Charitable gambling in Minnesota tops $1.5 billion in 2016

Minnesotans apparently were feeling lucky in fiscal year 2016, spending $1.5 billion on pulltabs, bingo, raffles and other forms of charitable gambling — or more than $275 for every person in the state.

Charitable gaming sales increased 13.2 percent for the fiscal year ending June 30, 2016, according to the Minnesota Gambling Control Board's annual report. That makes the sixth year in a row of increases, and the numbers continued to surge into late 2016, said Gary Danger, the board's compliance officer.

"July through November, our numbers show we are on track to be up almost 11 percent over last year. It seems to follow the economy," said Danger. "Some believe there is a bit of a tie to lower gas prices. There is a little bit extra money people can use toward fun."

Most of the more than $1.5 billion in gross receipts was paid out in $1.27 billion in prizes. But the state cashed in too, collecting $55.8 million in taxes last year. The first $37 million was deposited into the general fund, per state statute, with the remaining $18 million going toward the funding of U.S. Bank Stadium, Danger said.

After prizes, taxes and expenses were paid, 4.7 percent of the money spent on gambling — or $70 million — went to nonprofits including youth sports, veterans groups and community charities.

Charitable gambling approached the $1.5 billion mark around 2000, but plummeted by nearly 50 percent over the following decade during the Great Recession. The state recorded $980 million in gambling sales in 2010.

While all forms of gambling — bingo, raffles, pulltabs, tipboards and paddleboards — were up in fiscal year 2016, electronic pulltabs saw the biggest percentage gains, increasing by 175 percent to more than $90 million. About 600 of the 2,800 gaming sites across the state now offer e-pulltabs, where players use a tablet loaded with games.

E-pulltabs debuted in Minnesota in the fall of 2012 and have seen explosive growth even as many gambling managers were initially leery of the new products, Danger said.

"Some were a little apprehensive about it. The conventional wisdom was electronic pulltabs would cannibalize paper sales. What they've found is that they are complementary goods. When electronic pulltabs are put in, paper sales go up too," Danger said. "What we are hearing is that people are interested in trying both forms."

North metro operators continued to dominate the top 10 list. Merrick Inc. in Vadnais Heights had $17.8 million in gross receipts, while Northwest Area Jaycees of Maple Grove reported $14.7 million and Blaine Youth Hockey reported $14.6 million.

In the south suburbs, Eagan Hockey Association enjoyed a $2 million bump in gross receipts in a year's time, edging them into the Top 10. The Eagan nonprofit, which sells pulltabs at four locations, reported $12.1 million in the fiscal year ending in June.

"Part of it is the economy is better than in the past," said Sue Downey, Eagan Hockey Association gambling manager. "You can tell people have a little bit more spending money."

In Eagan, some newer and higher-priced pulltab games are drumming up business, Downey said. There are now $5 games with larger $1,000 pots, compared to the conventional $1 pulltab with $200 to $300 pots.

"People like those bigger winners and we can make quite a bit more money on those," Downey said.

After paying out administrative costs, $10.6 million in prizes and $508,000 in taxes, $474,000 went to the hockey association for ice time, equipment, facility upgrades and repairs, and college scholarships for graduating seniors.

Shannon Prather • 612-673-4804