1.1 	A bill for an act
1.2 	relating to gambling; 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 electronic bingo;
1.6 	regulating lottery service businesses; authorizing
1.7 	certain video games of chance and social skill games;
1.8 	amending Minnesota Statutes 2004, sections 349.12,
1.9 	subdivisions 5, 25, 33, by adding subdivisions;
1.10 	349.15, subdivision 1; 349.151, subdivisions 4, 4b, by
1.11 	adding a subdivision; 349.152, subdivision 2; 349.153;
1.12 	349.155, subdivision 3; 349.16, subdivisions 2, 8;
1.13 	349.161, subdivision 5; 349.162, subdivisions 1, 4, 5;
1.14 	349.163, subdivision 3; 349.1635, subdivision 4;
1.15 	349.166, subdivisions 1, 2; 349.167, subdivision 1;
1.16 	349.168, subdivision 8; 349.17, subdivisions 5, 7;
1.17 	349.1711, subdivision 1; 349.173; 349.18, subdivision
1.18 	1; 349.19, subdivisions 4, 5, 10; 349.211, subdivision
1.19 	2c; 349.2125, subdivision 1; 349.213; 609.75,
1.20 	subdivisions 1, 8; 609.761, subdivision 3; proposing
1.21 	coding for new law in Minnesota Statutes, chapter
1.22 	299L; repealing Minnesota Statutes 2004, sections
1.23 	349.162, subdivision 3; 349.164; 349.17, subdivision 1.
1.24 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.25 	ARTICLE 1
1.26 	LAWFUL GAMBLING

1.27 	Section 1. Minnesota Statutes 2004, section 349.12, is
1.28 	amended by adding a subdivision to read:
1.29 		Subd. 3c.Bar bingo. "Bar bingo" is a bingo occasion
1.30 	conducted at a permitted premises in an area where intoxicating
1.31 	liquor or 3.2 percent malt beverages are sold and where the
1.32 	licensed organization conducts another form of lawful gambling.

1.33 	Sec. 2. Minnesota Statutes 2004, section 349.12,
1.34 	subdivision 5, is amended to read:
2.1 		Subd. 5.Bingo occasion.  "Bingo occasion" means a single
2.2 	gathering or session at which a series of one or more successive
2.3 	bingo games is played. There is no limit on the number of games
2.4 	conducted during a bingo occasion but a bingo occasion must not
2.5 	last longer than eight consecutive hours.

2.6 	Sec. 3. Minnesota Statutes 2004, section 349.12, is
2.7 	amended by adding a subdivision to read:
2.8 		Subd. 7a.Charitable contribution. "Charitable
2.9 	contribution" means one or more of the lawful purposes
2.10 	expenditures under section 349.12, subdivision 25, paragraph
2.11 	(a), clauses (1) to (7), (10), (11), (13) to (15), and (19).

2.12 	Sec. 4. Minnesota Statutes 2004, section 349.12, is
2.13 	amended by adding a subdivision to read:
2.14 		Subd. 12a.Electronic bingo device. "Electronic bingo
2.15 	device" means an electronic device used by a bingo player to
2.16 	monitor bingo paper sheets purchased at the time and place of an
2.17 	organization's bingo occasion and which (1) provides a means for
2.18 	bingo players to input numbers announced by a bingo caller; (2)
2.19 	compares the numbers entered by the player to the bingo faces
2.20 	previously stored in the memory of the device; and (3)
2.21 	identifies a winning bingo pattern.
2.22 	Electronic bingo device does not mean any device into which
2.23 	coin, currency, or tokens are inserted to activate play.

