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X, LAWFUL GAMRLING <br />Roy the late 1980s, the growth of gambling activities and st * <br />I ories of impropricty <br />r�lrompted con,cems about theindustry, which the Legislature renamed "lawful <br />gambling" in, 198i9. In mid-1989 the, Legislative Audit Commission directed <br />e Legislative Auditor to answer the followi uestions: <br />ng q <br />0 How are the Proceeds from lawful, gambling being used? <br />Are the controls over gambling operations adequate to prevent fraud <br />and abuse? <br />Our evaluation revealed, a, number of serious problems. Most serious are the <br />lack of adequate internal co,ntrols to pirievent fraud and abuse in the organiza- <br />tions sponsoring gambling activities and, the lack of effective oversight by the <br />state., <br />