1.1                          A bill for an act 
  1.2             relating to gambling; allowing a class B licensee of a 
  1.3             class A racetrack conducting horse racing to conduct 
  1.4             card club activities; changing the membership of the 
  1.5             Minnesota racing commission; requiring a report; 
  1.6             providing appointments; amending Minnesota Statutes 
  1.7             1994, sections 240.01, by adding subdivisions; 240.02, 
  1.8             subdivisions 1, 2, 3, and 4; 240.08, subdivisions 1 
  1.9             and 3; 299L.02, subdivision 3; 541.20; and 541.21; 
  1.10            proposing coding for new law in Minnesota Statutes, 
  1.11            chapter 240. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1994, section 240.01, is 
  1.14  amended by adding a subdivision to read: 
  1.15     Subd. 24.  [CARD CLUB.] "Card club" means a facility or 
  1.16  portion of a facility where the commission has authorized a 
  1.17  licensee to conduct card playing. 
  1.18     Sec. 2.  Minnesota Statutes 1994, section 240.01, is 
  1.19  amended by adding a subdivision to read: 
  1.20     Subd. 25.  [CARD PLAYING.] "Card playing" means an activity 
  1.21  wherein individuals compete and wager with each other utilizing 
  1.22  a 52-unit system comprised of a series of numbers, numbered 2 
  1.23  through 10, and the letters J, Q, K, and A, combined with four 
  1.24  symbols commonly known as hearts, diamonds, spades, and clubs, 
  1.25  wherein each individual unit constitutes the display of one of 
  1.26  the 52 possible combinations.  The symbol commonly known as a 
  1.27  joker may be incorporated into the system. 
  1.28     Sec. 3.  Minnesota Statutes 1994, section 240.01, is 
  2.1   amended by adding a subdivision to read: 
  2.2      Subd. 26.  [UNBANKED.] "Unbanked" means a wagering system 
  2.3   or game where the individual participants compete against each 
  2.4   other and not against the sponsor or house.  In an unbanked 
  2.5   system or game, the sponsor or house may deduct a percentage 
  2.6   from the accumulated wagers and impose other charges for hosting 
  2.7   the activity, but it shall not have an interest in the outcome 
  2.8   of any game.  The sponsor or house may add additional prizes, 
  2.9   awards, or money to any game for promotional purposes. 
  2.10     Sec. 4.  Minnesota Statutes 1994, section 240.02, 
  2.11  subdivision 1, is amended to read: 
  2.12     Subdivision 1.  [COMMISSION.] A Minnesota racing commission 
  2.13  is established with the powers and duties specified in this 
  2.14  section.  The commission consists of nine members appointed by 
  2.15  the governor with the advice and consent of the senate, one 
  2.16  member of the house of representatives appointed by the speaker, 
  2.17  and one senator appointed by the senate committee on rules and 
  2.18  administration.  Not more than five of the members appointed by 
  2.19  the governor may belong to the same political party.  The 
  2.20  governor shall designate the chair of the commission.  
  2.21  Appointments by the governor are for terms of six years.  An 
  2.22  appointment to fill a vacancy in an unexpired term is for the 
  2.23  remainder of the term and is with the advice and consent of the 
  2.24  senate.  
  2.25     Sec. 5.  Minnesota Statutes 1994, section 240.02, 
  2.26  subdivision 2, is amended to read: 
  2.27     Subd. 2.  [QUALIFICATIONS.] A member of the commission 
  2.28  appointed by the governor must have been a resident of Minnesota 
  2.29  for at least five years before appointment, and must have a 
  2.30  background and experience as would qualify for membership on the 
  2.31  commission.  A member appointed by the governor must, before 
  2.32  taking a place on the commission, file a bond in the principal 
  2.33  sum of $100,000 payable to the state, conditioned upon the 
  2.34  faithful performance of duties.  No commissioner, nor any member 
  2.35  of the commissioner's immediate family residing in the same 
  2.36  household, may hold a license issued by the commission or have a 
  3.1   direct or indirect financial interest in a corporation, 
  3.2   partnership, or association which holds a license issued by the 
  3.3   commission.  
  3.4      Sec. 6.  Minnesota Statutes 1994, section 240.02, 
  3.5   subdivision 3, is amended to read: 
  3.6      Subd. 3.  [COMPENSATION.] The compensation of commission 
  3.7   members appointed by the governor for each day spent on 
  3.8   commission activities, when authorized by the commission, shall 
  3.9   be the same as compensation provided for other members of boards 
  3.10  and commissions under section 15.0575, subdivision 3, plus 
  3.11  expenses in the same manner and amount as provided in the 
  3.12  commissioner's plan adopted according to section 43A.18, 
  3.13  subdivision 2.  
