Gambling Control Board approves routine transfers, capital projects and licenses; opens rules comment period

The Gambling Control Board on Oct. 20 approved a series of routine fund transfers, property and capital-asset expenditure requests, game approvals and license applications, and opened a public comment period on five proposed rule changes, board Chair Jim Nardone said during the meeting.

The action matters because the board regulates charitable gambling operations that generate billions in gross receipts and because board members flagged a statutory 5% cap on capital improvements that some organizations are exceeding amid rising costs. Director White gave agency financial figures showing year-to-date gross receipts and outlined outreach and training the board is conducting as it begins the rules process.

Director White reported the industry’s gross receipts for August were $429,700,000, up 1.85% from August a year earlier, and year-to-date gross receipts were $847,400,000, an increase of 2.67% compared with the prior fiscal year at the same point. White said last year’s total gross receipts were $4,900,000,000 and noted that, if current trends continue, the industry could surpass $5 billion in gross receipts for the fiscal year.

The board voted unanimously on a set of routine items including: approval of a transfer of gambling funds into an organization’s account (Exhibit A); approval of property and capital-asset expenditure requests (Exhibit C); transfers of gambling funds to another licensed gambling organization (Exhibit K); a fund loss/profit carryover adjustment (Exhibit M); denial of a separate fund-loss request (Exhibit N); approvals related to organization terminations (Exhibit Q); approvals of games; and approvals of license applications (Exhibit U). Votes were taken publicly by voice; individual roll-call tallies were not recorded in the meeting transcript.

Board discussion focused mainly on the capital-expenditure cap and the board’s outreach work. Board members thanked staff for preparing clear materials — including photos for larger-dollar requests — and urged the agency to track how frequently projects exceed the current 5% cap. According to the discussion, organizations generally retain 15% of gross receipts (85% is returned to players), and the 5% allowance for capital work is calculated against prior-year sales. One board member said a recent request exceeded the 5% limit by nearly 50% (roughly a near-10% request relative to the comparison base). The board noted that changing the 5% cap would require a statutory amendment and that similar legislative proposals have been filed in recent sessions.

On rulemaking, White said the board published a request for comment in the State Register on Oct. 6 and opened a comment period running Oct. 13 through Dec. 15. White said the agency notified 1,167 licensed organizations, seven licensed manufacturers, 10 licensed distributors, three game-testing laboratories and 11 tribal nations about the proposed changes and that the five proposed rule changes and related materials are posted on the board’s website. The agency plans to form a public advisory committee; interested parties should contact the board’s staff attorney, Doug Lewis, through the board’s public website for instructions on applying to serve on that committee.

Board members also discussed outreach and communications: the agency provides a quarterly newsletter and periodic email alerts via its GovDelivery system; members said some stakeholders may still be unaware of those publications and noted the agency’s limited authority to promote gambling due to its regulatory mandate.

The board set its next meeting for Friday, Nov. 21, at 11 a.m. at the Duluth Entertainment Convention Center in Duluth and adjourned at the conclusion of business.