2.24 	Sec. 5. Minnesota Statutes 2004, section 349.12,
2.25 	subdivision 25, is amended to read:
2.26 		Subd. 25.Lawful purpose.  (a) "Lawful purpose" means one
2.27 	or more of the following:
2.28 	(1) any expenditure by or contribution to a 501(c)(3) or
2.29 	festival organization, as defined in subdivision 15a, provided
2.30 	that the organization and expenditure or contribution are in
2.31 	conformity with standards prescribed by the board under section
2.32 	349.154, which standards must apply to both types of
2.33 	organizations in the same manner and to the same extent;
2.34 	(2) a contribution to or expenditure for goods and services
2.35 	for an individual or family suffering from poverty,
2.36 	homelessness, or physical or mental disability, which is used to
3.1 	relieve the effects of that poverty, homelessness, or disability 
3.2 	suffering;
3.3 	(3) a contribution to an individual for treatment for
3.4 	delayed posttraumatic stress syndrome or a contribution to a
3.5 	program recognized by the Minnesota Department of Human Services
3.6 	for the education, prevention, or treatment of compulsive 
3.7 	problem gambling;
3.8 	(4) a contribution to or expenditure on a public or private
3.9 	nonprofit educational institution registered with or accredited
3.10 	by this state or any other state;
3.11 	(5) a contribution to a scholarship fund for defraying the
3.12 	cost of education to individuals where the funds are awarded
3.13 	through an open and fair selection process;
3.14 	(6) activities by an organization or a government entity
3.15 	which recognize humanitarian or military service to the United
3.16 	States, the state of Minnesota, or a community, subject to rules
3.17 	of the board, provided that the rules must not include mileage
3.18 	reimbursements in the computation of the per diem reimbursement
3.19 	limit and must impose no aggregate annual limit on the amount of
3.20 	reasonable and necessary expenditures made to support:
3.21 	(i) members of a military marching or color guard unit for
3.22 	activities conducted within the state;
3.23 	(ii) members of an organization solely for services
3.24 	performed by the members at funeral services; or 
3.25 	(iii) members of military marching, color guard, or honor
3.26 	guard units may be reimbursed for participating in color guard,
3.27 	honor guard, or marching unit events within the state or states
3.28 	contiguous to Minnesota at a per participant rate of up to $35
3.29 	per diem; or 
3.30 	(iv) active military personnel and their immediate family
3.31 	members in need of support services;
3.32 	(7) recreational, community, and athletic facilities and
3.33 	activities intended primarily for persons under age 21, provided
3.34 	that such facilities and activities do not discriminate on the
3.35 	basis of gender and the organization complies with section
3.36 	349.154;
4.1 	(8) payment of local taxes authorized under this chapter,
4.2 	taxes imposed by the United States on receipts from lawful
4.3 	gambling, the taxes imposed by section 297E.02, subdivisions 1,
4.4 	4, 5, and 6, and the tax imposed on unrelated business income by
4.5 	section 290.05, subdivision 3;
4.6 	(9) payment of real estate taxes and assessments on
4.7 	permitted gambling premises wholly owned by the licensed
4.8 	organization paying the taxes, or wholly leased by a licensed
4.9 	veterans organization under a national charter recognized under
4.10 	section 501(c)(19) of the Internal Revenue Code, not to exceed:
4.11 	(i) for premises used for bingo, the amount that an
4.12 	organization may expend under board rules on rent for bingo; and 
4.13 	(ii) $35,000 per year for premises used for other forms of
4.14 	lawful gambling;
4.15 	(10) a contribution to the United States, this state or any
4.16 	of its political subdivisions, or any agency or instrumentality
4.17 	thereof other than a direct contribution to a law enforcement or
4.18 	prosecutorial agency;
4.19 	(11) a contribution to or expenditure by a nonprofit
4.20 	organization which is a church or body of communicants gathered
4.21 	in common membership for mutual support and edification in
4.22 	piety, worship, or religious observances;
4.23 	(12) payment of the reasonable costs of an audit required
4.24 	in section 297E.06, subdivision 4, provided the annual audit is
4.25 	filed in a timely manner with the Department of Revenue and paid
4.26 	prior to June 30, 2006;
4.27 	(13) a contribution to or expenditure on a wildlife
4.28 	management project that benefits the public at-large, provided
4.29 	that the state agency with authority over that wildlife
4.30 	management project approves the project before the contribution
4.31 	or expenditure is made;
4.32 	(14) expenditures, approved by the commissioner of natural
4.33 	resources, by an organization for grooming and maintaining
4.34 	snowmobile trails and all-terrain vehicle trails that are (1)
4.35 	grant-in-aid trails established under section 85.019, or (2)
4.36 	other trails open to public use, including purchase or lease of
5.1 	equipment for this purpose;
5.2 	(13) a contribution to or expenditure on projects or
5.3 	activities approved by the commissioner of natural resources for:
5.4 	(i) wildlife management projects that benefit the public at
5.5 	large;
5.6 	(ii) grant-in-aid trail maintenance and grooming
5.7 	established under sections 84.83 and 84.927 and other trails
5.8 	open to public use, including purchase or lease of equipment for
5.9 	this purpose; and 
5.10 	(iii) supplies and materials for safety training and
5.11 	educational programs coordinated by the Department of Natural
5.12 	Resources including the Enforcement Division;
5.13 	(15) (14) conducting nutritional programs, food shelves,
5.14 	and congregate dining programs primarily for persons who are age
5.15 	62 or older or disabled;
5.16 	(16) (15) a contribution to a community arts organization,
5.17 	or an expenditure to sponsor arts programs in the community,
5.18 	including but not limited to visual, literary, performing, or
5.19 	musical arts;
5.20 	(17) (16) an expenditure by a licensed veterans
5.21 	organization for payment of water, fuel for heating,
5.22 	electricity, and sewer costs for a building wholly owned or
5.23 	wholly leased by and used as the primary headquarters of the
5.24 	licensed veterans organization;
5.25 	(18) (17) expenditure by a licensed veterans organization
5.26 	of up to $5,000 in a calendar year in net costs to the
5.27 	organization for meals and other membership events, limited to
5.28 	members and spouses, held in recognition of military service.
5.29 	No more than $5,000 can be expended in total per calendar year
5.30 	under this clause by all licensed veterans organizations sharing
5.31 	the same veterans post home; or 
5.32 	(19) (18) payment of fees authorized under this chapter
5.33 	imposed by the state of Minnesota to conduct lawful gambling in
5.34 	Minnesota; or 
5.35 	(19) a contribution or expenditure to honor an individual's
5.36 	humanitarian service as demonstrated through philanthropy or
6.1 	volunteerism to the United States, this state, or local
6.2 	community.
6.3 	(b) Notwithstanding paragraph (a), "lawful purpose" does
6.4 	not include:
6.5 	(1) any expenditure made or incurred for the purpose of
6.6 	influencing the nomination or election of a candidate for public
6.7 	office or for the purpose of promoting or defeating a ballot
6.8 	question;
6.9 	(2) any activity intended to influence an election or a
6.10 	governmental decision-making process;
6.11 	(3) the erection, acquisition, improvement, expansion,
6.12 	repair, or maintenance of real property or capital assets owned
6.13 	or leased by an organization, unless the board has first
6.14 	specifically authorized the expenditures after finding that (i)
6.15 	the real property or capital assets will be used exclusively for
6.16 	one or more of the purposes in paragraph (a); (ii) with respect
6.17 	to expenditures for repair or maintenance only, that the
6.18 	property is or will be used extensively as a meeting place or
6.19 	event location by other nonprofit organizations or community or
6.20 	service groups and that no rental fee is charged for the use;
6.21 	(iii) with respect to expenditures, including a mortgage payment
6.22 	or other debt service payment, for erection or acquisition only,
6.23 	that the erection or acquisition is necessary to replace with a
6.24 	comparable building, a building owned by the organization and
6.25 	destroyed or made uninhabitable by fire or natural
6.26 	disaster catastrophe, provided that the expenditure may be only
6.27 	for that part of the replacement cost not reimbursed by
6.28 	insurance; (iv) with respect to expenditures, including a
6.29 	mortgage payment or other debt service payment, for erection or
6.30 	acquisition only, that the erection or acquisition is necessary
6.31 	to replace with a comparable building a building owned by the
6.32 	organization that was acquired from the organization by eminent
6.33 	domain or sold by the organization to a purchaser that the
6.34 	organization reasonably believed would otherwise have acquired
6.35 	the building by eminent domain, provided that the expenditure
6.36 	may be only for that part of the replacement cost that exceeds
7.1 	the compensation received by the organization for the building
7.2 	being replaced; or (v) with respect to an expenditure to bring
7.3 	an existing building into compliance with the Americans with
7.4 	Disabilities Act under item (ii), an organization has the option
7.5 	to apply the amount of the board-approved expenditure to the
7.6 	erection or acquisition of a replacement building that is in
7.7 	compliance with the Americans with Disabilities Act;
7.8 	(4) an expenditure by an organization which is a
7.9 	contribution to a parent organization, foundation, or affiliate
7.10 	of the contributing organization, if the parent organization,
7.11 	foundation, or affiliate has provided to the contributing
7.12 	organization within one year of the contribution any money,
7.13 	grants, property, or other thing of value;
7.14 	(5) a contribution by a licensed organization to another
7.15 	licensed organization unless the board has specifically
7.16 	authorized the contribution.  The board must authorize such a
7.17 	contribution when requested to do so by the contributing
7.18 	organization unless it makes an affirmative finding that the
7.19 	contribution will not be used by the recipient organization for
7.20 	one or more of the purposes in paragraph (a); or
7.21 	(6) a contribution to a statutory or home rule charter
7.22 	city, county, or town by a licensed organization with the
7.23 	knowledge that the governmental unit intends to use the
7.24 	contribution for a pension or retirement fund.
7.25 	
EFFECTIVE DATE. The effective date for paragraph (a),
7.26 	clause (9), is January 1, 2006.  All other changes in this
7.27 	section are effective the day following final enactment.

