Revenue for stadium funding has failed to keep up even with state's reduced projections.
The electronic pulltab sales slated to help fund the Vikings stadium are nowhere near their projected target, even after the state lowered that target last month, a House committee learned Wednesday.
About 120 restaurants and bars now offer the video pulltab devices, a far cry from the 2,500 projected to be up and running by July. And gross sales through December were $4.2 million, far behind the $17.2 million projected to be raised by the end of July.
"I am more concerned than when I walked in," said Rep. Joe Atkins, DFL-Inver Grove Heights, chair of the House Committee on Commerce and Regulatory Reform, which was briefed on the pulltab progress.
"The revised revenue forecast, which already is lower [than the original forecast], is based on projections from 2,500 sites," he said. "We've got 120 now. That would be a twentyfold increase by July."
Tom Barrett, executive director of the Minnesota Gambling Control Board, said it is unlikely that 2,500 gambling sites will be up and running by summer. The board plans to meet with revenue officials to discuss the situation, he told the committee.
The sale of electronic pulltabs, run by Minnesota charities, was supposed to generate $348 million in taxes to underwrite the state's share of the cost of a new Vikings stadium.
But the electronic pulltab games, introduced in September, have pulled in just $4.2 million in gross receipts -- and $635,000 in net receipts after prizes were paid.
Barrett attributed the slower-than-expected growth to charities' desire for more competition among vendors and to the roughly $800 upfront costs to bar owners to install wireless connections for the games.
But Rep. Greg Davids, R-Preston, said that the projections were unrealistic to begin with.
"When the Metrodome was funded in the mid-1970s, they had to re-write legislation to make [funding] work," said Davids. "We could find ourselves in a similar situation."
Matt Massman, deputy commissioner of the Minnesota Department of Revenue, told the committee that under the revised budget forecast, pulltab sales were projected to bring in $17.2 million by July, and then $53 million over the next two years.
"The biggest driver isn't the number of [electronic gambling] sites," he said, "but the rate at which new ones are added."
Atkins asked the Gambling Control Board to report back to the committee at least monthly. Wednesday's hearing, he said, was held to get a baseline report on the status of pulltab revenue, to lay the groundwork for possible future legislation.
"Electronic pulltabs are like the Christian Ponder of state government," he said, referring to the inconsistent Vikings quarterback. "There were high expectations going in. But people are a little leery now."
Possible legislation could include:
• Adding new locations for selling electronic pulltabs beyond the bars, restaurants and fraternal halls now offering them. Several bars at the Minneapolis-St. Paul International Airport, for example, soon will offer the electronic games. There has been discussion about selling them in grocery stores as well.
"Are there other places they ought to be?" Atkins asked.
• Fixing kinks in the regulatory process that are delaying swift approval of game manufacturers. There are currently two approved manufacturers.
The Minnesota Department of Public Safety's background checks on manufacturers can take months. One manufacturer whose background check was submitted in August is still awaiting approval, according to the Gambling Control Board report.
• Removing a provision that requires paper pulltabs to be sold in the same place as electronic pulltabs.
• Creating additional funding sources if needed.
"There's definitely concern by legislators about the funding source," said Atkins. "The numbers are pretty stark at this point.
"We're hoping for good news in the months to come. Lacking that, I expect there will be a greater call for changes."
Jean Hopfensperger • 612-673-4511
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