Many electronic pull tab games patrons of bars and restaurants in Minnesota have come to know include special features like bonuses, free plays and “open all” functions. Not anymore.
That’s because the DFL-led legislature passed a law two years ago prohibiting those elements to ensure the games don’t mimic video slot machines exclusive to the state’s casinos and violate gaming compacts with the tribes that operate them.
But a GOP-backed bill this session would reverse all of those restrictions and allow those games once again. The legislation’s supporters told a House committee on Wednesday that the change would shore up much-needed funding for good, local causes that charitable gambling organizations help.
All the games with those features had to be removed by the end of last year, according to the law, and revenue has plummeted as a result, some charitable groups told reporters Wednesday. New versions that don’t have those play functions have not caught on with customers, they said.
“We tried to make lemonade out of lemons. We told our customers, ‘It’s not going to be so bad.’ We don’t want to have it be a self-fulfilling prophecy of some sort,” said Tim Engstrom with the American Legion Department of Minnesota. “We tried our best to put a smile on this. And the customers — they still didn’t like the new games.”
Revenue from e-pull tabs at the American Legion in Bloomington dropped by 44% this January compared to last January, Engstrom said. The first month of implementation, these organizations worry, does not portend well for the rest of the year unless there are changes.
Overall, revenues after prizes were paid out totaled $386 million for charities last year, said Rachel Jenner, executive director of Allied Charities. The bill, sponsored by GOP Rep. Bjorn Olson of Fairmont, advanced in committee on Wednesday along a party line vote.
Democrats on the panel rejected the plan and said there should be a better way to support charitable efforts than relying on revenue from the games.
“I also really believe in having integrity and honoring promises and the words that we give, especially to our sovereign government neighbors,” said Rep. Amanda Hemmingsen-Jaeger, DFL-Woodbury.
DFL lawmakers when they greenlit the changes in 2023 also pointed to a court decision that said the proper process wasn’t followed to initially bring those games with “open all” features online.
“These programs are really important to our communities and our state and I think that direct appropriations and funding those types of programs is a way the state can contribute to their mission,” said Rep. Sandra Feist, DFL-New Brighton. “I don’t know how we got here that we’re asking charities to run gambling operations to fund their important services.
In a sports betting bill that has buy-in from all key stakeholders, charitable gambling organizations would stand to get 45% of the revenues. But the future of that legislation is uncertain, and those groups say any funding from it might not even be enough to make them whole if the restrictions on games stay.
Allied Charities still supports that bill because the $40 million windfall from it would be “more tax cuts than we’ve seen ever,” said Jenner, the group’s executive director.
But she was frank about the financial outlook: “If we continue to see the losses that we’re seeing now that sports betting revenue will not offset those losses.”
Olson acknowledged the bill will likely change given the make-up of the Minnesota House requiring bipartisan support to pass bills and the DFL-controlled state Senate, and he said he is open to compromise.
