Effort to rein in electronic pull tabs pits tribal casinos against bars, charities

A 2012 law change allowed for electronic pull tabs as long as they did not mimic slot machines.

By: - May 5, 2021 3:54 pm

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A fierce debate has emerged at the State Capitol over the future of legal gambling. Minnesota tribes, which control slot machine gambling, are pushing for closer regulation of so-called electronic pull tabs, which have exploded in popularity in recent years at bars across the state. 

The debate, coming in the legislative session’s closing days, has been sparked by a House bill sponsored by state Rep. Zack Stephenson, DFL-Coon Rapids, which would alter the definition of electronic pull-tabs to prohibit certain forms of gameplay.

The potential impact on charities and bars that have enjoyed the use of electronic pull tabs since 2012 is estimated to be vast.

A Legislative Budget Office report forecasts that bars could lose more than $29 million annually in revenue if the legislation is approved; distributors of electronic games would lose revenue of nearly $13 million annually; and revenue generated by charitable lawful gambling would drop $33 million annually. 

Bar owners and a handful of GOP lawmakers on Wednesday called for Senate Republicans to block the House bill from becoming part of the final state government budget bill. Senate and House lawmakers are currently working to bridge differences between their respective bills. 

“When I think about how this legislation was kind of shoved in after deadlines and the impact that it’s going to have statewide once again on these charitable organizations, it’s mind-boggling how we could not follow the process,” said Rep. Keith Franke, R-St. Paul Park. 

Franke, who owns a bar where e-pull tabs are played, said all the revenue from charitable gambling goes directly back into the community. 

Asked whether his advocacy posed a conflict of interest, Franke said in a statement: “If it’s a conflict for me as a restaurant owner to speak out about issues that would devastate restaurants and bars, we’ll probably have to pull all farmers from the agriculture committee, all lawyers from judiciary, and all teachers from the education committee.”

With less than two weeks left until the legislative session ends, it’s unclear whether the House provision will make it into the final budget bill to be voted on by lawmakers. 

State Sen. Mary Kiffmeyer, R-Big Lake, said she received assurances from state Sen. Gary Dahms, R-Redwood Falls, that the Senate would not accept the House provision. 

Dahms is chair of the Senate Commerce Committee. 

A spokesperson for Senate Majority Leader Paul Gazelka, R-East Gull Lake, did not immediately respond to a request for comment outlining his position on the bill. 

The legislation is being pushed by the Minnesota Indian Gaming Association, whose members have a monopoly on slot machine gambling. 

First approved in 2012, electronic pull tabs were authorized as a way to pay for the construction of the U.S. Bank Stadium, but an agreement was reached with tribes that the games not mimic slot machines.

The games proved popular. According to recent estimates, the state will have collected $250 million by 2023 to pay off the stadium. 

Now, tribes that operate casinos want the games regulated.  

“The Minnesota Indian Gaming Association and its member tribes urge the Minnesota Legislature and the Minnesota Gambling Control Board to take clarifying actions necessary to ensure electronic pull-tab and bingo games comply with the intent of the 2012 authorizing statute,” the association said in a statement.

Stephenson, the DFL lawmaker who is sponsoring the measure, said he understands the concerns raised by bar owners and charities. “They have done nothing wrong, and our legislation will still allow electronic gaming and the great work of our charities to continue while honoring the agreement we made with Minnesota’s tribal nations in 2012.”

He also said the law would not take effect until September 2022, giving developers time to redesign games to be in compliance with the proposed law change. 

“This is about the state honoring our agreement,” Stephenson said. “The state has a very long history of not keeping its word when it comes to agreements made with tribal governments. We don’t want to be a part of that long history of not keeping our word.”

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