1.1                          A bill for an act 
  1.2             relating to gaming; amending various provisions 
  1.3             relating to lawful gambling; amending and providing 
  1.4             definitions; making technical, clarifying, and 
  1.5             conforming changes; providing for sports-themed 
  1.6             tipboard games; providing for electronic bingo; 
  1.7             regulating lottery service businesses; authorizing 
  1.8             certain video games of chance and social skill games; 
  1.9             amending Minnesota Statutes 2004, sections 349.12, 
  1.10            subdivisions 5, 25, 33, 34, by adding subdivisions; 
  1.11            349.15, subdivision 1; 349.151, subdivisions 4, 4b, by 
  1.12            adding subdivisions; 349.152, subdivision 2; 349.153; 
  1.13            349.154, subdivision 1; 349.155, subdivision 3; 
  1.14            349.16, subdivision 8; 349.161, subdivision 5; 
  1.15            349.162, subdivisions 1, 4, 5; 349.163, subdivision 3; 
  1.16            349.1635, subdivision 4; 349.166, subdivisions 1, 2; 
  1.17            349.167, subdivision 1; 349.168, subdivision 8; 
  1.18            349.17, subdivisions 5, 7; 349.1711, subdivisions 1, 
  1.19            2; 349.173; 349.18, subdivision 1; 349.19, 
  1.20            subdivisions 4, 10; 349.211, subdivision 2c, by adding 
  1.21            a subdivision; 349.2125, subdivision 1; 349.213; 
  1.22            609.75, subdivisions 1, 8; 609.761, subdivision 3; 
  1.23            proposing coding for new law in Minnesota Statutes, 
  1.24            chapter 299L; repealing Minnesota Statutes 2004, 
  1.25            sections 349.162, subdivision 3; 349.164; 349.17, 
  1.26            subdivision 1. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28                             ARTICLE 1 
  1.29                          LAWFUL GAMBLING 
  1.30     Section 1.  Minnesota Statutes 2004, section 349.12, is 
  1.31  amended by adding a subdivision to read: 
  1.32     Subd. 3c.  [BAR BINGO.] "Bar bingo" is a bingo occasion 
  1.33  conducted at a permitted premises in an area where intoxicating 
  1.34  liquor or 3.2 percent malt beverages are sold and where the 
  1.35  licensed organization conducts another form of lawful gambling. 
  1.36     Sec. 2.  Minnesota Statutes 2004, section 349.12, 
  2.1   subdivision 5, is amended to read: 
  2.2      Subd. 5.  [BINGO OCCASION.] "Bingo occasion" means a single 
  2.3   gathering or session at which a series of one or more successive 
  2.4   bingo games is played.  There is no limit on the number of games 
  2.5   conducted during a bingo occasion but a bingo occasion must not 
  2.6   last longer than eight consecutive hours. 
  2.7      Sec. 3.  Minnesota Statutes 2004, section 349.12, is 
  2.8   amended by adding a subdivision to read: 
  2.9      Subd. 12a.  [ELECTRONIC BINGO DEVICE.] "Electronic bingo 
  2.10  device" means an electronic device used by a bingo player to 
  2.11  monitor bingo paper sheets purchased at the time and place of an 
  2.12  organization's bingo occasion and which (1) provides a means for 
  2.13  bingo players to input numbers announced by a bingo caller; (2) 
  2.14  compares the numbers entered by the player to the bingo faces 
  2.15  previously stored in the memory of the device; and (3) 
  2.16  identifies a winning bingo pattern. 
  2.17  Electronic bingo device does not mean any device into which 
  2.18  coin, currency, or tokens are inserted to activate play. 
  2.19     Sec. 4.  Minnesota Statutes 2004, section 349.12, 
  2.20  subdivision 25, is amended to read: 
  2.21     Subd. 25.  [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 
  2.22  or more of the following:  
  2.23     (1) any expenditure by or contribution to a 501(c)(3) or 
  2.24  festival organization, as defined in subdivision 15a, provided 
  2.25  that the organization and expenditure or contribution are in 
  2.26  conformity with standards prescribed by the board under section 
  2.27  349.154, which standards must apply to both types of 
  2.28  organizations in the same manner and to the same extent; 
  2.29     (2) a contribution to or expenditure for goods and services 
  2.30  for an individual or family suffering from poverty, 
  2.31  homelessness, or physical or mental disability, which is used to 
  2.32  relieve the effects of that poverty, homelessness, or disability 
  2.33  suffering; 
  2.34     (3) a contribution to an individual for treatment for 
  2.35  delayed posttraumatic stress syndrome or a contribution to a 
  2.36  program recognized by the Minnesota Department of Human Services 
  3.1   for the education, prevention, or treatment of compulsive 
  3.2   problem gambling; 
  3.3      (4) a contribution to or expenditure on a public or private 
  3.4   nonprofit educational institution registered with or accredited 
  3.5   by this state or any other state; 
  3.6      (5) a contribution to a scholarship fund for defraying the 
  3.7   cost of education to individuals where the funds are awarded 
  3.8   through an open and fair selection process; 
  3.9      (6) activities by an organization or a government entity 
  3.10  which recognize humanitarian or military service to the United 
  3.11  States, the state of Minnesota, or a community, subject to rules 
  3.12  of the board, provided that the rules must not include mileage 
  3.13  reimbursements in the computation of the per diem reimbursement 
  3.14  limit and must impose no aggregate annual limit on the amount of 
  3.15  reasonable and necessary expenditures made to support: 
  3.16     (i) members of a military marching or color guard unit for 
  3.17  activities conducted within the state; 
  3.18     (ii) members of an organization solely for services 
  3.19  performed by the members at funeral services; or 
  3.20     (iii) members of military marching, color guard, or honor 
  3.21  guard units may be reimbursed for participating in color guard, 
  3.22  honor guard, or marching unit events within the state or states 
  3.23  contiguous to Minnesota at a per participant rate of up to $35 
  3.24  per diem; or 
  3.25     (iv) active military personnel and their immediate family 
  3.26  members in need of support services; 
  3.27     (7) recreational, community, and athletic facilities and 
  3.28  activities intended primarily for persons under age 21, provided 
  3.29  that such facilities and activities do not discriminate on the 
  3.30  basis of gender and the organization complies with section 
  3.31  349.154; 
  3.32     (8) payment of local taxes authorized under this chapter, 
  3.33  taxes imposed by the United States on receipts from lawful 
  3.34  gambling, the taxes imposed by section 297E.02, subdivisions 1, 
  3.35  4, 5, and 6, and the tax imposed on unrelated business income by 
  3.36  section 290.05, subdivision 3; 
  4.1      (9) payment of real estate taxes and assessments on 
  4.2   permitted gambling premises wholly owned by the licensed 
  4.3   organization paying the taxes, or wholly leased by a licensed 
  4.4   veterans organization under a national charter recognized under 
  4.5   section 501(c)(19) of the Internal Revenue Code, not to exceed: 
  4.6      (i) for premises used for bingo, the amount that an 
  4.7   organization may expend under board rules on rent for bingo; and 
  4.8      (ii) $35,000 per year for premises used for other forms of 
  4.9   lawful gambling; 
  4.10     (10) a contribution to the United States, this state or any 
  4.11  of its political subdivisions, or any agency or instrumentality 
  4.12  thereof other than a direct contribution to a law enforcement or 
  4.13  prosecutorial agency; 
  4.14     (11) a contribution to or expenditure by a nonprofit 
  4.15  organization which is a church or body of communicants gathered 
  4.16  in common membership for mutual support and edification in 
  4.17  piety, worship, or religious observances; 
  4.18     (12) payment of the reasonable costs of an audit required 
  4.19  in section 297E.06, subdivision 4, provided the annual audit is 
  4.20  filed in a timely manner with the Department of Revenue and paid 
  4.21  prior to June 30, 2006; 
  4.22     (13) a contribution to or expenditure on a wildlife 
  4.23  management project that benefits the public at-large, provided 
  4.24  that the state agency with authority over that wildlife 
  4.25  management project approves the project before the contribution 
  4.26  or expenditure is made; 
  4.27     (14) expenditures, approved by the commissioner of natural 
  4.28  resources, by an organization for grooming and maintaining 
  4.29  snowmobile trails and all-terrain vehicle trails that are (1) 
  4.30  grant-in-aid trails established under section 85.019, or (2) 
  4.31  other trails open to public use, including purchase or lease of 
  4.32  equipment for this purpose; a contribution to or expenditure on 
  4.33  projects or activities approved by the commissioner of natural 
  4.34  resources for: 
  4.35     (i) wildlife management projects that benefit the public at 
  4.36  large; 
  5.1      (ii) grant-in-aid trail maintenance and grooming 
  5.2   established under sections 84.83 and 84.927 and other trails 
  5.3   open to public use, including purchase or lease of equipment for 
  5.4   this purpose; and 
  5.5      (iii) supplies and materials for safety training and 
  5.6   educational programs coordinated by the Department of Natural 
  5.7   Resources including the Enforcement Division; 
  5.8      (15) (14) conducting nutritional programs, food shelves, 
  5.9   and congregate dining programs primarily for persons who are age 
  5.10  62 or older or disabled; 
  5.11     (16) (15) a contribution to a community arts organization, 
  5.12  or an expenditure to sponsor arts programs in the community, 
  5.13  including but not limited to visual, literary, performing, or 
  5.14  musical arts; 
  5.15     (17) (16) an expenditure by a licensed veterans 
  5.16  organization for payment of water, fuel for heating, 
  5.17  electricity, and sewer costs for a building wholly owned or 
  5.18  wholly leased by and used as the primary headquarters of the 
  5.19  licensed veterans organization; 
  5.20     (18) (17) expenditure by a licensed veterans organization 
  5.21  of up to $5,000 in a calendar year in net costs to the 
  5.22  organization for meals and other membership events, limited to 
  5.23  members and spouses, held in recognition of military service.  
  5.24  No more than $5,000 can be expended in total per calendar year 
  5.25  under this clause by all licensed veterans organizations sharing 
  5.26  the same veterans post home; or 
  5.27     (19) (18) payment of fees authorized under this chapter 
  5.28  imposed by the state of Minnesota to conduct lawful gambling in 
  5.29  Minnesota; or 
  5.30     (19) a contribution or expenditure to honor an individual's 
  5.31  humanitarian service as demonstrated through philanthropy or 
  5.32  volunteerism to the United States, this state, or local 
  5.33  community. 
