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Minnesota top pull-tab state

Jul 5, 2004, 8:32 am

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Minnesota Lottery

Imagine that every fruitless pull of a casino's slot machine produced a colorful bit of trash and you get an idea of how the garbage bins at American Legion Post 1776 overflow on a good night.

Last year $6.4 million worth of pull-tabs were sold from this tidy metal-clad hall -- tops in a state that is tops in the nation -- allowing Post 1776 to pass a profit of $246,000 on to hundreds of schools, sports programs and charities.

Though they're sold without the glamor of Las Vegas or the marketing budgets of state lotteries, pull-tabs are the lifeblood of bar gambling, and bar gambling has long been big business in Minnesota.

Minnesotans spend about $1.3 billion annually on pull tabs -- about four times more than they spend on state-run lottery games and second only to casino-style tribal gambling. They spend tens of millions more on other charity games such as bingo, tipboards and roulette-style paddlewheel games.

Though charitable gambling is as popular as ever, the amount of money being returned to traditional charities is small and growing smaller, a review by the Associated Press found. And in a time of budget difficulties, the regulators who oversee pull-tabs and other games worry that they may not be able to stay on top of the industry.

They're known as pickle cards in Nebraska, tip tickets in Ohio and rippies in Rhode Island.

Yet pull-tabs may best be thought of as paper slots. After paying from 50 cents to $2 per ticket, players tear open their tabs -- experienced players can open them in a fluid one-handed motion -- and look for a line of winners.

Pull-tabs were invented in the 1950s as a novelty and slowly found their way into the bars of fraternal lodges and veterans halls as fund-raising tools. With sales highest in working-class bars, they sit on the opposite end of the gambling spectrum from casinos, decidedly more Schlitz than glitz.

Sales exploded in the state between the mid-1980s and the early 1990s, mirroring trends elsewhere, but have been stagnant since.

The bars of Minnesota's lakes regions have long been popular, if underground, gambling centers -- places where men on weekend fishing trips stopped to play illicit slot machines, according to Minnesota Gambling Control Board's Gary Danger.

That trend is evident today, with all forms of gambling more prevalent north of the Twin Cities than south. The counties that sell the most pull-tabs per capita are mostly central Minnesota lakes getaways. Tops is Aitkin County, where $929 was wagered per resident last year, though much of the betting is probably from visitors.

Regulation of the games arrived in 1945 when the state legalized bingo as a "mild form of social recreation" allowed solely for raising money for nonprofit religious, charitable or fraternal organizations.

Bit by bit, the forms of legalized charity gambling grew to include paddlewheels, tipboards and raffles. In 1981, pull-tabs -- by then already widely if illicitly available from glass jars on bar counters -- were legalized. Laws and tax rates have changed a handful of times, but they've always emphasized that the games exist solely to help charities.

Minnesota is easily the nation's top seller, according to people who print the games. The National Association of Fundraising Ticket Manufacturers lists Minnesota as No. 1, with Washington state second. California is a wild card because sales are regulated by local governments and total sales aren't tracked by the state. The group's lawyer, Mary Magnuson, said manufacturers estimate California may be about a billion-dollar market as well, which would place it second.

When asked why Minnesotans love pull-tabs, regulators, industry experts and bar owners give some of the same answers:

" Payoffs tend to be higher in the state, averaging 82 percent of a dollar wager. That's higher than what's paid out in games in other states but still well below the payout rate of a Vegas slot machine.

" Minnesota makes it easier to gamble. Pull-tabs are sold in more than 3,000 bars and lodges across the state. Many states only allow them to be sold in bingo parlors, which might attract a thriftier audience.

" Minnesotans like to feel good about their gambling. Knowing their losses go to charity helps salve the sting.

"People will walk out and say, 'Well, I hope you can buy a few hockey sticks with what I left here tonight,' " said David Anderson, gambling manager at Post 1776.

Unlike the lottery, which also donates part of its profits to public purposes in the state, the results of pull-tab spending are often highly visible in the communities where the games are based.

For Post 1776, gambling grew out of occasional charity "Las Vegas nights" 25 years ago, as a means of building a new hall. Now Anderson proudly lists hundreds of good works, from scholarships to seniors' Christmas dinners to Boy Scout troop outings, that his post's pull-tab sales have helped pay for. It has donated $1.8 million over the past seven years.

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