7.28 	Sec. 6. Minnesota Statutes 2004, section 349.12,
7.29 	subdivision 33, is amended to read:
7.30 		Subd. 33.Raffle.  "Raffle" means a game in which a
7.31 	participant buys a ticket for a chance at a prize with the
7.32 	winner determined by a random drawing to take place at a
7.33 	location and date printed upon the ticket or other certificate
7.34 	of participation in an event where the prize determination is
7.35 	based on a method of random selection and all entries have an
7.36 	equal chance of selection.  The ticket or certificate of
8.1 	participation must include the location, date, and time of the
8.2 	selection of the winning entries.
8.3 	
EFFECTIVE DATE. This section is effective the day
8.4 	following final enactment.

8.5 	Sec. 7. Minnesota Statutes 2004, section 349.15,
8.6 	subdivision 1, is amended to read:
8.7 		Subdivision 1.Expenditure restrictions.  Gross profits
8.8 	from lawful gambling may be expended only for lawful purposes or
8.9 	allowable expenses as authorized by the membership of the
8.10 	conducting organization at a monthly meeting of the
8.11 	organization's membership.  Provided that no more than 70
8.12 	percent of the gross profit less the tax imposed under section
8.13 	297E.02, subdivision 1, from bingo, and no more than 55 60 
8.14 	percent of the gross profit from other forms of lawful gambling,
8.15 	may be expended biennially during the term of the license for
8.16 	allowable expenses related to lawful gambling. For licenses
8.17 	issued after June 30, 2006, compliance with this subdivision
8.18 	will be measured on a biennial basis that is concurrent with the
8.19 	term of the license.  Compliance with this subdivision is a
8.20 	condition for the renewal of any license beginning on July 1,
8.21 	2008.
8.22 	
EFFECTIVE DATE. This section is effective July 1, 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 report annually to the governor and legislature a
9.14 	financial summary for each licensed organization identifying the
9.15 	gross receipts, prizes paid, allowable expenses, lawful purpose
9.16 	expenditures including charitable contributions and all taxes
9.17 	and fees as per section 349.12, subdivision 25, paragraph (a),
9.18 	clauses (8) and (18), and the percentage of annual gross profit
9.19 	used for lawful purposes;
9.20 	(10) to impose civil penalties of not more than $500 per
9.21 	violation on organizations, distributors, distributor
9.22 	salespersons, manufacturers, bingo halls,linked bingo game
9.23 	providers, and gambling managers for failure to comply with any
9.24 	provision of this chapter or any rule or order of the board;
9.25 	(10) (11) to issue premises permits to organizations
9.26 	licensed to conduct lawful gambling;
9.27 	(11) (12) to delegate to the director the authority to
9.28 	issue or deny license and premises permit applications and
9.29 	renewals under criteria established by the board;
9.30 	(12) (13) to delegate to the director the authority to
9.31 	approve or deny fund loss requests, contribution of gambling
9.32 	funds to another licensed organization, and property expenditure
9.33 	requests under criteria established by the board;
9.34 	(14) to suspend or revoke licenses and premises permits of
9.35 	organizations, distributors, distributor salespersons,
9.36 	manufacturers, bingo halls,linked bingo game providers, or
10.1 	gambling managers as provided in this chapter;
10.2 	(15) to approve or deny requests from licensees for:
10.3 	(i) waivers from fee requirements as provided in section
10.4 	349.16, subdivision 6; and 
10.5 	(ii) variances from Gambling Control Board rules under
10.6 	section 14.055; and 
10.7 	(13) (16) to register employees of organizations licensed
10.8 	to conduct lawful gambling;
10.9 	(14) (17) to require fingerprints from persons determined
10.10 	by board rule to be subject to fingerprinting;
10.11 	(15) (18) to delegate to a compliance review group of the
10.12 	board the authority to investigate alleged violations, issue
10.13 	consent orders, and initiate contested cases on behalf of the
10.14 	board;
10.15 	(16) (19) to order organizations, distributors, distributor
10.16 	salespersons, manufacturers, bingo halls,linked bingo game
10.17 	providers, and gambling managers to take corrective actions; and
10.18 	(17) (20) to take all necessary steps to ensure the
10.19 	integrity of and public confidence in lawful gambling.
10.20 	(b) The board, or director if authorized to act on behalf
10.21 	of the board, may by citation assess any organization,
10.22 	distributor, employee eligible to make sales on behalf of a 
10.23 	distributor salesperson, manufacturer, bingo hall licensee,
10.24 	linked bingo game provider, or gambling manager a civil penalty
10.25 	of not more than $500 per violation for a failure to comply with
10.26 	any provision of this chapter or any rule adopted or order
10.27 	issued by the board.  Any organization, distributor, bingo hall
10.28 	licensee distributor salesperson, gambling manager, linked bingo
10.29 	game provider, or manufacturer assessed a civil penalty under
10.30 	this paragraph may request a hearing before the board.  Appeals
10.31 	of citations imposing a civil penalty are not subject to the
10.32 	provisions of the Administrative Procedure Act.
10.33 	(c) All penalties received by the board must be deposited
10.34 	in the general fund.
10.35 	(d) All fees imposed by the board under sections 349.16 to
10.36 	349.167 must be deposited in the state treasury and credited to
11.1 	a lawful gambling regulation account in the special revenue
11.2 	fund.  Receipts in this account are available for the operations
11.3 	of the board up to the amount authorized in biennial
11.4 	appropriations from the legislature.

