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January 22, 2021

7/30/2015 4:02:00 PM
2014 Star Ratings by Gambling Control Board tied to charity support

There have been a few local charitable gambling groups that haven’t been able to beef-up the charitable contribution side of their ledgers, and they have given up the privilege to operate in this state.  

But,  those that remain licensed as charitable gambling operations are showing that spending on charitable causes can, and in most cases, is being improved.  

Annual reports of hundreds of organizations licensed in Minnesota to conduct charitable gaming depict a balancing act of allocating revenues to cover an acceptable level of overhead-- while also respecting the “charity” aspect of charitable gaming.

The MN Gambling Control Board, in its annual report released on the agency’s website; states  that over the 30 years the GCB has been in existence,  lawful purpose spending of licensed organizations has seen an increase of over $105 million, and the GCB chair noted this is a “credit to the industry.”

Charitable gambling is meant to be just that-- generating money for doing good things.  

The state initiated a “Star Rating” system a few years ago to help the public understand at a glance if their charitable gambling money was going for a good cause. The Press reports the ratings every year.

The GCB public outreach includes issuing these “Star Ratings” for every licensed bingo, pulltab and major raffle license holder, all those local groups you support by playing pulltabs, usually in local bars, etc.

In Chisago County six organizations ended 2014 with 5 Star ratings, the best level  on the state’s list...Stacy-Lent Fire Relief Association, North Branch, Lindstrom, Chisago City and Center City fire relief associations and Rush City Sno Bugs were all 5 Star.  

According to the financial data submitted for the report, Stacy-Lent Fire Association should have gotten six stars, but the system doesn’t go that high.  Reporting $1.8 million in gross sales, this organization paid out $1.5 million in prizes and gave $108,000 exclusively to charity...easily the highest of local groups.

Chisago City Fire Relief came in with 2014 gross proceeds of $2.6 million and prizes amounting to $2.1 million, with charity support at $93,234.

The rating is based on the percent of “lawful purpose expenditures” the organizations cover with their net proceeds.  There is a line item within lawful expenditures where the licensed organizations report “charity” support and “other lawful expenses” such as cost of operations and taxes are listed separately.
Prizes are taken out of the gross proceeds first, to get the “net.”

If charitable and other lawful expenses amount to 50 percent of net the star rating is a five.  If it’s 40 percent the rating is 4-Star. If it’s 30 percent the star rating is a three.
Any group with a 2-Star Rating is given a year to boost it or the state assesses sanctions, or takes the license. The exception is bingo-only fundraisers, which can remain at two.

Charitable gambling operations in this county in the 3 Star range,  include Rush Lake Improvement Association and North Branch Hockey Association.

The RLIA reported gross proceeds of $1.9 million and prizes at $1.6 million and only $28,000 as “charity” expenditures.

The group that wants to build a Stacy area hockey arena had $1.4 million in pulltab revenues and $1.1 million in prize payout and $48,000 reported in charity contributions.

LARA (Lakes Area Recreation Assoc) is also a 3 Star organization.  It reported $1 million in gross in 2014 and $870,000 in prizes with $36,000 as charitable expenditures.

The full analysis of approximately 14 local charitable licensees can be found on the MN Gambling Control Board website.

The overall breakdown statewide  is that 83 percent of revenues end up in the hands of players as prizes.  

Overhead and administrative costs are about nine percent.  

Taxes will eat 3.5 percent of your charitable gambling dollar.

Gross sales for 2015 are coming in ahead of last year by 13 percent, the Board also announced.

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