Friday, February 18, 2005

Slots for Minnesota Bars Offers Alternative to Casino Plans

allen costantini,

The sound of slot machines could soon be mixing with the sounds of clanking bar glasses and noisy patrons if one state lawmaker has his way. State Senator David Tomassoni of Chisholm is the DFL Majority Whip who likes the Governor’s support of gambling. He thinks the Pawlenty administration’s proposals for some kind of Twin Cities casino project has opened the door for his own concept for expanding legal gambling in Minnesota. “What I have here is a proposal to allow bar owners to put up to five slot machines in their bars.”Tomassoni is well aware that his proposal is far from a sure bet, “If you’re going to talk about gambling revenues, then you want to talk about something that can actually fund the general fund and can actually make a difference.” Tomassoni’s plan is to have the slots controlled by the Minnesota Lottery with the money allotted under a system used in Oregon. “It’s based on 3,200 bars and I think it averages out to 4.8 machines per establishment.”So, where does the money go? “The biggest allocation,” Tomassoni insists, “would be about $350 million to the general fund annually.” Another $70 million would be ear-marked, as required by state law, for the Environmental Trust Fund and $17 million is to be set-aside for compulsive gambling prevention and treatment programs. Then $87 million goes to charities that already benefit from the Legal Gambling Division’s “pull tab” operations in bars. The bars themselves could keep up to one-third of the proceeds. That part of Tomassoni’s bill doesn’t please all the bar owners, some of whom would like to capture a bigger slice of the proceeds pie. Tomassoni counters that saying, “A third is actually a pretty big number. It’s about, I think, about $230 million that would end up going to the bar owners.” The plan is particularly appealing to tavern proprietors hit hard by the loss of business from the cancellation of the National Hockey League season. “I’m excited for the idea of spreading the wealth with the gambling,” smiles Kevin Geisen of St. Paul. Geisen’s Eagle Street Grill is directly across Kellogg Boulevard from the Excel Energy Center. The two year old tavern has had to drop its staff from 40 to just 5 when a labor dispute dropped Minnesota Wild hockey games to zero. “I would enjoy an opportunity, especially with our location in St. Paul, any opportunity that will increase our revenue.”Charity organizations are more cautious. “There has been some concern over the years that if video lottery came in, depending on how it was put together, it could devastate us,” comments King Wilson, Executive Director of the Allied Charities of Minnesota. “Our understanding is that this would be in addition to the current pull tabs. This would occur in many of the same, if not most of the same establishments that we do our pull tabs.” Wilson says the present funding for members of his trade association breaks down like this, “It’s a $1.4 billion industry. Pull tabs are, like, $1.2 billion of it and that’s primarily done in bars and restaurants across the state. There’s no doubt there will be a loss of pull tab sales if four or five slot machines, video lottery machines, are put in an establishment.” Tomassoni agrees. His initial proposal, three years ago, had no provision to compensate the charities for the presumed pull tab losses. Now he understands the charities plight. “I think it would actually draw off a bit of the pull tab revenue just because of the fact that they’d both be in the same location. And so, the way the bill’s proposed and the way it’s been introduced, it would allow a pretty good chunk of money to actually go to the charities.”State Lottery officials say they assume private clubs like VFW’s and American Legion posts that now feature pull tabs would be eligible to add the machines, so long as they meet the same criteria required of tavern owners. Still, Tomassoni’s proposal got a chilly reception from pull tab salesperson Marguerite Butler at the Golden Valley American Legion Post. “Overall, people like dealing with people better than a machine. I don’t see a necessity to have em here, not at all.” She worries that the slots might not just coexist with pull tabs, but replace them. “I think if we don’t have em (pull tabs) that a lot of us will be out of business, out of work. I mean people who sell. We won’t have a job.”Tomassoni sees big advantages for his proposal over a “Racino” at Canterbury Downs or a State/Tribal casino in Minneapolis, St. Paul or the Mall of America. First, he contends, it can be “up and running in six months” under Lottery control. Second, he argues, unlike a single casino, the video/lottery plan spreads the direct benefits of any gambling expansion across the entire state.

By Allen Costantini, KARE 11 News
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