Tuesday, March 30, 2010


A report issued by the Minnesota legislature's non-partisan House Research Department has provided legislators with a sharp reality check on the amount of revenue they should expect from proposed racinos at Canterbury Park and Running Aces Harness Track.

While Racino Now lobbyist Dick Day claims the proposed racinos will generate $125 million per year for the state, a memo issued February 18 by House Research Director Patrick McCormack suggests the amount will be substantially lower.

McCormack based his projections on an analysis by the State of Illinois, which previously had considered authorizing racinos at the state's racetracks. Using the Illinois model, McCormack estimates Minnesota state revenues from racinos at between $44 million and $98 million per year.

SF 2950, the racino bill supported by Racino Now, dedicates net revenues of $125 million annually to the state out of a projected total annual net of approximately $365 million, or about $1 million per day from from 3,000 slot machines divided between the two racino locations.

In order to reach the $1 million per day mark, each racino slot machine would have to generate $333 per day in net revenue. For comparison purposes, Wynn Resorts reported an average daily net win per unit of $149 for Wynn Las Vegas as of October 27, 2009, down from $225 in 2008.

MIGA Executive Director John McCarthy said the unreliability of revenue projections makes the racino bill a high-risk proposition. "If legislators make budget decisions based on racino revenue that never materializes or falls far short, the budget problem will be even worse than it is now," he said.

Wednesday, March 17, 2010


A statewide non-partisan think tank has published a report challenging the claims made by Racino Now, the racino advocacy group led by former State Senator Dick Day, who serves as the group's primary spokesperson.

The report, issued by the Freedom Foundation of Minnesota (FFM), said that Racino Now has greatly exaggerated the economic importance of the horse industry in Minnesota to win broader support for the racino proposal. Among the overstated items, according to the FFM report:

  • Racino Now frequently cites a "University of Minnesota study" as the basis for its economic impact claims, but the statistics actually come from a PowerPoint presentation made by a U of M faculty member.
  • Racino Now claims that there are 150,000 horses in Minnesota, but the actual figure, according to the MN Department of Agriculture is about 90,000.
  • Racino Now claims that each horse in the state generates about $6,000 per year in economic impact--but that figure actually comes from Pennsylvania, not Minnesota.
  • Racino Now says the total economic impact of the horse industry is over $1 billion a year, but it's actually about half that--an estimated $541 million.
  • Racino Now claims Minnesota's horse industry is in financial trouble, but statistics show that there are more horses in the state today than in 1982, and that the average number of horses per farm is the highest in modern record-keeping, indications of a thriving industry.
The report also notes that members of the horse industry are more affluent than other Minnesotans. While only 10 percent of all Minnesotans have annual incomes in excess of $105,000, about 25 percent of horse owners earn more than $125,000 a year.

Freedom Foundation spokesperson Annette Meeks said the report raises some important questions about the true benefits of the racino proposal.

"One must ask why, if the horse industry in Minnesota is thriving, it should be subsidized by the state," she said. "Adding racinos to Minnesota will have little or no economic benefit to farmers, ranchers and other horse enthusiasts throughout the state."


SF 2950, a bill that would have authorized privately owned racinos at Canterbury Park and Running Aces Harness Track, failed to pass out of a key Minnesota Senate committee last Wednesday after the bill’s author, Senator Dan Sparks, asked committee members to table the measure instead of proceeding to a vote.

In closing comments, Sparks acknowledged that he didn’t have the votes needed to pass the bill.

No further committee hearings are expected on any of the gambling expansion bills currently before the legislature, but any of the proposals could resurface as amendments to bills on the Senate or House floors later in the session.

Another racino bill was heard earlier in the House Committee on Local Government, but no vote was taken.

MIGA Executive Director John McCarthy said the association is not taking anything for granted, even though no gambling bills were passed out of committees in either chamber.

“The racino forces aren’t going to go away just because their bills didn’t get committee support,” McCarthy said. “They’ll attach a racino amendment to some other bill to get it on the floor for debate. We’re prepared for that.”

Expansion opponents who have joined the MIGA Action Network will receive email alerts when their help is needed, McCarthy said.

"We're very grateful for the involvement of our Action Network," McCarthy said. "There's no doubt that they are making a difference by making their voices heard."

Video of the hearing is available at http://www.senate.leg.state.mn.us/media/media_video_popup.php?flv=cmte_stgov_031010b.flv

Tuesday, March 2, 2010


The Owatonna People's Press has reported that Republicans in Steele County have overwhelmingly voted to oppose the proposed racino, rejecting a plea for support from the area's former state senator and Racino Now spokesperson Dick Day. Here's the full text of the February 27 story:

In spite of former Sen. Dick Day’s efforts, local delegates from his own party unanimously rejected a resolution supporting racino — an initiative to bring slot machines and video gaming to Minnesota’s horse racing tracks.

In December 2009, Day resigned from the state senate in the middle of his sixth term to pursue a career with for Racino Now, a lobbyist group backed by Canterbury Park, the Minnesota Quarter Horse Racing Association and other groups connected to the horse track industry.

Day has often said that 70 percent of Minnesotans are in favor of racino, which supporters say would generate millions of dollars in revenue for the state at a time when the legislature cased a billion dollar deficit.

However, a resolution expressly supporting racino did not get a single supporting vote at the Steele County Republican Party’s County Convention on Saturday. The delegates also shot down a resolution to strike out a portion of the party’s platform that calls for the elimination of state sponsored gambling in Minnesota.
Day was not present at the time.