11.5 	Sec. 9. Minnesota Statutes 2004, section 349.151,
11.6 	subdivision 4b, is amended to read:
11.7 		Subd. 4b.Pull-tab sales from dispensing devices.  (a)
11.8 	The board may by rule authorize but not require the use of
11.9 	pull-tab dispensing devices.
11.10 	(b) Rules adopted under paragraph (a):
11.11 	(1) must limit the number of pull-tab dispensing devices on
11.12 	any permitted premises to three; and
11.13 	(2) must limit the use of pull-tab dispensing devices to a
11.14 	permitted premises which is (i) a licensed premises for on-sales
11.15 	of intoxicating liquor or 3.2 percent malt beverages; or (ii) a
11.16 	licensed bingo hall that allows gambling only by premises where
11.17 	bingo is conducted and admission is restricted to persons 18
11.18 	years or older.
11.19 	(c) Notwithstanding rules adopted under paragraph (b),
11.20 	pull-tab dispensing devices may be used in establishments
11.21 	licensed for the off-sale of intoxicating liquor, other than
11.22 	drugstores and general food stores licensed under section
11.23 	340A.405, subdivision 1.

11.24 	Sec. 10. Minnesota Statutes 2004, section 349.151, is
11.25 	amended by adding a subdivision to read:
11.26 		Subd. 4c.Electronic bingo. (a) The board may by rule
11.27 	authorize but not require the use of electronic bingo devices.
11.28 	(b) Rules adopted under paragraph (a):
11.29 	(1) must limit the number of bingo faces that can be played
11.30 	using an electronic bingo device to 36;
11.31 	(2) must require that an electronic bingo device be used
11.32 	with corresponding bingo paper sheets;
11.33 	(3) must require that the electronic bingo device site
11.34 	system have dial-up capability to permit the board to remotely
11.35 	monitor the operation of the device and the internal accounting
11.36 	systems; and 
12.1 	(4) must prohibit the price of a face played on an
12.2 	electronic bingo device from being less than the price of a face
12.3 	on a bingo paper sheet sold at the same occasion.

12.4 	Sec. 11. Minnesota Statutes 2004, section 349.152,
12.5 	subdivision 2, is amended to read:
12.6 		Subd. 2.Duties of director.  The director has the
12.7 	following duties:
12.8 	(1) to carry out gambling policy established by the board;
12.9 	(2) to employ and supervise personnel of the board;
12.10 	(3) to advise and make recommendations to the board on
12.11 	rules, policy, and legislative initiatives;
12.12 	(4) to approve or deny operational requests from licensees
12.13 	as delegated by the board;
12.14 	(5) to issue licenses and premises permits as authorized by
12.15 	the board;
12.16 	(5) (6) to issue cease and desist orders;
12.17 	(6) (7) to make recommendations to the board on license
12.18 	issuance, denial, censure, suspension and revocation, civil
12.19 	penalties, and corrective action the board imposes;
12.20 	(7) (8) to ensure that board rules, policy, and decisions
12.21 	are adequately and accurately conveyed to the board's licensees;
12.22 	(8) (9) to conduct investigations, inspections, compliance
12.23 	reviews, and audits under this chapter; and
12.24 	(9) (10) to issue subpoenas to compel the attendance of
12.25 	witnesses and the production of documents, books, records, and
12.26 	other evidence relating to an investigation, compliance review,
12.27 	or audit the director is authorized to conduct.

