Electronic pulltab gambling sales dismal as more bars offer them

iPod Touch PulltabLet’s start with the good news — at least good news if you expect electronic pulltab gambling to live up to its promise when it was  legalized to pay for a Vikings stadium.

Despite recent disappointments, more people are getting into the electronic pulltab business.

The number of distributors in Minnesota grew by 50 percent in June –up from six distributors that offer the e-pulltabs to nine at the start of July. The new outfits are small. They account for less than 2 percent of the devices in play. But all the other distributors started with a handful of sites and now some have hundreds.

Those new distributors also helped the whole e-pulltab industry in Minnesota make an appreciable boost in the number of bars across the state that offer the gambling games. The number of sites grew from 236 in May to 279 last month, an 18 percent jump. It was the biggest expansion of the e-pulltab gambling games since January.

But total sales slumped.

Here’s what the month-to-month totals have looked like since September:

Month Gross sales
Sept. 2012 $275,150
Oct. 2012 $1,066,762
Nov. 2012 $1,346,513
Dec. 2012 $1,477,566
Jan. 2013 $1,720,323
Feb. 2013 $1,935,269
Mar. 2013 $2,404,437
April 2013 $2,093,389
May 2013 $1,993,046
June 2013 $1,857,037

More tellingly, the sales of the games continue on a steady decline, on a per-machine basis. The average daily sales on each e-pulltab gambling machine fell for the 10th straight month, to $50.38.

The state’s projections back in 2012 were significantly different than that. When lawmakers signed off on the stadium deal, the state thought there would be 15,400 devices making $225 a day, or about $950 million a year. As of the end of June, there were 1,281 devices making less than a quarter of their projected sales.

Here’s what the month-to-month numbers look like, according to data from the Minnesota Gambling Control Board (click for a larger version). The averages are daily numbers.

June-2013-web-display

Based on the monthly trends since October — the first full month of sales — Minnesota could expect just about 4,400 e-pulltab gambling devices up and running by the end of 2013, and daily per-machine revenue falling below to $18. That would be less than a dime to every dollar the state expected. E-pulltab gambling is shaping up to be a $28 million-a-year business, not a $950 million-a-year business.

That said, Allied Charities of Minnesota just wrapped up their 9-city promotional “road show” in June, which may help spark more interest in the gambling. Executive director Al Lund said about 500 people and about 300 charities showed up for the rollout, and that all the suppliers were represented.

But he added that charities and the game operators still haven’t cracked the nut as far as what makes these e-pulltab gambling work spectacularly well in some places and virtually not at all in others. “This thing is still an enigma,” Lund says.