E-pulltabs have raised as much money for the Vikings stadium as the tooth fairy
So far, the state's e-pulltab plan has failed, and failed hard.
Lawmakers projected that e-pulltabs would raise $35 million toward the state's contribution for the new Vikings stadium during their first year of existence. Turns out that forecast was about $35 million too optimistic.
According to numbers released yesterday by the Minnesota Gambling Control Board, e-pulltabs actually contributed $0 to the stadium cause after expenses were accounted for. Gamers spent $15 million playing e-pulltabs, but $13 million of that was gobbled up as prizes, with the remaining $2 million covering various charity expenses and taxes.
So grab your packs of smokes tightly, Minnesotans who like to light up. The one-time cigarette tax paid by wholesalers and retailers (and ultimately, smokers) earlier this year came in response to disappointing e-pulltab sales. That tax raised about $26.5 million for the stadium and about $4 million more for the general fund, the Pioneer Press reports. And legislators also approved taxing the foreign profits of Minnesota businesses as another way to make up the e-tab shortfall. (For more specifics about the timeline of how the state is paying for the Vikings stadium, read our recent interview Minnesota Sports Facilities Authority chair Michele Kelm-Helgen here.)
The Field of Schemes blog explains why some think using taxes instead of gaming revenue to pay for the stadium amounts to a bait-and-switch pulled on citizens by lawmakers:
Dayton declared on Friday that his "number one take-away from this" is that "to take an untried source of revenue for the sole source of funding for a major project is ill-advised." He added, "We made an honest mistake and corrected it" -- meaning, took hundreds of millions of dollars in current cigarette taxes and future corporate taxes and handed them over to the Vikings instead. Which the state could have voted to do in the first place, but didn't because legislators would only vote to approve the thing if it involved gambling revenue, not tax money. But proposing gambling revenue and then switching to tax revenue after the fact, that's totally cool because it was an "honest mistake." Even though legislators were warning a month before the pulltab vote that gambling revenue might not come through. Hmmmm.
Why have e-pulltabs failed so hard? Some cite the fact that while you can see what winners remain in a box of old-fashioned pulltabs and adjust expectations accordingly, there's no equivalent for the electronic version. Therefore, the newfangled games are less appealing to gamers than their paper counterparts.
Others, including Senate Majority Leader-turned-bowling alley owner Amy Koch, say installing e-pulltabs, which are played on iPads, is prohibitively expensive for bars.
"The bars, it's incredibly expensive to put them in," Koch told MPR. "There's no way they're going to be able to afford to buy equipment and take six, eight months to pay off your investment and then see maybe a couple hundred bucks a month. It's not worth the trouble."
Dayton, for his part, says Minnesotans -- at least, ones who don't smoke or do business overseas -- shouldn't fret, because despite the e-pulltab debacle, the state shouldn't have any trouble raising its $348 million share of the nearly $1 billion stadium.
"There's every indication that closing some of the corporate loopholes is also going to meet its mark, and we'll have the stadium adequately financed for as long as anyone can foresee," Dayton told MPR.
-- Follow Aaron Rupar on Twitter at @atrupar. Got a tip? Drop him a line at email@example.com.
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