Gambling bills may be headed for photo finish

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Despite legislative turnover, both parties remain divided on gaming expansion

In previous legislative sessions, proposals to expand gambling have attracted more support from Republicans than DFLers. Given Minnesota’s $5 billion state budget deficit and the new Republican majorities in the House and Senate, gambling proposals would seem to stand a much-improved chance of landing on the governor’s desk as part of a budget agreement.

But conversations with numerous legislators in the past week suggest that the fallout from the 2010 election has brought to St. Paul a diverse and conflicting set of attitudes toward gambling. While the change has borne some fruit for backers of the perennial proposal to allow slots at two Minnesota horse racing tracks, the change has brought several racino opponents into office, too.

As it stands, votes on racino or any other controversial gambling proposal are too close to call, said John McCarthy, the executive director of the Minnesota Indian Gaming Association (MIGA), which opposes efforts to break the tribes’ monopoly on gambling in Minnesota.

“We probably don’t have the votes, but they don’t either,” McCarthy said. “It’s all up in the air.”

Dick Day, a former state senator who retired in late 2009 to lead the Racino Now advocacy group, notes that he has a tough climb to win support for the racino, last year’s election notwithstanding.

“In the Senate, I think we can pass it by one or two votes,” Day said. “In the House, I think we are about 15 votes shy.”

Net effect of election upheaval unclear

So far no floor votes have been taken on any marquee gambling bills. One factor complicating the outlook is a surprising number of new Republican lawmakers who say they are undecided. That makes it hard to know whether floor votes will register a change of attitude toward expanded gambling. Senate President Michelle Fischbach, R-Paynesville, who is the chief author of a bill to allow video slot machines in taverns, said on Tuesday her caucus has not caucused the bill and does not have a position. Fueling the uncertainty are differences of opinion that cross partisan and regional lines.

Sen. Dave Senjem, R-Rochester, is the chief author of this year’s bill to allow slots at Canterbury Park in Shakopee and Running Aces in Columbus. His four co-authors, including two DFLers, have supported racino legislation in the past. Although an official fiscal note has not been released, racino backers claim that operations at the two tracks would raise roughly $250 million in tax revenue for the state per biennium. The revenue would be put into an economic development fund.

In the upper chamber, there is a Rosetta stone of sorts in the Senate Journal for April 20, 2009. The Journal records Day’s attempt while he was still in the Senate to pass the racino as a floor amendment.

The amendment failed 41-25, with both party caucuses splitting their votes. Of the 25 supporters, 17 senators are still serving. Six were DFLers and the rest are Republicans.

The House is harder to track, because racino never made it to a floor vote in the last biennium. On May 15, 2009, Rep. Robin Brown, DFL-Moscow Township, tried to introduce e-pulltabs legislation as a floor amendment. The amendment was ruled out of order by members of her own party.

The question for Capitol watchers: What sort of ground did racino gain in the last election?

Gains in Senate

Among the bright spots for pro-racino head counters in the Senate is the election of Sen. Doug Magnus, R-Slayton. The former House member supports racino, while his predecessor – Jim Vickerman, DFL-Tracy – voted against the measure. Likewise, the seats from which DFL Sens. Rick Olseen and Jim Carlson cast votes against racino are now occupied by racino supporters Sean Nienow and Ted Daley. Sen. John Pederson, R-St. Cloud, is inclined to support racino. That would constitute a reversal of the position held by his predecessor, DFL Sen. Tarryl Clark, who was a reliable nay vote on racino.

But the change in the Legislature doesn’t appear to be a rout for the racino. Racino backers lost an advocate with the defeat of Sen. Paul Koering, R-Fort Ripley. Sen. Pat Gazelka, R-Brainerd, now represents Koering’s district and took a stance opposing racino during the campaign.

“My concern is that it’s an expansion of gambling,” Gazelka said. “I think electronic gaming in particular is the most addictive. …I would say I’m leaning against it, but I want to hear the debate.”