  5.34     (b) Notwithstanding paragraph (a), "lawful purpose" does 
  5.35  not include: 
  5.36     (1) any expenditure made or incurred for the purpose of 
  6.1   influencing the nomination or election of a candidate for public 
  6.2   office or for the purpose of promoting or defeating a ballot 
  6.3   question; 
  6.4      (2) any activity intended to influence an election or a 
  6.5   governmental decision-making process; 
  6.6      (3) the erection, acquisition, improvement, expansion, 
  6.7   repair, or maintenance of real property or capital assets owned 
  6.8   or leased by an organization, unless the board has first 
  6.9   specifically authorized the expenditures after finding that (i) 
  6.10  the real property or capital assets will be used exclusively for 
  6.11  one or more of the purposes in paragraph (a); (ii) with respect 
  6.12  to expenditures for repair or maintenance only, that the 
  6.13  property is or will be used extensively as a meeting place or 
  6.14  event location by other nonprofit organizations or community or 
  6.15  service groups and that no rental fee is charged for the use; 
  6.16  (iii) with respect to expenditures, including a mortgage payment 
  6.17  or other debt service payment, for erection or acquisition only, 
  6.18  that the erection or acquisition is necessary to replace with a 
  6.19  comparable building, a building owned by the organization and 
  6.20  destroyed or made uninhabitable by fire or natural 
  6.21  disaster catastrophe, provided that the expenditure may be only 
  6.22  for that part of the replacement cost not reimbursed by 
  6.23  insurance; (iv) with respect to expenditures, including a 
  6.24  mortgage payment or other debt service payment, for erection or 
  6.25  acquisition only, that the erection or acquisition is necessary 
  6.26  to replace with a comparable building a building owned by the 
  6.27  organization that was acquired from the organization by eminent 
  6.28  domain or sold by the organization to a purchaser that the 
  6.29  organization reasonably believed would otherwise have acquired 
  6.30  the building by eminent domain, provided that the expenditure 
  6.31  may be only for that part of the replacement cost that exceeds 
  6.32  the compensation received by the organization for the building 
  6.33  being replaced; or (v) with respect to an expenditure to bring 
  6.34  an existing building into compliance with the Americans with 
  6.35  Disabilities Act under item (ii), an organization has the option 
  6.36  to apply the amount of the board-approved expenditure to the 
  7.1   erection or acquisition of a replacement building that is in 
  7.2   compliance with the Americans with Disabilities Act; 
  7.3      (4) an expenditure by an organization which is a 
  7.4   contribution to a parent organization, foundation, or affiliate 
  7.5   of the contributing organization, if the parent organization, 
  7.6   foundation, or affiliate has provided to the contributing 
  7.7   organization within one year of the contribution any money, 
  7.8   grants, property, or other thing of value; 
  7.9      (5) a contribution by a licensed organization to another 
  7.10  licensed organization unless the board has specifically 
  7.11  authorized the contribution.  The board must authorize such a 
  7.12  contribution when requested to do so by the contributing 
  7.13  organization unless it makes an affirmative finding that the 
  7.14  contribution will not be used by the recipient organization for 
  7.15  one or more of the purposes in paragraph (a); or 
  7.16     (6) a contribution to a statutory or home rule charter 
  7.17  city, county, or town by a licensed organization with the 
  7.18  knowledge that the governmental unit intends to use the 
  7.19  contribution for a pension or retirement fund. 
  7.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  7.21  following final enactment except that the amendment to paragraph 
  7.22  (a), clause (9), is effective January 1, 2006. 
  7.23     Sec. 5.  Minnesota Statutes 2004, section 349.12, 
  7.24  subdivision 33, is amended to read: 
  7.25     Subd. 33.  [RAFFLE.] "Raffle" means a game in which a 
  7.26  participant buys a ticket for a chance at a prize with the 
  7.27  winner determined by a random drawing to take place at a 
  7.28  location and date printed upon the ticket or other certificate 
  7.29  of participation in an event where the prize determination is 
  7.30  based on a method of random selection and all entries have an 
  7.31  equal chance of selection.  The ticket or certificate of 
  7.32  participation must include the location, date, and time of the 
  7.33  selection of the winning entries.  
  7.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  7.35  following final enactment. 
  7.36     Sec. 6.  Minnesota Statutes 2004, section 349.12, 
  8.1   subdivision 34, is amended to read: 
  8.2      Subd. 34.  [TIPBOARD.] "Tipboard" means a board, placard or 
  8.3   other device containing a seal that conceals the winning number 
  8.4   or symbol, and that serves as the game flare for a tipboard 
  8.5   game, or a board or placard that is not required to contain a 
  8.6   seal, but for which the winning numbers are determined in whole 
  8.7   or in part by the outcome of one or more professional sporting 
  8.8   events. 
  8.9      Sec. 7.  Minnesota Statutes 2004, section 349.15, 
  8.10  subdivision 1, is amended to read: 
  8.11     Subdivision 1.  [EXPENDITURE RESTRICTIONS.] Gross profits 
  8.12  from lawful gambling may be expended only for lawful purposes or 
  8.13  allowable expenses as authorized by the membership of the 
  8.14  conducting organization at a monthly meeting of the 
  8.15  organization's membership.  Provided that no more than 70 
  8.16  percent of the gross profit less the tax imposed under section 
  8.17  297E.02, subdivision 1, from bingo, and no more than 55 60 
  8.18  percent of the gross profit from other forms of lawful gambling, 
  8.19  may be expended biennially during the term of license for 
  8.20  allowable expenses related to lawful gambling.  
  8.21     <b>[EFFECTIVE DATE.]</b> This section is effective for licenses 
  8.22  issued after June 30, 2006. 
  8.23     Sec. 8.  Minnesota Statutes 2004, section 349.151, 
  8.24  subdivision 4, is amended to read: 
  8.25     Subd. 4.  [POWERS AND DUTIES.] (a) The board has the 
  8.26  following powers and duties:  
  8.27     (1) to regulate lawful gambling to ensure it is conducted 
  8.28  in the public interest; 
  8.29     (2) to issue licenses to organizations, distributors, 
  8.30  distributor salespersons, bingo halls, manufacturers, linked 
  8.31  bingo game providers, and gambling managers; 
  8.32     (3) to collect and deposit license, permit, and 
  8.33  registration fees due under this chapter; 
  8.34     (4) to receive reports required by this chapter and inspect 
  8.35  all premises, records, books, and other documents of 
  8.36  organizations, distributors, manufacturers, and linked bingo 
  9.1   game providers, and bingo halls to insure compliance with all 
  9.2   applicable laws and rules; 
  9.3      (5) to make rules authorized by this chapter; 
  9.4      (6) to register gambling equipment and issue registration 
  9.5   stamps; 
  9.6      (7) to provide by rule for the mandatory posting by 
  9.7   organizations conducting lawful gambling of rules of play and 
  9.8   the odds and/or house percentage on each form of lawful 
  9.9   gambling; 
  9.10     (8) to report annually to the governor and legislature on 
  9.11  its activities and on recommended changes in the laws governing 
  9.12  gambling; 
  9.13     (9) to impose civil penalties of not more than $500 per 
  9.14  violation on organizations, distributors, distributor 
  9.15  salespersons, manufacturers, bingo halls, linked bingo game 
  9.16  providers, and gambling managers for failure to comply with any 
  9.17  provision of this chapter or any rule or order of the board; 
  9.18     (10) to issue premises permits to organizations licensed to 
  9.19  conduct lawful gambling; 
  9.20     (11) to delegate to the director the authority to issue or 
  9.21  deny license and premises permit applications and renewals under 
  9.22  criteria established by the board; 
  9.23     (12) to delegate to the director the authority to approve 
  9.24  or deny fund loss requests, contribution of gambling funds to 
  9.25  another licensed organization, and property expenditure requests 
  9.26  under criteria established by the board; 
  9.27     (13) to suspend or revoke licenses and premises permits of 
  9.28  organizations, distributors, distributor salespersons, 
  9.29  manufacturers, bingo halls, linked bingo game providers, or 
  9.30  gambling managers as provided in this chapter; 
  9.31     (13) (14) to register employees of organizations licensed 
  9.32  to conduct lawful gambling; 
  9.33     (14) (15) to require fingerprints from persons determined 
  9.34  by board rule to be subject to fingerprinting; 
  9.35     (15) (16) to delegate to a compliance review group of the 
  9.36  board the authority to investigate alleged violations, issue 
 10.1   consent orders, and initiate contested cases on behalf of the 
 10.2   board; 
 10.3      (16) (17) to order organizations, distributors, distributor 
 10.4   salespersons, manufacturers, bingo halls, linked bingo game 
 10.5   providers, and gambling managers to take corrective actions; and 
 10.6      (17) (18) to take all necessary steps to ensure the 
 10.7   integrity of and public confidence in lawful gambling.  
 10.8      (b) The board, or director if authorized to act on behalf 
 10.9   of the board, may by citation assess any organization, 
 10.10  distributor, employee eligible to make sales on behalf of a 
 10.11  distributor salesperson, manufacturer, bingo hall licensee, 
 10.12  linked bingo game provider, or gambling manager a civil penalty 
 10.13  of not more than $500 per violation for a failure to comply with 
 10.14  any provision of this chapter or any rule adopted or order 
 10.15  issued by the board.  Any organization, distributor, bingo hall 
 10.16  licensee distributor salesperson, gambling manager, linked bingo 
 10.17  game provider, or manufacturer assessed a civil penalty under 
 10.18  this paragraph may request a hearing before the board.  Appeals 
 10.19  of citations imposing a civil penalty are not subject to the 
 10.20  provisions of the Administrative Procedure Act.  
 10.21     (c) All penalties received by the board must be deposited 
 10.22  in the general fund. 
 10.23     (d) All fees imposed by the board under sections 349.16 to 
 10.24  349.167 must be deposited in the state treasury and credited to 
 10.25  a lawful gambling regulation account in the special revenue 
 10.26  fund.  Receipts in this account are available for the operations 
 10.27  of the board up to the amount authorized in biennial 
 10.28  appropriations from the legislature. 
 10.29     Sec. 9.  Minnesota Statutes 2004, section 349.151, 
 10.30  subdivision 4b, is amended to read: 
 10.31     Subd. 4b.  [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 
 10.32  The board may by rule authorize but not require the use of 
 10.33  pull-tab dispensing devices. 
 10.34     (b) Rules adopted under paragraph (a): 
 10.35     (1) must limit the number of pull-tab dispensing devices on 
 10.36  any permitted premises to three; and 
 11.1      (2) must limit the use of pull-tab dispensing devices to a 
 11.2   permitted premises which is (i) a licensed premises for on-sales 
 11.3   of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
 11.4   licensed bingo hall that allows gambling only by premises where 
 11.5   bingo is conducted and admission is restricted to persons 18 
 11.6   years or older. 
 11.7      (c) Notwithstanding rules adopted under paragraph (b), 
 11.8   pull-tab dispensing devices may be used in establishments 
 11.9   licensed for the off-sale of intoxicating liquor, other than 
 11.10  drugstores and general food stores licensed under section 
 11.11  340A.405, subdivision 1. 
 11.12     Sec. 10.  Minnesota Statutes 2004, section 349.151, is 
 11.13  amended by adding a subdivision to read: 
 11.14     Subd. 4c.  [ELECTRONIC BINGO.] (a) The board may by rule 
 11.15  authorize but not require the use of electronic bingo devices. 
 11.16     (b) Rules adopted under paragraph (a): 
 11.17     (1) must limit the number of bingo faces that can be played 
 11.18  using an electronic bingo device to 36; 
 11.19     (2) must require that an electronic bingo device be used 
 11.20  with corresponding bingo paper sheets; 
 11.21     (3) must require that the electronic bingo device site 
 11.22  system have dial-up capability to permit the board to remotely 
 11.23  monitor the operation of the device and the internal accounting 
 11.24  systems; and 
 11.25     (4) must prohibit the price of a face played on an 
 11.26  electronic bingo device from being less than the price of a face 
 11.27  on a bingo paper sheet sold at the same occasion. 
