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Youth wrestling club distributed nearly $1 million in grants to other organizations through e-tab machines in 2024
Another nonprofit had its charitable gaming license yanked and was ordered to repay $398K
In August, an employee of the West Fargo Hockey Association, identified as Steven Lyon, pleaded guilty to embezzling nearly $70,000 from the gaming proceeds of the nonprofit.
The Matpac Wrestling Club, a nonprofit youth program in North Dakota, has increased its revenue 30-fold since 2017. Not through candy-bar sales or bake-offs, but from a multimillion-dollar gambling operation.
Newly rich from e-tab cash, the Matpac Wrestling Club purchased an 18,000-square-foot facility and, in 2024, distributed nearly $1 million in grants to other organizations, according to Internal Revenue Service nonprofit filings.
Other nonprofits in the state are cashing in as well. In fiscal year 2025, the state had 337 charitable organizations licensed to conduct charitable gambling. But North Dakota's Attorney General is looking to crack down, and already has to some extent.
In early March, Attorney General Drew Wrigley sought to revoke the one group’s charitable gaming license and fine them, alleging that an investigation had found “multiple violations of state gaming laws and regulations.”
That group was none other than the Beulah Convention and Visitors Bureau. That nonprofit's revenue surged past $750,000 by 2024 after it began sponsoring e-tab machines around 2021—up from less than six figures five years earlier, according to filings.
His actions included the following:
- Revoked the Convention and Visitors Bureau’s charitable gaming license
- Ordered the organization to pay back $398,000.
- Imposed a $50,000 penalty on the CVB.
- Barred certain individuals from participating in gaming activities
- Issued additional fines and suspensions tied to related parties and locations.
Wrigley also accused the CVB of false reporting.
While the Beulah Convention and Visitors Bureau is believed to be complying with the order, they have yet to offer an official statement, though a chairwoman said at a city council meeting in March that her staff had been “unfairly vilified.”
From The Wall Street Journal:
According to the AG’s preliminary findings, the nonprofit claimed to have donated over $270,000 to the Pfennig Wildlife Museum, a tourist attraction, but instead opened a bank account under the museum’s name, sent itself the money and used a portion of the funds to pay its own employees’ salaries and pay back a loan, among other expenses.
In August, an employee of the West Fargo Hockey Association, identified as Steven Lyon, pleaded guilty to embezzling nearly $70,000 from the gaming proceeds of the nonprofit.
Lyon served in a gaming-related role (bingo manager) tied to the organization’s charitable gambling operations.
The ill-gotten funds were taken directly from electronic pull-tab / gambling machines.
And now these are popping up all over North Dakota.
Neil Mehta of the Wall Street Journal writes that nonprofits often make money faster than they can spend it. Some tax-exempt organizations have bought pubs, branded as casinos. A charity for the disabled runs four bars.
“I don’t know if the public understands the scale at which charitable gaming is occurring in the state,” said Sean Cleary, a Republican state senator in North Dakota. “It has gone well beyond the scope of what a lot of folks were intending.”
A jaw-dropping $2 billion is spent on e-tabs annually, with profits derived directed towards the charities. The machines are now fixtures from bowling alleys to Applebee’s, Mehta's investigative reporting found.
Even more staggering perhaps, there is one e-tab for roughly every 100 adults in the state.
A bill proposed by North Dakota lawmakers (Senate Bill 2035) would have restricted which organizations qualify to conduct charitable gambling, but in even years like 2026, there are only special legislative sessions held.
- Aaron Goldstein, Gambling911.com
