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Lottery up, other gambling down

Published (2/18/2011)
By Nick Busse
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The Minnesota State Lottery had another record year in 2010, but other forms of gambling in Minnesota are on the decline, members of a House committee learned.

The House State Government Finance Committee heard Feb. 17 from state officials who regulate the state’s lottery, horse racing and charitable gambling industries. No action was taken.

Lottery sales in the state soared to a record $499 million in fiscal year 2010. Despite this, Don Feeney, research and planning director for the lottery, said legal forms of gambling as a whole, saw a decline in gross sales. He said the slump in gambling sales is likely “a reflection of the economy.”

“Most lotteries around the country actually saw sales decline; we were one of the few exceptions,” Feeney said.

Charitable gaming (i.e. pull-tabs and bingo) and betting on horse-races both saw a decline in 2010, continuing a trend that’s been ongoing for several years. Feeney said the economy may be driving people to play the lottery rather than going to a bar to play pull-tabs or spending a day at the racetrack. He called this the “substitution effect.”

Richard Krueger, executive director of the Minnesota Racing Commission said enthusiasm for horse racing has been on the wane for nearly two decades. He said competition from other forms of legal gambling — as well as online illegal gambling — has been hurting the industry.

“The racetracks obviously are revenue-challenged right now,” he said.

Responding to a question from Rep. Dean Urdahl (R-Grove City), Krueger added, “A racino would help. There’s no doubt about it.”

Gambling Control Board Executive Director Tom Barrett presented a report showing gross receipts by charitable gambling organizations fell nearly 32 percent in the state between fiscal years 2001 and 2010. Despite this, he said Minnesota is ranked second in the country for charitable gambling receipts.

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