 11.28     Sec. 11.  Minnesota Statutes 2004, section 349.151, is 
 11.29  amended by adding a subdivision to read: 
 11.30     Subd. 4d.  [SPORTS-THEMED TIPBOARD RULES.] The board may 
 11.31  adopt rules for the conduct of tipboards for which the winning 
 11.32  numbers are determined in whole or in part by the outcome of one 
 11.33  or more professional sporting events.  The rules must provide 
 11.34  for operation procedures, internal control standards, posted 
 11.35  information, records, and reports.  The rules must provide for 
 11.36  the award of prizes, method of payout, wagers, determination of 
 12.1   winners, and the specifications of these tipboards.  Cash or 
 12.2   merchandise prizes may be awarded in these tipboards. 
 12.3      Sec. 12.  Minnesota Statutes 2004, section 349.152, 
 12.4   subdivision 2, is amended to read: 
 12.5      Subd. 2.  [DUTIES OF DIRECTOR.] The director has the 
 12.6   following duties: 
 12.7      (1) to carry out gambling policy established by the board; 
 12.8      (2) to employ and supervise personnel of the board; 
 12.9      (3) to advise and make recommendations to the board on 
 12.10  rules, policy, and legislative initiatives; 
 12.11     (4) to approve or deny operational requests from licensees 
 12.12  as delegated by the board; 
 12.13     (5) to issue licenses and premises permits as authorized by 
 12.14  the board; 
 12.15     (5) (6) to issue cease and desist orders; 
 12.16     (6) (7) to make recommendations to the board on license 
 12.17  issuance, denial, censure, suspension and revocation, civil 
 12.18  penalties, and corrective action the board imposes; 
 12.19     (7) (8) to ensure that board rules, policy, and decisions 
 12.20  are adequately and accurately conveyed to the board's licensees; 
 12.21     (8) (9) to conduct investigations, inspections, compliance 
 12.22  reviews, and audits under this chapter; and 
 12.23     (9) (10) to issue subpoenas to compel the attendance of 
 12.24  witnesses and the production of documents, books, records, and 
 12.25  other evidence relating to an investigation, compliance review, 
 12.26  or audit the director is authorized to conduct. 
 12.27     Sec. 13.  Minnesota Statutes 2004, section 349.153, is 
 12.28  amended to read: 
 12.29     349.153 [CONFLICT OF INTEREST.] 
 12.30     (a) A person may not serve on the board, be the director, 
 12.31  or be an employee of the board who has an interest in any 
 12.32  corporation, association, limited liability company, or 
 12.33  partnership that is licensed by the board as a distributor, 
 12.34  manufacturer, or linked bingo game provider, or bingo hall under 
 12.35  section 349.164.  
 12.36     (b) A member of the board, the director, or an employee of 
 13.1   the board may not accept employment with, receive compensation 
 13.2   directly or indirectly from, or enter into a contractual 
 13.3   relationship with an organization that conducts lawful gambling, 
 13.4   a distributor, a linked bingo game provider, a bingo hall, or a 
 13.5   manufacturer while employed with or a member of the board or 
 13.6   within one year after terminating employment with or leaving the 
 13.7   board. 
 13.8      (c) A distributor, bingo hall, manufacturer, linked bingo 
 13.9   game provider, or organization licensed to conduct lawful 
 13.10  gambling may not hire a former employee, director, or member of 
 13.11  the Gambling Control Board for one year after the employee, 
 13.12  director, or member has terminated employment with or left the 
 13.13  Gambling Control Board.  
 13.14     Sec. 14.  Minnesota Statutes 2004, section 349.154, 
 13.15  subdivision 1, is amended to read: 
 13.16     Subdivision 1.  [STANDARDS FOR CERTAIN ORGANIZATIONS.] The 
 13.17  board shall by rule prescribe Standards that must be met by any 
 13.18  licensed organization that is a 501(c)(3) organization.  The 
 13.19  standards must provide include: 
 13.20     (1) operating standards for the organization, including a 
 13.21  maximum percentage or percentages not to exceed 30 percent of 
 13.22  the organization's total expenditures that may be expended for 
 13.23  the organization's administration and operation fund-raising as 
 13.24  reported biennially to and in a format prescribed by the board; 
 13.25  and 
 13.26     (2) standards for any expenditure by the organization of 
 13.27  net profits from lawful gambling, including a requirement that 
 13.28  the expenditure be related to the primary purpose of the 
 13.29  organization or meet the criteria of a lawful purpose donation 
 13.30  as defined in section 349.12, subdivision 25. 
 13.31     <b>[EFFECTIVE DATE.]</b> This section is effective for licenses 
 13.32  issued after June 30, 2006. 
 13.33     Sec. 15.  Minnesota Statutes 2004, section 349.155, 
 13.34  subdivision 3, is amended to read: 
 13.35     Subd. 3.  [MANDATORY DISQUALIFICATIONS.] (a) In the case of 
 13.36  licenses for manufacturers, distributors, distributor 
 14.1   salespersons, bingo halls, linked bingo game providers, and 
 14.2   gambling managers, the board may not issue or renew a license 
 14.3   under this chapter, and shall revoke a license under this 
 14.4   chapter, if the applicant or licensee, or a director, officer, 
 14.5   partner, governor, or person in a supervisory or management 
 14.6   position of the applicant or licensee: 
 14.7      (1) has ever been convicted of a felony or a crime 
 14.8   involving gambling; 
 14.9      (2) has ever been convicted of (i) assault, (ii) a criminal 
 14.10  violation involving the use of a firearm, or (iii) making 
 14.11  terroristic threats; 
 14.12     (3) is or has ever been connected with or engaged in an 
 14.13  illegal business; 
 14.14     (4) owes $500 or more in delinquent taxes as defined in 
 14.15  section 270.72; 
 14.16     (5) had a sales and use tax permit revoked by the 
 14.17  commissioner of revenue within the past two years; or 
 14.18     (6) after demand, has not filed tax returns required by the 
 14.19  commissioner of revenue.  The board may deny or refuse to renew 
 14.20  a license under this chapter, and may revoke a license under 
 14.21  this chapter, if any of the conditions in this paragraph are 
 14.22  applicable to an affiliate or direct or indirect holder of more 
 14.23  than a five percent financial interest in the applicant or 
 14.24  licensee.  
 14.25     (b) In the case of licenses for organizations, the board 
 14.26  may not issue or renew a license under this chapter, and shall 
 14.27  revoke a license under this chapter, if the organization, or an 
 14.28  officer or member of the governing body of the organization:  
 14.29     (1) has been convicted of a felony or gross misdemeanor 
 14.30  within the five years before the issuance or renewal of the 
 14.31  license involving theft or fraud; 
 14.32     (2) has ever been convicted of a crime involving gambling; 
 14.33  or 
 14.34     (3) has had a license issued by the board or director 
 14.35  permanently revoked for violation of law or board rule. 
 14.36     Sec. 16.  Minnesota Statutes 2004, section 349.16, 
 15.1   subdivision 8, is amended to read: 
 15.2      Subd. 8.  [LOCAL INVESTIGATION FEE.] A statutory or home 
 15.3   rule charter city or county notified under section 349.213, 
 15.4   subdivision 2, may assess an investigation fee on organizations 
 15.5   or bingo halls applying for or renewing a premises permit or a 
 15.6   bingo hall license.  An investigation fee may not exceed the 
 15.7   following limits: 
 15.8      (1) for cities of the first class, $500; 
 15.9      (2) for cities of the second class, $250; 
 15.10     (3) for all other cities, $100; and 
 15.11     (4) for counties, $375. 
 15.12     Sec. 17.  Minnesota Statutes 2004, section 349.161, 
 15.13  subdivision 5, is amended to read: 
 15.14     Subd. 5.  [PROHIBITION.] (a) No distributor, distributor 
 15.15  salesperson, or other employee of a distributor, may also be a 
 15.16  wholesale distributor of alcoholic beverages or an employee of a 
 15.17  wholesale distributor of alcoholic beverages. 
 15.18     (b) No distributor, distributor salesperson, or any 
 15.19  representative, agent, affiliate, or other employee of a 
 15.20  distributor, may:  (1) be involved in the conduct of lawful 
 15.21  gambling by an organization; (2) keep or assist in the keeping 
 15.22  of an organization's financial records, accounts, and 
 15.23  inventories; or (3) prepare or assist in the preparation of tax 
 15.24  forms and other reporting forms required to be submitted to the 
 15.25  state by an organization. 
 15.26     (c) No distributor, distributor salesperson, or any 
 15.27  representative, agent, affiliate, or other employee of a 
 15.28  distributor may provide a lessor of gambling premises any 
 15.29  compensation, gift, gratuity, premium, or other thing of value. 
 15.30     (d) No distributor, distributor salesperson, or any 
 15.31  representative, agent, affiliate, or other employee of a 
 15.32  distributor may provide an employee or agent of the organization 
 15.33  any compensation, gift, gratuity, premium, or other thing of 
 15.34  value greater than $25 per organization in a calendar year. 
 15.35     (e) No distributor, distributor salesperson, or any 
 15.36  representative, agent, affiliate, or other employee of a 
 16.1   distributor may participate in any gambling activity at any 
 16.2   gambling site or premises where gambling equipment purchased 
 16.3   from that distributor or distributor salesperson is being used 
 16.4   in the conduct of lawful gambling. 
 16.5      (e) (f) No distributor, distributor salesperson, or any 
 16.6   representative, agent, affiliate, or other employee of a 
 16.7   distributor may alter or modify any gambling equipment, except 
 16.8   to add a "last ticket sold" prize sticker. 
 16.9      (f) (g) No distributor, distributor salesperson, or any 
 16.10  representative, agent, affiliate, or other employee of a 
 16.11  distributor may:  (1) recruit a person to become a gambling 
 16.12  manager of an organization or identify to an organization a 
 16.13  person as a candidate to become gambling manager for the 
 16.14  organization; or (2) identify for an organization a potential 
 16.15  gambling location. 
 16.16     (g) (h) No distributor or distributor salesperson may 
 16.17  purchase gambling equipment for resale to a person for use 
 16.18  within the state from any person not licensed as a manufacturer 
 16.19  under section 349.163, except for gambling equipment returned 
 16.20  from an organization licensed under section 349.16, or exempt or 
 16.21  excluded from licensing under section 349.166. 
 16.22     (h) (i) No distributor or distributor salesperson may sell 
 16.23  gambling equipment to any person for use in Minnesota other than 
 16.24  (i) a licensed organization or organization excluded or exempt 
 16.25  from licensing, or (ii) the governing body of an Indian tribe. 
 16.26     (i) (j) No distributor or distributor salesperson may sell 
 16.27  or otherwise provide a pull-tab or tipboard deal with the symbol 
 16.28  required by section 349.163, subdivision 5, paragraph (h), 
 16.29  visible on the flare to any person other than in Minnesota to a 
 16.30  licensed organization or organization exempt from licensing. 
