How the Vikings stadium tax bankrupted a St. Cloud bingo charity

The Vikings stadium bill resulted in a St. Cloud charity's taxes jumping from $68,000 to $140,000.

The Vikings stadium bill resulted in a St. Cloud charity's taxes jumping from $68,000 to $140,000.

Those were the days.

Since 1988, St. Cloud's Bingo Emporium was United Arts of Central Minnesota's golden calf. The nonprofit, which operated the facility with three other charities, including a battered women's shelter, functioned as an umbrella sugar daddy, supplying cash to such virtuous causes as the St. Cloud Symphony Orchestra and Visual Arts Minnesota, which showcases the creations of high school students.

Retirees and twentysomethings flocked to the hall. Fridays and weekends were guaranteed sell outs, featuring three two-and-a-half-hour games where almost 300 players vied for prizes averaging $400.

The scene was more social gathering than gambling parlor. In between bingo, patrons spooned homemade soup at the concession stand and plunked down a few bucks on pull tabs.   

"It was a social evening with friends that was cheap or even cheaper than going to the movies," says former United Arts president Chris Shorba. "But the net profit was going to charity."  

In its heyday, the Emporium, one of the state's largest charitable bingo halls, grossed in excess of $6 million annually between the four nonprofits. Each separately shouldered a state tax rate of less than 2 percent. Meanwhile, profits totaling $1 million were funneled back into charities.      

Newfound competition in the form of Native casinos and Powerball would soon cut into the action. By the 2000s, United Arts' take-home was no more than $150,000, according to Shorba.

Enter the deal breaker.

In 2012, the legislature looked to charitable gaming to help bankroll construction of the new $1 billion Vikings stadium. The previous flat tax paid on gross receipts was replaced with a graduating scale. The system started at 9 percent and increased in increments to 36 percent, which the charities were required to pay on their net.

"Essentially what happened for some of these charitable groups, they went from paying 1.75 percent on gross receipts to 9 to 36 percent after pay outs," says Joel Michael of the Minnesota House Research Department, which provides nonpartisan information to lawmakers,  

In the case of the Bingo Emporium, 80 cents out of every dollar went to prizes. The remaining 20 percent of the pie was devoured by the higher state toll. 

Over a 10-month period beginning in 2014 and into the next spring, Bingo Emporium's net profit before taxes was $154,000. It paid the state $140,000, leaving charities $14,000. Prior to the stadium legislation, taxes would have been $68,000.

The math "certainly sounds plausible to be true," says House researcher Michael.

"The stadium tax basically put us into a loss position," Shorba says. "Between that tax and our overhead, it chewed up all the profit.… Just think about if Target had to sell their product, subtract the costs of their product, regardless of their labor or their rent, and then they had to pay tax on that number. You'd put them out of business in six months." 

That's exactly what the stadium tax did to the Bingo Emporium, which closed its doors last year.

"We got crushed," Shorba adds, "but I get the argument. We'd be a cold Omaha without pro sports.

"Here's the thing: Building stadiums for billionaire owners doesn't add economic value to the state. They took $70,000 that could've gone to St. Cloud charitable arts organizations and basically cash flowed to the new Vikings stadium."