Gambling Proposals vs. Minnesota’s Constitution

Gene Merriam and Dennis Ozment
ECM Guest Columnists

Governor Dayton, legislative leaders and the Minnesota Vikings are working hard to find a deal they can all support to build a new stadium.  Their discussions have brought the subject of expanded gambling to the forefront.  While gambling proponents will always be there to push new casinos and slot machines as a way to solve the state’s financial issue du jour, this moment of heightened discussion is a good time to point out major problems with their proposals that seem to get very little attention in the media or at the Legislature.

It is important to understand that Minnesota’s State Constitution prohibits most gambling.  The constitution has been amended only twice to allow specific types of gambling; once for pari-mutuel betting at racetracks, and once to establish the state lottery.  Tribal casinos exist in Minnesota and throughout the country because of the Indian Gambling Regulatory Act, which was passed by Congress in 1988 and supersedes state gambling prohibitions.

An 18-page opinion issued by the Minnesota Attorney General’s Office in March, 2005 states that a state run casino does not fall under the definition of the state lottery as understood and approved by voters and  “that the operation of slot machines, roulette wheels or craps by the State would violate Article XIII, Section 5 of the Minnesota Constitution.”  The opinion further concludes that in order to pursue creation of any state run casino, the Governor and Legislature should “first seek approval of a constitutional amendment from the voters.”

There is another constitutional problem with these proposals.  The only possible way for these proposals to be considered legal is to conclude that they are authorized under the constitutional provision creating the state lottery.  This is the opposite of the conclusion in the Attorney General’s opinion.  But even assuming that the Attorney General was wrong and that casinos can be built as part of the state lottery, then according to the constitution “not less than 40% of the net proceeds from any state-operated lottery must be credited to the [environment and natural resources] fund.”  All of the gambling-based stadium proposals that we have seen fail this constitutional test.

The proposals use various gimmicks that will not hold up in court to give money to the state as a gambling tax or fee.  They pretend that this money that comes to the state is somehow different and would not be considered as “proceeds” to the state from the lottery.  This gimmick is clearly designed to get around the constitution and would not be allowed by a court.  The attorney general opinion states that failure to allocate 40% of proceeds to the environment and natural resources fund is “clearly unconstitutional.”

An attorney, who is working for the race tracks that are attempting to get a law passed to authorize casinos at their tracks, argues that the state’s constitution doesn’t actually prohibit most gambling as we assert.  He says the constitution only mentions “lotteries” and, therefore, everything else is permitted.  It sound’s logical.  But the existence of his racing clients and the fact that establishing their pari-mutuel gambling businesses required a constitutional amendment is proof to the contrary.  In the 1800’s, when Minnesota’s constitution was written, there were no state lotteries as we think of them today.  The term lottery was used to describe any game of chance, from betting on horses to craps.  Most important, it has always been interpreted as such by Minnesota courts.

Expanded gambling isn’t the simple “solution” that proponents claim.  The current proposals are actually risky and unreliable.  They are an invitation for extended court battles.  The Governor, the Legislature, the Vikings and all of us would be better served by focusing on solutions that don’t violate the state’s constitution.

Gene Merriam, Coon Rapids, Former DFL State Senator and Former Commissioner of the Department of Natural Resources

Dennis Ozment, Rosemount, Former Republican State Representative and Former Chair of Legislative Committee on Minnesota Resources (LCMR)