 16.31     Sec. 18.  Minnesota Statutes 2004, section 349.162, 
 16.32  subdivision 1, is amended to read: 
 16.33     Subdivision 1.  [STAMP REGISTRATION REQUIRED.] (a) A 
 16.34  distributor may not sell, transfer, furnish, or otherwise 
 16.35  provide to a person, and no person may purchase, borrow, accept, 
 16.36  or acquire from a distributor gambling equipment for use within 
 17.1   the state unless the equipment has been registered with the 
 17.2   board and has a registration stamp affixed, except for gambling 
 17.3   equipment not stamped by the manufacturer pursuant to section 
 17.4   349.163, subdivision 5 or 8.  Each stamp must bear a 
 17.5   registration number assigned by the board.  
 17.6      (b) A manufacturer must return all unused registration 
 17.7   stamps in its possession to the board by February 1, 1995.  No 
 17.8   manufacturer may possess unaffixed registration stamps after 
 17.9   February 1, 1995. 
 17.10     (c) After February 1, 1996, no person may possess any 
 17.11  unplayed pull-tab or tipboard deals with a registration stamp 
 17.12  affixed to the flare or any unplayed paddleticket cards with a 
 17.13  registration stamp affixed to the master flare.  This paragraph 
 17.14  does not apply to unplayed pull-tab or tipboard deals with a 
 17.15  registration stamp affixed to the flare, or to unplayed 
 17.16  paddleticket cards with a registration stamp affixed to the 
 17.17  master flare, if the deals or cards are identified on a list of 
 17.18  existing inventory submitted by a licensed organization or a 
 17.19  licensed distributor, in a format prescribed by the commissioner 
 17.20  of revenue, to the commissioner of revenue on or before February 
 17.21  1, 1996 or the Department of Revenue in a manner prescribed by 
 17.22  the board or the Department of Revenue.  Gambling equipment kept 
 17.23  in violation of this paragraph subdivision is contraband under 
 17.24  section 349.2125. 
 17.25     Sec. 19.  Minnesota Statutes 2004, section 349.162, 
 17.26  subdivision 4, is amended to read: 
 17.27     Subd. 4.  [PROHIBITION.] (a) No person other than a 
 17.28  licensed distributor or licensed manufacturer may possess 
 17.29  unaffixed registration stamps issued by the board for the 
 17.30  purpose of registering gambling equipment. 
 17.31     (b) Unless otherwise provided in this chapter, no person 
 17.32  may possess gambling equipment that has not been stamped and 
 17.33  registered.  
 17.34     (c) On and after January 1, 1991, no distributor may: 
 17.35     (1) sell a bingo hard card or paper sheet that does not 
 17.36  bear an individual number; or 
 18.1      (2) sell a package of bingo paper sheets that does not 
 18.2   contain bingo paper sheets in numerical order. 
 18.3      Sec. 20.  Minnesota Statutes 2004, section 349.162, 
 18.4   subdivision 5, is amended to read: 
 18.5      Subd. 5.  [SALES FROM FACILITIES.] (a) All gambling 
 18.6   equipment purchased or possessed by a licensed distributor for 
 18.7   resale to any person for use in Minnesota must, prior to the 
 18.8   equipment's resale, be unloaded into a storage facility located 
 18.9   in Minnesota which the distributor owns or leases; and which has 
 18.10  been registered, in advance and in writing, with the Division of 
 18.11  Alcohol and Gambling Enforcement as a storage facility of the 
 18.12  distributor.  All unregistered gambling equipment and all 
 18.13  unaffixed registration stamps owned by, or in the possession of, 
 18.14  a licensed distributor in the state of Minnesota shall be stored 
 18.15  at a storage facility which has been registered with the 
 18.16  Division of Alcohol and Gambling Enforcement.  No gambling 
 18.17  equipment may be moved from the facility unless the gambling 
 18.18  equipment has been first registered with the board, except for 
 18.19  gambling equipment not stamped by the manufacturer pursuant to 
 18.20  section 349.163, subdivision 5 or 8 or the Department of Revenue.
 18.21     (b) Notwithstanding section 349.163, subdivisions 5, 6, and 
 18.22  8, a licensed manufacturer may ship into Minnesota approved or 
 18.23  unapproved gambling equipment if the licensed manufacturer ships 
 18.24  the gambling equipment to a Minnesota storage facility that is:  
 18.25  (1) owned or leased by the licensed manufacturer; and (2) 
 18.26  registered, in advance and in writing, with the Division of 
 18.27  Alcohol and Gambling Enforcement as a manufacturer's storage 
 18.28  facility.  No gambling equipment may be shipped into Minnesota 
 18.29  to the manufacturer's registered storage facility unless the 
 18.30  shipment of the gambling equipment is reported to the Department 
 18.31  of Revenue in a manner prescribed by the department.  No 
 18.32  gambling equipment may be moved from the storage facility unless 
 18.33  the gambling equipment is sold to a licensed distributor and is 
 18.34  otherwise in conformity with this chapter, is shipped to an 
 18.35  out-of-state site and the shipment is reported to the Department 
 18.36  of Revenue in a manner prescribed by the department, or is 
 19.1   otherwise sold and shipped as permitted by board rule. 
 19.2      (c) All storage facilities owned, leased, used, or operated 
 19.3   by a licensed distributor or manufacturer may be entered upon 
 19.4   and inspected by the employees of the Division of Alcohol and 
 19.5   Gambling Enforcement, the Division of Alcohol and Gambling 
 19.6   Enforcement director's authorized representatives, employees of 
 19.7   the Gambling Control Board or its authorized representatives, 
 19.8   employees of the Department of Revenue, or authorized 
 19.9   representatives of the director of the Division of Special Taxes 
 19.10  of the Department of Revenue during reasonable and regular 
 19.11  business hours.  Obstruction of, or failure to permit, entry and 
 19.12  inspection is cause for revocation or suspension of a 
 19.13  manufacturer's or distributor's licenses and permits issued 
 19.14  under this chapter.  
 19.15     (d) Unregistered gambling equipment and unaffixed 
 19.16  registration stamps found at any location in Minnesota other 
 19.17  than the manufacturing plant of a licensed manufacturer or a 
 19.18  registered storage facility are contraband under section 
 19.19  349.2125.  This paragraph does not apply: 
 19.20     (1) to unregistered gambling equipment being transported in 
 19.21  interstate commerce between locations outside this state, if the 
 19.22  interstate shipment is verified by a bill of lading or other 
 19.23  valid shipping document; and 
 19.24     (2) to gambling equipment not stamped by the manufacturer 
 19.25  pursuant to section 349.163, subdivision 5 or 8 registered with 
 19.26  the Department of Revenue for distribution to the tribal casinos.
 19.27     Sec. 21.  Minnesota Statutes 2004, section 349.163, 
 19.28  subdivision 3, is amended to read: 
 19.29     Subd. 3.  [PROHIBITED SALES.] (a) A manufacturer may not: 
 19.30     (1) sell gambling equipment for use or resale within the 
 19.31  state to any person not licensed as a distributor, except that 
 19.32  gambling equipment used exclusively in a linked bingo game may 
 19.33  be sold to a licensed linked bingo provider; or 
 19.34     (2) sell gambling equipment to a distributor in this state 
 19.35  that has the same serial number as another item of gambling 
 19.36  equipment of the same type that is sold by that manufacturer for 
 20.1   use or resale in this state. 
 20.2      (b) A manufacturer, affiliate of a manufacturer, or person 
 20.3   acting as a representative or agent of a manufacturer may not 
 20.4   provide a lessor of gambling premises or an appointed official 
 20.5   any compensation, gift, gratuity, premium, contribution, or 
 20.6   other thing of value. 
 20.7      (c) A manufacturer may not sell or otherwise provide a 
 20.8   pull-tab or tipboard deal with the symbol required by 
 20.9   subdivision 5, paragraph (h) (d), imprinted on the flare to any 
 20.10  person other than a licensed distributor unless the manufacturer 
 20.11  first renders the symbol permanently invisible. 
 20.12     Sec. 22.  Minnesota Statutes 2004, section 349.1635, 
 20.13  subdivision 4, is amended to read: 
 20.14     Subd. 4.  [PROHIBITION.] (a) Except for services associated 
 20.15  exclusively with a linked bingo game, a linked bingo game 
 20.16  provider may not participate or assist in the conduct of lawful 
 20.17  gambling by an organization.  No linked bingo game provider may: 
 20.18     (1) also be licensed as a bingo hall or hold any financial 
 20.19  or managerial interest in a premises leased for the conduct of 
 20.20  bingo hall; 
 20.21     (2) also be licensed as a distributor or hold any financial 
 20.22  or managerial interest in a distributor; 
 20.23     (3) sell or lease linked bingo game equipment to any person 
 20.24  not licensed as an organization; 
 20.25     (4) purchase gambling equipment to be used exclusively in a 
 20.26  linked bingo game from any person not licensed as a manufacturer 
 20.27  under section 349.163; and 
 20.28     (5) provide an organization, a lessor of gambling premises, 
 20.29  or an appointed official any compensation, gift, gratuity, 
 20.30  premium, or contribution. 
 20.31     (b) Employees of the board and the Division of Alcohol and 
 20.32  Gambling Enforcement may inspect the books, records, inventory, 
 20.33  and business premises of a licensed linked bingo game provider 
 20.34  without notice during the normal business hours of the linked 
 20.35  bingo game provider.  The board may charge a linked bingo game 
 20.36  provider for the actual cost of conducting scheduled or 
 21.1   unscheduled inspections of the licensee's facilities. 
 21.2      Sec. 23.  Minnesota Statutes 2004, section 349.166, 
 21.3   subdivision 1, is amended to read: 
 21.4      Subdivision 1.  [EXCLUSIONS.] (a) Bingo, with the exception 
 21.5   of linked bingo games, may be conducted without a license and 
 21.6   without complying with sections 349.168, subdivisions 1 and 2; 
 21.7   349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and 
 21.8   349.19, if it is conducted:  
 21.9      (1) by an organization in connection with a county fair, 
 21.10  the state fair, or a civic celebration and is not conducted for 
 21.11  more than 12 consecutive days and is limited to no more than 
 21.12  four separate applications for activities applied for and 
 21.13  approved in a calendar year; or 
 21.14     (2) by an organization that conducts four or fewer bingo 
 21.15  occasions in a calendar year.  
 21.16     An organization that holds a license to conduct lawful 
 21.17  gambling under this chapter may not conduct bingo under this 
 21.18  subdivision.  
 21.19     (b) Bingo may be conducted within a nursing home or a 
 21.20  senior citizen housing project or by a senior citizen 
 21.21  organization if the prizes for a single bingo game do not exceed 
 21.22  $10, total prizes awarded at a single bingo occasion do not 
 21.23  exceed $200, no more than two bingo occasions are held by the 
 21.24  organization or at the facility each week, only members of the 
 21.25  organization or residents of the nursing home or housing project 
 21.26  are allowed to play in a bingo game, no compensation is paid for 
 21.27  any persons who conduct the bingo, and a manager is appointed to 
 21.28  supervise the bingo.  Bingo conducted under this paragraph is 
 21.29  exempt from sections 349.11 to 349.23, and the board may not 
 21.30  require an organization that conducts bingo under this 
 21.31  paragraph, or the manager who supervises the bingo, to register 
 21.32  or file a report with the board.  The gross receipts from bingo 
 21.33  conducted under the limitations of this subdivision are exempt 
 21.34  from taxation under chapter 297A.  
