Gambling gambit flops for Vikings, pays off in smaller ways

The electronic pulltabs that debuted a year ago today are no longer expected to pay for the state's share of the new Vikings stadium. But lawmakers opened the door to a new era of gambling in Minnesota that's paying off in smaller ways.

E-pulltab gambling helped boost the number of skaters in the St. Cloud Youth Hockey Association by about 5 percent this year, according to association president Mike Petroske. He attributes to an uptick to in charitable gambling at the association's two bars.

"We were one of the few associations in the state that actually had an increase in their numbers last year, and we're looking to do that again this year," Petroske said.

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For American Legion Post 491, in Bayport, e-pulltabs have turned around charitable contributions this year. Legion members hope to almost double the $6,000 they typically contribute to scholarships for Stillwater high school kids each year, said Marion Coffman, the post's gambling manager.

"It makes it more attractive for locals to come in to the establishments and not drive all the way to the casinos," Coffman said.

But state lawmakers weren't aiming for small success stories when they approved electronic gambling last May.

The games, which started Sept. 18, 2012, were expected to explode into a $1.2 billion business that would deliver tens of millions of dollars into state coffers. Instead, e-pulltabs amount to only about a $20 million-a-year business.

As a result, state legislators were forced to enact new corporate taxes to pay for the state's share of the new $1 billion Minnesota Vikings stadium.

Expected to be in 2,500 bars statewide by now, the games are just crossing the 300 mark.

To add insult to injury, paper pulltabs have been on a hot streak: charitable gambling was up 8 percent last year, in part on the strength of traditional pulltab games.

Only a handful of small bars are living up to the high expectations for electronic pulltabs. Porky's on Payne Avenue in St. Paul has taken in nearly $850,000 in bets in the past year. That's nearly five percent of the total of the entire state.

Dan Day, a one of the bar's owners, said electronic pulltab gambling has made a very tangible difference to the business. The Minnesota Licensed Beverage Association Children's Fund, the charity that runss the games at Porky's has been paying steady rent to be there.

"That rent, it helped," Day said. "It definitely helped put a roof on the building."

"I think when you look at these successful sites, they're relatively small bars, in greater Minnesota [and the] metro area," said Tom Barrett, executive director of the Minnesota Gambling Control Board, who helped make the initial estimates that proves so wrong. "It's not reserved for metro area only. When I asked one of the gambling managers what's the secret, they say, 'Tom, its no secret. We just educate the player and work with the sellers.' Now, that's pretty easy."

One of the inventors of the games, Las Vegas-based John Acres, said the games still have promise.

He said providers need to learn how to sell them and industry rivalries need to settle out. As the first state in the country to roll the games out, he says Minnesota has offered some difficult lessons in how NOT to start electronic pulltab gambling.

Acres also thinks the games aren't paying out enough prizes to be successful. He said a statutory cap on winnings curbs interest and leaves the games sitting idle. State law limits payback to gamblers to 85 percent of all bets.

"I'd love to see that 85 percent number be changed to market determined," he said. "A game that's not being played at all earns nothing."

But after a disappointing first year, it isn't clear if the games will get a second chance to hit it big in Minnesota.

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