Shakopee community challenging legality of electronic pulltabs

Electronic pulltabs, the source of public funding for U.S. Bank Stadium, are facing a legal challenge from the Shakopee Mdewakanton Sioux Community that could stanch the flow of state revenue from the video games to the stadium.

In a legal petition to the Minnesota Gambling Control Board, the Mdewakanton Sioux contend that an "open-all" feature for e-pulltabs mimics their video slot machines and threatens their business.

Under the compacts negotiated with the state three decades ago, Minnesota tribes have exclusive rights to operate slot machines on their reservations.

The open-all feature on the video games enables all windows to be revealed with a single touch. With paper pulltabs, each line is opened manually.

The gambling board, which oversees charitable gambling in the state, disputed the premise of the tribe's claim.

"These pulltab games do not 'mimic' a video slot machine; they are designed to emulate facsimiles of paper pulltab tickets," the board responded.

An administrative hearing judge will hear oral arguments Feb. 27 on the petition.

The games were slow to catch on, and the state was forced to find other means to make the debt payments. In the first year, fiscal 2013, e-pulltabs brought in only $16 million.

But revenue climbed to $33 million within two years, and by fiscal year 2016 had jumped to $90 million.

It has continued to explode since, with $596 million collected from e-pulltabs in the most recent fiscal year ending last June.

The Mdewakanton Sioux petition takes issue with a decision by the gambling control board in 2015 that allowed the open-all feature.

Until then, the petition says, the board had approved 300 electronic video games, none of which contained an open-all feature that allowed multiple rows to be opened with a single button.

The tribe's petition alleges the board made the change without public notice or hearing, a violation of the state rule-making process, and did so again in 2019.

It was then, the petition says, that the board agreed to stop allowing the opening of multiple lines with the touch of a single button.

Nine days later, the board resumed allowing the open-all buttons, the petition says.

In response, the gambling board disputed the timeline claims and said all pulltabs complied with state law.

The board also said the Mdewakanton Sioux don't have legal standing to challenge the pulltab rule because the community doesn't manufacture pulltabs.

The operations have an annual payroll of about $177 million and make up the largest employer in Scott County, the suit says.

Minnesota has gaming compacts with 11 Indian tribes that were negotiated and completed by the early 1990s.

The compacts grant exclusive gambling rights to tribes on their sovereign lands.