 21.35     (c) Raffles may be conducted by an organization without a 
 21.36  license and without complying with sections 349.154 to 349.165 
 22.1   and 349.167 to 349.213 registering with the board if the value 
 22.2   of all raffle prizes awarded by the organization in a calendar 
 22.3   year does not exceed $1,500.  
 22.4      (d) Except as provided in paragraph (b), the organization 
 22.5   must maintain all required records of excluded gambling activity 
 22.6   for 3-1/2 years. 
 22.7      Sec. 24.  Minnesota Statutes 2004, section 349.166, 
 22.8   subdivision 2, is amended to read: 
 22.9      Subd. 2.  [EXEMPTIONS.] (a) Lawful gambling, with the 
 22.10  exception of linked bingo games, may be conducted by an 
 22.11  organization without a license and without complying with 
 22.12  sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4 
 22.13  and 5; 349.18, subdivision 1; and 349.19 if: 
 22.14     (1) the organization conducts lawful gambling on five or 
 22.15  fewer days in a calendar year; 
 22.16     (2) the organization does not award more than $50,000 in 
 22.17  prizes for lawful gambling in a calendar year; 
 22.18     (3) the organization pays a fee of $50 to the board, 
 22.19  notifies the board in writing not less than 30 days before each 
 22.20  lawful gambling occasion of the date and location of the 
 22.21  occasion, or 60 days for an occasion held in the case of a city 
 22.22  of the first class, the types of lawful gambling to be 
 22.23  conducted, the prizes to be awarded, and receives an exemption 
 22.24  identification number; 
 22.25     (4) the organization notifies the local government unit 30 
 22.26  days before the lawful gambling occasion, or 60 days for an 
 22.27  occasion held in a city of the first class; 
 22.28     (5) the organization purchases all gambling equipment and 
 22.29  supplies from a licensed distributor; and 
 22.30     (6) the organization reports to the board, on a single-page 
 22.31  form prescribed by the board, within 30 days of each gambling 
 22.32  occasion, the gross receipts, prizes, expenses, expenditures of 
 22.33  net profits from the occasion, and the identification of the 
 22.34  licensed distributor from whom all gambling equipment was 
 22.35  purchased.  
 22.36     (b) If the organization fails to file a timely report as 
 23.1   required by paragraph (a), clause (3) or (6), the board shall 
 23.2   not issue any authorization, license, or permit to the 
 23.3   organization to conduct lawful gambling on an exempt, excluded, 
 23.4   or licensed basis until the report has been filed and the 
 23.5   organization may be subject to penalty as determined by the 
 23.6   board. 
 23.7      (c) Merchandise prizes must be valued at their fair market 
 23.8   value. 
 23.9      (d) Organizations that qualify to conduct exempt raffles 
 23.10  under paragraph (a), are exempt from section 349.173, paragraph 
 23.11  (b), clause (2), if the raffle tickets are sold only in 
 23.12  combination with an organization's membership or a ticket for an 
 23.13  organization's membership dinner and are not included with any 
 23.14  other raffle conducted under the exempt permit. 
 23.15     (e) Unused pull-tab and tipboard deals must be returned to 
 23.16  the distributor within seven working days after the end of the 
 23.17  lawful gambling occasion.  The distributor must accept and pay a 
 23.18  refund for all returns of unopened and undamaged deals returned 
 23.19  under this paragraph. 
 23.20     (e) (f) An organization that is exempt from taxation on 
 23.21  purchases of pull-tabs and tipboards under section 297E.02, 
 23.22  subdivision 4, paragraph (b), clause (4), must return to the 
 23.23  distributor any tipboard or pull-tab deal no part of which is 
 23.24  used at the lawful gambling occasion for which it was purchased 
 23.25  by the organization. 
 23.26     (f) (g) The organization must maintain all required records 
 23.27  of exempt gambling activity for 3-1/2 years. 
 23.28     Sec. 25.  Minnesota Statutes 2004, section 349.167, 
 23.29  subdivision 1, is amended to read: 
 23.30     Subdivision 1.  [GAMBLING MANAGER REQUIRED.] (a) All lawful 
 23.31  gambling conducted by a licensed organization must be under the 
 23.32  supervision of a gambling manager.  A gambling manager 
 23.33  designated by an organization to supervise lawful gambling is 
 23.34  responsible for the gross receipts of the organization and for 
 23.35  its conduct in compliance with all laws and rules.  A person 
 23.36  designated as a gambling manager shall maintain a fidelity 
 24.1   dishonesty bond in the sum of $10,000 in favor of the 
 24.2   organization conditioned on the faithful performance of the 
 24.3   manager's duties.  The terms of the bond must provide that 
 24.4   notice be given to the board in writing not less than 30 days 
 24.5   before its cancellation.  
 24.6      (b) A person may not act as a gambling manager for more 
 24.7   than one organization. 
 24.8      (c) An organization may not conduct lawful gambling without 
 24.9   having a gambling manager.  
 24.10     (d) An organization may not have more than one gambling 
 24.11  manager at any time. 
 24.12     Sec. 26.  Minnesota Statutes 2004, section 349.168, 
 24.13  subdivision 8, is amended to read: 
 24.14     Subd. 8.  [PERCENTAGE OF GROSS PROFIT PAID.] (a) A licensed 
 24.15  organization may pay a percentage of the gross profit from 
 24.16  raffle ticket sales to a nonprofit organization that sells 
 24.17  raffle tickets for the licensed organization. 
 24.18     (b) A licensed organization may compensate an employee of 
 24.19  the organization for the sale of gambling equipment at a bar 
 24.20  operation if the frequency of the activity is one day or less 
 24.21  per week and the games are limited to 30 chances or less per 
 24.22  game.  For purposes of this paragraph, an employee shall not be 
 24.23  a lessor, an employee of the lessor, or an immediate family 
 24.24  member of the lessor. 
 24.25     Sec. 27.  Minnesota Statutes 2004, section 349.17, 
 24.26  subdivision 5, is amended to read: 
 24.27     Subd. 5.  [BINGO CARDS AND SHEETS.] (a) The board shall by 
 24.28  rule require that all licensed organizations:  (1) conduct bingo 
 24.29  only using liquid daubers on bingo paper sheets that bear an 
 24.30  individual number recorded by the distributor or linked bingo 
 24.31  game provider; and (2) use each bingo paper sheet for no more 
 24.32  than one bingo occasion.  In lieu of the requirements of clause 
 24.33  (2), a licensed organization may electronically record the sale 
 24.34  of each bingo hard card or paper sheet at each bingo occasion 
 24.35  using an electronic recording system approved by the board. 
 24.36     (b) The requirements of paragraph (a) shall only apply to a 
 25.1   licensed organization that received gross receipts from bingo in 
 25.2   excess of $150,000 in the organization's last fiscal year. 
 25.3      Sec. 28.  Minnesota Statutes 2004, section 349.17, 
 25.4   subdivision 7, is amended to read: 
 25.5      Subd. 7.  [NOON HOUR BAR BINGO.] Notwithstanding 
 25.6   subdivisions 1 and 3, An organization may conduct bar bingo 
 25.7   subject to the following restrictions: 
 25.8      (1) the bingo is conducted only between the hours of 11:00 
 25.9   a.m. and 2:00 p.m.; 
 25.10     (2) the bingo is conducted at a site the organization owns 
 25.11  or leases and which has a license for the sale of intoxicating 
 25.12  beverages on the premises under chapter 340A; 
 25.13     (3) the bingo is limited to one progressive bingo game per 
 25.14  site as defined by section 349.211, subdivision 2; 
 25.15     (4) (2) the bingo is conducted using only bingo paper 
 25.16  sheets purchased from a licensed distributor; 
 25.17     (5) if the premises are leased, the (3) no rent may not 
 25.18  exceed $25 per day for each day bingo is conducted be paid for a 
 25.19  bar bingo occasion; and 
 25.20     (6) (4) linked bingo games may not be conducted at a noon 
 25.21  hour bar bingo occasion. 
 25.22     Sec. 29.  Minnesota Statutes 2004, section 349.1711, 
 25.23  subdivision 1, is amended to read: 
 25.24     Subdivision 1.  [SALE OF TICKETS.] Tipboard games must be 
 25.25  played using only tipboard tickets that are either (1) attached 
 25.26  to a placard and arranged in columns or rows, or (2) separate 
 25.27  from the placard and contained in a receptacle while the game is 
 25.28  in play.  The placard serves as the game flare.  The placard 
 25.29  must contain a seal that conceals the winning number or symbol.  
 25.30  When a tipboard ticket is purchased and opened from a game 
 25.31  containing more than 30 tickets, each player having a tipboard 
 25.32  ticket with one or more predesignated numbers or symbols must 
 25.33  sign the placard at the line indicated by the number or symbol 
 25.34  on the tipboard ticket. 
 25.35     Sec. 30.  Minnesota Statutes 2004, section 349.1711, 
 25.36  subdivision 2, is amended to read: 
 26.1      Subd. 2.  [DETERMINATION OF WINNERS.] When the 
 26.2   predesignated numbers or symbols have all been purchased, or all 
 26.3   of the tipboard tickets for that game have been sold, the seal 
 26.4   must be removed to reveal a number or symbol that determines 
 26.5   which of the predesignated numbers or symbols is the winning 
 26.6   number or symbol.  A tipboard may also contain consolation 
 26.7   winners, or winning chances that are determined in whole or in 
 26.8   part by the outcome of one or more professional sporting events, 
 26.9   that need not be determined by the use of the seal. 
 26.10     Sec. 31.  Minnesota Statutes 2004, section 349.173, is 
 26.11  amended to read: 
 26.12     349.173 [CONDUCT OF RAFFLES.] 
 26.13     (a) Raffle tickets or certificates of participation at a 
 26.14  minimum must list the three most expensive prizes to be 
 26.15  awarded.  If additional prizes will be awarded that are not 
 26.16  contained on the raffle ticket, the raffle ticket must contain 
 26.17  the statement "A complete list of additional prizes is available 
 26.18  upon request.", a complete list of additional prizes must be 
 26.19  publicly posted at the event and copies of the complete prize 
 26.20  list made available upon request.  Notwithstanding section 
 26.21  349.12, subdivision 33, raffles conducted under the exemptions 
 26.22  in section 349.166 may use tickets that contain only the 
 26.23  sequential number of the raffle ticket and no other information 
 26.24  if the organization makes a list of prizes and a statement of 
 26.25  other relevant information required by rule available to persons 
 26.26  purchasing tickets and if tickets are only sold at the event and 
 26.27  on the date when the tickets are drawn. 
 26.28     (b) Raffles must be conducted in a manner that ensures: 
 26.29     (1) all entries in the raffle have an equal chance of 
 26.30  selection; 
 26.31     (2) entry in the raffle is not conditional upon any other 
 26.32  purchase; 
 26.33     (3) the method of selection is conducted in a public forum; 
 26.34     (4) the method of selection cannot be manipulated or based 
 26.35  on the outcome of an event not under the control of the 
 26.36  organization; 
 27.1      (5) physical presence at the raffle is not a requirement to 
 27.2   win; and 
 27.3      (6) all sold and unsold tickets or certificates of 
 27.4   participation are accounted for. 
