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; amending Minnesota Statutes 
  1.5             1996, sections 240.01, by adding subdivisions; 240.03; 
  1.6             240.08, subdivisions 1 and 3; 240.23; and 299L.02, 
  1.7             subdivision 3; proposing coding for new law in 
  1.8             Minnesota Statutes, chapter 240. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1996, section 240.01, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 24.  [CARD CLUB.] "Card club" means a facility or 
  1.13  portion of a facility where the commission has authorized a 
  1.14  licensee to conduct card playing. 
  1.15     Sec. 2.  Minnesota Statutes 1996, section 240.01, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 25.  [CARD PLAYING.] "Card playing" means an activity 
  1.18  wherein individuals compete and wager with each other utilizing 
  1.19  a 52-unit system comprised of a series of numbers, numbered 2 
  1.20  through 10, and the letters J, Q, K, and A, combined with four 
  1.21  symbols commonly known as hearts, diamonds, spades, and clubs, 
  1.22  wherein each individual unit constitutes the display of one of 
  1.23  the 52 possible combinations.  The symbol commonly known as a 
  1.24  joker may be incorporated into the system. 
  1.25     Sec. 3.  Minnesota Statutes 1996, section 240.01, is 
  1.26  amended by adding a subdivision to read: 
  1.27     Subd. 26.  [UNBANKED.] "Unbanked" means a wagering system 
  2.1   or game where the individual participants compete against each 
  2.2   other and not against the sponsor or house.  In an unbanked 
  2.3   system or game, the sponsor or house may deduct a percentage 
  2.4   from the accumulated wagers and impose other charges for hosting 
  2.5   the activity, but does not have an interest in the outcome of a 
  2.6   game.  The sponsor or house may add additional prizes, awards, 
  2.7   or money to any game for promotional purposes. 
  2.8      Sec. 4.  Minnesota Statutes 1996, section 240.03, is 
  2.9   amended to read: 
  2.10     240.03 [COMMISSION POWERS AND DUTIES.] 
  2.11     The commission has the following powers and duties:  
  2.12     (1) to regulate horse racing in Minnesota to ensure that it 
  2.13  is conducted in the public interest; 
  2.14     (2) to issue licenses as provided in this chapter; 
  2.15     (3) to enforce all laws and rules governing horse racing; 
  2.16     (4) to collect and distribute all taxes provided for in 
  2.17  this chapter; 
  2.18     (5) to conduct necessary investigations and inquiries and 
  2.19  compel the submission of information, documents, and records it 
  2.20  deems necessary to carry out its duties; 
  2.21     (6) to supervise the conduct of pari-mutuel betting on 
  2.22  horse racing; 
  2.23     (7) to employ and supervise personnel under this chapter; 
  2.24     (8) to determine the number of racing days to be held in 
  2.25  the state and at each licensed racetrack; and 
  2.26     (9) to take all necessary steps to ensure the integrity of 
  2.27  racing in Minnesota; and 
  2.28     (10) to regulate card playing activities authorized by 
  2.29  section 240.30.  
  2.30     Sec. 5.  Minnesota Statutes 1996, section 240.08, 
  2.31  subdivision 1, is amended to read: 
  2.32     Subdivision 1.  [AUTHORITY.] The commission may issue class 
  2.33  C occupational licenses to persons who wish to be employed in 
  2.34  horse racing where pari-mutuel betting is conducted as:  
  2.35     (a) horse owners or lessees; 
  2.36     (b) jockeys or drivers; 
  3.1      (c) exercise riders; 
  3.2      (d) grooms; 
  3.3      (e) trainers and their assistants; 
  3.4      (f) pari-mutuel personnel; 
  3.5      (g) security officers; 
  3.6      (h) other occupations, including occupations related to 
  3.7   card clubs, the commission by rule determines require licensing 
  3.8   to ensure the integrity of horse racing in Minnesota.  
  3.9      Sec. 6.  Minnesota Statutes 1996, section 240.08, 
  3.10  subdivision 3, is amended to read: 
  3.11     Subd. 3.  [INVESTIGATIONS.] The commission shall 
  3.12  investigate each applicant for a class C license to the extent 
  3.13  it deems necessary, and may request the assistance of and may 
  3.14  reimburse the division of gambling enforcement in investigating 
  3.15  applicants.  The commission may by rule require that an 
  3.16  applicant be fingerprinted or furnish the applicant's 
  3.17  fingerprints.  Investigations must be conducted and their costs 
  3.18  paid in the manner prescribed by section 240.06, subdivision 3.  
  3.19  The commission may charge an applicant an investigation fee to 
  3.20  cover the cost of the investigation, and shall from this fee 
  3.21  reimburse the division of gambling enforcement for its share of 
  3.22  the cost of the investigation.  The commission may cooperate 
  3.23  with national and international organizations and agencies in 
  3.24  conducting investigations.  The commission may by rule provide 
  3.25  for examining the qualifications of an applicant for the license 
  3.26  being applied for.  The commission has access to all criminal 
  3.27  history data compiled by the division of gambling enforcement on 
  3.28  class C applicants and licensees. 
  3.29     Sec. 7.  [240.135] [CARD CLUB REVENUE.] 
  3.30     From the amounts derived from charges authorized under 
  3.31  section 240.30, subdivision 4, the licensee shall set aside the 
  3.32  amounts specified in this section to be used for purse payments 
  3.33  or to be deposited in the breeders fund.  These amounts are in 
  3.34  addition to the breeders fund and purse requirements set forth 
  3.35  elsewhere in this chapter. 
