Lottery's role may grow in Vikings stadium funding

6:49 AM, Apr 9, 2013   |    comments
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ST. PAUL, Minn. - The Minnesota Lottery may end up playing a larger role than originally anticipated in the funding of the Vikings stadium.

Gov. Mark Dayton told reporters Monday that he has asked the Minnesota State Lottery's director to explore ideas for games that can fill the gap between the bond payments on the stadium and the revenue brought in by electronic pull-tabs.

"We've asked them, and we've asked others, give us your good ideas," Dayton said.

The electronic pull-tabs haven't taken hold as quickly as manufacturers expected and those predictions were the basis of the Minnesota Department of Revenue's projections that were in play when the legislature passed the stadium bill in 2012.

That bill, signed by the governor last May amid great fanfare, obligates the state to pay $348 million toward the project. The Vikings are contributing $477 million, and the city of Minneapolis is plugging in $150 million.

The state will finance its share by selling bonds. It will pay an estimated $30 million per year to retire that debt. The total number of installments will depend on the interest rates at the time of the bond sale in August.

The electronic pull-tabs, or E-Tabs, were expected to easily generate enough money to meet that $30 million annual payment, but the new games have been slow to catch on and are available in 200 locations compared to 2,800 sites for traditional paper pull-tabs.

Electronic linked Bingo was approved by the state gambling board in March and the charitable gaming industry expects it to be more popular than the electronic pull-tabs have been.

If the gambling revenue doesn't fully materialize, the remainder would come from the state's general fund, which would violated the spirit of not spending taxpayer money on the project.

As part of the original stadium bill, lawmakers added two back-up sources. One was a surcharge on luxury suites, which can't be collected until the team begins play there.

The second was a Vikings-themed Lottery scratch-off game, but that alone may not be enough to plug the hole between what E-Tabs can raise and the $30 million annual payments, which come due beginning in 2014.

The lottery's director pointed out that it already has a network of electronically linked stores, so that other types of games are technologically viable if they're approved by lawmakers and the governor.

Dayton said as recently as April 1, the legislature should wait until next year to come up with a back-up plan, but one week later said he now believes the problem should be solved this session because of the "tumult" it has generated in the media.

"To me this is a very solvable problem and we need to get it done and we'll get something done by the end of the session," he said.

"It's not insurmountable a financial problem. It's more that this is a point they can make to take political advantage out of it."

Currently the state extracts $37 million in taxes from all local charitable gaming, including the E-Tabs and existing games run by charities. Anything above $37 million is supposed to flow into the Vikings stadium fund to go toward bond debt payments.

But the idea of the state lottery launching games inside hundreds of stores statewide is not appealing to the people who are currently offering pull-tabs to customers in bars, restaurants, bowling alleys and airports.

"We're the charities and our purview has been the local establishments. We're there for the local needs," Allen Lund heads Allied Charities of Minnesota told KARE.

"The lottery coming into that venue would make it no longer a community based organization.  The local projects we support would suffer." 

Electronic linked bingo was approved by the state gambling board in March, and the charitable gaming industry expects it to be more popular than the electronic pull-tabs have been.

In the meantime, the owners of the Running Aces harness track say a racino -- adding slot machines to race tracks -- would generate at least $100 million per year for the state's coffers.

"It's general fund money that's going to be paying back the debt service on these bonds," Rep. Tom Hackbarth told reporters Monday.

"So this money is going to go to the general fund. It can be used for anything you can imagine."

A racino was pushed for years by the owners of Canterbury Park at the race track in Shakopee, but Canterbury is not likely to support Rep. Hackbarth's bill this time around.

The race track's owners dropped their racino quest last year after reaching an agreement with the Shakopee Mdewakanton Sioux Community. The tribe, which operates of the nearby Mystic Lake Casino, is spending millions of dollars to enrich the purses at Canterbury.

Dayton says he hasn't closed the door on the racino idea or any idea for that matter, but he said other financial sources, including new lottery games, would have a better chance of getting up and running by the time the first bond debt payment is due.

(Copyright 2013 by KARE. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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