 27.5      (c) Methods of selecting winning entries from a raffle 
 27.6   other than prescribed in rule may be used with the prior written 
 27.7   approval of the board. 
 27.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 27.9   following final enactment. 
 27.10     Sec. 32.  Minnesota Statutes 2004, section 349.18, 
 27.11  subdivision 1, is amended to read: 
 27.12     Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED; RENT 
 27.13  LIMITATIONS.] (a) An organization may conduct lawful gambling 
 27.14  only on premises it owns or leases.  Leases must be on a form 
 27.15  prescribed by the board.  Except for leases entered into before 
 27.16  August 1, 1994, the term of the lease may not begin before the 
 27.17  effective date of the premises permit and must expire on the 
 27.18  same day that the premises permit expires.  Copies of all leases 
 27.19  must be made available to employees of the board and the 
 27.20  Division of Alcohol and Gambling Enforcement on request.  The 
 27.21  board may prescribe by rule limits on the amount of rent which 
 27.22  an organization may pay to a lessor for premises leased for 
 27.23  bingo.  Any rule adopted by the board limiting the amount of 
 27.24  rent to be paid may only be effective for leases entered into, 
 27.25  or renewed, after the effective date of the rule. 
 27.26     (b) Rent paid by an organization for leased premises for 
 27.27  the conduct of pull-tabs, tipboards, and paddlewheels is subject 
 27.28  to the following limits: 
 27.29     (1) for booth operations, including booth operations where 
 27.30  a pull-tab dispensing device is located, booth operations where 
 27.31  a bar operation is also conducted, and booth operations where 
 27.32  both a pull-tab dispensing device is located and a bar operation 
 27.33  is also conducted, the maximum rent is: 
 27.34     (i) in any month where the organization's gross profit at 
 27.35  those premises does not exceed $4,000, up to $400; and 
 27.36     (ii) in any month where the organization's gross profit at 
 28.1   those premises exceeds $4,000, up to $400 plus not more than ten 
 28.2   percent of the gross profit for that month in excess of $4,000; 
 28.3      (2) for bar operations, including bar operations where a 
 28.4   pull-tab dispensing device is located but not including bar 
 28.5   operations subject to clause (1), and for locations where only a 
 28.6   pull-tab dispensing device is located: 
 28.7      (i) in any month where the organization's gross profit at 
 28.8   those premises does not exceed $1,000, up to $200; and 
 28.9      (ii) in any month where the organization's gross profit at 
 28.10  those premises exceeds $1,000, up to $200 plus not more than 20 
 28.11  percent of the gross profit for that month in excess of $1,000; 
 28.12     (3) a lease not governed by clauses (1) and (2) must be 
 28.13  approved by the board before becoming effective; 
 28.14     (4) total rent paid to a lessor from all organizations from 
 28.15  leases governed by clause (1) may not exceed $1,750 per month.  
 28.16  Total rent paid to a lessor from all organizations from leases 
 28.17  governed by clause (2) may not exceed $2,500 per month. 
 28.18     (c) Rent paid by an organization for leased premises for 
 28.19  the conduct of bingo is subject to the following limits: 
 28.20     (1) not more than ten percent of the monthly gross profit 
 28.21  from all lawful gambling activities held during bingo occasions 
 28.22  excluding bar bingo or at a rate based on a cost per square foot 
 28.23  not to exceed ten percent of a comparable cost per square foot 
 28.24  for leased space as approved by the director, whichever is less; 
 28.25  and 
 28.26     (2) no rent may be paid for bar bingo. 
 28.27     (d) Amounts paid as rent under leases are all-inclusive.  
 28.28  No other services or expenses provided or contracted by the 
 28.29  lessor may be paid by the organization, including, but not 
 28.30  limited to, trash removal, janitorial and cleaning services, 
 28.31  snow removal, lawn services, electricity, heat, security, 
 28.32  security monitoring, storage, other utilities or services, and, 
 28.33  in the case of bar operations, cash shortages, unless approved 
 28.34  by the director.  Any other expenditure made by an organization 
 28.35  that is related to a leased premises must be approved by the 
 28.36  director.  An organization may not provide any compensation or 
 29.1   thing of value to a lessor or the lessor's employees from any 
 29.2   fund source other than its gambling account.  Rent payments may 
 29.3   not be made to an individual. 
 29.4      (d) (e) Notwithstanding paragraph (b), an organization may 
 29.5   pay a lessor for food or beverages or meeting room rental if the 
 29.6   charge made is comparable to similar charges made to other 
 29.7   individuals or groups. 
 29.8      (e) (f) No person, distributor, manufacturer, lessor, 
 29.9   linked bingo game provider, or organization other than the 
 29.10  licensed organization leasing the space may conduct any activity 
 29.11  other than the sale or serving of food and beverages on the 
 29.12  leased premises during times when lawful gambling is being 
 29.13  conducted on the premises. 
 29.14     (f) (g) At a site where the leased premises consists of an 
 29.15  area on or behind a bar at which alcoholic beverages are sold 
 29.16  and employees of the lessor are employed by the organization as 
 29.17  pull-tab sellers at the site, pull-tabs and tipboard tickets may 
 29.18  be sold and redeemed by those employees at any place on or 
 29.19  behind the bar, but the tipboards and receptacles for pull-tabs 
 29.20  and cash drawers for lawful gambling receipts must be maintained 
 29.21  only within the leased premises. 
 29.22     (g) (h) Employees of a lessor or employees of an 
 29.23  organization may participate in lawful gambling on the premises 
 29.24  provided (1) if pull-tabs or tipboards are sold, the 
 29.25  organization voluntarily posts, or is required to post, the 
 29.26  major prizes as specified in section 349.172; and (2) any 
 29.27  employee of the lessor participating in lawful gambling is not a 
 29.28  gambling employee for the organization conducting lawful 
 29.29  gambling on the premises. 
 29.30     (h) (i) A gambling employee may purchase pull-tabs or 
 29.31  tipboards at the site of the employee's place of employment 
 29.32  provided: 
 29.33     (1) the organization voluntarily posts, or is required to 
 29.34  post, the major prizes for pull-tab or tipboard games as 
 29.35  specified in section 349.172; and 
 29.36     (2) the employee is not involved in the sale of pull-tabs 
 30.1   or tipboards at that site. 
 30.2      (i) (j) At a leased site where an organization uses a 
 30.3   paddlewheel consisting of 30 numbers or less or a tipboard 
 30.4   consisting of 30 tickets or less, tickets may be sold throughout 
 30.5   the permitted premises, but winning tickets must be redeemed, 
 30.6   the paddlewheel must be located, and the tipboard seal must be 
 30.7   opened within the leased premises. 
 30.8      (j) (k) A member of the lessor's immediate family may not 
 30.9   be a compensated employee of an organization leasing space at 
 30.10  the premises.  For purposes of this paragraph, a "member of the 
 30.11  immediate family" is a spouse, parent, child, or sibling. 
 30.12     Sec. 33.  Minnesota Statutes 2004, section 349.19, 
 30.13  subdivision 4, is amended to read: 
 30.14     Subd. 4.  [DISCREPANCIES.] If at a bingo occasion a 
 30.15  discrepancy of more than $20 $50 is found between the gross 
 30.16  receipts as reported by the checkers and the gross receipts 
 30.17  determined by adding the cash receipts, the discrepancy must be 
 30.18  reported to the board within five days of the bingo occasion.  
 30.19     Sec. 34.  Minnesota Statutes 2004, section 349.19, 
 30.20  subdivision 10, is amended to read: 
 30.21     Subd. 10.  [PULL-TAB RECORDS.] (a) The board shall by rule 
 30.22  require a licensed organization to require each winner of a 
 30.23  pull-tab prize of $50 or more to present identification in the 
 30.24  form of a driver's license, Minnesota identification card, or 
 30.25  other identification the board deems sufficient to allow the 
 30.26  identification and tracing of the winner.  The rule must require 
 30.27  the organization to retain winning pull-tabs of $50 or more, and 
 30.28  the identification of the winner of the pull-tab, for 3-1/2 
 30.29  years. 
 30.30     (b) An organization must maintain separate cash banks for 
 30.31  each deal of pull-tabs unless (1) two or more deals are 
 30.32  commingled in a single receptacle pull-tab dispensing device, or 
 30.33  (2) the organization uses a cash register, of a type approved by 
 30.34  the board, which records all sales of pull-tabs by separate 
 30.35  deals. 
 30.36     (c) The board shall: 
 31.1      (1) by rule adopt minimum technical standards for cash 
 31.2   registers that may be used by organizations, and shall approve 
 31.3   for use by organizations any cash register that meets the 
 31.4   standards,; and 
 31.5      (2) before allowing an organization to use a cash register 
 31.6   that commingles receipts from several different pull-tab games 
 31.7   in play, adopt rules that define how cash registers may be used 
 31.8   and that establish a procedure for organizations to reconcile 
 31.9   all pull-tab games in play at the end of each month. 
 31.10     Sec. 35.  Minnesota Statutes 2004, section 349.211, 
 31.11  subdivision 2c, is amended to read: 
 31.12     Subd. 2c.  [TIPBOARD PRIZES.] The maximum prize which may 
 31.13  be awarded for a tipboard ticket is $500 $599, not including any 
 31.14  cumulative or carryover prizes.  Cumulative or carryover prizes 
 31.15  in tipboard games shall not exceed $2,500.  
 31.16     Sec. 36.  Minnesota Statutes 2004, section 349.211, is 
 31.17  amended by adding a subdivision to read: 
 31.18     Subd. 2d.  [SPORTS-THEMED TIPBOARDS.] The maximum prize 
 31.19  which may be awarded for a tipboard for which the winning 
 31.20  numbers are determined in whole or in part by the outcome of one 
 31.21  or more professional sporting events is $500.  A chance for such 
 31.22  a board may not be sold for more than $10. 
