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The House's Research Department recently issued a memo estimating how much revenue would be generated by allowing slot machines in bars and at the state's two racetracks. The bottom line: projected revenues are substantially lower than previously reported.

Paper Trail: House research projects lower revenues for gambling proposals

On Thursday afternoon, four gambling proposals were discussed at the House’s Commerce and Labor Committee. With the state facing chronic budget deficits, expansion of state-sanctioned gaming is guaranteed to draw additional consideration in the coming months.

No fiscal notes have been prepared on the proposals currently before the Legislature, and unofficial estimates of revenue generation from such endeavors are notoriously elastic depending on who’s crunching the numbers. But Patrick McCormack, director of the House’s Research Department, recently issued a memo estimating how much revenue would be generated by the two most potentially lucrative proposals, allowing slot machines in bars and at the state’s two racetracks.

The bottom line: McCormack’s revenue estimates are substantially lower than previously projected. In the case of bars, House research presumed that each slot machine would generate $70 to $90 in revenues per day. Prior proposals had used a figure more than double that amount — $190. The basis for this reduced projection is a new study examining potential gaming profits by the state of Illinois.

Under this framework, bar slot machines would generate between $245 million and $447 million annually in Minnesota. That’s less than half of the roughly $1 billion a year that some previous estimates had envisioned. But the state’s share of that haul would be significantly lower. House research estimates that slot machines in bars would add between $82 million and $135 million annually to the tax rolls.

In the case of the so-called Racino proposal, it’s estimated that slot machines at Canterbury Park and Running Aces Harness Park would generate revenues somewhere between $146 million and $329 million each year. House research projects that the state would receive between $44 million and $98 million of that haul. Once again, that’s substantially lower than the $125 million figure that’s generally used for projected revenues from such gambling expansions.

Read the entire House research document here.


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