1997 Minnesota Statutes

     349A.06 Lottery retailers. 

    Subdivision 1.    Contracts.  The director shall sell 
 tickets for the lottery through lottery retailers with whom the 
 director contracts.  Contracts under this section are not 
 subject to the provisions of sections 16B.06 to 16B.102, and 
 16B.17, and are valid for a period of one year.  The director 
 may permit a retailer to sell tickets at more than one business 
 location under a contract entered into under this section. 

    Subd. 1a.    Sales at airport.  The metropolitan 
 airports commission shall permit the sale of lottery tickets at 
 the Minneapolis-St. Paul International Airport in at least each 
 concourse of the Lindbergh terminal, or at other locations 
 mutually agreed to by the director and the commission.  The 
 director shall issue a contract to a nonprofit organization to 
 operate an independent kiosk to sell lottery tickets at the 
 airport. 

    Subd. 2.    Qualifications.  (a) The director may not 
 contract with a retailer who: 

    (1) is under the age of 18; 

    (2) is in business solely as a seller of lottery tickets; 

    (3) owes $500 or more in delinquent taxes as defined in 
 section 270.72; 

    (4) has been convicted within the previous five years of a 
 felony or gross misdemeanor, any crime involving fraud or 
 misrepresentation, or a gambling-related offense; 

    (5) is a member of the immediate family, residing in the 
 same household, as the director or any employee of the lottery; 

    (6) in the director's judgment does not have the financial 
 stability or responsibility to act as a lottery retailer, or 
 whose contracting as a lottery retailer would adversely affect 
 the public health, welfare, and safety, or endanger the security 
 and integrity of the lottery; or 

    (7) is a currency exchange, as defined in section 53A.01. 

    A contract entered into before August 1, 1990, which 
 violates clause (7) may continue in effect until its expiration 
 but may not be renewed. 

    (b) An organization, firm, partnership, or corporation that 
 has a stockholder who owns more than five percent of the 
 business or the stock of the corporation, an officer, or 
 director, that does not meet the requirements of paragraph (a), 
 clause (4), is not eligible to be a lottery retailer under this 
 section. 

    (c) The restrictions under paragraph (a), clause (4), do 
 not apply to an organization, partnership, or corporation if the 
 director determines that the organization, partnership, or firm 
 has terminated its relationship with the individual whose 
 actions directly contributed to the disqualification under this 
 subdivision. 

    Subd. 3.    Bond.  The director may require that a 
 lottery retailer post a bond, securities, or an irrevocable 
 letter of credit, in an amount as the director deems necessary, 
 to protect the financial interests of the state.  If securities 
 are deposited or an irrevocable letter of credit filed, the 
 securities or letter of credit must be of a type or in the form 
 provided under section 349A.07, subdivision 5, paragraphs (b) 
 and (c).  

    Subd. 4.    Criminal history.  The director may request 
 the director of alcohol and gambling enforcement to investigate 
 all applicants for lottery retailer contracts to determine their 
 compliance with the requirements of subdivision 2.  The director 
 may issue a temporary contract, valid for not more than 90 days, 
 to an applicant pending the completion of the investigation or a 
 final determination of qualifications under this section.  The 
 director has access to all criminal history data compiled by the 
 director of alcohol and gambling enforcement on any person (1) 
 holding or applying for a retailer contract, (2) any person 
 holding a lottery vendor contract or who has submitted a bid on 
 such a contract, and (3) any person applying for employment with 
 the lottery. 

    Subd. 5.    Restrictions on lottery retailers.  (a) A 
 lottery retailer may sell lottery tickets only on the premises 
 described in the contract. 

    (b) A lottery retailer must prominently display a 
 certificate issued by the director on the premises where lottery 
 tickets will be sold. 

    (c) A lottery retailer must keep a complete set of books of 
 account, correspondence, and all other records necessary to show 
 fully the retailer's lottery transactions, and make them 
 available for inspection by employees of the lottery at all 
 times during business hours.  The director may require a lottery 
 retailer to furnish information as the director deems necessary 
 to carry out the purposes of this chapter, and may require an 
 audit to be made of the books of account and records.  The 
 director may select an auditor to perform the audit and may 
 require the retailer to pay the cost of the audit.  The auditor 
 has the same right of access to the books of account, 
 correspondence, and other records as is given to employees of 
 the lottery. 

    (d) A contract issued under this section may not be 
 transferred or assigned. 

    (e) The director shall require that lottery tickets may be 
 sold by retailers only for cash.  

