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January 18, 2005
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| The report also follows concerns expressed by some anti-gambling groups and state lawmakers about oversight of Indian casinos. (Office of Legislative Auditor) |
St. Paul, Minn. — The Office of Legislative Auditor looked at whether state oversight of gambling in Minnesota is helping to ensure the integrity of the industry -- from the lottery, horse racing and charitable pull-tabs to Native American casinos.
Auditor James Nobles says he found no signs of corruption, but he says regulators could be doing a better job.
"Gambling is inherently -- and certainly historically -- vulnerable to crime, cheating, to theft, and it needs to be regulated. There needs to be vigorous, constant oversight. So I think one of the worst results of this report -- if people take it as reassuring -- is that it would cause complacency. We need to have vigorous, constant oversight of gambling -- all forms of gambling in Minnesota," according to Nobles.
The auditor's report comes a year after the head of the Minnesota State Lottery committed suicide in the midst of a separate legislative audit that led to a dramatic restructuring of the lottery, including a significant staff reduction and big cuts in promotional spending.
The report also follows concerns expressed by some anti-gambling groups and state lawmakers about oversight of Indian casinos.
Despite the sharp criticism of regulatory efforts, Frank Ball, who heads the state's tribal gambling regulatory efforts, characterized the report as "positive" and pledged to work toward its recommendations.
"We're doing the best we can with the resources that we have," Ball said. "We feel as though we're doing an excellent job... we are the enforcers of the regulatory system. We have a working relationship with the 189 casinos. As a matter of fact here's a statement for you: there are more casinos than I have agents."
But Legislative Auditor Nobles suggested the problems he identified have more to do with management than a lack of funding.
"They need to learn the technology that casinos use better," he said. "They need to get a different mix of skills and staff. So I don't think necessarily that they need more resources; that certainly wouldn't be my first response to what they need to do."
Rep. Sondra Erickson, R-Princeston, a member of the Legislative Audit Commission, says the report is long overdue and that regulators like Ball need to begin taking a considerably different approach to their jobs.
"What disappoints me is that gambling has been rampant in Minnesota for over a dozen years and we've been slow -- all of us... the public, legislators, administration -- to say to all of these entities 'are you following the law? Are those of you who are in charge following the rules? Are you holding everybody accountable?' I'm especially disappointed by the Office of Alcohol and Gambling Enforcement," she said.
Charitable pull-tab games make up a relatively small part of the gambling industry compared to casinos. But Auditor Nobles was highly critical of the small percentage of pull-tab money that actually goes to charities -- just 4 percent, according to the report.
"We just think the result -- 4 cents on the dollar -- going to charities doesn't necessarily justify all of that regulation. So, again, if the purpose here is to get money to charities, we think the Legislature and the gambling Control Board and a lot of other people who are interested in charitable gambling really need to rethink that," he said.
A spokesman for an association that represents hundreds of charities that benefit from pull-tab sales says even with low profit margin the games raise about $75 million a year for charitable causes.
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