E-gambling is off to a strong start. Some of the tax money will eventually go to a new stadium.
Minnesotans are throwing their support at the Vikings stadium-funding plan, plunking down $642,000 in just the first month of the state's grand experiment in electronic pulltabs.
With video pulltab games up and running in 40 locations, and more on the way, e-gaming is off to a good start, Tom Barrett, executive director of the Minnesota Gambling Control Board, said at its meeting Tuesday.
"We opened five [sites] last night, and will open another 20 this week," said Jon Weaver, president of Express Games Inc., the sole distributor of the video pulltab devices to date. "We've got another 100 on the waiting list."
Taxes from electronic games, overseen by Minnesota's charitable gambling groups, are expected to generate $350 million in funding for the new Vikings stadium in the years ahead. But don't count on any construction cash yet.
From the $642,000 in game sales, all but $99,000 was returned to players as wins, Barrett said. And that money is divided among the site hosting the games, the charity, the games distributor and state taxes.
But even the tax money doesn't go directly to the stadium. Under the law, only state tax dollars above and beyond the $37 million paid by charities in 2011 will subsidize football.
The 40 new electronic gambling sites range from Tootsie's Tavern in Big Lake, selling games for the Elk River Lions Club, to the Gopher Bar in Duluth, selling for the Duluth Irving Community Association.
Genny Hinnenkamp, gambling manager for the Irving Community Association, is among the managers driving up the numbers. She launched electronic gambling at five bars last Thursday and plans to open another two this week. She oversees gambling at 19 locations in the Duluth area and expects to bring the iPad games to even more.
While customers aren't making a stampede to the new devices, they have been well-received, she said.
"It's something new, and people will get adjusted to it," Hinnenkamp said. "There will always be people who love paper pulltabs, so it's a good thing we have to offer those, too."
It's still too early to know whether the games are surpassing their projected revenue, Barrett said. The state had projected that the average net proceed, per device, per day, would be $34, he said. But the number of devices changes from day to day, he said, making the calculation difficult.
New games coming
Minnesotans should expect some new games in their bars and restaurants in the months ahead. Several new games, including games played on handheld devices similar to iPods, will be awaiting board approval next month, Weaver said.
His company has been monitoring the gambling habits of Minnesotans and adjusting games accordingly. For example, a game featuring a female protagonist has been popular, so he plans to introduce another game with a female pirate character.
Several other manufacturers are lined up to introduce their electronic pulltab and bingo devices to the mix, but none has been approved by the gambling control board to date.
While the games have had minimal technical problems, users have called the customer hotline regularly for mistakes while logging into the devices, Weaver said. Sometimes it's a matter of the gambling manager or bar owners learning the ABCs of technology.
"I got a call Sunday morning, saying, 'My iPads are broken,'" Weaver recalled. "How did they know? 'My screens are black.'"
The problem? The caller failed to turn on the iPad.
A learning curve for Express Games has been installing secure wireless network in bars and restaurants and fraternal clubs across the state. Weaver said his company has hired a chief technology officer who worked for the U.S. Department of Defense to oversee the efforts.
The secure transactions, and the real-time reports now available on gambling revenue, have been a godsend to state regulators, accustomed to paper reports from charities that arrive a month or two after the games are played.
"It's a new day for us as regulators keeping track of a $1 billion industry,'' Barrett said.
Meanwhile, gambling managers such as Hinnenkamp will be closely watching their customers, to see if the electronics are a novelty item or something that sticks.
"I'm optimistic," said Hinnenkamp. "This is good for the bars, good for the charities, good for the state."
Jean Hopfensperger • 612-673-4511