1.1                          A bill for an act 
  1.2             relating to gambling; restricting advertising and 
  1.3             promotion; amending Minnesota Statutes 1994, sections 
  1.4             349A.02, subdivisions 2 and 3; 349A.03, subdivision 2; 
  1.5             349A.06, subdivision 5; and 349A.10, subdivision 3; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapters 3; 240; 349; and 349A; repealing Minnesota 
  1.8             Statutes 1994, sections 349A.02, subdivision 5; and 
  1.9             349A.09. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [3.9215] [INDIAN TRIBES; GAMING ADVERTISING 
  1.12  RESTRICTED.] 
  1.13     All forms of advertising or promotion of class II gaming or 
  1.14  class III gaming, except advertising and promotion published or 
  1.15  disseminated solely on Indian lands, is prohibited. 
  1.16     For purposes of this section, "class II gaming" or "class 
  1.17  III gaming" and "Indian lands" have the meaning given those 
  1.18  terms in the Indian Gaming Regulatory Act, Public Law Number 
  1.19  100-497, as amended. 
  1.20     The attorney general shall enforce compliance with this 
  1.21  section and in doing so has the powers set forth in section 8.31.
  1.22     Sec. 2.  [240.125] [ADVERTISING RESTRICTED.] 
  1.23     All forms of advertising and promotion of horse racing on 
  1.24  which pari-mutuel betting is conducted, except advertising and 
  1.25  promotion published or disseminated solely at a licensed 
  1.26  racetrack, is prohibited.  The racing commission shall take all 
  1.27  necessary steps to ensure that all advertising and promotion of 
  2.1   horse racing on which pari-mutuel betting is conducted is 
  2.2   consistent with this subdivision. 
  2.3      The attorney general shall enforce compliance with this 
  2.4   section and in doing so has the powers set forth in section 8.31.
  2.5      Sec. 3.  [349.192] [ADVERTISING RESTRICTED.] 
  2.6      All forms of lawful gambling advertising and promotion, 
  2.7   except advertising and promotion published or disseminated 
  2.8   solely on the premises where lawful gambling is conducted, is 
  2.9   prohibited.  The board shall take all necessary action to ensure 
  2.10  that all advertising and promotion for lawful gambling is 
  2.11  consistent with this section. 
  2.12     The attorney general shall enforce compliance with this 
  2.13  section and in doing so has the powers set forth in section 8.31.
  2.14     Sec. 4.  Minnesota Statutes 1994, section 349A.02, 
  2.15  subdivision 2, is amended to read: 
  2.16     Subd. 2.  [REMOVAL.] (a) The director may be removed from 
  2.17  that position only by the governor after notice and a hearing if 
  2.18  requested, only for: 
  2.19     (1) violating section 349A.11; 
  2.20     (2) malfeasance, nonfeasance, or misfeasance as defined in 
  2.21  section 351.14, subdivisions 2, 3, and 4; or 
  2.22     (3) failure to perform adequately the duties of the 
  2.23  director.  
  2.24     (b) For the purposes of this subdivision, adequate 
  2.25  performance of the director may be determined by:  
  2.26     (1) gross revenue from the sale of lottery tickets; 
  2.27     (2) efficiency of the administration of lottery operations; 
  2.28  and 
  2.29     (3) public confidence in the integrity of the lottery; and 
  2.30     (4) compliance with advertising requirements in section 
  2.31  349A.09. 
  2.32     A hearing under this subdivision must be conducted by the 
  2.33  governor.  
  2.34     Sec. 5.  Minnesota Statutes 1994, section 349A.02, 
  2.35  subdivision 3, is amended to read: 
  2.36     Subd. 3.  [POWERS AND DUTIES.] In operating the lottery the 
  3.1   director shall exercise the following powers and duties: 
  3.2      (1) adopt rules and game procedures; 
  3.3      (2) issue lottery retailer contracts and rule on appeals of 
  3.4   decisions relating to those contracts; 
  3.5      (3) enter into lottery procurement contracts for the 
  3.6   provision of goods and services to the lottery; 
  3.7      (4) employ personnel as are required to operate the 
  3.8   lottery; 
  3.9      (5) enter into written agreements with one or more 
  3.10  government-authorized lotteries, or with an organization created 
  3.11  and controlled by those lotteries, for the operation, marketing, 
  3.12  and promotion of a joint lottery; and 
  3.13     (6) adopt and publish advertising and promotional materials 
  3.14  consistent with section 349A.09; and 
  3.15     (7) take all necessary steps to ensure the integrity of, 
  3.16  and public confidence in, the state lottery. 
