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Minnesota charities, bars would lose millions under proposed electronic pulltab revenue adjustment

(The Center Square) – Minnesota charities and bars are warning the Minnesota House Omnibus Commerce Bill could potentially cost bars and charities as much as a combined $62 million each year.

Specifically, it’s claimed the bill could cause a significant drop in electronic pull-tabs and electronic gaming revenue.

The bill follows the Minnesota Indian Gaming Association bringing action against the Minnesota Gambling Control Board since tribal casinos have a monopoly on slot machines. The Gaming Association argues there’s little difference between slot machines and electronic pull tabs.

The Gaming Association hasn’t yet responded to a request for comment.

Sen. Tom Bakk, I-Cook, said electronic pulltabs were authorized solely to pay for the U.S. Bank Stadium debt service. Bakk partnered in the original 2012 agreement and authored the Senate companion SF 1863.

“An agreement was reached by all parties involved that the intent was to not allow the devices to morph into hand held type slot machines, which is largely what has happened,” Bakk said in a statement. “Unless people are careful about this, the state will get sued by the tribes, and we may lose the devices completely.”

If passed by the Senate and signed into law, this provision would reduce player entertainment and revenue for bars, restaurants, and local charities, starting in Sept. 2022.

“Changing this law would be devastating to charities around the state, as well as bar and restaurant host sites that would experience a huge drop-off in customers who come in for food and beverages and to play these games. This is happening as both charities and host sites are just starting to rebuild their base of support from the pandemic,” Tracy Wigen, president of the Electronic Gaming Group of MN, said in a statement.

“Electronic pull-tabs have been a great success in Minnesota – funding hundreds of charities that support a wide variety of organizations including veterans, youth sports and activities, food shelves, religious, fire service and equipment, outdoor recreation and conservation, education scholarships, and numerous other missions.”

Bars and restaurants statewide are also speaking out against the proposal.

“It’s not right to change the rules of the game right now on our struggling industry and on these struggling charities. This bill is unnecessary and irrational,” Tony Chesak, the director of the Minnesota Licensed Beverage Association, wrote to legislators.

Electronic pull-tabs financed to pay annually the state’s $348 million owed on the Vikings stadium, passed in 2012. By 2019, electronic pulltabs brought in $595 million in gross receipts.

Electronic pulltabs and electronic bingo are estimated to generate $1 billion in fiscal year 2021, according to a House analysis.

Annually, electronic pulltabs and bingo generate between $50 million to $60 million in charitable gambling taxes. The analysis estimated that local bars would receive an estimated $29 million, while $33 million would go to charities. However, it noted a challenge in accurately predicting future gambling activity.

“Our local communities, nonprofits, and charities have the most to lose if this irrational provision moves forward,” said Mari Lysn, gambling manager for several bars in the Outing area. “Revenue from e-pull tabs helps locally with so many things for kids, elderly, and in the community. This law would end that needed help.”

Kolleen Raymond, program director for Competition Cheer Spirit Booster Club, said, “This bill will severely and negatively affect the revenues that our charity is eligible for – along with many other nonprofits just like ours. If this bill passes, our organization would not be able to offer our programs. Youth extracurriculars and veterans’ organizations have the most to lose.”

The proposed measure seeks to remove electronic pull-tabs from bars and restaurants.

The Minnesota House passed a bill Wednesday that included the electronic pulltab limits. The bill’s status in the Senate is unclear.


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