Affirming what American Legion hall operators and mom-and-pop bar owners had warned, a new report shows that the statewide ban on smoking enacted last year appears to have cut into charitable gambling revenues from bar game pulltabs and bingo.
Gross receipts from charitable gambling were down 12.8 percent in the last three months of 2007, which correlates with when the statewide smoking ban took effect. Even taking into account a weakening economy, the ban is likely to be responsible for a decline in gross receipts of 7.5 percent to 8 percent, or a loss equal to $95 million to $105 million a year, according to the report.
The overall 12.8 percent drop represents the largest decline in receipts since lawful gambling was first regulated in the state in 1985, according to the report released Monday by the State Gambling Control Board, which regulates the industry.
As the debate about a statewide smoking ban intensified before its passage last year, supporters of charitable gambling warned that banning smoking, particularly in bars and restaurants, would have a disastrous effect on charitable gambling, which was already struggling.
The new report shows that towns close to states that have not enacted a smoking ban appear to have been more affected. Sites near tribal casinos, where smoking can be permitted, have seen receipts decline more than the state average for several years, an apparent trend that began before the ban.
Funding for sports, vets
Charitable gambling plays a unique part in the fabric of Minnesota life. The state's charitable gambling industry is by far the largest in the nation, with $1.2 billion in gross receipts a year. Receipts from it fund such nonprofit organizations as youth sports, veterans groups and volunteer firefighting organizations. There are more than 1,400 licensed charity organizations and 3,000 locations where charitable gambling takes place.
Charitable gambling officials predict revenue declines of 16 percent to 18 percent through this year. Anticipating the effect, the industry has been pushing for several pieces of legislation that would give them more flexibility in their operations.
"We're very cognizant of the fact that the smoking ban is not going to go away," said King Wilson, executive director of Allied Charities of Minnesota. "What we as an industry need to do is look at whether it's reinvigorating ourselves, retooling ourselves, perhaps reinventing ourselves so that we can survive in the environment that's upon us today."
Wilson said that many organizations terminated their licenses because of funding problems last year and that the number is likely to increase this year.
Advocates of the smoking ban did not dispute the report's numbers, but challenged the conclusions.
"Our argument would be, you evaluate the smoking ban by what it was tasked to do and that is improve people's health, and we have recent studies that already indicate that it is doing that," said Mike Maguire, a spokesman for the American Cancer Society, which pushed for the ban.
Mark Brunswick • 651-222-1636