are several other charities to donate to. Some lottery winnings go to charitable causes like AMVETS in Mendota, Minnesota.
In the 2017 fiscal year, gamblers bet about $13 million for AMVETS. After gamblers received their winnings and taxes and operating costs were paid, $54,000 was donated to the charity. AMVETS benefits U.S. veterans. According to tax records, the donation amount is less than 50 percent of the gambling manager’s salary, which is $115,000.
Gambling and the Minnesota Hockey Association
Also in 2017, the Minnesota Hockey Association lost a significant amount of gambling operation funds. The organization’s gambling revenue was $508,000 after payouts to gamers, according to records from the Control Board. The Minnesota Hockey Association had to pay $347,000 for rent, salaries, and marketing, and $166,000 in taxes. The salary included paying businesses and individuals to sell pull tabs. Salaries were also paid to establishments that hosted bingo nights and raffles. Despite the gaming revenue, the hockey association wound up $5,000 in the red.
However, smaller operators with lower operation costs paid less in taxes and retained a higher percentage of gambling revenue. For instance, Fairmont Knights of Columbus made $66,000 in gambling proceeds after paying winnings to gamers. The organization kept 74 percent of its total gaming earnings, which was $49,000.
The Benefits of Pull Tabs
Pull tabs can be pretty lucrative for the nonprofit organizations that manage this form of gambling. Merrick, Inc. is a prime example. The City Council authorized a license for charitable gambling to New Train, LLC, dba Manitou Grill. Because of the license, Merrick can conduct legal gambling on the restaurant premises. The nonprofit, based in Vadnais Heights, is the top-grossing charitable gambling group in Minnesota. In 2017, the Minnesota Gambling Control Board reported that Merrick earned $25.1 million.
Manitou Grill wanted to work with the White Bear Lake Area Hockey Association. However, due to city ordinances, lawful gambling groups are limited to three businesses within the borders of the city. The request to work with the White Bear Lake Area Hockey Association was denied in July 2018. Manitou Grill would have been the fourth business to conduct charitable gambling in the city.
Manitou Grill Fights for Charitable Gambling
Brian Farrell, the owner of Manitou Grill, named Merrick Inc. in an application to handle raffles and pull tabs on the restaurant grounds. Manitou Grill is located at 2171 Fourth St., which is the first White Bear Lake gambling location for Merrick. The nonprofit organization uses the gambling proceeds to provide activities and gainful employment for people with disabilities.
John Wayne Barker, the executive director for Merrick, shared with council that the organization has 18 gambling sites. Some sites are small gaming machines. However, Barker confirmed that all gaming sites “are on the east side of the river from South St. Paul to Hugo.”
City Ordinances for Gambling
According to the city ordinance, a qualified charitable organization has to be organized for operation in White Bear Lake. No less than 60 percent of the organization’s members have to live within the city or township of Birchwood Village. Merrick doesn’t meet this stipulation. However, the ordinance does give the City Council the authority to waive the requirement. This is permitted if the charitable organization expends a minimum of 80 percent of gambling profits within the trade area of the city. The trade area includes Vadnais Heights.
Earlier this year, 15 percent of 2017 net gambling profits for Merrick went toward its charitable mission. $21.4 million went to prize winnings.
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