  3.14     Sec. 7.  Minnesota Statutes 1994, section 240.02, 
  3.15  subdivision 4, is amended to read: 
  3.16     Subd. 4.  [REMOVAL; VACANCIES.] The removal of commission 
  3.17  members appointed by the governor is as provided in section 
  3.18  15.0575.  Other members serve at the pleasure of the appointing 
  3.19  authority.  
  3.20     Sec. 8.  Minnesota Statutes 1994, section 240.08, 
  3.21  subdivision 1, is amended to read: 
  3.22     Subdivision 1.  [AUTHORITY.] The commission may issue class 
  3.23  C occupational licenses to persons who wish to be employed in 
  3.24  horse racing where pari-mutuel betting is conducted as:  
  3.25     (a) horse owners or lessees; 
  3.26     (b) jockeys or drivers; 
  3.27     (c) exercise riders; 
  3.28     (d) grooms; 
  3.29     (e) trainers and their assistants; 
  3.30     (f) pari-mutuel personnel; 
  3.31     (g) security officers; 
  3.32     (h) other occupations, including occupations related to 
  3.33  card clubs, the commission by rule determines require licensing 
  3.34  to ensure the integrity of horse racing in Minnesota.  
  3.35     Sec. 9.  Minnesota Statutes 1994, section 240.08, 
  3.36  subdivision 3, is amended to read: 
  4.1      Subd. 3.  [INVESTIGATIONS.] The commission shall 
  4.2   investigate each applicant for a class C license to the extent 
  4.3   it deems necessary, and may request the assistance of and may 
  4.4   reimburse the division of gambling enforcement in investigating 
  4.5   applicants.  The commission may by rule require that an 
  4.6   applicant be fingerprinted or furnish the applicant's 
  4.7   fingerprints.  Investigations must be conducted and their costs 
  4.8   paid in the manner prescribed by section 240.06, subdivision 3.  
  4.9   The commission may charge an applicant an investigation fee to 
  4.10  cover the cost of the investigation, and shall from this fee 
  4.11  reimburse the division of gambling enforcement for its share of 
  4.12  the cost of the investigation.  The commission may cooperate 
  4.13  with national and international organizations and agencies in 
  4.14  conducting investigations.  The commission may by rule provide 
  4.15  for examining the qualifications of an applicant for the license 
  4.16  being applied for.  The commission has access to all criminal 
  4.17  history data compiled by the division of gambling enforcement on 
  4.18  class C applicants and licensees. 
  4.19     Sec. 10.  [240.135] [CARD CLUB REVENUE.] 
  4.20     From the amounts derived from charges authorized under 
  4.21  section 12, subdivision 4, the licensee shall set aside the 
  4.22  amounts specified in this section to be used for purse payments 
  4.23  or to be deposited in the breeders fund.  These amounts are in 
  4.24  addition to the breeders fund and purse requirements set forth 
  4.25  elsewhere in this chapter. 
  4.26     (a) For the first $3,000,000 deducted by the licensee in 
  4.27  any year, the licensee shall set aside six percent to be used as 
  4.28  purses. 
  4.29     (b) For amounts between $3,000,000 and $6,000,000, the 
  4.30  licensee shall set aside ten percent to be used as purses. 
  4.31     (c) For amounts in excess of $6,000,000, the licensee shall 
  4.32  set aside 14 percent to be used as purses. 
  4.33     (d) From all amounts deducted, the licensee shall set aside 
  4.34  one percent to be deposited in the breeders fund.  The licensee 
  4.35  and the horseperson's organization representing the majority of 
  4.36  horsepersons who raced in the most recent race meet held at the 
  5.1   racetrack may negotiate percentages different from those stated 
  5.2   herein, provided that such agreement is in writing and filed 
  5.3   with the racing commission. 
  5.4      Sec. 11.  [240.231] [CARD CLUBS; RULES.] 
  5.5      (a) The commission, in cooperation with the attorney 
  5.6   general, shall make rules governing the operation of card clubs 
  5.7   at licensed racetracks and the conduct of card playing at such 
  5.8   clubs.  The rules must designate those occupations at card clubs 
  5.9   that require licensing from the commission under section 240.08. 
  5.10     (b) Rules adopted under paragraph (a) must provide that: 
  5.11     (1) the maximum number of tables used for card playing at a 
  5.12  card club at any one time may not exceed 50; 
  5.13     (2) the opening wager by any player in any card game may 
  5.14  not exceed $10; and 
  5.15     (3) no single wager that increases the total amount staked 
  5.16  in any card game may exceed $25.  
  5.17     Sec. 12.  [240.30] [CARD CLUBS.] 
  5.18     Subdivision 1.  [AUTHORIZATION.] The commission may 
  5.19  authorize a class B operator of a class A racetrack to operate a 
  5.20  card club and offer card playing services to patrons. 
