ST. PAUL, MN -- A bill to create a market in Minnesota for electronic pull-tab and bingo games that will run on portable devices was signed by Gov. Mark Dayton on May 14. The networked gaming measure, designated HF 2958, goes into effect July 1, 2012, and authorizes the handheld games for limited operation in Minnesota's bars, restaurants and bingo parlors.
Assuming the measure takes effect in Minnesota, some $400 million in tax proceeds from the newly legalized pull-tabs and bingos, projected over 30 years, will be earmarked for the state's share of construction costs for a planned $975 million football stadium. Creation of the new facility was said to be necessary to keep the Minnesota Vikings in the state.
The original version of HF 2958 was sponsored by Sen. Julie Rosen (R-Fairmont), who described it as an approach that "keeps the Vikings in Minnesota without burdening taxpayers." State lawmakers have been wrangling for more than a decade over whether and how to finance a new football stadium.
The bill appears to provide for operators to run the bingo and pull-tab devices in traditional street locations, supplied by separate tiers of distributors and manufacturers. All participants in the market will be subject to investigation, licensing and monitoring by Minnesota's Gaming Control Board.
However, strict limits will be imposed on the size, scope and profitability of the new gaming market. Operators would apparently be limited to retaining only 15% to 20% of the revenues generated by networked pull-tab and bingo devices. | SEE BILL
In addition, bars and restaurants with fewer than 200 seats would be limited to six of the handheld units. Liquor-licensed locations with more than 200 seats will be permitted to have "no more than 12 devices in play." Locations where bingo is the "primary business" -- presumably bingo halls -- will be permitted "no more than 50 devices in play."
Strict limits on total location revenues from bingo and pull-tabs are also established by HF 2958. Gaming revenue may constitute no more than 15% of the monthly rent paid by a participating bar or tavern.
However, the measure must pass several more hurdles before it becomes practically effective. First, the plan will require approval from the Minneapolis City Council, which is set to vote around May 25; most council members have already signaled their support. Third, the plan must be endorsed by 24 of the 32 teams in the National Football League.
Even if these hurdles are cleared, the state's Gaming Control Board will not receive funds for implementation of this new gaming market until 2013. That could mean bingo and pull-tab devices would not actually go live until late 2013, or later. (In Illinois, where the Video Gaming Act passed three years ago, the amusement industry is still waiting for the operational launch of video lottery terminals. Unexpected difficulties in meeting a long series of logistical, technological, financial, political and legal requirements have caused multiple delays.)
Assuming all these requirements are met, stadium construction would then commence, with a completion date of 2016.
Specific language of HF 2958 modifies Minnesota's gambling statutes, such that electronic pull-tab games, electronic linked bingo games, and sports-themed tipboard games will now be considered "lawful gambling" products.
Both types of games are required by the new law to be embodied in a "handheld and portable electronic device." In addition, the bill specifies that these handheld devices can offer both bingo and pull-tab games on a single unit.
The bill further states that such devices must require "coded entry" to activate play, and prohibits coin, currency or tokens to be inserted to activate play.
This language suggests that traditional standalone upright cabinets, equipped with payment devices like coin mechanisms, bill validators and credit card swipes, will not be part of the new market. Graphics depicting spinning reels or other slot machine images are prohibited. Pull-tab ticket prices are established as "not less than 25¢ per ticket."
The bill calls for the Gaming Control Board to supervise a central electronic reporting and management system whereby each licensed operator is subject to "internal control" so devices can be monitored and shut down when not in compliance with state law.
Manufacturers of networked games under the statute will be required to obtain two-year licenses from the board at a cost of $5,000. They will further be required to submit models of all devices, software and upgrades for testing and approval by the board or by state-approved organizations.
Operators are prohibited from participating simultaneously in legal gambling operations and wholesale liquor sales.
No estimate has been given for how much time might be required for Minnesota's Gambling Control Board to set up a central networked computer and promulgate necessary regulations. It will also need to carry out background checks for operators, distributors, manufacturers and locations seeking licenses.
HF 2958 authorizes approximately $1.5 million in public funds to carry out these tasks in fiscal 2013.