Conservatively Speaking

Legislative Audit Bureau report: Division of Gaming

Posted by Mary Lazich on Aug. 14, 2010

Audits

Tribal revenue from gaming in Wisconsin was approximately $1.3 billion during each year from 2007 through 2009 according to a report by the Legislative Audit Bureau (LAB).  Tribal revenue dwarfs the state’s gaming intake. The LAB reports the state’s revenue from all gaming sources totaled $124 million during fiscal year 2008-09, an increase of $52 million from fiscal year 2006-07. The increase was the result of a one-time $60 million payment to the state by the Ho-Chunk tribe during December 2008.

Under state law, the LAB is required to conduct a performance evaluation of the state Division of Gaming every two years. The Division oversees the gaming operations of tribes that have negotiated compacts with the state.

During 2009, tribal gaming profits, or revenue in excess of expenses, totaled $543.4 million, a decrease of $56.1 million from 2007, or 9.4 percent.

The LAB reviewed financial and compliance audits conducted by the Division of Gaming to ensure the 11 tribes that operate 27 casinos in Wisconsin are following provisions of their negotiated state compacts. From January 2007 through December 2009, the Davisson of Gaming performed 67 financial audits and 50 compliance audits. Upon examination of a random sample of the documents, the LAB determined they were complete and accurate, demonstrating the Division of Gaming followed its procedures.

The LAB suggested the expenditures pertaining to the Division’s full-time legal counsel be monitored closely to ensure they are reasonable and necessary. The Chicago home of the Division staff attorney has been designated his office headquarters. From fiscal year 2006-07 through fiscal year 2008-09, the Division reimbursed him $26,300 for mileage between his home and the Division’s office and for food and lodging while he stayed in Madison.  The LAB reports, “Division officials believe that the experience and specialized knowledge of this employee justify this unusual arrangement, and they assert that contracting for legal services would have resulted in substantially higher costs.”

The LAB noted the closing of the Dairyland Greyhound Park during December 2009. Money wagered at the park decreased from $56.9 million during fiscal year 2006-07 to $38 million during fiscal year 2008-09.

The Division licenses charitable organizations that conduct bingo and raffles, and it registers crane games. From fiscal year 2006-07 through fiscal year 2008-09, state revenue from bingo totaled $1.5 million, state revenue from raffle license fees totaled $634,100, and state revenue from crane game registration fees totaled $49,100.

You can read the entire LAB report here.