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Dayton: I Didn’t Know Source Of E-Pulltab Estimate

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(credit: CBS)

(credit: CBS)

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ST. PAUL, Minn. (AP) — Gov. Mark Dayton said Monday that Minnesota’s Gambling Control Board should have revealed from the start that it consulted the gambling industry when compiling its projections for how much the state would make from expanding electronic gaming to help pay for the new Minnesota Vikings stadium.

The amount raised so far has fallen far short of the original projections. Dayton told The Associated Press that he wasn’t aware of the input from an industry that stood to profit from the new games, until the Star Tribune reported it on Sunday.

“I think it should have been disclosed,” Dayton said. “I think obviously in hindsight, given the serious overestimation that occurred, that those sources should have been disclosed very publicly in the very beginning and people could have exercised the caution that probably was due given those sources.”

Gambling Control Board director Tom Barrett said it was never his intent to hide that the companies were consulted. He acknowledged he showed several vendors the projections, but he said the companies didn’t drive the estimates.

“They didn’t create this,” Barrett said. “They were asked, do you see any problems with the methodology? And in defense of what was before the board and how we approached it, I still stand behind the methodology.”

Last year, lawmakers authorized Minnesota charities that run gambling games in bars and clubs to begin offering electronic versions of pull-tab and bingo games. The additional tax revenue go toward paying the roughly $350 million the state has pledged toward the construction of the Vikings’ new, $975 million stadium planned for downtown Minneapolis.

Originally, the state projected those new games would generate $35 million in taxes by the end of 2013. That projection was downgraded to $17 million in November and then reduced to just $1.7 million last month. Barrett said the process of approving the games for use has gone slower than expected, and that charities have lacked the resources to promote the games. Boosters of the games are still hopeful they will grow in popularity and eventually get closer to the original projections.

Barrett said preparing the projections was difficult because no other state had authorized the widespread use of the electronic pulltab and bingo games. Barrett said he drew from a myriad of sources when preparing the estimates, including models used by the Minnesota State Lottery to estimate sales of various games of chance, and said he didn’t bounce the numbers off of gambling vendors until after they were prepared.

Some industry officials even suggested the estimates were too conservative, Barrett said.

Still, some Minnesota lawmakers and charitable game operators were critical of the initial projections when they were released.

Dayton said he saw no problem with running the revenue estimates past vendors, only suggesting the gambling board should have made it more widely known when the stadium bill was before state lawmakers. Dayton also said it’s too early to revisit the stadium financing plan, as some lawmakers have suggested, saying the games could still grow in popularity.

An initial shortfall of $30 million could easily be covered as the games catch on, Dayton said, pointing out that the stadium plan has several backup funding sources in the form of a luxury seat tax and a Vikings-themed lottery game.

“It’s a very manageable situation,” Dayton said. “We’re a long way from saying we have to do something different. I hope that’s not necessary, and I think we have a good year before we’ll know.”

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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