  5.21     Subd. 2.  [SUPERVISION.] The authorized licensee is 
  5.22  responsible for conducting and supervising the card games and 
  5.23  for providing all necessary equipment, services, and personnel.  
  5.24  The licensee must provide all cards and chips used in card 
  5.25  games.  No person other than an employee of a licensee may deal 
  5.26  cards in a card game. 
  5.27     Subd. 3.  [TYPE OF WAGERING.] All card club wagering 
  5.28  activities must be conducted in an unbanked system. 
  5.29     Subd. 4.  [CHARGES.] The authorized licensee shall be 
  5.30  allowed to charge patrons for card playing services by deducting 
  5.31  and retaining money from wagers, by charging a fee based on 
  5.32  playing time, or by any other means authorized by the commission.
  5.33     Subd. 5.  [LIMITATION.] The commission shall not allow a 
  5.34  licensee to operate a card club unless the licensee has 
  5.35  conducted at least 50 days of live racing at a class A facility 
  5.36  within the past 12 months or during the preceding calendar year. 
  6.1      Subd. 6.  [OFF-TRACK WAGERING.] The authority granted under 
  6.2   this section expires on the effective date of any law that 
  6.3   authorizes pari-mutuel wagering on horse racing at any location 
  6.4   other than a licensed racetrack. 
  6.5      Sec. 13.  Minnesota Statutes 1994, section 299L.02, 
  6.6   subdivision 3, is amended to read: 
  6.7      Subd. 3.  [HORSE RACING INVESTIGATIONS.] (a) The director 
  6.8   shall conduct background investigations as provided by law on 
  6.9   all applicants for licenses issued by the Minnesota racing 
  6.10  commission.  
  6.11     (b) The director shall, upon request of the director of the 
  6.12  racing commission, or when the director believes it to be 
  6.13  reasonable and necessary, investigate the activities of a 
  6.14  licensee of the Minnesota racing commission to determine the 
  6.15  licensee's compliance with law and with rules of the commission, 
  6.16  including rules relating to card clubs at licensed racetracks.  
  6.17  The director shall enforce all laws and rules relating to card 
  6.18  clubs at licensed racetracks. 
  6.19     Sec. 14.  Minnesota Statutes 1994, section 541.20, is 
  6.20  amended to read: 
  6.21     541.20 [RECOVERY OF MONEY LOST.] 
  6.22     Every person who, by playing at cards, dice, or other game, 
  6.23  or by betting on the hands or sides of such as are gambling, 
  6.24  shall lose to any person so playing or betting any sum of money 
  6.25  or any goods, and pays or delivers the same, or any part 
  6.26  thereof, to the winner, may sue for and recover such money by a 
  6.27  civil action, before any court of competent jurisdiction.  For 
  6.28  purposes of this section, gambling shall not include pari-mutuel 
  6.29  wagering or card club wagering conducted under a license issued 
  6.30  pursuant to chapter 240, purchase or sale of tickets in the 
  6.31  state lottery, or gambling authorized under chapters 349 and 
  6.32  349A. 
  6.33     Sec. 15.  Minnesota Statutes 1994, section 541.21, is 
  6.34  amended to read: 
  6.35     541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 
  6.36     Every note, bill, bond, mortgage, or other security or 
  7.1   conveyance in which the whole or any part of the consideration 
  7.2   shall be for any money or goods won by gambling or playing at 
  7.3   cards, dice, or any other game whatever, or by betting on the 
  7.4   sides or hands of any person gambling, or for reimbursing or 
  7.5   repaying any money knowingly lent or advanced at the time and 
  7.6   place of such gambling or betting, or lent and advanced for any 
  7.7   gambling or betting to any persons so gambling or betting, shall 
  7.8   be void and of no effect as between the parties to the same, and 
  7.9   as to all persons except such as hold or claim under them in 
  7.10  good faith, without notice of the illegality of the 
  7.11  consideration of such contract or conveyance.  The provisions of 
  7.12  this section shall not apply to:  (1) pari-mutuel wagering or 
  7.13  card club wagering conducted under a license issued pursuant to 
  7.14  chapter 240; (2) purchase of tickets in the state lottery under 
  7.15  chapter 349A; (3) gaming activities conducted pursuant to the 
  7.16  Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.; or (4) 
  7.17  lawful gambling activities permitted under chapter 349. 
  7.18     Sec. 16.  [RULES; REPORT.] 
  7.19     (a) Rules adopted by the Minnesota racing commission under 
  7.20  section 11 may not take effect before March 1, 1997. 
  7.21     (b) The Minnesota racing commission shall by January 1, 
  7.22  1997, report to the governor and governmental operations 
  7.23  committees in the house of representatives and the senate on its 
  7.24  proposed rules under section 11.  
  7.25     Sec. 17.  [EFFECTIVE DATE.] 
  7.26     Sections 1 to 16 are effective the day following final 
  7.27  enactment.