Plan To Use Gambling To Help State Pay For Portion Of New Vikings Stadium Is Failing HorriblyElectronic Pull-Tab Revenues Abysmal Since Fall 2012 Launch |
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Did Minnesotans just get hustled?
In a desperate high-stakes bid to keep the Minnesota Vikings football franchise, which threatened to relocate (some believe the threats were a sophisticated scare tactic however), state officials agreed to pony up $348 million worth of public cash to help build a new stadium, which, on an ironic side note, could charge fans even higher rates of admission.
To make the finances work to subsidize construction state lawmakers authorized certain establishments, including bars, restaurants and those of charities, to offer electronic pull-tabs — similar to slots — on hand-held devices. Not so bad, right? Well, this new form of gambling was expected to be so lucrative that it would help cover the state’s portion of the stadium it was duped into providing. However, revenues from the new pull-tabs have been depressing, largely due to the games not spreading like wildfire like previously imagined. Firms that make the games are taking the brunt of the blame for the inflated projections, the Star Tribune reported.
To get an idea of how abysmal the revenues have been so far relative to projections take a look at the following: Last year it was thought that electronic pull-tabs would net the state $35 million by the end of 2013; but now that estimate is a mere $1.7 million. The establishments that host the games, as well as the game-makers, also receive a cut of whatever gamblers spend.
Executives at the game developers misguidedly used models based on the revenues from similar initiatives in other states. Also, Minnesotans reportedly spend $1 billion per year on charity gambling that already exists, so electronic pull-tab interests thought another $1 billion was available if the games were updated from their paper form.
Charities and small businesses also played a role in this embarrassing episode for Minnesota, as they reportedly had been clamoring for electronic gambling for years. Minnesota first legalized paper pull-tabs in the 1980s under “charitable gambling.”
But perhaps at the root of the whole debacle is the Minnesota Vikings franchise, which demanded a stadium costing around $1 billion to build. As a 2012 article from City Pages put it, “The team simply gives the prospective host community a price, then sits back and watches the elected officials scramble to find the money.” In other words, instead of finding private financing, the team lobbied (literally) for its own fans to help pay for the stadium that many will pay to visit.
Anyways, the authorization of the electronic pull-tabs will undoubtedly be good for some businesses — generating economic activity — and is a nice addition for those who enjoy recreational gambling while having a drink, but as far as being a source of funding for a Vikings stadium, the decision has been, at least so far, a horribly rash move by lawmakers. Other options, such as new types of games, are on the table to come up with the $348 million. It’s worth noting that the city of Minneapolis has agreed to put up $150 million of public money, making it so that tax money will pay for more than half of the stadium’s cost.
Artist rendering of the new Vikings stadium via HKS Architects.
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