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Legislative Audit Commission

Minutes
January 18, 2005

The Legislative Audit Commission meeting was called to order by Vice-Chair, Senator Ann H. Rest, at 3:15 P.M. in Room 316, State Capitol. A quorum was present at 3:55 P.M.

Members present:

Representative Lyndon Carlson    Senator David Hann
Representative Sondra Erickson Senator Ann H. Rest
Representative Dan Larson
Representative Aaron Peterson
Representative Paul Thissen
Representative Tim Wilkin

Members excused:

Representative Jeff Johnson    Senator Richard Cohen
Representative Connie Ruth Senator Sheila Kiscaden
Senator Thomas Neuville Senator Claire Robling
Senator Yvonne Prettner Solon

Senator Rest indicated the purpose of the meeting was to release and review the program evaluation report on Gambling Regulation and Oversight. She recognized James Nobles, Legislative Auditor.

Mr. Nobles gave an overview of the scope of the evaluation and the findings and recommendations contained in the report. He noted that his office did not find any compelling reason to reorganize how gambling regulation and oversight is conducted in Minnesota at the present time. In response to a question from Senator Rest, Mr. Nobles indicated it is very difficult to compare Minnesota to other states. Each state has very different types of gambling allowed, and Minnesota’s charitable gambling industry is much larger than that of any other state.

Representative Tim Wilkin arrived and assumed the Chair.

Mr. Nobles introduced Deborah Parker Junod, program evaluation project manager. Ms. Junod introduced Carrie Meyerhoff and Judy Randall, evaluation specialists, who had also worked on the study. Ms. Junod reviewed the four organizations responsible for gambling regulation and oversight and their areas of responsibility. In response to a question from Senator Rest, Ms. Junod indicated she would have to look into the percentage of charitable gambling proceeds going to charity over the years and get that information to her later. Ms. Junod reviewed the findings and recommendations contained in the report and answered questions from members.

Representative Wilkin recognized Tom Barrett, Executive Director of the Gambling Control Board, which oversees charitable gambling. Mr. Barrett reviewed his agency’s response to the report, including steps the Board has already taken to improve oversight and reporting and changes planned for the future. In response to a question from Senator Rest, he noted there were some problem organizations that they would be focusing on. He noted that the number of organizations licensed to conduct charitable gambling has decreased for a number of reasons, but that the sites offering it had remained the same. He noted there has been an increase in compliance problems and when detected, they work with local law enforcement and Public Safety to make referrals for prosecution.

In response to a question from Senator Hann, Mr. Nobles indicated evaluators did not look at the cost to the state for dealing with and treating gambling addictions, but that it would be an area to be considered in the next topic selection process.

Representative Wilkin recognized Richard Krueger, Executive Director of the Minnesota Racing Commission. Mr. Krueger reviewed the commission’s response to the report and answered questions from members. He noted the purpose of the Card Club was to improve the level of funds available for racing purses, and it has done so.

Representative Wilkin recognized Clint Harris, Executive Director of the Minnesota State Lottery. Mr. Harris reviewed his agency’s response to the report and answered questions from members.

Representative Wilkin recognized Frank Ball, director of the Alcohol and Gambling Enforcement Division in the Department of Public Safety. Mr. Ball reviewed his agency’s response to the report and answered questions from members. In response to a question from Senator Hann, Mr. Ball indicated he could send the Senator information on the costs of dealing with illegal gambling and information on the state’s compulsive gambling program. In response to a question from Representative Erickson, he indicated he was reviewing the fees charged to the American Indian tribes for casino inspections.

In response to a question from Representative Larson, Mr. Nobles indicated that costs associated with expanding gambling in Minnesota with a site at the Mall of America, as suggested by the Governor, would need to be looked at. Which agency would be responsible for oversight would depend on the type of gambling. The Legislature should consider not only the cost of regulation by the state, but also the cost of local regulation and social costs.

Representative Wilkin noted that as soon as the Speaker of the House has finalized appointments to the Legislative Audit Commission for the 2005-06 session, a meeting of the commission would be called where the gavel would pass to a Senator.

The meeting adjourned at 4:30 P.M.

_______________________________________
Representative Tim Wilkin, Chair

_______________________________________
Jean Barnhill, Recording Secretary

 

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155