A winner of a bill?

A new form of lawful gambling could be coming to a bar near you.

Proponents of a bill that would legalize linked bingo and electronic pull-tab games hope it could boost the struggling bar business and provide sorely needed revenue for charities that rely on charitable gambling proceeds.

Rep. John Kriesel (R-Cottage Grove) sponsors HF1485 which would not only legalize those forms of gambling and extend the hours for some games, but lower tax rates paid by charities that receive the proceeds. The House Commerce and Regulatory Reform Committee approved it April 27, sending it to the House State Government Finance Committee. Sen. Mike Parry (R-Waseca) sponsors a companion, SF702, which awaits action by the Senate State Government Innovation and Veterans Committee.

Bar owners support the proposal, according to Dan O’Gara, owner of O’Gara’s Bar and Grill in St. Paul and a board member of the Minnesota Licensed Beverage Association. It’s projected that the $15 million they receive annually in rent from charities that provide the games could increase to about $50 million if the bill becomes law.

Charities like the proposed tax relief. The gross receipts tax would be lowered from 8.5 percent to 5 percent, the pull-tab and tipboard tax would go from 1.7 percent to 1 percent and the combined receipts tax would be lowered in varying rates based on the amount of receipts. All told, their taxes paid would be reduced by 41 percent, according to King Wilson, the executive director of Allied Charities of Minnesota.

However, it’s also expected that new customers interested in electronic gambling games could bring in an additional $2 billion in receipts. King said an unofficial estimate would be about $120 million more to charities that benefit.

In 2009, gross receipts from lawful gambling totaled $999 million. After prizes paid and allowable expenses, net profits were about $80 million. About $36.6 million was paid in taxes and $43.4 million was distributed to charitable organizations.

John McCarthy, executive director of the Minnesota Indian Gaming Association, said that tribes and the association support charitable gambling, but have some concerns about “the potential for a huge expansion of gambling” that the new forms could lead to. He said the electronic devices are not slot machines, but could easily be changed with a simple switch of a chip into full-blown slot machines.