    (f) A lottery retailer must prominently post at the point 
 of sale of lottery tickets, in a manner approved by the 
 commissioner of human services, the toll-free telephone number 
 established by the commissioner of human services in connection 
 with the compulsive gambling program established under section 
 245.98. 

    Subd. 6.    Retention by retailers.  The director may by 
 rule provide for: 

    (1) amounts which a lottery retailer may retain from gross 
 receipts from the sale of lottery tickets in order to pay prizes 
 to holders of winning tickets; and 

    (2) amounts which a lottery retailer may retain from gross 
 receipts from the sale of lottery tickets as a commission.  

    Subd. 7.    Retailer rental payments.  If a lottery 
 retailer's rental payments for the business premises are 
 contractually computed, in whole or in part, on the basis of a 
 percentage of retail sales, and the computation of retail sales 
 is not explicitly defined to include the sale of lottery 
 tickets, the compensation retained by the sales agent for the 
 sale of lottery tickets shall be considered the amount of the 
 retail sale for purposes of computing the rental payments. 

    Subd. 8.    Proceeds of sales.  All proceeds from the 
 sale of lottery tickets received by a lottery retailer 
 constitute a trust fund until paid to the director.  The lottery 
 retailer is personally liable for all proceeds. 

    Subd. 9.    Fee.  The director may charge a 
 nonrefundable application fee to a person applying for a lottery 
 retailer contract, in an amount sufficient to cover the costs of 
 making the investigation required under subdivision 4.  The fee 
 collected under this subdivision must be deposited in the 
 lottery fund. 

    Subd. 10.    Local licenses.  No political subdivision 
 may require a local license to operate as a lottery retailer or 
 impose a tax or fee on the business of operating as a lottery 
 retailer. 

    Subd. 11.    Cancellation, suspension, and refusal to 
 renew contracts or locations.  (a) The director shall cancel 
 the contract of any lottery retailer or prohibit a lottery 
 retailer from selling lottery tickets at a business location who:

    (1) has been convicted of a felony or gross misdemeanor; 

    (2) has committed fraud, misrepresentation, or deceit; 

    (3) has provided false or misleading information to the 
 lottery; or 

    (4) has acted in a manner prejudicial to public confidence 
 in the integrity of the lottery. 

    (b) The director may cancel, suspend, or refuse to renew 
 the contract of any lottery retailer or prohibit a lottery 
 retailer from selling lottery tickets at a business location who:

    (1) changes business location; 

    (2) fails to account for lottery tickets received or the 
 proceeds from tickets sold; 

    (3) fails to remit funds to the director in accordance with 
 the director's rules; 

    (4) violates a law or a rule or order of the director; 

    (5) fails to comply with any of the terms in the lottery 
 retailer's contract; 

    (6) fails to file a bond, securities, or a letter of credit 
 as required under subdivision 3; 

    (7) in the opinion of the director fails to maintain a 
 sufficient sales volume to justify continuation as a lottery 
 retailer; or 

    (8) has violated section 340A.503, subdivision 2, clause 
 (1), two or more times within a two-year period. 

    (c) The director may also cancel, suspend, or refuse to 
 renew a lottery retailer's contract or prohibit a lottery 
 retailer from selling lottery tickets at a business location if 
 there is a material change in any of the factors considered by 
 the director under subdivision 2.  

    (d) A contract cancellation, suspension, refusal to renew, 
 or prohibiting a lottery retailer from selling lottery tickets 
 at a business location under this subdivision is a contested 
 case under sections 14.57 to 14.69 and is in addition to any 
 criminal penalties provided for a violation of law or rule. 

    (e) The director may temporarily suspend a contract or 
 temporarily prohibit a lottery retailer from selling lottery 
 tickets at a business location without notice for any of the 
 reasons specified in this subdivision provided that a hearing is 
 conducted within seven days after a request for a hearing is 
 made by a lottery retailer.  Within 20 days after receiving the 
 administrative law judge's report, the director shall issue an 
 order vacating the temporary suspension or prohibition or making 
 any other appropriate order.  If no hearing is requested within 
 30 days of the temporary suspension or prohibition taking 
 effect, the suspension or prohibition becomes permanent unless 
 the director vacates or modifies the order.  

    HIST: 1989 c 334 art 3 s 6; 1990 c 590 art 1 s 50,51; 1991 c 
 233 s 109; 1991 c 336 art 2 s 36-38; 1994 c 633 art 6 s 1; 1995 
 c 254 art 1 s 83; 1996 c 288 s 1-3; 1997 c 129 art 2 s 15