  3.36     (a) For the first $3,000,000 deducted by the licensee in 
  4.1   any year, the licensee shall set aside six percent to be used as 
  4.2   purses. 
  4.3      (b) For amounts between $3,000,000 and $6,000,000, the 
  4.4   licensee shall set aside ten percent to be used as purses. 
  4.5      (c) For amounts in excess of $6,000,000, the licensee shall 
  4.6   set aside 14 percent to be used as purses. 
  4.7      (d) From all amounts deducted, the licensee shall set aside 
  4.8   one percent to be deposited in the breeders fund.  The licensee 
  4.9   and the horseperson's organization representing the majority of 
  4.10  horsepersons who have raced at the racetrack during the 
  4.11  preceding 12 months may negotiate percentages different from 
  4.12  those stated in this section if the agreement is in writing and 
  4.13  filed with the racing commission. 
  4.14     Sec. 8.  Minnesota Statutes 1996, section 240.23, is 
  4.15  amended to read: 
  4.16     240.23 [RULEMAKING AUTHORITY.] 
  4.17     The commission has the authority, in addition to all other 
  4.18  rulemaking authority granted elsewhere in this chapter to 
  4.19  promulgate rules governing:  
  4.20     (a) the conduct of horse races held at licensed racetracks 
  4.21  in Minnesota, including but not limited to the rules of racing, 
  4.22  standards of entry, operation of claiming races, filing and 
  4.23  handling of objections, carrying of weights, and declaration of 
  4.24  official results; 
  4.25     (b) wire communications between the premises of a licensed 
  4.26  racetrack and any place outside the premises; 
  4.27     (c) information on horse races which is sold on the 
  4.28  premises of a licensed racetrack; 
  4.29     (d) liability insurance which it may require of all class 
  4.30  A, class B, and class D licensees; 
  4.31     (e) the auditing of the books and records of a licensee by 
  4.32  an auditor employed or appointed by the commission; 
  4.33     (f) emergency action plans maintained by licensed 
  4.34  racetracks and their periodic review; 
  4.35     (g) safety, security, and sanitation of stabling facilities 
  4.36  at licensed racetracks; 
  5.1      (h) entry fees and other funds received by a licensee in 
  5.2   the course of conducting racing which the commission determines 
  5.3   must be placed in escrow accounts; 
  5.4      (i) affirmative action in employment and contracting by 
  5.5   class A, class B, and class D licensees; and 
  5.6      (j) any other aspect of horse racing or pari-mutuel betting 
  5.7   which in its opinion affects the integrity of racing or the 
  5.8   public health, welfare, or safety; and 
  5.9      (k) card playing activities authorized by section 240.30.  
  5.10     Rules of the commission are subject to chapter 14, the 
  5.11  Administrative Procedure Act. 
  5.12     Sec. 9.  [240.231] [CARD CLUBS; RULES.] 
  5.13     (a) The commission shall make rules governing the operation 
  5.14  of card clubs at licensed racetracks and the conduct of card 
  5.15  playing at such clubs.  The rules must designate those 
  5.16  occupations at card clubs that require licensing from the 
  5.17  commission under section 240.08. 
  5.18     (b) Rules adopted under paragraph (a) must provide that: 
  5.19     (1) the maximum number of tables used for card playing at a 
  5.20  card club at any one time may not exceed 50; 
  5.21     (2) the opening wager by any player in any card game may 
  5.22  not exceed $10; and 
  5.23     (3) no single wager that increases the total amount staked 
  5.24  in any card game may exceed $25. 
  5.25     Sec. 10.  [240.30] [CARD CLUBS.] 
  5.26     Subdivision 1.  [AUTHORIZATION.] The commission may 
  5.27  authorize a class B operator of a class A racetrack to operate a 
  5.28  card club and offer card playing services to patrons. 
  5.29     Subd. 2.  [SUPERVISION.] The authorized licensee is 
  5.30  responsible for conducting and supervising the card games and 
  5.31  for providing all necessary equipment, services, and personnel. 
  5.32     Subd. 3.  [TYPE OF WAGERING.] All card club wagering 
  5.33  activities must be conducted in an unbanked system. 
  5.34     Subd. 4.  [CHARGES.] The authorized licensee may charge 
  5.35  patrons for card playing services by deducting and retaining 
  5.36  money from wagers, by charging a fee based on playing time, or 
  6.1   by any other means authorized by the commission. 
  6.2      Subd. 5.  [LIMITATION.] The commission shall not allow a 
  6.3   licensee to operate a card club unless the licensee has 
  6.4   conducted at least 50 days of live racing at a class A facility 
  6.5   within the past 12 months or during the preceding calendar year. 
  6.6      Sec. 11.  Minnesota Statutes 1996, section 299L.02, 
  6.7   subdivision 3, is amended to read: 
  6.8      Subd. 3.  [HORSE RACING INVESTIGATIONS.] (a) The director 
  6.9   shall conduct background investigations as provided by law on 
  6.10  all applicants for licenses issued by the Minnesota racing 
  6.11  commission.  
  6.12     (b) The director shall, upon request of the director of the 
  6.13  racing commission, or when the director believes it to be 
  6.14  reasonable and necessary, investigate the activities of a 
  6.15  licensee of the Minnesota racing commission to determine the 
  6.16  licensee's compliance with law and with rules of the commission, 
  6.17  including rules relating to card clubs at licensed racetracks.  
  6.18  The director shall enforce all laws and rules relating to card 
  6.19  clubs at licensed racetracks. 
  6.20     Sec. 12.  [EFFECTIVE DATE.] 
  6.21     Sections 1 to 11 are effective the day following final 
  6.22  enactment.