Lawsuit threatens to disrupt electronic pulltabs, Vikings stadium funding

A dispute over licensing the iPads used in Minnesota’s most popular electronic pulltab games has brought roll out of the devices to a halt, at least temporarily.

That’s according to a lawsuit filed in Ramsey County District Court and since moved to U.S. District Court in Minneapolis. It says that the maker of the games, Las Vegas-based Acres 4.0, failed to get a business-related license from Apple for the e-pulltab gambling software it has installed on more than 400 devices in at least 100 Minnesota bars.

“Because Acres has refused to obtain appropriate and approved software license(s) from Apple, (Express Games Minnesota) has been unable to continue to distribute A4 Systems in the state of Minnesota, including distribution without fear of suit by Apple for infringement,” says the suit. The licenses permit the dedicated software to run securely on the iPads now in use across the state.

The suit says the dispute has halted the roll-out of new iPad devices and games played on existing devices, including 150 iPads shipped to Minnesota last summer. Express Games founder Jon Weaver declined comment on the suit.

Acres founder John Acres says he believes the games are legal. "We sincerely believe the claims against Acres 4.0 are without merit and we will vigorously assert our position in the appropriate court of law,” Acres said in an email response to an inquiry about the dispute.

It’s the latest controversy amid a series of disappointments over the games.

State officials and the game’s providers projected that there would be 15,400 of the devices in 2,500 bars. According to the latest data from the Minnesota Gambling Control Board, there were just 1,186 devices in 285 locations at the end of 2013.

The results forced the state to reboot its plans to finance the new Vikings stadium with gambling taxes, and has turned instead to corporate taxes to pay most of  the debt service on bonds sold to investors last week. New gambling is still expected to pay a small part of the debt service.

Paperwork filed with the pulltab lawsuit says the dispute has been dragging for months, prompting Acres to threaten to end its exclusive deal with Express Games to offer the electronic pulltabs to charitable gambling providers. Acres also threatened to turn off the games already in operation.

Express Games has supplied about 40 percent of the devices in play so far, and accounts for about 80 percent of gambling on electronic pulltabs, according to Minnesota Gambling Control Board data.

Express Games fired back with a request for an order preventing Acres from shutting off the systems already in operation in the state. Express Games also stopped paying Acres its share of the proceeds from the games -- although the money is now going into a court escrow account.

U.S. District Court Judge Michael Davis issued a temporary restraining order on Jan. 22 to keep the games going. A hearing on the dispute is scheduled for March 11th in St. Paul, before U.S. Magistrate Judge Jeffrey Keyes.

The Minnesota Gambling Control Board says it does regulate the games, but that the matter is a business dispute between a supplier and a distributor.

“The games are still in operation,” said Gambling Control Board executive director Tom Barrett. “The games are being sold, the charities are earning their money, the players are enjoying the games. So there’s nothing in terms of affecting the integrity of the games or the operation.”

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