A steady source of revenue for nonprofit organizations in Minnesota – proceeds from electronic pull-tabs – might be reduced.
E-tab machines are set up in bars and restaurants all around the state, including a few locations in Douglas County. In fact, in 2015, Herby’s Bar, Grill and Café in Carlos was ranked eighth in the state for top sales of e-pull tabs by the Minnesota Gambling Control Board, according to an Echo Press story at the time.
Because of a recent Court of Appeals’ decision, the Legislature is considering to ban a feature on some e-tab machines – an “open-all” feature. This allows players to push a button that sets off cascading rows of animated characters and allows players to win bonus rounds. In effect, it makes the e-tab machines look more like slot machines – which American Indian tribes are allowed to operate exclusively, according to a Feb. 27 Star Tribune story.
The Shakopee Mdewakanton Sioux Community brought the matter to the appeals court after initially challenging the open-all function in 2019, according to the story. The Court of Appeals reversed an administrative law judge's decision that found the open-all provision was legal.
The Court of Appeals’ decision could renew a legislative push to clarify the law, explicitly banning the open-all feature.
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At an American Legion regional conference in Rochester on Feb. 18, Sen. Nick Frentz of North Mankato called on organizations to let lawmakers know that e-tabs shouldn’t be scaled back.
The American Legion Department and Allied Charities of Minnesota heeded the call, noting that e-tabs are crucial for the many small charitable gambling operations all across the state in their missions to help their communities.
“From offsetting the effects of poverty to aiding youth programs and from purchasing life-saving firefighting equipment to solving veteran homelessness, e-tabs have helped overcome rising costs across the board,” the organizations said in a news release. “Minnesota loses if e-tabs are scaled back.”
The American Legion Department noted that when this was proposed in 2021, a state fiscal note said:
- E-tabs generate $60 million a year.
- Local charities would lose $33 million.
- Jobs would be lost, with $35 million in lost wages.
- Restaurants and bars would lose $30 million.
To be clear, the changes wouldn’t affect the more popular paper pull-tabs, which generated $2.1 billion in gross receipts in 2022, but a lot of revenue is on the line.
The American Legion and Allied Charities held a new conference on Monday, March 6 at the Minnesota Capitol. It included comments from firefighters, children, local nonprofits and various recipients of charitable donations.
Charitable gambling proceeds, through both e-tabs and paper pull-tabs, are helping many good causes in Douglas County. A recent report from the Osakis VFW showed that over a six-month period, January through June of last year, the club donated more than $80,500 from its charitable gambling proceeds.
Just a few of the causes the Osakis VFW supported: Osakis High School scholarships ($2,000), the city’s DARE program ($1,000), Central Lakes Search and Rescue ($3,000), Boy Scouts ($1,350), St. Agnes School ($2,492), Wounded Warriors Guide Service ($2,000), Sauk Centre Eagles Healing Nest ($2,000), Salvation Army Ukraine Relief ($2,000), Osakis Fire Department ($6,250) and dozens more.
It would be a shame if donations like these would have to be scaled back. Let’s hope the Legislature, the tribes and the courts can find a solution.
The Trust Project