 31.23     Sec. 37.  Minnesota Statutes 2004, section 349.2125, 
 31.24  subdivision 1, is amended to read: 
 31.25     Subdivision 1.  [CONTRABAND DEFINED.] The following are 
 31.26  contraband: 
 31.27     (1) all pull-tab or tipboard deals or paddleticket cards 
 31.28  not stamped or bar coded in accordance with this chapter or 
 31.29  chapter 297E; 
 31.30     (2) all pull-tab or tipboard deals in the possession of any 
 31.31  unlicensed person, firm, or organization, whether stamped or 
 31.32  unstamped; 
 31.33     (3) any container used for the storage and display of any 
 31.34  contraband pull-tab or tipboard deals as defined in clauses (1) 
 31.35  and (2); 
 31.36     (4) all currency, checks, and other things of value used 
 32.1   for pull-tab or tipboard transactions not expressly permitted 
 32.2   under this chapter, and any cash drawer, cash register, or any 
 32.3   other container used for illegal pull-tab or tipboard 
 32.4   transactions including its contents; 
 32.5      (5) any device including, but not limited to, motor 
 32.6   vehicles, trailers, snowmobiles, airplanes, and boats used, with 
 32.7   the knowledge of the owner or of a person operating with the 
 32.8   consent of the owner, for the storage or transportation of more 
 32.9   than five pull-tab or tipboard deals that are contraband under 
 32.10  this subdivision.  When pull-tabs and tipboards are being 
 32.11  transported in the course of interstate commerce between 
 32.12  locations outside this state, the pull-tab and tipboard deals 
 32.13  are not contraband, notwithstanding the provisions of clauses 
 32.14  (1) and (12); 
 32.15     (6) any unaffixed registration stamps except as provided in 
 32.16  section 349.162, subdivision 4; 
 32.17     (7) any prize used or offered in a game utilizing 
 32.18  contraband as defined in this subdivision; 
 32.19     (8) any altered, modified, or counterfeit pull-tab or 
 32.20  tipboard ticket; 
 32.21     (9) any unregistered gambling equipment except as permitted 
 32.22  by this chapter; 
 32.23     (10) any gambling equipment kept in violation of section 
 32.24  349.18; 
 32.25     (11) any gambling equipment not in conformity with law or 
 32.26  board rule; 
 32.27     (12) any pull-tab or tipboard deal in the possession of a 
 32.28  person other than a licensed distributor or licensed 
 32.29  manufacturer for which the person, upon demand of a licensed 
 32.30  peace officer or authorized agent of the commissioner of revenue 
 32.31  or director of alcohol and gambling enforcement, does not 
 32.32  immediately produce for inspection the invoice or a true and 
 32.33  correct copy of the invoice for the acquisition of the deal from 
 32.34  a licensed distributor; 
 32.35     (13) any pull-tab or tipboard deals or portions of deals on 
 32.36  which the tax imposed under chapter 297E has not been paid; and 
 33.1      (14) any device prohibited by section 609.76, subdivisions 
 33.2   4 to 6. 
 33.3      Sec. 38.  Minnesota Statutes 2004, section 349.213, is 
 33.4   amended to read: 
 33.5      349.213 [LOCAL AUTHORITY.] 
 33.6      Subdivision 1.  [LOCAL REGULATION.] (a) A statutory or home 
 33.7   rule city or county has the authority to adopt more stringent 
 33.8   regulation of lawful gambling within its jurisdiction, including 
 33.9   the prohibition of lawful gambling, and may require a permit for 
 33.10  the conduct of gambling exempt from licensing under section 
 33.11  349.166.  The fee for a permit issued under this subdivision may 
 33.12  not exceed $100.  The authority granted by this subdivision does 
 33.13  not include the authority to require a license or permit to 
 33.14  conduct gambling by organizations or sales by distributors or 
 33.15  linked bingo game providers licensed by the board.  The 
 33.16  authority granted by this subdivision does not include the 
 33.17  authority to require an organization to make specific 
 33.18  expenditures of more than ten percent per year from its net 
 33.19  profits derived from lawful gambling.  For the purposes of this 
 33.20  subdivision, net profits are gross profits less amounts expended 
 33.21  for allowable expenses and paid in taxes assessed on lawful 
 33.22  gambling.  A statutory or home rule charter city or a county may 
 33.23  not require an organization conducting lawful gambling within 
 33.24  its jurisdiction to make an expenditure to the city or county as 
 33.25  a condition to operate within that city or county, except as 
 33.26  authorized under section 349.16, subdivision 8, or 297E.02; 
 33.27  provided, however, that an ordinance requirement that such 
 33.28  organizations must contribute ten percent per year of their net 
 33.29  profits derived from lawful gambling conducted at premises 
 33.30  within the city's or county's jurisdiction to a fund 
 33.31  administered and regulated by the responsible local unit of 
 33.32  government without cost to such fund, for disbursement by the 
 33.33  responsible local unit of government of the receipts for (i) 
 33.34  lawful purposes, or (ii) police, fire, and other emergency or 
 33.35  public safety-related services, equipment, and training, 
 33.36  excluding pension obligations, is not considered an expenditure 
 34.1   to the city or county nor a tax under section 297E.02, and is 
 34.2   valid and lawful.  A city or county making expenditures 
 34.3   authorized under this paragraph must by March 15 of each year 
 34.4   file a report with the board, on a form the board prescribes, 
 34.5   that lists all such revenues collected and expenditures for the 
 34.6   previous calendar year. 
 34.7      (b) A statutory or home rule city or county may by 
 34.8   ordinance require that a licensed organization conducting lawful 
 34.9   gambling within its jurisdiction expend all or a portion of its 
 34.10  expenditures for lawful purposes on lawful purposes conducted or 
 34.11  located within the city's or county's trade area.  Such an 
 34.12  ordinance must be limited to lawful purpose expenditures of 
 34.13  gross profits derived from lawful gambling conducted at premises 
 34.14  within the city's or county's jurisdiction, must define the 
 34.15  city's or county's trade area, and must specify the percentage 
 34.16  of lawful purpose expenditures which must be expended within the 
 34.17  trade area.  A trade area defined by a city under this 
 34.18  subdivision must include each city and township contiguous to 
 34.19  the defining city. 
 34.20     (c) A more stringent regulation or prohibition of lawful 
 34.21  gambling adopted by a political subdivision under this 
 34.22  subdivision must apply equally to all forms of lawful gambling 
 34.23  within the jurisdiction of the political subdivision, except a 
 34.24  political subdivision may prohibit the use of paddlewheels. 
 34.25     Subd. 2.  [LOCAL APPROVAL.] Before issuing or renewing a 
 34.26  premises permit or bingo hall license, the board must notify the 
 34.27  city council of the statutory or home rule city in which the 
 34.28  organization's premises or the bingo hall is located or, if the 
 34.29  premises or hall is located outside a city, the county board of 
 34.30  the county and the town board of the town where the premises or 
 34.31  hall is located.  The board may require organizations or bingo 
 34.32  halls to notify the appropriate local government at the time of 
 34.33  application.  This required notification is sufficient to 
 34.34  constitute the notice required by this subdivision.  The board 
 34.35  may not issue or renew a premises permit or bingo hall license 
 34.36  unless the organization submits a resolution from the city 
 35.1   council or county board approving the premises permit or bingo 
 35.2   hall license.  The resolution must have been adopted within 90 
 35.3   days of the date of application for the new or renewed permit or 
 35.4   license. 
 35.5      Subd. 3.  [LOCAL GAMBLING TAX.] A statutory or home rule 
 35.6   charter city that has one or more licensed organizations 
 35.7   operating lawful gambling, and a county that has one or more 
 35.8   licensed organizations outside incorporated areas operating 
 35.9   lawful gambling, may impose a local gambling tax on each 
 35.10  licensed organization within the city's or county's 
 35.11  jurisdiction.  The tax may be imposed only if the amount to be 
 35.12  received by the city or county is necessary to cover the costs 
 35.13  incurred by the city or county to regulate lawful gambling.  The 
 35.14  tax imposed by this subdivision may not exceed three percent per 
 35.15  year of the gross receipts of a licensed organization from all 
 35.16  lawful gambling less prizes actually paid out by the 
 35.17  organization.  A city or county may not use money collected 
 35.18  under this subdivision for any purpose other than to regulate 
 35.19  lawful gambling.  All documents pertaining to site inspections, 
 35.20  fines, penalties, or other corrective action involving local 
 35.21  lawful gambling regulation must be shared with the board within 
 35.22  30 days of filing at the city or county of jurisdiction.  A tax 
 35.23  imposed under this subdivision is in lieu of all other local 
 35.24  taxes and local investigation fees on lawful gambling.  A city 
 35.25  or county that imposes a tax under this subdivision shall 
 35.26  annually, by March 15, file a report with the board in a form 
 35.27  prescribed by the board showing (1) the amount of revenue 
 35.28  produced by the tax during the preceding calendar year, and (2) 
 35.29  the use of the proceeds of the tax.  
 35.30     Sec. 39.  Minnesota Statutes 2004, section 609.75, 
 35.31  subdivision 1, is amended to read: 
 35.32     Subdivision 1.  [LOTTERY.] (a) A lottery is a plan which 
 35.33  provides for the distribution of money, property or other reward 
 35.34  or benefit to persons selected by chance from among participants 
 35.35  some or all of whom have given a consideration for the chance of 
 35.36  being selected.  A participant's payment for use of a 900 
 36.1   telephone number or another means of communication that results 
 36.2   in payment to the sponsor of the plan constitutes consideration 
 36.3   under this paragraph. 
 36.4      (b) An in-package chance promotion is not a lottery if all 
 36.5   of the following are met:  
 36.6      (1) participation is available, free and without purchase 
 36.7   of the package, from the retailer or by mail or toll-free 
 36.8   telephone request to the sponsor for entry or for a game piece; 
 36.9      (2) the label of the promotional package and any related 
 36.10  advertising clearly states any method of participation and the 
 36.11  scheduled termination date of the promotion; 
 36.12     (3) the sponsor on request provides a retailer with a 
 36.13  supply of entry forms or game pieces adequate to permit free 
 36.14  participation in the promotion by the retailer's customers; 
 36.15     (4) the sponsor does not misrepresent a participant's 
 36.16  chances of winning any prize; 
 36.17     (5) the sponsor randomly distributes all game pieces and 
 36.18  maintains records of random distribution for at least one year 
 36.19  after the termination date of the promotion; 
 36.20     (6) all prizes are randomly awarded if game pieces are not 
 36.21  used in the promotion; and 
 36.22     (7) the sponsor provides on request of a state agency a 
 36.23  record of the names and addresses of all winners of prizes 
 36.24  valued at $100 or more, if the request is made within one year 
 36.25  after the termination date of the promotion.  
 36.26     (c) Except as provided by section 349.40, acts in this 
 36.27  state in furtherance of a lottery conducted outside of this 
 36.28  state are included notwithstanding its validity where conducted. 
 36.29     (d) The distribution of property, or other reward or 
 36.30  benefit by an employer to persons selected by chance from among 
 36.31  participants who, all of whom: 
 36.32     (1)  have made a contribution through a payroll or pension 
 36.33  deduction campaign to a registered combined charitable 
 36.34  organization, within the meaning of section 309.501; or 
 36.35     (2) have paid other consideration to the employer entirely 
 36.36  for the benefit of such a registered combined charitable 
 37.1   organization, as a precondition to the chance of being selected, 
 37.2   is not a lottery if: 
 37.3      (1) (i) all of the persons eligible to be selected are 
 37.4   employed by or retirees of the employer; and 
 37.5      (2) (ii) the cost of the property or other reward or 
 37.6   benefit distributed and all costs associated with the 
 37.7   distribution are borne by the employer. 
 37.8      Sec. 40.  [REPEALER.] 
 37.9      Minnesota Statutes 2004, sections 349.162, subdivision 3; 
 37.10  349.164; and 349.17, subdivision 1, are repealed. 
 37.11                             ARTICLE 2
 37.12                      LOTTERY SERVICE BUSINESS
 37.13     Section 1.  [299L.09] [LOTTERY SERVICE BUSINESS.] 
 37.14     Subdivision 1.  [DEFINITION.] For purposes of this section: 
 37.15     (a) A "lottery service business" is a commercial enterprise 
 37.16  that for a fee or commission purchases lottery tickets on behalf 
 37.17  of customers or subscribers. 
 37.18     (b) "Division" means the Division of Alcohol and Gambling 
 37.19  Enforcement in the Department of Public Safety. 
 37.20     (c) "Commissioner" means the commissioner of public safety 
 37.21  acting through the division. 
