E-pulltab shortfall could force Minnesota to seek “additional funding sources” for Vikings stadium

When last we checked in on the Minnesota Vikings stadium, the electronic pulltabs gambling scheme that was supposed to pay for it was falling woefully short of revenues, though there were hopes things would pick up soon. And now?

About 120 restaurants and bars now offer the video pulltab devices, a far cry from the 2,500 projected to be up and running by July. And gross sales through December were $4.2 million, far behind the $17.2 million projected to be raised by the end of July.

“I am more concerned than when I walked in,” said Rep. Joe Atkins, DFL-Inver Grove Heights, chair of the House Committee on Commerce and Regulatory Reform, which was briefed on the pulltab progress.

“The revised revenue forecast, which already is lower [than the original forecast], is based on projections from 2,500 sites,” he said. “We’ve got 120 now. That would be a twentyfold increase by July.”

So that’s not good. On the bright side, as I mentioned last month, there are “blink-on” taxes on Vikings tickets, parking, and memorabilia club seats and a sports-themed lottery [UPDATE: see comments below] that go into effect if the gambling proceeds aren’t enough to pay stadium costs. On the significantly less bright side, if the pulltabs are really going to generate less than a quarter of the $62.5 million a year that they were supposed to provide for the Vikings stadium, that’s a huge hole to fill, probably too huge for any amount of admission fees and souvenir taxes these revenue streams to make up for — earlier estimates had those bringing in at best $3 million a year.

So while it’s too soon for Minnesota legislators to panic … actually, it’s probably not too soon to panic, given that Hamilton County, Ohio has had to resort to selling off public hospitals to meet its Cincinnati Bengals stadium fund shortfall. Anyway, according to the Minneapolis Star Tribune, new revenue sources being considered are allowing e-pulltabs to be sold at grocery stores, easing regulations around approval of e-pulltab manufacturers — neither likely to do much if the problem is really that nobody wants to pay the $800 fee to install the games — and “creating additional funding sources if needed.” Keep one hand on your hospitals, Minnesotans.

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14 comments on “E-pulltab shortfall could force Minnesota to seek “additional funding sources” for Vikings stadium

  1. Thanks Neil. If only the legislation was written in such a way that the state of MN would get some money out of the deal in the form of rent, taxes, PSL, etc! I still have to wonder if the lack of funds mean that the stadium might not get built or that the legislation reworked. I would imagine that the answer is ‘no’, but for some reason I keep hoping that logic and finances will prevail!!

  2. Actually, the blink-on financing was reduced significantly between the bills passed by the House and Senate and the final bill passed after conference committee. All that’s left is “a sports-themed lottery game” and a 10% tax on suites. No tax on memorabilia, ticket base or parking. These were removed in conference, I believe at the team’s or league’s request (though that last part is based on conjecture and conversation with people privy to the conference.) The lottery would raise the first $2.1 million of shortfall in debt service; I never saw an estimate of revenues from the suite tax.

    Conference report is here:

  3. Honestly the legislature couldn’t care less. 90% of them are there to take the next step in their political careers and are just looking to line their pockets with future campaign donations.

    There are always more donations from billionaires hoping to make hundreds of millions than there are from regular folks who may not even be aware that it likely means an extra $25 or $50 in taxes for a boondoggle. That is the main weakness of our current form of government and both parties celebrate and wallow in it instead of attempting to rectify it.

  4. Easy solution: just make every man, woman, and child in Minnesota purchase a “minimum number” of pulltabs.

  5. Thanks, K — I’d missed the blink-on changes in the final frenzy of bill negotiations. The main point above stands, though — there’s not going to be much revenue from that source, so Minnesota is in serious trouble if e-pulltab sales don’t pick up dramatically.

  6. In fact, the $3 million a year blink-on revenue estimate is from a story post-conference bill, so it should still be valid. (Or as valid as ever, anyway.)

  7. Neil, yes, that $3 million should be a reasonable estimate of the remaining blink-ons. If you trace the history of HF 1485’s fiscal notes, you will see the increasingly heroic assumptions they have to make to justify the revenue estimates needed to support the debt finance for the stadium.

