Express Games v. Acres 4.0 lawsuit pits key players in Minnesota e-pulltabs

A suit pitting Minnesota’s biggest seller of e-pulltabs and the games’ manufacturer could disrupt this kind of gambling

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A new lawsuit has generated additional questions about the future of e-games, which already are under tremendous pressure.

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Minnesota’s ill-fated experiment with electronic pulltab games has hit another roadblock, this time a fight between two key players that is threatening to disrupt e-gambling across the state.

The state’s largest distributor of electronic pulltab games — games initially destined to fund the Minnesota Vikings stadium — has won a temporary restraining order against the games’ manufacturer, Acres 4.0.

Acres threatened to disconnect its computer servers at bars and restaurants across the state if the distributor, Express Games MN, didn’t make its overdue payments.

Express Games had withheld payments and sued Acres 4.0 in December, claiming that the Nevada manufacturer had refused to get appropriate licenses for its Apple products. That eroded Express’ ability to bring on new devices and new customers, the lawsuit claims.

The clash marks a major falling out between two parties that had been instrumental in Minnesota’s rollout of the e-games. John Acres, CEO of Acres 4.0, and Jon Weaver, CEO of Express Games MN, had stood side by side at the State Capitol during the legislative hearings on the Vikings stadium and during the first day’s rollout of the games in 2012. Their companies were consulted by the Minnesota Gambling Control Board as it devised its predictions for how much money charitable gambling would contribute to the state’s share of the $1 billion Vikings stadium.

Since those happier days, state officials were forced to find a new stadium funding source. Projections for e-pulltab sales were slashed from $35 million a year to less than $2 million.

‘What else?’

The lawsuit in U.S. District Court in Minneapolis, is the latest disappointment for dozens of charities that have signed contracts for the electronic games — from youth hockey groups to VFW and Lions clubs.

“People will just go, ‘Oh man! What else can go wrong?’ ” said Al Lund, executive director of Allies Charities of Minnesota.

Tom Barrett, executive director of the Minnesota Gambling Control Board, said the board is concerned about the conflict.

Express Games Minnesota is the first and largest provider of e-games in the state. Of the $1.9 million in e-pulltab sales in December, $1.5 million were from Express Games.

“It’s a dispute their lawyers need to work out with Apple,” said Barrett.

That said, the “integrity and operations” of the electronic games were not compromised, Barrett said.

“The servers weren’t shut down: It’s business as usual,” Barrett said. “Let’s let these two vendors work out their differences.”

John Acres said the charges are “without merit.”

“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,” said Acres.

The fight begins

Underlying the lawsuit is a loss of exclusive distributorship that Express Games MN has held for Acres’ e-pulltabs — the lightweight iPad games with colorful graphics that rolled out in September 2012.

  • related content

  • Marv Reynolds played an e-pulltab game at CR’s Sports Bar in Coon Rapids. He won, then lost $2. The e-games have been questioned as a reliable source of revenue.

  • Electronic pulltabs gross sales in Dec.:

    $1,922,810

    Top vendors:

    Express Games: $1,548,353

    3 Diamond: $122,933

    M Peters: $94,718

    All charitable gambling in Minnesota:

    $98,000,000 monthly average

    Jan. to Aug. 2013

    Source: MN Gambling Control Board

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