  3.17     Sec. 6.  Minnesota Statutes 1994, section 349A.03, 
  3.18  subdivision 2, is amended to read: 
  3.19     Subd. 2.  [BOARD DUTIES.] The board has the following 
  3.20  duties: 
  3.21     (1) to advise the director on all aspects of the lottery; 
  3.22     (2) to review and comment on rules and game procedures 
  3.23  adopted by the director; 
  3.24     (3) review and comment on lottery procurement 
  3.25  contracts; and 
  3.26     (4) review and comment on agreements between the director 
  3.27  and one or more other lotteries relating to a joint lottery; and 
  3.28     (5) to review and comment on advertising promulgated by the 
  3.29  director at least quarterly to ensure that all advertising is 
  3.30  consistent with the dignity of the state and with section 
  3.31  349A.09. 
  3.32     Sec. 7.  Minnesota Statutes 1994, section 349A.06, 
  3.33  subdivision 5, is amended to read: 
  3.34     Subd. 5.  [RESTRICTIONS ON LOTTERY RETAILERS.] (a) A 
  3.35  lottery retailer may sell lottery tickets only on the premises 
  3.36  described in the contract. 
  4.1      (b) A lottery retailer must prominently display a 
  4.2   certificate issued by the director on the premises where lottery 
  4.3   tickets will be sold. 
  4.4      (c) A lottery retailer must keep a complete set of books of 
  4.5   account, correspondence, and all other records necessary to show 
  4.6   fully the retailer's lottery transactions, and make them 
  4.7   available for inspection by employees of the lottery at all 
  4.8   times during business hours.  The director may require a lottery 
  4.9   retailer to furnish information as the director deems necessary 
  4.10  to carry out the purposes of this chapter, and may require an 
  4.11  audit to be made of the books of account and records.  The 
  4.12  director may select an auditor to perform the audit and may 
  4.13  require the retailer to pay the cost of the audit.  The auditor 
  4.14  has the same right of access to the books of account, 
  4.15  correspondence, and other records as is given to employees of 
  4.16  the lottery. 
  4.17     (d) A contract issued under this section may not be 
  4.18  transferred or assigned. 
  4.19     (e) The director shall require that lottery tickets may be 
  4.20  sold by retailers only for cash.  
  4.21     (f) A lottery retailer must prominently post at the point 
  4.22  of sale of lottery tickets, in a manner approved by the 
  4.23  commissioner of human services, the toll-free telephone number 
  4.24  established by the commissioner of human services in connection 
  4.25  with the compulsive gambling program established under section 
  4.26  245.98. 
  4.27     (g) A lottery retailer must post prominently at or near the 
  4.28  point of ticket sale a notice or notices printed and provided by 
  4.29  the director of the approximate odds of winning each prize in 
  4.30  each game for which the lottery retailer sells tickets. 
  4.31     Sec. 8.  [349A.091] [ADVERTISING PROHIBITED.] 
  4.32     Money in the lottery fund and other public funds may not be 
  4.33  expended to advertise or promote the lottery. 
  4.34     Sec. 9.  Minnesota Statutes 1994, section 349A.10, 
  4.35  subdivision 3, is amended to read: 
  4.36     Subd. 3.  [LOTTERY OPERATIONS.] (a) The director shall 
  5.1   establish a lottery operations account in the lottery fund.  The 
  5.2   director shall pay all costs of operating the lottery, including 
  5.3   payroll costs or amounts transferred to the state treasury for 
  5.4   payroll costs, but not including lottery prizes, from the 
  5.5   lottery operating account.  The director shall credit to the 
  5.6   lottery operations account amounts sufficient to pay the 
  5.7   operating costs of the lottery. 
  5.8      (b) The director may not credit in fiscal year 1993 amounts 
  5.9   to the lottery operations account which when totaled exceed 14.5 
  5.10  percent of gross revenue to the lottery fund.  The director may 
  5.11  not credit in any fiscal year thereafter amounts to the lottery 
  5.12  operations account which when totaled exceed 15 percent of gross 
  5.13  revenue to the lottery fund in that fiscal year.  In computing 
  5.14  total amounts credited to the lottery operations account under 
  5.15  this paragraph the director shall disregard amounts transferred 
  5.16  to or retained by lottery retailers as sales commissions or 
  5.17  other compensation. 
  5.18     (c) The director of the lottery may not expend after July 
  5.19  1, 1991, more than 2-3/4 percent of gross revenues in a fiscal 
  5.20  year for contracts for the preparation, publication, and 
  5.21  placement of advertising. 
  5.22     (d) Except as the director determines, the lottery is not 
  5.23  subject to chapter 16A relating to budgeting, payroll, and the 
  5.24  purchase of goods and services. 
  5.25     Sec. 10.  [SEVERABILITY.] 
  5.26     In accordance with Minnesota Statutes, section 645.20, the 
  5.27  provisions of this law shall be severable.  If a section of the 
  5.28  law relating to advertising for a particular type of gambling is 
  5.29  found unconstitutional, the remaining sections shall remain 
  5.30  valid. 
  5.31     Sec. 11.  [REPEALER.] 
  5.32     Minnesota Statutes 1994, sections 349A.02, subdivision 5; 
  5.33  and 349A.09, are repealed.