2023 Vol 17, Issue 2 March-April Gem Lake News

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Gem Lake News Page 5 of 6 How Does Charitable Gambling Work in Minnesota? Charitable gambling is big business in Minnesota, resulting in over $4 Billion in sales in fiscal year 2022. (The State of Minnesota has a fiscal year that runs from July 1 to June 30 each year.) Charitable gambling, or lawful gambling, is a sub-set of general gambling, and is conducted by four types of organizations in Minnesota, including fraternal, religious, veteran and other non- profits. These organizations hold official licenses to allow types of gambling at bars, restaurants, veteran’s halls, bingo halls, and other public places. The types of gambling allowed include bingo, pull-tab sales, raffles, tip boards and paddle wheels. Casino gambling is a whole different animal and isn’t considered charitable gambling. It all started with the 1945 Minnesota Bingo Law so that bingo could be conducted by non-profit organizations. The law prohibited profits from going to individuals. The many regulations have been revised and expanded over the years, but the overall purpose remains the same - to make charitable gambling into a fund raising device, rather than a commercial activity. In Gem Lake, there is one location where charitable gambling is conducted - the Country Lounge. The license holder that conducts the operations is called Merrick, Inc. Merrick is a non-profit organization that provides life enrichment activities and meaningful work to adults with intellectual or developmental disabilities. It has been in existence in the northeast metro area since 1964. The organization’s work center and main offices are located in Vadnais Heights. Based on gross receipts, Merrick, Inc. operates the largest charitable gambling organization in the State of Minnesota, for both paper pull tabs and electronic pull tabs. In Fiscal Year 2022, their gross receipts were $50,000,948. (The current number is now over $60M.) After prizes in the amount of $42,147,938 (84.3%) were paid to customers, the net receipts before taxes and operating costs was $7,853,010. The State of Minnesota regulates license holders like Merrick, who then set up sites where charitable gambling can be conducted. Cities in Minnesota then provide the license to the bar or restaurant, such as the Country Lounge. In addition to providing a license, the city can conduct an annual investigation or overview of operations and has some regulatory authority. Most cities in Minnesota are able to get up 10% of gross revenues from the charitable gambling that happens within city limits. They then have to contribute all of these funds to charitable organizations or use it for very specific public safety or educational purposes. Gem Lake received over $16,223.34 in charitable gambling funds in calendar year 2022. The city donated these funds primarily to the White Bear Area Emergency Food Shelf, Willow Lake Elementary School, or to the City’s post-secondary scholarship fund. Charitable gambling is highly regulated by the Minnesota Gambling Control Board. It is also growing by leaps and bounds. Total sales were $4.3B in Fiscal Year 2022. This is up 38% over FY 2021 and a 104% increase over FY 2020. Net profits were $325 Million in Fiscal Year 2022, up 33.5% over 2021. Charitable gambling in Fiscal Year 2022 resulted in $131.5 M going to non-profit license holders, such as Merrick, Inc. and $180M going to the state’s general fund, through applicable taxes. All things to consider when you are out there playing bingo or opening those pull tabs!