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EXECUTIVE, SUMMARY XY <br />0, 40 1 <br />"Weleg-11 <br />IL <br />The incenti'vei for organizations to sell un,re ii,stered and unt,axed puill-,tabs has <br />9i <br />grown with, the increase �in, state gambling taxes. There have been a number <br />110 <br />of cases in the state where both licensed and unlicensed organizations or <br />viduals, have been selling untaxed illegal pull-tabs. Liawi enforcement <br />personnel thl*nk that the sale of illegal pull-tabs, is cornmon. <br />Controls over the distribution channel are weak because the <br />Department of Revenue does not currently crosscheck distributor <br />reports with organizations' reports of the actual games used. As a <br />*I <br />resul4 the state cannot be assureId that distributors are reporting all <br />sales, to, the state or that organizat ions report all games received. <br />However, we believe that a state takeover of the distribution system offers <br />only limited control advantages over the currIent distribution system. We, arc: <br />sceptical that such, a takeover represents, the most, cost effective regulatory ap- <br />proach for the state. <br />!Tip I <br />rr <br />-III@ <br />IN JhL <br />The incenti'vei for organizations to sell un,re ii,stered and unt,axed puill-,tabs has <br />9i <br />grown with, the increase �in, state gambling taxes. There have been a number <br />110 <br />of cases in the state where both licensed and unlicensed organizations or <br />viduals, have been selling untaxed illegal pull-tabs. Liawi enforcement <br />personnel thl*nk that the sale of illegal pull-tabs, is cornmon. <br />Controls over the distribution channel are weak because the <br />Department of Revenue does not currently crosscheck distributor <br />reports with organizations' reports of the actual games used. As a <br />*I <br />resul4 the state cannot be assureId that distributors are reporting all <br />sales, to, the state or that organizat ions report all games received. <br />However, we believe that a state takeover of the distribution system offers <br />only limited control advantages over the currIent distribution system. We, arc: <br />sceptical that such, a takeover represents, the most, cost effective regulatory ap- <br />proach for the state. <br />