On Thursday, the Senate’s Committee on Taxes heard several bills related to charitable gambling. One piece of legislation, SF 414, was authored by Senator Justin Eichorn (R-Grand Rapids). That bill would exempt donations from the “combined receipts” gambling tax allowing for more charitable gambling proceeds to be invested into their communities and organizations.

“Charitable gambling is often thought of a fun activity that is meant to serve a good cause, but when people play and donate, they don’t typically think to track where exactly all their dollars go,” said Senator Justin Eichorn. “My legislation will make sure that more donors dollars go where intended, lowering the amount of taxes that these organizations have to pay, and allowing proceeds to best serve their intent of helping local communities and causes.”

It has been reported that charitable gaming will remit over $95 million in gambling taxes and fees to the state in 2019 fiscal year. That is more than double the $40 million of just six years ago. Per the 2018 Gambling Control Board Organization Annual Report, 340 charities, or 30% of the charitable gambling organizations in Minnesota, pay more to the state than they do to support their communities and missions.

Further compounding the issue is that gambling organizations that don’t give back to their communities, like Jackpot, FanDuel and Draft Kings, pay the 9.8% business rate while their charitable counterparts can see their effective tax rate rise to as high as 72%.