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Slow growth of electronic pull-tabs worries some, supporters say be patient

ST. PAUL — Genny Hinnenkamp travels the Duluth area, picking up proceeds from pull-tab games, with profits destined for the charity she represents and the new Minnesota Vikings stadium.

At the same time she dreams about getting more money as electronic pull-tab games spread and statewide electronic bingo is added. But she is realistic about how fast the money will come.

“Everybody’s got to be patient,” Hinnenkamp said, counseling customers and legislators alike.

In the Minnesota Capitol, some lawmakers are worried that electronic pull-tab games are not bringing in as much money as expected to pay taxes supporting the state’s portion of a nearly $1 billion Vikings stadium.

Taxes from pull-tabs and a related bingo game that has yet to begin are supposed to eventually bring in $348 million for the stadium. However, since e-pull-tabs began in September, they brought in less than expected because they are played in fewer locations than predicted.

Only about 120 sites around the state are hosting the electronic games, with earlier projections calling for 2,500 by July 1. That is a number many lawmakers say cannot be be reached in such a short time.

“I’m more concerned than I was before the hearing,” Rep. Joe Atkins, DFL-Inver Grove Heights, said after a House committee heard the numbers this week.

Even with the lower figures, House Speaker Paul Thissen, DFL-Minneapolis, said he does not see a need to make any changes in stadium financing this year. Gov. Mark Dayton is not expected to propose any changes in pull-tabs, either, when he releases his budget plan on Tuesday.

Hinnenkamp would love to see changes that would provide her Duluth charity, Irving Community Association, more gambling money, but predicts things will pick up at its 19 pull-tab sites once the wrinkles are ironed out.

“Some of our bar owners are really, really waiting to get started,” she said.

Bars and other businesses host pull-tab games and split proceeds with charities that sponsor the games. The state collects taxes, some of which go to the stadium.

Most charities that sponsor games expect e-pull-tab revenues to jump, but the real money may come from linked bingo games that can be played around the state and give winners big payouts. A state board has yet to authorize bingo to begin.

“I think that bingo is going to be a bigger one; you are going to see a lot bigger prizes,” said Rich Jarenson of the Bemidji Snowmobile Club, which sponsors pull-tab games in 11 Bemidji-area bars and convenience stores.

Jarenson predicted bingo payouts of up to $30,000. If one bingo game produces no winner, the money rolls over into the next game, much like the Powerball offered by state lotteries.

“I think it is going to be a little more exciting,” Jarenson said.

His sites have not added e-pull-tabs, but he expects to begin wading into the future in a month or two.

“In all honesty, until it gets going, we have some sites that are not going to look at it,” he said.

Where the future has arrived, players appear to like what they see.

The electronic games are going over without a hitch at Dilworth’s Mills Lounge, said Brent Kangas, gaming manager for the Dilworth Lions Club, which is receiving a percentage of the profits from the games. The games arrived at the bar Jan. 2.

Kangas would not say how much money the games have brought in, but he said in the two weeks they have been in use, they have beaten the paper pull-tabs games. In other locations, pull-tab revenues have gone up along with e-pull-tabs.

“We have people playing every day,” Kangas said. “It’s going good. I think we’re doing our part towards the stadium.”

In Dilworth, bar owner Rick Cariveau said he has only had a few minor problems, but over-the-phone technical service has been speedy and easy to follow.

“No problems whatsoever other than me hitting the wrong button once and a while,” Cariveau said, laughing. “First time I’ve gotten to use an iPad.”

He said Mills Lounge has 17 electronic games that are unique to the location.

“These games are not played statewide,” Cariveau said. “They’re very user friendly, and they’re fun to play.”

In Duluth, eight of the Irving Community Association’s sites have e-pull-tabs. Other bars want to add them, Hinnenkamp said, but the Duluth City Council must modify an ordinance first so the iPad-based games can be distributed from behind the bar, not only in the existing paper pull-tab booth.

“The customers will see it better there,” she said, bringing up a main point e-pull-tab supporters discuss: The new game needs to be marketed.

“It is a learning experience for us,” Hinnenkamp said. “We were one of the first ones in electronics.”

No other states offer e-pull-tabs and linked bingo like in the Minnesota law passed last year.

Her association gave $170,000 to uses such as children’s programs and food shelves last year, Hinnenkamp said, and there is not much money to promote the new games.

“It would be really nice if the state would help us with some marketing,” Hinnenkamp said. “I think basically a lot of the charities can’t afford to do a lot of marketing. There are people out there who would play a little bit more if they knew more about it.”

In six months, she said, the games should be going well.

Down the road in Bemidji, Jarenson still is trying to get an e-pull-tab distributor to lay out the costs to bars.

A bar could spend $1,000 to add electronic games, Jarenson said, for things such as secure Internet connections the state requires.

“Eventually, I think we are going to be in it,” Jarenson said. “I think we are 30 to 60 days out before we do a trial. Then we probably will go into it slow.”

No Bemidji-area charities have electronic games, he added. “Everybody has the wait-and-see attitude.”

And even though his snowmobile group had yet to add e-pull-tabs, Jarenson is eager to see linked bingo arrive.

One game distributor is thinking about offering $2,500 prizes at first to attract customers, Jarenson said. As charities across the state link their games together, those pots could grow to many times that amount.

But linked bingo like planned for Minnesota has never been tried elsewhere.

“We could be totally wrong on this because it has not been done before,” Jarenson said. “It has not been done anyplace.”

Reporter Erik Burgess of The Forum of Fargo-Moorhead contributed to this story.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.