12.28 	Sec. 12. Minnesota Statutes 2004, section 349.153, is
12.29 	amended to read:
12.30 	349.153 CONFLICT OF INTEREST.
12.31 	(a) A person may not serve on the board, be the director,
12.32 	or be an employee of the board who has an interest in any
12.33 	corporation, association, limited liability company, or
12.34 	partnership that is licensed by the board as a distributor,
12.35 	manufacturer, or linked bingo game provider, or bingo hall under
12.36 	section 349.164.
13.1 	(b) A member of the board, the director, or an employee of
13.2 	the board may not accept employment with, receive compensation
13.3 	directly or indirectly from, or enter into a contractual
13.4 	relationship with an organization that conducts lawful gambling,
13.5 	a distributor, a linked bingo game provider, a bingo hall,or a
13.6 	manufacturer while employed with or a member of the board or
13.7 	within one year after terminating employment with or leaving the
13.8 	board.
13.9 	(c) A distributor, bingo hall,manufacturer, linked bingo
13.10 	game provider, or organization licensed to conduct lawful
13.11 	gambling may not hire a former employee, director, or member of
13.12 	the Gambling Control Board for one year after the employee,
13.13 	director, or member has terminated employment with or left the
13.14 	Gambling Control Board.

13.15 	Sec. 13. Minnesota Statutes 2004, section 349.155,
13.16 	subdivision 3, is amended to read:
13.17 		Subd. 3.Mandatory disqualifications.  (a) In the case of
13.18 	licenses for manufacturers, distributors, distributor
13.19 	salespersons, bingo halls,linked bingo game providers, and
13.20 	gambling managers, the board may not issue or renew a license
13.21 	under this chapter, and shall revoke a license under this
13.22 	chapter, if the applicant or licensee, or a director, officer,
13.23 	partner, governor, or person in a supervisory or management
13.24 	position of the applicant or licensee:
13.25 	(1) has ever been convicted of a felony or a crime
13.26 	involving gambling;
13.27 	(2) has ever been convicted of (i) assault, (ii) a criminal
13.28 	violation involving the use of a firearm, or (iii) making
13.29 	terroristic threats;
13.30 	(3) is or has ever been connected with or engaged in an
13.31 	illegal business;
13.32 	(4) owes $500 or more in delinquent taxes as defined in
13.33 	section 270.72;
13.34 	(5) had a sales and use tax permit revoked by the
13.35 	commissioner of revenue within the past two years; or
13.36 	(6) after demand, has not filed tax returns required by the
14.1 	commissioner of revenue.  The board may deny or refuse to renew
14.2 	a license under this chapter, and may revoke a license under
14.3 	this chapter, if any of the conditions in this paragraph are
14.4 	applicable to an affiliate or direct or indirect holder of more
14.5 	than a five percent financial interest in the applicant or
14.6 	licensee.
14.7 	(b) In the case of licenses for organizations, the board
14.8 	may not issue or renew a license under this chapter, and shall
14.9 	revoke a license under this chapter, if the organization, or an
14.10 	officer or member of the governing body of the organization:
14.11 	(1) has been convicted of a felony or gross misdemeanor
14.12 	within the five years before the issuance or renewal of the
14.13 	license involving theft or fraud;
14.14 	(2) has ever been convicted of a crime involving gambling;
14.15 	or
14.16 	(3) has had a license issued by the board or director
14.17 	permanently revoked for violation of law or board rule.

14.18 	Sec. 14. Minnesota Statutes 2004, section 349.16,
14.19 	subdivision 2, is amended to read:
14.20 		Subd. 2.Issuance of gambling licenses.  (a) Licenses
14.21 	authorizing organizations to conduct lawful gambling may be
14.22 	issued by the board to organizations meeting the qualifications
14.23 	in paragraphs (b) to (h) if the board determines that the
14.24 	license is consistent with the purpose of sections 349.11 to
14.25 	349.22.
14.26 	(b) The organization must have been in existence for the
14.27 	most recent three years preceding the license application as a
14.28 	registered Minnesota nonprofit corporation or as an organization
14.29 	designated as exempt from the payment of income taxes by the
14.30 	Internal Revenue Code.
14.31 	(c) The organization at the time of licensing must have at
14.32 	least 15 active members.
14.33 	(d) The organization must not be in existence solely for
14.34 	the purpose of conducting gambling.
14.35 	(e) The organization has identified in its license
14.36 	application the lawful purposes on which it proposes to expend
15.1 	net profits from lawful gambling and has identified an annual
15.2 	goal for charitable contributions, expressed as a percentage of
15.3 	gross profits.
15.4 	(f) The organization has identified on its license
15.5 	application a gambling manager and certifies that the manager is
15.6 	qualified under this chapter.
15.7 	(g) The organization must not, in the opinion of the board
15.8 	after consultation with the commissioner of revenue, be seeking
15.9 	licensing primarily for the purpose of evading or reducing the
15.10 	tax imposed by section 297E.02, subdivision 6.
15.11 	(h) The organization has not exceeded the expenditure
15.12 	restrictions imposed under section 349.15, subdivision 1, or if
15.13 	the organization has exceeded the expenditure restrictions under
15.14 	section 349.15, subdivision 1, the organization has reimbursed
15.15 	any excess expenses from nongambling funds.

