Minnesota Appeals Court Deals Blow to Electronic Pull Tab Industry

Posted on: February 28, 2023, 05:09h. 

Last updated on: March 1, 2023, 11:20h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

A Minnesota appeals court has ruled that the state gambling control board erred when it permitted “open-all” electronic pull-tabs (EPTs) at bars, restaurants, and other venues.

Electronic pull tabs, Minnesota
A customer playing an “open-all” EPT in Minnesota. The machines have helped raise millions for good causes in the state, but there is confusion about whether they’re actually legal. (Image: Arrow International/YouTube)

Like traditional printed pull-tabs, EPTs reveal a set of symbols or numbers with each play. But they transplant the action into a gaming cabinet, along with a digital visual presentation that apes slot machines.

Unlike slots, they don’t use a random number generator to produce results. Each result is predetermined, as it would be if you were buying printed tickets, one by one, from a stack in a store.

But they’re still way too much like slots, according to local tribal gaming operators, who have a monopoly on that vertical.

The Shakopee Mdewakanton Sioux Community (SMSC) sued the Minnesota Gambling Control Board in 2019. The tribe argued that the “open all” variety of EPTs, which reveal all symbols with one the touch of a button, conflicted with how the state defined the machines when they legalized them in 2012.

Caught in Two Minds

The statute required that players “must activate or open each electronic pull-tab ticket and each individual line, row, or column of each electronic pull-tab ticket.”

Minnesota legalized EPTs as part of an initiative to raise money for the US Bank Stadium in Minneapolis. The machines continue to raise a lot of cash for charitable causes in the state.

In 2019, following pressure from the tribes, the control board sent emails to vendors stating that it would no longer approve games that revealed more than one symbol at a time. But it flip-flopped within a week after vendors pushed back, which sparked the SMSC lawsuit. ?

In 2020, an administrative law judge ruled that “open-all” EPTs were legal. That decision was not completely reversed Monday. But the appellate court determined that the control board’s 2019 emails to vendors essentially created an “unpromulgated rule” that the games were not allowed.

The appellate panel determined that the 2012 statute itself was ambiguous, which could lay the ground for the legislature to revisit it.

$2B Industry

The SMSC Monday doubled down on its belief that the statute is clear cut.

“The Minnesota Gambling Control Board has ignored the plain meaning and legislative intent of the law authorizing electronic pull-tabs in its approval of games which mimic slot machines,” read the statement. “We hope the Legislature will pass needed clarifications to ensure that electronic pull-tabs help charities raise money for worthy community causes while not undermining tribal gaming.”

EPT’s generated $1.9 billion in 2022, according to the gaming control board’s most recent report, although that’s slightly shy of the $2.1 billion the printed version pulled in. All profits go to nonprofits and charities.

Sam Krueger, executive director of the Electronic Gaming Group, told 5 Eyewitness New Mondays that EPTs were hugely popular, despite “relentless efforts of the tribal casinos to destroy electronic charitable gaming in Minnesota.”