  8. At this point, the state of Minnesota should throw in the towel regarding the new stadium. It isn’t worth the headaches even if every man, woman, and child in the state is forced to use the Electronic pull-tabs every month. Either that, or I-94 (including 394, 494, and 694), I-90, and I-35 become toll roads.

    Seriously, Minnesota can, and should raise taxes to finance the Olympic Games in 2024. Most of the venues are in place with the exception of a Tennis Stadium, Aquatics Center, and Velodrome. If not for baseball, Target Field could be used in some fashion along with Midway Stadium. The Metrodome can be used to host Gymnastics, Indoor Track and Field, and Basketball while the main stadium is in the Cathedral district, and it is the new home of the Minnesota Vikings. Otherwise, the main problems for the Organizing committee would be transportation problems where Light Rail would have to be expanded, the interstates need to be upgraded, and MSP International Airport needs upgrades as well.

  9. “…the increasingly heroic assumptions they have to make to justify the revenue estimates needed to support the debt finance for the stadium….”

    Well said. And thanks for summing up the fundamental goal of every stadium subsidy proponent so clearly. It’s about negotiating politicians into agreeing to a thinly researched and documented estimate of costs/benefits. Because once you’ve got them to say “Yes”, even in the weakest and most non-committal way, there isn’t anything they won’t do to make your project happen, no matter what it costs anyone else.

    “Getting to yes” is, as the book advises, the single most important step. You can change all the details afterwards if you like… just get them to say yes and they can’t back away.

    Shameful. But predictable.

  10. THE answer is to have school children going door to door with “pull tab” screens asking residents to gamble more. While school children used to come around selling magazines or bad candy to raise money.
    There is no reason they couldn’t do the same with pull tab screens.

  11. As a native Minnesotan and a resident of the state I have no problem paying higher property or income taxes to get this stadium done. I am tired of the pathetic Metrodome…I would NEVER take my children to that god awful place, or have to worry about my wife being groped as we walk through those narrow narrow concourses that are always packed on game days. Oh yeah, and the bathroom situation is the worst. Pissing in troughs, fine…but only having ONE TOILET PER MEN’S BATHROOM?!?! Apparently in the 70’s people didn’t go number 2 very often. So while I somewhat agree with the overall premise of the site, Neil of Mouse…you are just so wrong about the acceptability of the Metrodome. Go watch a game there and tell me how great the experience is.

  12. I’ve never made it to the Metrodome, so can’t speak to its current acceptability for fans. I will say, though, that $62.5 million a year could buy an awful lot of toilet stalls if the Vikings hadn’t been fixated on a brand new building.

  13. Yoshimi, presumably the same people will go to games in the new stadium, so please tell your wife to hurry to her seat and STAY THERE!

  14. I got those Minnesota pols on their backs and boy did they put out! Mmmm, I loves me some stadium cash, baby! 1-800-Stadium Cash Now! I guess they are waking up now and looking up the definition of “cheap whore” because thanks to Roger and Art’s visit I pimped them all. They will keep putting out $$$ for me for years to come. I will have a giggle as I sip champagne in my Park Avenue luxury pad every time I think about it.

    Provincial schmucks, you really believed that “move to L.A.” b.s, lol. The league has run that scam for 19 years, you’re just the latest bunch of sad saps to fall for it. We’ve moved on to Charlotte. I hear the team is already packed, lol. The vans are warming up, but wait, there’s still hope, just fork over the stadium cash, now, Carolinians! Hurry!

    There’s no stadium in L.A., just Tim Leiweke imagining that Anschutz is going to make him into an NFL somebody, haha. Can you say, “No sale?” Roski’s industrial park sits empty 5 years after he threw confetti to celebrate his big plan, because the numbers don’t add up. They don’t add up downtown either. Without public stadium cash they almost never add up. Not if you have to buy or relocate a team anyway.

    Who needs it anyway? Anyone taking over that market better let the rest of us NFL owners wet our beaks up front if you catch my drift. We show the best games there every week and get great ratings. Why put some 53 man bum squad out there to drag the down the Nielsons? Anyhow there’s not dollar one out there to build it, any idiot could have figured it out.

    But then, you’re not just any idiots, you’re Minnesotans. You like it there. I like it there too, especially when you are tossing me money hand over fist!

    Your beloved emperor,

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