Minnesota Governor Signs E-Gaming Measure

On May 14th Minnesota Governor Mark Dayton signed a bill that will create a market for electronic bingo and pull tab games that will be played on portable devices. The bill takes effect on July 1st 2012and authorizes the games at Minnesota’s bars, restaurants and bingo parlors. Once the gambling law takes effect state officials are hoping to collect $400 million in taxes over the next 30 years. The funds will be earmarked for the state’s share in funding the new Viking’s stadium. The construction costs have been estimated at $975 million, just short of $1 billion. Officials said that the construction of a new stadium was necessary to keep the Vikings in Minnesota.

The original version of the bill, known as HF 2958 was sponsored by state Senator Julie Rosen who described the bill as a way that “keeps the Vikings in Minnesota without burdening taxpayers.” State legislators have been arguing for a decade on how to finance the construction of a new Vikings stadium. Rosen’s bill allows operators to run the electronic games at traditional locations and the games will be supplied by separate tiers of distributors and manufacturers. The Minnesota’s Gaming Control Board will have the responsibility of licensing, investigating and monitoring gaming operators.

Strict limits will be imposed on the size, profitability and scope of the new electronic gaming market. Operators will be limited to keeping only 15% to 20% of the revenues generated by the new e-games. Bars and restaurants with fewer than 200 seats will be limited to six of the e-gaming devices. Locations with liquor licenses that have over 200 seats will be allowed to have “no more than 12 devices in play.” Locations where bingo is the main business will be limited to “no more than 50 devices in play.” Limits on location revenues generated by bingo and pull-tabs will be established by Rosen’s bill. Revenues from gaming cannot be more than 15% of the monthly rent paid by participating businesses.

The measure must clear several hurdles before it can go into effect. The measure must clear the Minneapolis City Council and must be endorsed by 24 of the 32 teams in the National Football League. The measure faces other obstacles. The state’s Gaming Control Board will not receive any funding for the implementation of e-gaming until 2013. Because of the funding issue the games will not go live until late 2013. The bill authorizes about $1.5 million for gaming control officials to implement e-gaming in 2013.