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Charities sound alarm on e-pull tab changes

House tax bill would required games be redesigned to remove one-touch "open all" feature.

ST PAUL, Minn. — Minnesota charities are pushing back against a change in how electronic pull tab games work, saying it will significantly reduce the amount of money they can donate to youth sports, veterans and other causes.

The omnibus tax bill that passed the House last week would require those popular games be redesigned to remove the "open all" feature, which allows results to be revealed with one touch of the screen.

The charities that operate the games say their concerns are being dismissed by the DFL majority in the House.

"Changing the rules would be devastating to these organizations," Keith Franke, a former legislator who now heads the Protect Our Charities organization.

"Reach into your heart and understand what you’re actually doing. Let’s figure this out."

Lawmakers brought electronic pull tabs into existence as part of the 2012 Vikings stadium bill, as a way to pay for the state's $348 million share without relying on any general fund tax dollars. Taxes on the gross proceeds were sent to a stadium fund from which annual bond payments would be made over the course of 30 years.

Charities pay taxes for the stadium, pay manufacturers to use the games, and pay rent to the bars and restaurants that host the games. What's left over is available for charities to donate to various causes.

Electronic pull tabs became so popular and generated so much tax revenue it will now be possible for the state to pay off its share of the stadium 20 years ahead of schedule. But tribes brought suit against state regulators, saying the games too closely mimic games that are only available in tribal casinos.

The Minnesota Court of Appeals ruled recently that the Minnesota Gambling Control Board errored by allowing games that went beyond the limits of the legislation that legalized that form of charitable gaming.

That said electronic pull tabs must work like paper pull tabs, with multiple actions required to open the tabs. Games that mimic slot machines are specifically barred.

"This institution, this state government made promises to our tribal nations, our 11 federally recognized tribal nations on whose ground we stand," Rep. Aisha Gomez, the House Tax Committee Chair, told colleagues during the April 27 debate.

"We will not break that promise."

Gomez said the charities are blowing the threat out of proportion, because in her opinion, complying with the court order won't seriously hamper game play. She said game manufacturers can make those changes.

"We're going from one touch to four touches. We're adding maybe three seconds to the time it takes to play one of these e-pull tabs." 

Rep. Shane Hudella, a Hastings Republican, said that lost time will add up considering how many people are playing those games statewide.

"The difference may only be $10 in that hour I’m sitting there, but if you take and multiply that over hundreds of thousands if not millions of people doing that on an annual basis, suddenly, in my estimation, that’s hundreds of millions of dollars in losses for charities."

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