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Charities say estimate of electronic pull-tab take is too high

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Electronic pull tab
Boosters want to put as many as a dozen electronic pull tab terminals in eligible Minnesota bars as part of a digital wireless upgrade of pull tab games. They would supplement, not replace, the paper versions.
MPR Photo/Tim Nelson

Big questions are emerging about the amount of money electronic pull-tabs would raise to help pay for a new Vikings stadium.

Taxes on those pull-tab machines, along with electronic bingo, are proposed to finance the $400 million state share of a new, billion dollar stadium in downtown Minneapolis. But some of the charities that use pull-tabs and bingo now say a state gambling control board estimate of the amount of money electronic gambling would raise is highly optimistic.  

The state is betting greatly on gambling to pay for a NFL stadium. There may be nowhere that wager is bigger than in Hoffman, Minn., population 672. It's northwest of the Twin Cities, about 20 miles west of Alexandria.

A state projection reports the charitable gambling operation at the Hoffman senior center could more than triple in size when lawmakers legalize new, electronic linked bingo — that's an often-overlooked addition to an electronic pull-tab proposal. From a $900 weekly bingo among friends, the game in Hoffman is projected to grow into a six-figure cash cow annually.

Figures released by the Dayton administration project a 229 percent growth in sales at the Hoffman senior center, the highest figure in the state, in percentage terms.

"Our people wouldn't go for that at all," said Darlene Christensen, CEO of the Hoffman Senior Citizens Club that serves about three-dozen people daily. It offers meals, a weekly craft activity and a foot clinic. Christensen is skeptical about the $100,000 in new sales the state thinks the bingo operation could get.

"Aw, get off my back. No way."

They even tried electronic bingo once, Christensen said, and the game's sponsors decided it wasn't worth the effort. Players stick with the old-fashioned game now.

"We have bingo every Friday night, and I would say at least 80 percent is senior citizens. Maybe even more than 80 percent," Christensen said. "And I don't think they're interested in pull-tabs."

However, there may be some incentive to go electronic. The state projects the senior center's annual net gambling income could jump from about $3,500 to more than $15,000. The state would get an extra $120 a month toward the stadium.

ADD IT UP

Electronic pull tab
King Wilson, executive director of Allied Charities of Minnesota, shows off a wireless electronic pull tab terminal that thousands of charitable gambling operations would like to adopt. A similar device offers Internet-linked bingo.
MPR Photo/Tim Nelson

All told, charitable gambling Minnesota is expected to increase from about $1 billion to $2.3 billion annually when the games are up and running.

State revenue commissioner Myron Frans concedes that the numbers may not add up in Hoffman. But he said they're still valid overall.

For one thing, the state's projections assume the number of places to gamble will jump by a third, and that growth will likely be uneven — big in some places, nonexistent in others.

"I understand that some charities are going to feel like we were way off on them and some of them we may be," Frans said. "But the goal was to not to get into that, because we're also not trying to model who the new ones might be."

Predictions are difficult, Frans said, because there's no real example for Minnesota to follow with a big expansion in electronic gambling.

"They're reasonable, they're actually conservative in some ways, but they are a projection," he said.

PROJECTIONS GIVE PAUSE

Vikings stadium rendering
This artist rendering provided by the Metropolitan Sports Facilities Commission shows how a new Vikings stadium might be situated on the exiting Metrodome site in downtown Minneapolis.
Courtesy Metropolitan Sports Facilities Commission

The numbers give even some bigger operations pause.

The Spring Lake Park Lions Club sells pull-tabs at four sites in Spring Lake Park and Blaine. They do about $5.9 million in annual business.  They're the seventh-largest charitable gambling operation in the state.

The projections for Vikings stadium funding have the Lions sales more than doubling to $11.8 million annually.

"I don't see where it's coming from, you know, especially in this economy. It will increase a little bit. But I don't see it doubling," said Shawn Donahue, Lion's gambling manager. "People, when they go into the bars and restaurants, they only have so much money in their pocket."

Donahue likes the idea of electronic pull-tabs gambling and considers himself a Vikings fan. But he thinks the two make for a risky combination.

"My only response is that we're in a gambling industry, and I think they're gambling with the numbers they're proposing, to be honest," Donahue said. "You know, everybody's just guessing."

That may include legislators who are weighing a Vikings stadium. Some already say they're worried taxpayers will be on the hook if those guesses are wrong.