{"id":219,"date":"2013-03-24T20:36:44","date_gmt":"2013-03-24T20:36:44","guid":{"rendered":"http:\/\/johnspry.com\/?p=219"},"modified":"2013-03-24T20:36:44","modified_gmt":"2013-03-24T20:36:44","slug":"written-testimony-about-gambling-control-board-revenue-estimates","status":"publish","type":"post","link":"http:\/\/johnspry.com\/?p=219","title":{"rendered":"Written Testimony about Gambling Control Board Revenue Estimates"},"content":{"rendered":"

On April 27, 2012, I provided the following written testimony\u00a0about the Gambling Control Board estimates to the Minnesota Senate Tax Committee hearing<\/a> on SF 2391<\/a>: Providing for a New National Football League Stadium.<\/p>\n

Dear Chairwoman Ortman and Members of the Committee,<\/p>\n

I have been asked to provide some information about the economics of revenue estimates for your consideration by members of the Legislature.\u00a0 My testimony and all errors are my own.<\/p>\n

As Yogi Berra might have said, \u201cforecasting is difficult, especially when it involves the future.\u201d\u00a0 Yet forecasting the gross and net receipts and change in state revenue from the proposed changes in lawful (charitable) gambling is especially difficult.\u00a0 It is so difficult that no economist can claim accuracy in forecasting lawful gambling revenue from the gambling behavior of Minnesota consumers encountering new forms of gambling.<\/p>\n

Forecasting sales of any new product launch accurately for decades is an impossible challenge.\u00a0 In this case, it would require knowing how consumers will respond to the novel forms of gambling versus existing gambling.\u00a0 It also requires knowing how paper lawful gambling receipts and lottery sales will fall due to the newly introduced forms of gambling.<\/p>\n

The multiple Revenue Analyses for HF 1486\/SF 702 and HF 2810\/SF2391 show the difficulty of this estimation because of their wildly different guesses.\u00a0 In several of the early iterations of Revenue Analyses, the Gambling Control Board said:<\/p>\n

This estimate assumes that 50% of paper pull-tabs and tip boards would be eliminated in FY 2012, 75% in FY 2013, and by FY 2014 95% of paper pull-tabs and tip boards would be eliminated.<\/em><\/p>\n

Then beginning in December 4, 2011 the Gambling Control Board said:<\/p>\n

The introduction of electronic pull-tabs and electronic linked bingo will reduce the amount of paper pull-tabs sold by 20%.<\/em><\/p>\n

There is obviously a large difference in revenue between the Gambling Control Board\u2019s estimate that 95% of paper pull-tabs and tip boards would be eliminated and its estimate that 20% would be eliminated.\u00a0 One thing we know for sure is that not all of the Gambling Control Board estimates can be close to being correct.<\/p>\n

It is hard to understand how the Gambling Control Board estimated that the new forms of gambling would reduce paper lawful gambling but not have any negative effects on lottery sales and state revenue from the lottery.\u00a0 Perhaps they just didn\u2019t consider effects on the lottery in their estimation process.\u00a0 This is a significant omission.<\/p>\n

I am not able to vouch for the estimates provided to you from the Gambling Control Board.\u00a0 Those Gambling Control Board estimates are highly uncertain.<\/p>\n

In addition, reporters Elizabeth Dunbar<\/a>, Marlys Harris<\/a>,\u00a0and\u00a0Don Davis<\/a>\u00a0quoted me about the uncertainty surrounding\u00a0forecasting revenue from\u00a0novel forms of gambling.<\/p>\n","protected":false},"excerpt":{"rendered":"

On April 27, 2012, I provided the following written testimony\u00a0about the Gambling Control Board estimates to the Minnesota Senate Tax Committee hearing on SF 2391: Providing for a New National Football League Stadium. Dear Chairwoman Ortman and Members of the Committee, I have been asked to provide some information about the economics of revenue estimates […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-219","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/johnspry.com\/index.php?rest_route=\/wp\/v2\/posts\/219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/johnspry.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/johnspry.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/johnspry.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/johnspry.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=219"}],"version-history":[{"count":6,"href":"http:\/\/johnspry.com\/index.php?rest_route=\/wp\/v2\/posts\/219\/revisions"}],"predecessor-version":[{"id":225,"href":"http:\/\/johnspry.com\/index.php?rest_route=\/wp\/v2\/posts\/219\/revisions\/225"}],"wp:attachment":[{"href":"http:\/\/johnspry.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/johnspry.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=219"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/johnspry.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}