Committee hears modernization bill to allow optional electronic pull tabs for charities; operators raise cost and fairness concerns
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Summary
Senate Bill 170 would allow optional tablet-based electronic pull tabs for charitable gaming to help nonprofits cope with rising paper and labor costs; testimony included broad nonprofit support and operator/distributor opposition focused on manufacturer fees, payout caps, limits on tablets in alcohol-serving locations, and confidentiality/market impacts; the bill was set aside for further work.
Senate Bill 170, presented Feb. 24 before the Senate Finance Committee, would permit charitable organizations to offer optional electronic pull‑tab games on tablets under a regulatory framework intended to mirror existing limits for paper pull tabs. Sponsor Senator Jesse Bjorkman said rising costs for paper tickets and labor have made the current model unsustainable for many nonprofits and charities and that the bill is modeled on Minnesota’s tablet approach.
The committee heard extensive invited and public testimony. Supporters included Diamond Game Enterprises, which manufactures electronic pull tabs; nonprofit operators such as senior centers and chambers of commerce; veterans groups; food banks; and school booster clubs. Bill Breslow of Diamond Game said electronic pull tabs on tablets have helped charities in other states and cautioned that some technical and inducement language could be improved. Julie Otto, executive director of the Kenai Senior Center, described how gaming revenue supports 15,000 meals a year and transportation for seniors and asked the committee to move the bill forward.
Several operators and distributors raised concerns. Jerry Lewis and Sandy Powers, who operate bingo halls and pull‑tab businesses, argued the bill’s caps and fee provisions do not match Minnesota’s model and could favor alcohol‑serving establishments or reduce charity proceeds. They flagged the bill’s proposed manufacturer cap (35% of ideal net as written) and a 90% ideal payout cap as unnecessarily high, and urged lowering the manufacturer share and tightening limits on tablets at locations that serve alcohol. Doug McBride, a distributor, objected to provisions he said would require manufacturers to sell to all distributors, could appropriate distributor intellectual property and would mandate disclosure of commercial contracts to the gaming unit — steps he said would harm competition and business confidentiality.
Senator Keel reviewed a fiscal note from the Department of Revenue Tax Division showing an appropriation of about $288,800 in the coming fiscal year and an indeterminate change in revenue thereafter; the department said regulation changes would be required. Bjorkman said the bill sets caps as maximums rather than guaranteed rates and expressed willingness to work with stakeholders to refine language. The committee set SB 170 aside for further consideration.
