Bars, eateries give video slots another try

Pitching gambling as a partial remedy for the state's budget woes, bar and restaurant owners launched a new effort to win permission to put video slot machines in their businesses.

Joined by northern Minnesota lawmakers, the bar and restaurant industry said that installing video slots and other gambling machines in their establishments would raise $629 million for the state general fund and another $229 million for charities, hockey and snowmobile clubs and other groups.

But Minnesota Indian tribes that operate casinos and a legislative researcher raised doubts about those figures, saying they may be based on unrealistic assumptions of the number and profitability of the machines.

Bar owners have pushed since the 1990s for the state authority that would allow them to install video slots or other electronic machines in their establishments, arguing they need the extra revenue to counter a decline in customers and to compete with tribal casinos.

This time they see the state's fiscal problems as an added incentive to expand gambling, and they are encouraged that the three major candidates for governor are willing to support some form of new gambling.

"We're lining meetings up with ... candidates for governor," said Dan O'Gara, president of the Minnesota Licensed Beverage Association, which helped form Profit Minnesota, a group organizing the campaign.

It cited Minnesota State Lottery estimates that 3,200 bars with five video machines each would make $69,500 per machine after payouts, or $1.1 billion a year. Under a bill proposed in January, $537 million of that revenue would go to the state's general fund, which pays such basic expenses as schools and health care.

"Their numbers are squishy," he said.

Minnesota House researcher Pat McCormack in February wrote that the assumption that all 3,200 bars would want gambling "may be unreasonable, as some bars do not have adequate space, some have business models that would not accommodate gambling," and others might be in communities that could prohibit gambling.

McCormack also said daily revenue per machine could be as low as $70, or about one-third the estimates of the bar and restaurant owners.

Bar owners at a Capitol news conference stressed the potential benefit to the state of expanded gambling, but it was clear that they also see it as a sorely needed new source of revenue when many of their businesses are struggling.

"It's never been a more difficult time," O'Gara said.

Pulltabs sending a small share of their revenue to clubs and charities have long been a fixture in Minnesota bars, but sales have dropped off $400 million in recent years.

Previous attempts to expand gambling have failed. But the bar owners take encouragement from the stances of the three gubernatorial candidates.

GOP candidate Tom Emmer at one point backed racinos at the two racetracks and video gambling in bars. Now he says he would "strongly consider" expanding gambling, but not to balance the state's budget.

DFLer Mark Dayton has supported casinos at the Mall of America or Minneapolis-St. Paul International Airport.

The Independence Party's Tom Horner favors allowing the state's two horse tracks to have racinos and using some of the revenue to build a new Vikings stadium as well as help fix the state's budget.