‘Dream House’ builder arrested

Police say contest for East Isles home was illegal

By Dylan Thomas

EAST ISLES — The contest to win an East Isles home valued at $1.8 million came to an early end Wednesday morning when police arrested the homebuilder for illegal gambling.

Paul Stepnes was giving a tour of the home at 2857 Irving Ave. S. when two plainclothes police officers from city licensing arrived at the home and confronted him. After a brief conversation, Stepnes was placed in handcuffs and led to an unmarked green minivan parked in front of the home.

Sgt. William Palmer, a spokesman for the Minneapolis Police Department, said Stepnes did not have the proper licensing to hold the contest, which also involved weekly drawings for prizes.

“If you’re doing a raffle, you have to have a license,” Palmer said.

Stepnes, a homebuilder and developer, said he came up with “The Big Dream House Give Away!” contest after he was unable to sell the home, completed in 2006. The contest would raise money for local charities, he said.

Participants paid $20 to guess the number of nuts, bolts, screws and other fasteners in a large chest located in the house’s dining room. The person closest to the number without going over would claim either the home or a cash prize of $1 million, according to rules posted on the contest website.

“It’s a game of skill,” Stepnes said when describing the game to a reporter just moments before his arrest. “It’s not a game of chance, and I think that’s the thing people need to understand.”

A winner was to be selected Nov. 15. The website also described weekly prize drawings for early entrants.

Sen. Scott Dibble (DFL-60) said Stepnes, an acquaintance, sought his advice on the legality of a raffle for the house. Dibble said a raffle was clearly impermissible under state gambling rules, so he later arranged a meeting at his office with Stepnes, state senate counsel and Tom Barrett, executive director of the Minnesota Gambling Control Board.

Barrett said he explained at that meeting in May the state’s definition of gambling had three elements, including a prize, chance and a consideration, typically an entry fee for a chance to play.

“It’s in [my] opinion that they’ve removed one of those elements,” Barrett said. “It’s not [chance.] There’s some effort involved to calculate how many nuts, bolts — whatever — is in the box.”

The contest was never brought to the Minnesota Gambling Control Board for review, he said.

Barrett said Stepnes never brought up the idea of holding weekly prize drawings. It was there, he suggested, Stepnes probably ran afoul of the law.

“Therein, he has also brought back in the element of chance,” Barrett said.

Stepnes did not answer directly when asked how many people had purchased tickets, but he said hundreds or thousands of people had come to see the house.

He said any money raised through the contest above and beyond the value of the home would go to Chester House Foundation, a company he started around the same time as the contest.

Carolyn Aberman, a spokesperson for the contest, described Chester House Foundation as a 501(c)3 nonprofit. The Office of the Secretary of State had no record of a nonprofit under that name, although the foundation could have been registered under another name.

Stepnes said the foundation was established around the same time as the contest and would distribute funds raised in the contest. Foundation funds would go to organizations that work to end homelessness, according to the contest website.