15.16 	Sec. 15. Minnesota Statutes 2004, section 349.16,
15.17 	subdivision 8, is amended to read:
15.18 		Subd. 8.Local investigation fee.  A statutory or home
15.19 	rule charter city or county notified under section 349.213,
15.20 	subdivision 2, may assess an investigation fee on organizations
15.21 	or bingo halls applying for or renewing a premises permit or a
15.22 	bingo hall license.  An investigation fee may not exceed the
15.23 	following limits:
15.24 	(1) for cities of the first class, $500;
15.25 	(2) for cities of the second class, $250;
15.26 	(3) for all other cities, $100; and
15.27 	(4) for counties, $375.

15.28 	Sec. 16. Minnesota Statutes 2004, section 349.161,
15.29 	subdivision 5, is amended to read:
15.30 		Subd. 5.Prohibition.  (a) No distributor, distributor
15.31 	salesperson, or other employee of a distributor, may also be a
15.32 	wholesale distributor of alcoholic beverages or an employee of a
15.33 	wholesale distributor of alcoholic beverages.
15.34 	(b) No distributor, distributor salesperson, or any
15.35 	representative, agent, affiliate, or other employee of a
15.36 	distributor, may:  (1) be involved in the conduct of lawful
16.1 	gambling by an organization; (2) keep or assist in the keeping
16.2 	of an organization's financial records, accounts, and
16.3 	inventories; or (3) prepare or assist in the preparation of tax
16.4 	forms and other reporting forms required to be submitted to the
16.5 	state by an organization.
16.6 	(c) No distributor, distributor salesperson, or any
16.7 	representative, agent, affiliate, or other employee of a
16.8 	distributor may provide a lessor of gambling premises any
16.9 	compensation, gift, gratuity, premium, or other thing of value.
16.10 	(d) No distributor, distributor salesperson, or any
16.11 	representative, agent, affiliate, or other employee of a
16.12 	distributor may provide an employee or agent of the organization
16.13 	any compensation, gift, gratuity, premium, or other thing of
16.14 	value greater than $25 per organization in a calendar year.
16.15 	(e) No distributor, distributor salesperson, or any
16.16 	representative, agent, affiliate, or other employee of a
16.17 	distributor may participate in any gambling activity at any
16.18 	gambling site or premises where gambling equipment purchased
16.19 	from that distributor or distributor salesperson is being used
16.20 	in the conduct of lawful gambling.
16.21 	(e) (f) No distributor, distributor salesperson, or any
16.22 	representative, agent, affiliate, or other employee of a
16.23 	distributor may alter or modify any gambling equipment, except
16.24 	to add a "last ticket sold" prize sticker.
16.25 	(f) (g) No distributor, distributor salesperson, or any
16.26 	representative, agent, affiliate, or other employee of a
16.27 	distributor may:  (1) recruit a person to become a gambling
16.28 	manager of an organization or identify to an organization a
16.29 	person as a candidate to become gambling manager for the
16.30 	organization; or (2) identify for an organization a potential
16.31 	gambling location.
16.32 	(g) (h) No distributor or distributor salesperson may
16.33 	purchase gambling equipment for resale to a person for use
16.34 	within the state from any person not licensed as a manufacturer
16.35 	under section 349.163, except for gambling equipment returned
16.36 	from an organization licensed under section 349.16, or exempt or
17.1 	excluded from licensing under section 349.166.
17.2 	(h) (i) No distributor or distributor salesperson may sell
17.3 	gambling equipment to any person for use in Minnesota other than
17.4 	(i) a licensed organization or organization excluded or exempt
17.5 	from licensing, or (ii) the governing body of an Indian tribe.
17.6 	(i) (j) No distributor or distributor salesperson may sell
17.7 	or otherwise provide a pull-tab or tipboard deal with the symbol
17.8 	required by section 349.163, subdivision 5, paragraph (h) (d),
17.9 	visible on the flare to any person other than in Minnesota to a
17.10 	licensed organization or organization exempt from licensing.

17.11 	Sec. 17. Minnesota Statutes 2004, section 349.162,
17.12 	subdivision 1, is amended to read:
17.13 		Subdivision 1.stamp registration required. (a) A
17.14 	distributor may not sell, transfer, furnish, or otherwise
17.15 	provide to a person, and no person may purchase, borrow, accept,
17.16 	or acquire from a distributor gambling equipment for use within
17.17 	the state unless the equipment has been registered with the
17.18 	board and has a registration stamp affixed, except for gambling
17.19 	equipment not stamped by the manufacturer pursuant to section
17.20 	349.163, subdivision 5 or 8.  Each stamp must bear a
17.21 	registration number assigned by the board.
17.22 	(b) A manufacturer must return all unused registration
17.23 	stamps in its possession to the board by February 1, 1995.  No
17.24 	manufacturer may possess unaffixed registration stamps after
17.25 	February 1, 1995.
17.26 	(c) After February 1, 1996, no person may possess any
17.27 	unplayed pull-tab or tipboard deals with a registration stamp
17.28 	affixed to the flare or any unplayed paddleticket cards with a
17.29 	registration stamp affixed to the master flare.  This paragraph
17.30 	does not apply to unplayed pull-tab or tipboard deals with a
17.31 	registration stamp affixed to the flare, or to unplayed
17.32 	paddleticket cards with a registration stamp affixed to the
17.33 	master flare, if the deals or cards are identified on a list of
17.34 	existing inventory submitted by a licensed organization or a
17.35 	licensed distributor, in a format prescribed by the commissioner
17.36 	of revenue, to the commissioner of revenue on or before February
18.1 	1, 1996 or the Department of Revenue in a manner prescribed by
18.2 	the board or the Department of Revenue.  Gambling equipment kept
18.3 	in violation of this paragraph subdivision is contraband under
18.4 	section 349.2125.

