North Dakota Lawmakers Clarify Where Charitable Electronic Pull-Tabs Can Operate

Posted on: December 6, 2022, 12:57h. 

Last updated on: December 6, 2022, 01:18h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

A North Dakota legislative panel has clarified where electronic pull-tab machines can operate.

North Dakota electronic pull tabs charitable gaming
A bank of electronic pull-tab machines in a North Dakota bar. A North Dakota legislative committee has backed a moratorium issued by the state Gaming Commission restricting additional liquor licenses that don’t provide on-site consumption from incorporating electronic charitable gaming terminals into their businesses. (Image: KX News)

North Dakota authorized charitable gaming in 1994. Legalizing such small games of chance was designed to provide nonprofits and community organizations across the state with increased donations by way of gaming.

Over the decades since charitable gaming became legal, nonprofits and the gaming manufacturers they work with have gotten creative with designing innovative products that closely mimic Las Vegas-style slot machines. Today, electronic pull tab terminals feature many of the same bright colors and sounds as traditional slots.

North Dakotans poured almost $1.75 billion into the electronic pull-tab machines in the state’s 2022 fiscal year. The North Dakota Gaming Commission says about 4,400 terminals are operating across the state, primarily in bars, restaurants, and other commercial businesses where alcoholic beverages are dispensed and consumed.

During the fiscal year, the terminals generated about $130 million in proceeds for state charities. The charitable gaming also delivered the state’s coffers with more than $25.5 million in tax proceeds.

Charitable Gaming Limitations

North Dakota’s 1994 charitable gaming act said such gaming devices can operate in any “retail alcoholic beverage establishment where alcoholic beverages are dispensed and consumed.”

Over the years, some business owners have interpreted that definition to qualify any state-licensed liquor establishment to house charitable electronic gaming apparatuses. State officials say the machines have recently been seen in gas stations and grocery stores that sell beer and liquor.

In May, the North Dakota Gaming Commission voted 3-2 to clarify the definition of where such charitable gaming can operate. The state gaming regulator said only businesses that primarily rely on alcohol sales through on-site consumption can house the machines.

“I’ve never thought of a gas station or convenience store as a bar — that’s not what anybody envisioned,” North Dakota Attorney General Drew Wrigley told the state Gaming Commission in May. His comments were made ahead of their vote to initiate a moratorium on additional non-bar entities incorporating the controversial terminals into their businesses.

Gaming Commission Overriding Legislature?

This week, the 14-member bipartisan North Dakota Administrative Rules Committee adopted the charitable gaming moratorium recommendation from the Gaming Commission.

The committee agreed that only businesses that serve alcohol for on-premises consumption can house the machines until the legislature provides further clarity. The topic is expected to receive deliberation when the North Dakota Legislative Assembly convenes next month for its 2023 session.

State Rep. Andrew Marschall (R-Fargo) and gaming lobbyist Scott Meske opined that the Rules Committee is allowing a state regulatory agency to dictate the law.

I think we’re skipping the [legislative] process,” commented Meske to the Associated Press.

The state’s Native American tribes that run Class III tribal casinos will likely welcome the electronic pull tab moratorium.

The five gaming tribes say the proliferation of charitable gaming devices is cutting into their gaming revenues. But North Dakota Gov. Doug Burgum (R) last month refused to allow the tribes to gain iGaming privileges to offset their claimed losses from charitable gaming.