Some new Republican senators will continue to oppose racino as the previous incumbents did. Even though Sen. Dan Hall, R-Burnsville, opposed and defeated DFL Sen. John Doll in last year’s election, he won’t deviate from Doll’s floor vote against racino. Hall, a chaplain, said he is opposed to racino because gambling hurts families. Ditto for Sen. John Howe, R-Red Wing, who replaced DFL racino opponent Steve Murphy. Howe spoke at an anti-expansion MIGA rally at the state Capitol Tuesday.

Sen. Gary Dahms, R-Redwood Falls, who succeeded racino opponent Dennis Fredrickson, said he is likewise opposed to racino. “As a [former] county commissioner, when I take a look at the costs of gambling addiction, that’s what I base my vote on,” Dahms said.

The wild card in the Senate equation is a contingent of freshman legislators who say they are on the fence. Sens. John Carlson, R-Bemidji, Ben Kruse, R-Brooklyn Park, and Pam Wolf, R-Spring Lake Park, beat DFLers who opposed racino in last year’s election. They say they haven’t pledged their votes to either side of the issue. Wolf said she is leaning toward support of racino because her constituents seem to favor it strongly.

“From my unofficial polling in my district, I’m hearing a lot of support for Canterbury and Running Aces to have the slots,” Wolf said. “I don’t want to make a decision without hearing the arguments from both sides.”

While Republicans have offered the most support for gambling proposals in the past, the issue has split the caucus. Sen. David Hann, R-Eden Prairie, has been one of the most ardent opponents. Hann argues the costs of problem gambling outweigh the potential revenues to the state. On Friday he will hold an informational hearing on the costs of gambling featuring Baylor University Professor Earl Grinols in the Senate Health and Human Services Committee that he chairs.

“I don’t think there’s enough of a mandate in the Legislature to make it a high priority,” Hann said.

DFLers split

The fate of the racino proposal has in the past been determined by DFLers. Most Democrats have aligned themselves with tribal interests in opposing expansion, which has been a source of GOP criticism in light of the munificent campaign contributions that DFL candidates and party units have received from the tribes in the past decade-plus.

But as the 2009 floor amendment and this year’s bill introductions show, some DFLers support racino as well as other new types of gambling, such as video slot machines in bars.

Sen. Kathy Sheran, DFL-Mankato, cast a vote against the racino amendment in 2009. But now she says she would be willing to support racino if she approves of where the proceeds are to be spent.

Racino is hardly the only proposal in front of the Legislature. In the House, a proposal by Rep. Ron Shimanski, R-Silver Lake, to allow video slot machines in bars appears to be gaining traction. The Senate companion was introduced earlier in the session by Fischbach. Supporters of the proposal include the hospitality-industry-backed group Profit Minnesota, which claims that it will bring the state $630 million in tax revenue per year. Unlike racino, which would principally benefit two private businesses, the video slots proposal would boost the charitable gambling industry – a plus in the eyes of some legislators.

Shimanski’s proposal to allow video slots in bars and e-pulltabs has seven co-authors. Two of them are DFLers. Fischbach’s Senate version has four co-authors. (Unlike the House, the Senate limits co-authors to four.)

During the same 2009 Senate floor session in which Day offered the racino amendment, Sen. David Tomassoni, DFL-Chisholm, proposed an amendment similar to Fischbach and Shimanski’s bill. It garnered three more backers than the racino amendment, ultimately failing on a 38-28 vote.

In the past, opposition to expansion from members of both parties has generally revolved around moral objections or fears about the hidden costs of gambling addiction. This year, Shimanski notes, there is a new objection in play: Some Republicans oppose his bill because it would bring additional money to the state’s general fund. Shimanski said that is a deal-breaker in principle for conservatives who oppose giving government additional resources under any circumstances.

To counter that opposition, he said, “One of my suggestions might be to do a tax reduction offset to the revenue we raise from the video lottery.”