Electronic pulltabs have become too similar to slot machines, Minnesota legislators say

When electronic pulltabs were first allowed in Minnesota bars and restaurants nine years ago, they were supposed to look just like the paper version, only on a screen.

Now, one press of a button can trigger cascading rows of animated characters. Players can score bonus rounds and free plays.

In short, they have become more fun — and a whole lot like slot machines. And in Minnesota, slot machine gambling can happen only at tribal casinos.

"The state has a very long history with not keeping its word when it comes to agreements it makes with tribal governments," said Rep. Zack Stephenson, DFL-Coon Rapids, who is pushing to return electronic pulltabs to the originally intended version of the game. "I don't want to be a part of that long history of not keeping our word."

The proposed changes at the Capitol have sparked an outcry from bar and restaurant owners and charities that have come to rely on the electronic pulltab revenue. They argue the state should not deal another financial blow after the COVID-19 pandemic has devastated the hospitality industry.

"It's not right to change the rules of the game right now on our struggling industry and on these struggling charities. This bill is unnecessary and irrational," the director of the Minnesota Licensed Beverage Association that represents bars and restaurants, Tony Chesak, wrote to legislators.

Meanwhile, Minnesota Indian Gaming Association Director Andy Platto said in a statement that the association is urging legislators and the Minnesota Gambling Control Board to ensure the electronic games comply with the intent of the 2012 statute that authorized their use.

Electronic pulltabs first were authorized to pay for the U.S. Bank Stadium debt service, not to help bars or charities, said Sen. Tom Bakk, I-Cook, who also is pushing to rein in the games. He was involved in the original agreement and said the intent was never to let the games morph into slot machines.

"Unless people are careful about this, the state will get sued by the tribes, and we may lose the devices completely," Bakk said in a statement.

Electronic pulltabs and electronic bingo, which also would have to change under the legislative proposal, are estimated to generate $1.3 billion in Minnesota in fiscal year 2021, according to a state House analysis. Local bars would receive an estimated $29 million of that through rent payments they get for allowing gambling at their establishments. About $33 million would go to charities, the House estimated.

Electronic pulltabs are not as popular as their paper counterparts, but revenue from the games has been growing. As of last June, 1,490 locations around Minnesota offered electronic pulltabs, a Gambling Control Board report states.

None of the existing electronic pulltab games in the state comply with the proposed legislative change, according to the Gambling Control Board. The board could not predict whether companies that provide the games would come up with new versions to comply with the proposed law.

Stephenson said he intentionally gave a long lead time to allow game developers to come up with versions that would comply. His proposal, which would do away with the bells and whistles that are now ubiquitous in the electronic games, does not take effect until September 2022.

He doesn't dispute that fewer people will play the less-exciting electronic version but said the state cannot estimate how much of a financial drop-off there would be.

The timing could not be worse for Colin Minehart, who owns MineAgain's bar in Alden and purchased the previously closed Trumbles restaurant in Albert Lea a few weeks ago. He was hoping to add six electronic bingo stations and six pulltab games at Trumbles. He said if the games look just like the paper versions, "it loses its entertainment value."

"It's designed to entertain your customer so they want to stay in your place and enjoy themselves," Minehart said, and the proposed change would mean lost revenue for charities and bars that "got kicked in the shorts in 2020."

Republican Rep. Keith Franke, a bar owner from St. Paul Park, said many people who would be hurt by the change do not know it is being considered and don't have a voice in the process. He urged legislators last week to slow down the decision.

Nonetheless, the Minnesota House passed a wide-ranging budget bill Wednesday that included the electronic pulltab limits. Although there's widespread bipartisan support for the change, the bill has stalled in the Senate. Its fate will be decided as lawmakers negotiate the state budget over the next month.

Jessie Van Berkel • 651-925-5044