18.5 	Sec. 18. Minnesota Statutes 2004, section 349.162,
18.6 	subdivision 4, is amended to read:
18.7 		Subd. 4.Prohibition.  (a) No person other than a
18.8 	licensed distributor or licensed manufacturer may possess
18.9 	unaffixed registration stamps issued by the board for the
18.10 	purpose of registering gambling equipment.
18.11 	(b) Unless otherwise provided in this chapter, no person
18.12 	may possess gambling equipment that has not been stamped and 
18.13 	registered.
18.14 	(c) On and after January 1, 1991, no distributor may:
18.15 	(1) sell a bingo hard card or paper sheet that does not
18.16 	bear an individual number; or
18.17 	(2) sell a package of bingo paper sheets that does not
18.18 	contain bingo paper sheets in numerical order.

18.19 	Sec. 19. Minnesota Statutes 2004, section 349.162,
18.20 	subdivision 5, is amended to read:
18.21 		Subd. 5.Sales from facilities.  (a) All gambling
18.22 	equipment purchased or possessed by a licensed distributor for
18.23 	resale to any person for use in Minnesota must, prior to the
18.24 	equipment's resale, be unloaded into a storage facility located
18.25 	in Minnesota which the distributor owns or leases; and which has
18.26 	been registered, in advance and in writing, with the Division of
18.27 	Alcohol and Gambling Enforcement as a storage facility of the
18.28 	distributor.  All unregistered gambling equipment and all
18.29 	unaffixed registration stamps owned by, or in the possession of,
18.30 	a licensed distributor in the state of Minnesota shall be stored
18.31 	at a storage facility which has been registered with the
18.32 	Division of Alcohol and Gambling Enforcement.  No gambling
18.33 	equipment may be moved from the facility unless the gambling
18.34 	equipment has been first registered with the board, except for
18.35 	gambling equipment not stamped by the manufacturer pursuant to
18.36 	section 349.163, subdivision 5 or 8 or the Department of Revenue.
19.1 	(b) Notwithstanding section 349.163, subdivisions 5, 6, and
19.2 	8, a licensed manufacturer may ship into Minnesota approved or
19.3 	unapproved gambling equipment if the licensed manufacturer ships
19.4 	the gambling equipment to a Minnesota storage facility that is:
19.5 	(1) owned or leased by the licensed manufacturer; and (2)
19.6 	registered, in advance and in writing, with the Division of
19.7 	Alcohol and Gambling Enforcement as a manufacturer's storage
19.8 	facility.  No gambling equipment may be shipped into Minnesota
19.9 	to the manufacturer's registered storage facility unless the
19.10 	shipment of the gambling equipment is reported to the Department
19.11 	of Revenue in a manner prescribed by the department.  No
19.12 	gambling equipment may be moved from the storage facility unless
19.13 	the gambling equipment is sold to a licensed distributor and is
19.14 	otherwise in conformity with this chapter, is shipped to an
19.15 	out-of-state site and the shipment is reported to the Department
19.16 	of Revenue in a manner prescribed by the department, or is
19.17 	otherwise sold and shipped as permitted by board rule.
19.18 	(c) All storage facilities owned, leased, used, or operated
19.19 	by a licensed distributor or manufacturer may be entered upon
19.20 	and inspected by the employees of the Division of Alcohol and
19.21 	Gambling Enforcement, the Division of Alcohol and Gambling
19.22 	Enforcement director's authorized representatives, employees of
19.23 	the Gambling Control Board or its authorized representatives,
19.24 	employees of the Department of Revenue, or authorized
19.25 	representatives of the director of the Division of Special Taxes
19.26 	of the Department of Revenue during reasonable and regular
19.27 	business hours.  Obstruction of, or failure to permit, entry and
19.28 	inspection is cause for revocation or suspension of a
19.29 	manufacturer's or distributor's licenses and permits issued
19.30 	under this chapter.
19.31 	(d) Unregistered gambling equipment and unaffixed
19.32 	registration stamps found at any location in Minnesota other
19.33 	than the manufacturing plant of a licensed manufacturer or a
19.34 	registered storage facility are contraband under section
19.35 	349.2125.  This paragraph does not apply:
19.36 	(1) to unregistered gambling equipment being transported in
20.1 	interstate commerce between locations outside this state, if the
20.2 	interstate shipment is verified by a bill of lading or other
20.3 	valid shipping document; and
20.4 	(2) to gambling equipment not stamped by the manufacturer
20.5 	pursuant to section 349.163, subdivision 5 or 8 registered with
20.6 	the Department of Revenue for distribution to the tribal casinos.

20.7 	Sec. 20. Minnesota Statutes 2004, section 349.163,
20.8 	subdivision 3, is amended to read:
20.9 		Subd. 3.Prohibited sales.  (a) A manufacturer may not:
20.10 	(1) sell gambling equipment for use or resale within the
20.11 	state to any person not licensed as a distributor, except that
20.12 	gambling equipment used exclusively in a linked bingo game may
20.13 	be sold to a licensed linked bingo provider; or
20.14 	(2) sell gambling equipment to a distributor in this state
20.15 	that has the same serial number as another item of gambling
20.16 	equipment of the same type that is sold by that manufacturer for
20.17 	use or resale in this state.
20.18 	(b) A manufacturer, affiliate of a manufacturer, or person
20.19 	acting as a representative or agent of a manufacturer may not
20.20 	provide a lessor of gambling premises or an appointed official
20.21 	any compensation, gift, gratuity, premium, contribution, or
20.22 	other thing of value.
20.23 	(c) A manufacturer may not sell or otherwise provide a
20.24 	pull-tab or tipboard deal with the symbol required by
20.25 	subdivision 5, paragraph (h) (d), imprinted on the flare to any
20.26 	person other than a licensed distributor unless the manufacturer
20.27 	first renders the symbol permanently invisible.

