Bob Norregaard has his doubts about using electronic gambling games to fund a new Vikings stadium.

“I can’t really see where it’s going to do us any good,” the gambling manager at the VFW in Austin said. “It’ll be just like slot machines. Someone will be hogging them and it won’t bring in much profit.”

Norregaard isn’t alone. Charitable gambling organizations throughout the state are voicing their concerns over the proposed Vikings stadium bill. The organizations say they may refuse to expand their gambling offerings if the state doesn’t agree to rework a tax system that costs some of them as much as 68 percent of their profits.

“Some months I’m paying 40 percent on my profits,” Norregaard said.

The state wants to raise its $398 million contribution to the stadium by authorizing electronic versions of the pull-tab and bingo games that charities operate at bars and fraternal clubs around Minnesota. The Gambling Control Board forecasts a spike in sales and tax receipts that would bring in about $124 million, with about half going to the state to cover stadium bonds and the charities keeping the rest.

Gov. Mark Dayton’s proposal to direct about $10 million toward tax relief isn’t enough to change the minds of many charity operators. Dayton acknowledged the hang-up Thursday, saying the charities and their legislative allies “need to work out their own conclusion to this first, and hopefully we’ll get an agreement.”

For charities, the proposal’s problem is that it rests on a widely despised system of taxing their gambling operations. Local areas affected would include everything from youth sports leagues to Veterans of Foreign Wars and American Legions.

“You wonder at times why we should be paying taxes on this stuff anyway,” Norregaard said. “We turn around and give our money out to other organizations.” Apart from VFW’s operating expenses, the money goes to benefit organizations like Boy Scouts and youth hockey.

Norregaard said he had doubts electronic pull tabs will bring in much extra money.

If the bill passes, taxes on charitable gambling could possibly go up, according to Rep. Rich Murray, R-Albert Lea. “The last thing we want to do is harm any charities,” he added.

The House Commerce Committee is working diligently to sort out concerns with both charities and backers of the stadium bill, Murray said. He expects the committee will have a better feel for it early next week.

“There’s no bill before us on the House floor at all yet,” said Rep. Jeanne Poppe, DFL-Austin. The bill’s first stop would be a hearing in the House Commerce Committee.

All the parties are talking, but the matter requires much more discussion before it’s ready to be heard, Murray said. Charities could slow down the bill if they are still opposed during the hearing, but they are unlikely to be able to stop it in the Commerce Committee, he said.

Devoting a portion of the charitable gambling tax toward the stadium isn’t the only matter that has some questioning the stadium bill.

“Part of the problem with the current bill is that the backstop is the general fund,” Murray said, saying the forecast tax revenue from electronic gambling may fail to cover the state’s portion of the stadium. Not many legislators are willing to have that be the case.

 

— The Associated Press contributed to this report