Wednesday, January 19, 2005

New report criticizes regulation of gambling

Pat Doyle and Mark Brunswick, Star Tribune
January 19, 2005 GAMBLE0119

The state agency that inspects tribal casinos in Minnesota fails to fully exercise its authority to ensure that they comply with rules intended to keep the games honest, the legislative auditor said Tuesday.
The failure was among findings in a report that was critical of the state's regulation of legalized gambling, including the card room at Canterbury Park and tavern games such as pull tabs.
The evaluation by the Office of the Legislative Auditor concluded that the Department of Public Safety, which has limited authority to inspect casinos, should spend more time scrutinizing casino audits and other financial data and less time inspecting slot machines.
The department's gambling division "has access to an array of information, including relevant casino information systems, casino financial and internal control audits, compliance data from tribal regulatory authorities" and other data, the auditor said. Because the division hasn't fully used those tools, its judgments on casino compliance are based on limited information.
The auditor also found:
• The agency that oversees pull tabs and other games played in taverns doesn't adequately detect and deter violations by the organizations running the games. While the purpose of so-called charitable gambling is to provide money for clubs and nonprofit organizations, the auditor found that "some organizations have excessive expenses and make small contributions to charities."
• The Minnesota Racing Commission's oversight of gambling at Canterbury Park racetrack is inadequate. While the commission exercises "effective oversight of horse racing, the commission relies too heavily on Canterbury Park for oversight of card club activities. The Racing Commission employs stewards, veterinarians and barn technicians to oversee racing. Each of these personnel has a specific role in ensuring the integrity of horse racing. In contrast, the Racing Commission does not have personnel with sufficient expertise to oversee card club activities, and the commission relies too much on self-regulation by Canterbury Park."
• The lottery does an adequate job protecting its scratch-off and online games, minimizing the risk of cheating, and makes sure its proceeds are distributed properly. However, its dual role as regulator and promoter could compromise integrity.
"All of Minnesota's gambling regulatory agencies, except the lottery, should make better use of technology to fulfill their oversight and regulatory responsibilities," the report said.
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