Gambling on charity

Minnesota State Roundup

Published September 1, 2004  | September 2004 issue

Minnesotans spend over $1.4 billion on charitable gambling per year, 93 percent of which is accounted for by pull-tabs. But pull-tabs might not be fulfilling their intended purpose as well as they once did.

The peel-off gambling tickets were legalized in 1981 under the condition that a portion of proceeds go to charity. But in recent years the share of revenue that makes it to charitable organizations has dwindled, according to an Associated Press series on the issue.

Sales generated almost $70 million in charitable contributions in 2003, down from a peak of more than $78 million in 1999. That's a decline of 10.5 percent, while total sales for the same period declined only 3.6 percent.

The charity take has decreased due in large part to rising administrative expenses. While customers still pay only $1 per pull-tab, in the last 10 years expenses have gone from 46 percent to 52 percent of revenue.

An additional factor in fewer dollars going to charity may be a lack of oversight. Regulators worry that cheating the system has become more of a problem because the Minnesota Gambling Control Board has only two investigators, or about one per 1,400 locations selling pull-tabs, as a result of staff cuts.

The state Legislature has ordered an audit of the program.

Joe Mahon