Tuesday, January 15, 2013

New Minnesota Vikings Stadium A Boondoggle Before It’s Even Built

Last spring, Gov. Mark Dayton (D-MN) and the Minnesota state legislature exploited a legal loophole to approve $348 million in public financing to help build a new stadium for the state’s National Football League franchise, the Minnesota Vikings. The majority of the state’s financing of the stadium would come from revenues gained from new electronic gambling machines placed in bars and restaurants — an idea that seemed fool-proof to Dayton and legislators since Minnesota ranks among the biggest states in charitable gaming.

Less than a year later, revenues from the electronic pull-tab machines are falling far short of projections, and even before ground has been broken on the new stadium, it already looks like a bad deal for Minnesota taxpayers. New financial projections say the revenue from gambling has come in below both monthly and daily targets, and the amount of cash on hand has been cut in half, Minnesota Public Radio reports:

Revenues since pull-tabs started on Sept. 18 have fallen far short of the $100 million monthly target experts initially set for the games. Last month, disappointing revenues prompted state finance officials to cut the expected stadium cash they’d have on hand by half.

The most current data from the Minnesota Gambling Control Board show Minnesotans only played a total of $4.1 million worth of the games through the end of 2012. [...]
The existing machines each are grossing $180 a day — again short of the projected $225 daily take — grossing less per day than the experts’ projection made when the stadium financing plan was being worked on last spring.

State officials now project the pull tabs will generate just $47 million in revenue, barely more than half original estimates. Pull tab revenues for 2012 were down 51 percent compared to projections. Minnesota officials and stadium advocates argue that the shortfall is a result of too-slow approval for the new machines. As of December, 75 bars and restaurants had been approved to host the machines, short of the 300 that would have been idea by that time, advocates told the St. Paul Pioneer-Press. The more likely explanation, though, is that the plan was a bad one.

Across the country, taxpayers are footing the bills for stadiums to the tune of $4 billion a year. Cities and states have used a host of public financing tactics, but the result is near-universal: revenue from such schemes falls short of projections, the city and state that financed the stadium are left with a shortfall and without the promised economic boom, and taxpayers eventually pick up the tab, whether through higher taxes or cuts to government services.

Usually, hard evidence that stadiums and arenas are boondoggles doesn’t emerge for at least a few years. In Minneapolis, it became obvious before construction crews even broke ground.

No comments:

Post a Comment