 37.22     (d) "Disqualifying offense" means any felony, gross 
 37.23  misdemeanor, and any criminal offense involving fraud, 
 37.24  misrepresentation, or deceit. 
 37.25     Subd. 2.  [REGISTRATION REQUIRED.] (a) No person may 
 37.26  operate a lottery service business unless the business has 
 37.27  registered with the commissioner and the business's registration 
 37.28  is in effect.  Registration is in effect for one year unless 
 37.29  suspended or revoked. 
 37.30     (b) Registration must be on a form that the commissioner 
 37.31  prescribes by rule.  The form may require any information that 
 37.32  the commissioner determines is necessary to carry out the 
 37.33  purposes of this section.  The form must contain a provision in 
 37.34  which the applicant for registration attests that no officer, 
 37.35  director, or employee of the business has been convicted of a 
 37.36  disqualifying offense.  The form must contain a provision in 
 38.1   which the business agrees to comply with the provisions of this 
 38.2   section and provide access to the commissioner as required under 
 38.3   subdivision 9. 
 38.4      (c) Notwithstanding section 16A.1283, the commissioner 
 38.5   shall by rule provide for a fee for registration sufficient to 
 38.6   provide for the division's annual costs in administering this 
 38.7   section. 
 38.8      (d) The director may investigate all applicants for 
 38.9   registration under this subdivision to determine the accuracy of 
 38.10  the attestation under paragraph (b).  The director may charge a 
 38.11  fee for such investigation and deposit the fee in the general 
 38.12  fund. 
 38.13     Subd. 3.  [REVOCATION OF REGISTRATION.] (a) The 
 38.14  commissioner may revoke the registration of a lottery service 
 38.15  business if the commissioner finds that: 
 38.16     (1) the business made a materially false statement in its 
 38.17  application for registration; 
 38.18     (2) an officer, director, or employee of the business has 
 38.19  been convicted of a disqualifying offense; 
 38.20     (3) an officer, director, or employee of the business has 
 38.21  violated this section or another section of law governing 
 38.22  gambling or a rule or order of the commissioner, or has had a 
 38.23  license to conduct business revoked in Minnesota or another 
 38.24  jurisdiction; 
 38.25     (4) an officer, director, or employee of the business has 
 38.26  engaged in any activity that adversely affects public confidence 
 38.27  in the lottery or the integrity of gaming, or that defrauds the 
 38.28  business's customers or subscribers. 
 38.29     (b) The commissioner may not take action under this 
 38.30  subdivision unless the commissioner has provided the business 
 38.31  with notice of intent to revoke together with the reasons for 
 38.32  the action and the effective date of the revocation.  The notice 
 38.33  must provide the business with an opportunity for a public 
 38.34  hearing on the revocation before the director within 30 days of 
 38.35  the date on which the notice was sent.  After the hearing the 
 38.36  director may revoke the registration.  A revocation of 
 39.1   registration is a contested case under sections 14.57 to 14.69. 
 39.2      Subd. 4.  [CEASE AND DESIST ORDER.] Whenever it appears to 
 39.3   the commissioner that a lottery service business or an officer, 
 39.4   director, or employee thereof has engaged in any act or practice 
 39.5   constituting a violation of this chapter or any rule or order of 
 39.6   the commissioner, the commissioner may issue and cause to be 
 39.7   served upon the business, officer, director, or employee an 
 39.8   order requiring the person to cease and desist from violations 
 39.9   of this chapter or the commissioner's rule or order.  The order 
 39.10  must give reasonable notice of the rights of the business or 
 39.11  person named in the order to request a hearing and must state 
 39.12  the reason for the entry of the order.  Unless otherwise agreed 
 39.13  between the parties, a hearing shall be held not later than 
 39.14  seven days after the request for the hearing is received by the 
 39.15  commissioner after which and within 20 days after the receipt of 
 39.16  the administrative law judge's report and subsequent exceptions 
 39.17  and argument the commissioner shall issue an order vacating the 
 39.18  cease and desist order, modifying it, or making it permanent as 
 39.19  the facts require.  If no hearing is requested within 30 days of 
 39.20  the service of the order, the order becomes final and remains in 
 39.21  effect until modified or vacated by the commissioner.  All 
 39.22  hearings shall be conducted in accordance with the provisions of 
 39.23  chapter 14.  If the business or person to whom a cease and 
 39.24  desist order is issued fails to appear at the hearing after 
 39.25  being duly notified, the business or person shall be deemed in 
 39.26  default, and the proceeding may be determined against the 
 39.27  business or person upon consideration of the cease and desist 
 39.28  order, the allegations of which may be deemed to be true. 
 39.29     Subd. 5.  [REQUIRED STATEMENTS.] (a) All print advertising 
 39.30  in any medium published by or on behalf of a lottery service 
 39.31  business, and all print communications intended to solicit 
 39.32  members, including Internet solicitations, for each lottery pool 
 39.33  or subscription service offered, must contain a clear and 
 39.34  prominent statement which lists the cost of a lottery ticket 
 39.35  provided through the lottery service business compared with the 
 39.36  actual cost of a lottery ticket purchased from a lottery 
 40.1   retailer.  The business's per-ticket price for tickets purchased 
 40.2   for a pool must be calculated by multiplying the member costs 
 40.3   paid to a lottery service business by the number of persons in 
 40.4   the pool and dividing the product by the total number of lottery 
 40.5   tickets purchased on behalf of the lottery pool.  The per-ticket 
 40.6   price for a lottery ticket purchased from a lottery retailer is 
 40.7   the price set for that ticket by the director. 
 40.8      (b) All advertising and solicitation described in paragraph 
 40.9   (a) must contain the following statement in clear and readable 
 40.10  type:  "This business is not affiliated with and is not an agent 
 40.11  of the Minnesota State Lottery.  The Minnesota State Lottery is 
 40.12  not responsible for paying any prize to any person other than 
 40.13  the possessor of a winning ticket." 
 40.14     Subd. 6.  [PROHIBITIONS.] (a) A lottery service business 
 40.15  may not accept any form of payment for any service it offers 
 40.16  other than cash, check, or money order. 
 40.17     (b) A lottery service business may not accept as a customer 
 40.18  or subscriber any person under age 18, or make a payment of 
 40.19  lottery winnings to a person under age 18. 
 40.20     (c) A lottery service business and any officer, director, 
 40.21  or employee of the business may not have any stake or own any 
 40.22  shares in any lottery pool it creates for customers or 
 40.23  subscribers. 
 40.24     Subd. 7.  [LOTTERY PRIZE ACCOUNT.] A lottery service 
 40.25  business must deposit all money received as winnings from 
 40.26  lottery tickets bought for or on behalf of customers or 
 40.27  subscribers into a lottery prize account that it maintains 
 40.28  separately from all other accounts of the business.  The 
 40.29  business may expend money from the account, including interest 
 40.30  thereon, only to pay winnings to customers or subscribers and to 
 40.31  make payments required under subdivision 8. 
 40.32     Subd. 8.  [UNCLAIMED PRIZES.] (a) A lottery service 
 40.33  business must make all good-faith efforts to distribute money in 
 40.34  its lottery prize account to customers and subscribers entitled 
 40.35  thereto. 
 40.36     (b) Any money deposited in the lottery prize account that 
 41.1   has not been distributed to customers or subscribers as winnings 
 41.2   within one year after the date of deposit becomes an unclaimed 
 41.3   prize.  A lottery service business must transmit all unclaimed 
 41.4   prizes, including all interest earned thereon while the prize 
 41.5   was in the lottery prize account, to the commissioner within ten 
 41.6   days of the prize becoming unclaimed.  The commissioner shall 
 41.7   deposit all payments under this subdivision in the general fund. 
 41.8      Subd. 9.  [BOOKS AND RECORDS; AUDIT.] A lottery service 
 41.9   business must keep a complete set of books of account, 
 41.10  correspondence, and all other records necessary to show fully 
 41.11  the lottery service business's lottery transactions.  The 
 41.12  commissioner and all employees of the Department of Public 
 41.13  Safety shall have access to these materials at any time.  The 
 41.14  commissioner may require a lottery service business to furnish 
 41.15  information the commissioner deems necessary to carry out the 
 41.16  purposes of this section and any other law relating to 
 41.17  gambling.  The commissioner may require an audit to be made of 
 41.18  the books, accounts, and records of a lottery service business, 
 41.19  select an auditor to perform the audit, and require the lottery 
 41.20  service business to pay the costs of the audit.  The auditor 
 41.21  selected to perform the audit has the same right of access to 
 41.22  the books, accounts, correspondence, and records of the business 
 41.23  as the commissioner. 
 41.24     <b>[EFFECTIVE DATE.]</b> Article 2 is effective August 1, 2005. 
 41.25                             ARTICLE 3
 41.26                        VIDEO GAME OF CHANCE
 41.27     Section 1.  Minnesota Statutes 2004, section 609.75, 
 41.28  subdivision 8, is amended to read: 
 41.29     Subd. 8.  [VIDEO GAME OF CHANCE.] A video game of chance is 
 41.30  a game or device that simulates one or more games commonly 
 41.31  referred to as poker, blackjack, craps, hi-lo, roulette, or 
 41.32  other common gambling forms, though not offering any type of 
 41.33  pecuniary award or gain to players.  The term also includes any 
 41.34  video game having one or more of the following characteristics: 
 41.35     (1) it is primarily a game of chance, and has no 
 41.36  substantial elements of skill involved; 
 42.1      (2) it awards game credits or replays and contains a meter 
 42.2   or device that records unplayed credits or replays. 
 42.3      The term does not include games or devices that simulate 
 42.4   horse breeding, training, and racing. 
 42.5      Sec. 2.  [EFFECTIVE DATE.] 
 42.6      Article 3 is effective the day following final enactment. 
 42.7                              ARTICLE 4
 42.8                          SOCIAL SKILL GAME
 42.9      Section 1.  Minnesota Statutes 2004, section 609.761, 
 42.10  subdivision 3, is amended to read: 
 42.11     Subd. 3.  [SOCIAL SKILL GAME.] Sections 609.755 and 609.76 
 42.12  do not prohibit tournaments or contests that satisfy all of the 
 42.13  following requirements: 
 42.14     (1) the tournament or contest consists of the card games of 
 42.15  chance commonly known as cribbage, skat, sheephead, bridge, 
 42.16  euchre, pinochle, gin, 500, smear, Texas hold'em, or whist; 
 42.17     (2) the tournament or contest does not provide any direct 
 42.18  financial benefit to the promoter or organizer; and 
 42.19     (3) the sum of all prizes awarded for each tournament or 
 42.20  contest does not exceed $200; and 
 42.21     (4) with respect to any Texas hold'em tournament or 
 42.22  contest, the organizer of the tournament or contest must ensure 
 42.23  that reasonable accommodations are made for players with 
 42.24  physical disabilities.  Accommodations to the table and the 
 42.25  cards shall include, among other things, the announcement of the 
 42.26  cards visible to the entire table and the use of braille cards 
 42.27  for players who are blind. 
 42.28     <b>[EFFECTIVE DATE.]</b> Article 4 is effective the day following 
 42.29  final enactment and applies to acts committed on or after that 
 42.30  date.