March 1: E-pulltab revenue down $15M in forecast for Vikings stadium plan

  • Article by: JEAN HOPFENSPERGER and RACHEL E. STASSEN-BERGER , Star Tribune staff writers
  • Updated: March 16, 2013 - 10:22 PM

Budget projections showed electronic pulltabs have been slow to catch on, but Gov. Dayton vowed to solve the funding problem.

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Electronic pulltab devices made their debut in Minnesota on Sept. 18, 2012.

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Gov. Mark Dayton reiterated his support for the Vikings stadium funding plan Thursday, even as the state budget forecast indicated that taxes from charitable gambling to pay for the stadium would fall far short of November projections.

Revenues from charitable gambling will run $15 million less this year than was projected, the forecast said. And they will be $46 million lower than expected in 2014 and 2015, the forecast said.

“It’s not an insurmountable problem, but it is a problem,” Dayton said at a news conference at the State Capitol. “We will be working with legislative leaders to solve it. And we will solve it.”

Dayton noted that no bonds have been sold to finance the new stadium and said that none will be sold until August. In addition, the Minnesota Management and Budget agency can control the timing of bond sales “to manage this situation,” he said.

When the Legislature passed the stadium bill last year, taxes on charitable gambling were projected to raise the state’s $348 million share of the new $975 million stadium on the site of the Metrodome. Hopes were pinned on the introduction of new electronic pulltab and linked bingo games, which were expected to dramatically boost tax revenue from the charities that run gambling in Minnesota bars and restaurants.

The budget shortfalls reflect the slower-than-expected rollout of the games. More than 2,000 bars and restaurants were projected to be offering electronic gambling by now. There are now about 170.

In November, $17.1 million was projected to be generated for stadium funding from the games this year. On Thursday, that figure plunged to $1.9 million.

Minnesota Management and Budget Commissioner Jim Schowalter said the state must take steps to make sure the games can generate the funds.

“It’s a serious concern,” he said. “No doubt we need to take action to figure out whether [the problem] is organizational, regulatory, whether it’s marketing ... and act to fix it,” he said.

“I think the second thing that needs to happen is a refreshed look at why it’s taking a while to get e-pulltabs going,” he said. “I’m not sure what that cycle looks like. Is that six months? Nine months? A year?”

Hope for the future

Charities welcomed the pledge by Dayton and Schowalter to examine the problems with the rollout of e-gambling.

Dayton’s office is considering ways to improve marketing of the games, reduce waits for the licensing of manufacturers and distributors, and create an oversight committee that can shepherd the rollout of the games, staff said.

“We are encouraged that they’re not ready to go to a Plan B,” said Al Lund, executive director of Allied Charities of Minnesota, the trade group for the state’s 1,200 nonprofits overseeing gambling. “We are asking that we will be part of that process as we are the ones raising the money.”

The stadium legislation calls for the creation of a legislative oversight committee. That committee is not yet up and running.

Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority, which will oversee development of the Vikings stadium, believes an oversight committee is a wise move, especially if it includes members from outside the halls of the Capitol.

Kelm-Helgen said she thinks trying to fix the current stadium funding formula, rather than creating a new one, makes sense.

“It’s still early in the process,” she said. “We still have a year to see if this actually works. We’re not ready to say pulltabs aren’t going to work.”

 

hopfen@startribune.com • 612-673-4511 rachel.stassen-berger@startribune.com Twitter: @rachelsb

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