Iowa is turning to a new gambling source in hopes of pulling in $20 million a year in additional revenue.
Iowa Lottery officials are installing about 4,000 high-tech video pull-tab machines in taverns, restaurants and fraternal clubs.
The equipment, featuring cheery music and colorful video monitors, has been a big hit during a market test in 10 Iowa communities. Revenues averaged $900 to $1,000 weekly per machine, demonstrating a potential to increase lottery profits.
The Iowa Lottery made $48 million last year, said Iowa Lottery Vice President Mary Neubauer.
Three styles of the new pull-tab machines were tested at Benchwarmers' Sports Bar-Grill in Ankeny where owner Mike Ashby said they've done well.
"We have had a lot of sales," Ashby said.
Steamboat Garden restaurant in Waterloo has seen interest in the "Irish Gold" machine it's been trying out.
Owner Joel Hundley said the good payback rates -- about 75 to 80 cents for every dollar wagered -- was the reason.
"You might put a dollar in and get $50," he said.
Gambling critic Tom Coates, of Norwalk, called pull tabs a regressive form of taxation.
"You can say it is a voluntary tax and that they are having fun. But there are people who are foregoing some of the necessities of life, and certainly savings ... to have this prospect of hitting a jackpot," Coates said.
Neubauer said a state phone service for problem gamblers reported no complaints about the new machines during the recent market test. A 2002 profile of Iowa problem gamblers showed that 3 percent said their primary wagering was using lottery or scratch tickets.
"Lottery tickets are a form of entertainment like movies or going to the restaurant or any other thing that people choose to do with their disposable income," she said.
The new machines will charge $1 per play. The top prize during the market test was $300.
Lottery officials haven't determined the odds and prizes for the statewide rollout, Neubauer said.
Installation of the new machines will begin next spring. It is expected to take more than a year to reach the 4,000 mark and $20 million in additional lottery profits, she said.
The Iowa Lottery began working on the video pull-tab project about two years ago.
Iowa lawmakers approved the idea last year.
Players insert money into the pull-tab machine like any other vending machine. After the ticket is dispensed, the video monitor displays whether the ticket is a winner. The machines don't accept credits and payouts are made by a cashier.
A business plan accepted by the Iowa Lottery Board calls for the machines to be installed in age-controlled locations through a network of existing private businesses that operate amusement equipment such as pool tables, dart boards and video arcade machines.
There will be a limit of two pull-tab machines per location, Neubauer said.
I suppose pull-tabs are less expensive to make than scratches.