E-pulltabs supporters aim higher, despite slow start

They've taken in a little under $4 million so far, disappointing state officials who'd earmarked the electronic pulltabs to pay for a Vikings stadium. But if projections are right, the pulltabs and bingo industry alone may eventually rival Minnesota's 18 tribal casinos in revenue.

Backers say they think new features and games will settle doubts about the potential for the state's newest form of gambling.

The pulltab revenue will be part of Minnesota's plan to contribute about $350 million toward a new Vikings stadium in the next four years. The state funding is going to come from places like the American Legion in White Bear Lake.

Henry Hubbard of Fridley bet the first dollar there on the new pulltab machine being rolled out in the coming days.

As of last week, more than 3.5 million electronic pulltabs have been played across Minnesota. State finance experts have been disappointed, though: They were hoping for a lot more.

Still, the state expects the billion-dollar charitable gambling industry to grow by an additional $1.4 billion with the help of e-pulltabs and electronically linked bingo. That's $100 million a month of new bettting.

The new games might nearly match the size of the state's better-known gambling industry: Minnesota's 18 tribal casinos, said Alan Meister, an economist with Nathan Associates, a Washington, D.C.-area consulting group.

Meister has been analyzing tribal gambling for a decade. "In my latest study, which is the 2012 edition, I analyzed calendar year 2010, and my data show that Minnesota Indian gaming generated about $1.4 billion," he said.

Meister estimated that number using publicly available data, proprietary forumulas and some input from tribes around the country.

Tribal gambling experts would not confirm or deny the number.

"I'm not saying that he's completely off whack," said John McCarthy, executive director of the Minnesota Indian Gaming Association. "He's a very respectable bean counter, I guess. But at the same time, it's not definitive."

The tribes are watching the games warily, unsure of how big they will become. An agreement with the tribes restricted the number of devices available and barred them from functioning like a slot machine.

For now, McCarthy said Indian gambling officials are not worried about competition from electronic pulltabs -- and they wonder if the initial disappointing results are a sign of future shortfalls.

And even some of the people selling the games say privately that they don't believe the projections. But they also say that they are going to try to hit the mark.

Spanky Kuhlman, with the 3 Diamond Corp., is working to promote the new games. He said the devices his company sells will handle virtual bingo, linking bars across the state and offering jackpots up to $100,000 on rare occasions.

"We think that the real market is in the bingo market," Kuhlman said. "And we think that's really going to enhance getting people into the bars, getting more opportunities out there."

He even thinks it may help sustain traditional paper pulltabs, which his company also sells.

At Express Games, John Weaver sells an electronic pulltab game invented by Las Vegas entrepreneur John Acres. Weaver said the company is already working on refinements to grow its iPad-based games, like iPad mini versions.

Weaver thinks innovation will expand the market even more.

"We're already on the third generation," he said. "Every single month we've had an upgrade in our software or in our games. And we see that continuing for the forseeable future. So we're looking at, when we sit down with John Acres and his group, where are we going to be six months from now? Where are we going to be 12 months from now?"

The state now has three licensed e-pulltab makers. Electronically linked bingo is expected to debut in January.

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