The vote points to a rift in the local Republican Party which first surfaced on the campaign for a nominee to unseat DFL Rep. Kory Kath in District 26A. So far, two Republicans have declared their intention to run — Ted Boosalis, who is firmly against racino, and Brandon Pofahl, a candidate backed by Day. According to Boosalis, the racino rumble turned ugly Saturday at the Republican County Convention in Waseca.

“I have been against racino since day one and I will not waver my position based on polling. I need to tell you this, as soon as I gave my speech in Waseca I walked out to check a voice message and guess what happened?” Boosalis told delegates at the Steele County Convention. “A racino supporter literally accosted me out in the hallway. Here we have someone writing legislation for racino accosting me and yelling me out in the hallway. I will get shouted down, that’s just fine, but I’ll still vote no.”

Boosalis’ confrontation was just the latest development in what has become a flashpoint for local conservatives. Debate over the topic also flared up twice at political events in the last week, once at a Conservative Coffee Talk on Feb. 20 and again at a townhall meeting with newly-elected Republican Sen. Mike Parry, who won Day’s old seat in a special election on Jan. 26.

At the coffee talk, Day got into a heated exchange with Boosalis and other fellow conservatives, who objected to the racino proposal on moral grounds. Local Republican delegate Bob Nesbit further pointed out the effort to push through racino is diametrically opposed to the state Republican Party’s platform — Section 4J — which states “We should eliminate all state-sponsored gambling and oppose any expansion of gambling in Minnesota.”

“I don’t even look at the platform,” Day replied.

Nesbit brought racino up again on Thursday, asking Parry where he stood on the issue. Parry voiced support for the push to expand gambling.

“I’m telling you right up front I believe we can use racino. I know I’ve had a couple people come to me and quote verses out of the Bible because they know I’m a Christian guy. The state has already allowed tribal gambling, the state has already allowed the lottery — this is something that we put forth and the citizens, if they want to gamble, they will gamble,” Parry said. “Let’s do something that’s voluntary, that’s a revenue source that’s not taxation, but let us control where that money goes. I would fully support it if we could take some of that money and put it towards education, because education needs it.”

Again, Nesbit told Parry that racino proposal goes against the state GOP’s own proposed policy.

“Granted, money is nice, but is it moral?” Nesbit said, who added what Day had said about the party platform. “That’s the problem — we spend hours and hours and hours making up all these resolutions (to alter the party’s platform), thinking we’ve got input into this whole situation then what do you guys do? You just go by the way you feel or by the way the pressure is coming.”

Parry argued that most of his constituents support racino — only two people urged him to take a stance against it while he was campaigning, he said. Because of this, Parry said the will of the public takes precedence over his own personal views regarding gambling.

“It’s a tough call, but am I here to represent the citizens,” Parry said.

“I don’t want you to vote for it. The reason why is every time we think we find a pot of gold and we designate the funds to go some place, eventually the legislature starts dibbling into it and moving the money to someplace else. I feel that we need to get the budget balanced, get the cuts done, and then we’ll think about racino,” said an audience member who refused to give her name, but is also a delegate for the Steele County Republican Party. “You guys will sit up there and do the same darn thing, you’ll keep filtering off that money and putting it everywhere else but where it was meant to go.”

This week two DFL members — Rep. Al Juhnke of Willmar and Sen. Dan Sparks of Austin — put forward a racino bill. Parry said he thought the proposal would fail if racino money was not directed to a specific purpose.

“I don’t think racino will pass if it isn’t designated. I don’t think there’s anyone who wants to see it go into the general fund,” Parry said. “And where ever it ends up going, it needs to go to a core need in our state, and I don’t think a football stadium is a core need of our state.”

Members of the local Republican Party gathered at the county convention felt differently.
“I do not support state-sponsored gambling,” said delegate Nathan Dotson. “I don’t think the state has any business in gambling. If you want to open a private casino, I don’t care, but I don’t think the state should have any part of it.”

The GOP’s endorsing convention for House District 26A and Senate District 26 will be next Saturday, March 6.

Monday, March 1, 2010


The Shakopee Mdewakanton Sioux Community has announced that it gave a record $129 million in economic development loans in FY 2009 to tribes in Minnesota and nationwide, and has already made $52 million in loans during FY 2010 to tribes in North Dakota, South Dakota and Minnesota. The loans are in addition to about $60 million awarded in grants to various tribes and charitable organizations.

The most recent loans include one to the Upper Sioux Community, which received a $9 million loan and a $1 million grant to add rooms at the tribe's hotel and enlarge gaming space within its Prairie's Edge Casino.

“The Upper Sioux Community would like to thank the Shakopee Mdewakanton Sioux Community for their continued support of our Nation. Through your generosity and commitment to assist other tribes, our casino/hotel project can move forward and will allow the Upper Sioux Community to better attain our financial goals, thus improving the quality of life for our Nation,” said Upper Sioux Chairman Kevin Jensvold.

A $30 million loan was awarded to the Mandan, Hidatsa and Arikara Tribes, formerly known as the Three Affiliated Tribes of North Dakota, to refinance outstanding tribal debt and decrease debt service, improve the tribal operating budget, and retire all casino revenue secured debt. The loan will fund new working capital needs to retain and create tribal government jobs as well as provide funding to support government operations for two years.

The Yankton Sioux Tribe of South Dakota received approval for up to $13 million in loans to build a new casino replacing their Fort Randall facility. The new casino will be the anchor of a major planned multi-phase development project including a hotel, convention center and RV park, creating a destination resort to bring visitors and economic development to the region.