St. Paul considers restricting gambling proceeds for low-income youth

St. Paul leaders want to change the rules for distributing money from pulltabs and bingo to benefit young people from the city's poorest neighborhoods, a move that would leave some youth programs without a key funding source.

A portion of charitable gambling proceeds collected in St. Paul goes to youth programs including Boy Scout troops, sports teams and booster clubs. Two City Council members have proposed an ordinance change that would require recipients to serve mostly youth living in areas of concentrated poverty.

Though some groups that receive gambling proceeds may no longer qualify, Council Member Rebecca Noecker said the change is needed.

"I would explain to those organizations that we really need to put our money where our mouth is when it comes to equity," she said.

Minnesota law allows registered nonprofits to conduct charitable gambling in the form of pulltabs, bingo, paddlewheels, tipboards and raffles. In St. Paul, state-licensed charitable gambling organizations operating in bars are required to give 10 percent of their monthly net proceeds to support youth programs in the city.

Currently, organizations need only to be incorporated nonprofits that provide programs for St. Paul youth to get into the "10 Percent Club" — a list of programs where gambling organizations can choose to send the required cut of their proceeds.

Noecker and Council Member Jane Prince sought input on the charitable gambling ordinance from St. Paul Youth Services' YouthPower program. Participants recommended changes including new criteria for applicants and tracking how organizations use the money they receive.

Each qualifying organization would be eligible for up to $15,000 a year, nearly double what they can get now.

The council is scheduled to vote on the ordinance change March 13. At a public hearing Wednesday evening, two speakers said they support making money available to more organizations but questioned adding criteria that would exclude others.

"I question whether that serves all of St. Paul, and especially all of St. Paul youth," said Janet Lawson, executive director of Shakespeare in St. Anthony Park, one of 40 programs on this year's 10 Percent Club list.

None of the program leaders reached by the Star Tribune in advance of Wednesday's council meeting was aware of the proposed ordinance change, and some were uncertain whether they would qualify under the new criteria.

Young women and girls come from across the city to play sports through the Summit-University Girls' Athletic Association, and many receive scholarships funded by charitable gambling proceeds, said President Lori Prioleau. But tracking individual participants to figure out who lives in areas of concentrated poverty would be difficult, she said.

Lance Van Elsen, assistant scoutmaster with Boy Scout Troop 294 on the city's East Side, said the troop accepts members regardless of where they live — including from outside St. Paul — and may not be eligible under the new criteria. Gambling proceeds provide about half of the troop's total funding, he said, and without that money, Scouts may have to do more fundraising or pay for things like summer camp themselves.

"I don't know if that's going to be a make or break for any of our boys," Van Elsen said. "I suspect there's a couple of them that it will matter for."

Meanwhile, some program leaders said the new criteria and opportunity for additional funding could give them an advantage.

Mary Thoemke, who runs the North End Area Booster Club with her husband, John, said charitable gambling proceeds provide the bulk of their budget. The booster club serves young North End residents — many of whom are immigrants — with services ranging from free meals on snow days to Minnesota History Center visits, she said.

"It would really, really help us," Thoemke said. "If this is truly the way this eligibility thing reads and there's no loopholes or hoops to jump through, I would favor it."