20.28 	Sec. 21. Minnesota Statutes 2004, section 349.1635,
20.29 	subdivision 4, is amended to read:
20.30 		Subd. 4.Prohibition.  (a) Except for services associated
20.31 	exclusively with a linked bingo game, a linked bingo game
20.32 	provider may not participate or assist in the conduct of lawful
20.33 	gambling by an organization.  No linked bingo game provider may:
20.34 	(1) also be licensed as a bingo hall or hold any financial
20.35 	or managerial interest in a premises leased for the conduct of 
20.36 	bingo hall;
21.1 	(2) also be licensed as a distributor or hold any financial
21.2 	or managerial interest in a distributor;
21.3 	(3) sell or lease linked bingo game equipment to any person
21.4 	not licensed as an organization;
21.5 	(4) purchase gambling equipment to be used exclusively in a
21.6 	linked bingo game from any person not licensed as a manufacturer
21.7 	under section 349.163; and
21.8 	(5) provide an organization, a lessor of gambling premises,
21.9 	or an appointed official any compensation, gift, gratuity,
21.10 	premium, or contribution.
21.11 	(b) Employees of the board and the Division of Alcohol and
21.12 	Gambling Enforcement may inspect the books, records, inventory,
21.13 	and business premises of a licensed linked bingo game provider
21.14 	without notice during the normal business hours of the linked
21.15 	bingo game provider.  The board may charge a linked bingo game
21.16 	provider for the actual cost of conducting scheduled or
21.17 	unscheduled inspections of the licensee's facilities.

21.18 	Sec. 22. Minnesota Statutes 2004, section 349.166,
21.19 	subdivision 1, is amended to read:
21.20 		Subdivision 1.Exclusions.  (a) Bingo, with the exception
21.21 	of linked bingo games, may be conducted without a license and
21.22 	without complying with sections 349.168, subdivisions 1 and 2;
21.23 	349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and
21.24 	349.19, if it is conducted:
21.25 	(1) by an organization in connection with a county fair,
21.26 	the state fair, or a civic celebration and is not conducted for
21.27 	more than 12 consecutive days and is limited to no more than
21.28 	four separate applications for activities applied for and
21.29 	approved in a calendar year; or
21.30 	(2) by an organization that conducts four or fewer bingo
21.31 	occasions in a calendar year.
21.32 	An organization that holds a license to conduct lawful
21.33 	gambling under this chapter may not conduct bingo under this
21.34 	subdivision.
21.35 	(b) Bingo may be conducted within a nursing home or a
21.36 	senior citizen housing project or by a senior citizen
22.1 	organization if the prizes for a single bingo game do not exceed
22.2 	$10, total prizes awarded at a single bingo occasion do not
22.3 	exceed $200, no more than two bingo occasions are held by the
22.4 	organization or at the facility each week, only members of the
22.5 	organization or residents of the nursing home or housing project
22.6 	are allowed to play in a bingo game, no compensation is paid for
22.7 	any persons who conduct the bingo, and a manager is appointed to
22.8 	supervise the bingo.  Bingo conducted under this paragraph is
22.9 	exempt from sections 349.11 to 349.23, and the board may not
22.10 	require an organization that conducts bingo under this
22.11 	paragraph, or the manager who supervises the bingo, to register
22.12 	or file a report with the board.  The gross receipts from bingo
22.13 	conducted under the limitations of this subdivision are exempt
22.14 	from taxation under chapter 297A.
22.15 	(c) Raffles may be conducted by an organization without a
22.16 	license and without complying with sections 349.154 to 349.165
22.17 	and 349.167 to 349.213registering with the board if the value
22.18 	of all raffle prizes awarded by the organization in a calendar
22.19 	year does not exceed $1,500.
22.20 	(d) Except as provided in paragraph (b), the organization
22.21 	must maintain all required records of excluded gambling activity
22.22 	for 3-1/2 years.

22.23 	Sec. 23. Minnesota Statutes 2004, section 349.166,
22.24 	subdivision 2, is amended to read:
22.25 		Subd. 2.Exemptions.  (a) Lawful gambling, with the
22.26 	exception of linked bingo games, may be conducted by an
22.27 	organization without a license and without complying with
22.28 	sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4
22.29 	and 5; 349.18, subdivision 1; and 349.19 if:
22.30 	(1) the organization conducts lawful gambling on five or
22.31 	fewer days in a calendar year;
22.32 	(2) the organization does not award more than $50,000 in
22.33 	prizes for lawful gambling in a calendar year;
22.34 	(3) the organization pays a fee of $50 to the board,
22.35 	notifies the board in writing not less than 30 days before each
22.36 	lawful gambling occasion of the date and location of the
23.1 	occasion, or 60 days for an occasion held in the case of a city
23.2 	of the first class, the types of lawful gambling to be
23.3 	conducted, the prizes to be awarded, and receives an exemption
23.4 	identification number;
23.5 	(4) the organization notifies the local government unit 30
23.6 	days before the lawful gambling occasion, or 60 days for an
23.7 	occasion held in a city of the first class;
23.8 	(5) the organization purchases all gambling equipment and
23.9 	supplies from a licensed distributor; and
23.10 	(6) the organization reports to the board, on a single-page
23.11 	form prescribed by the board, within 30 days of each gambling
23.12 	occasion, the gross receipts, prizes, expenses, expenditures of
23.13 	net profits from the occasion, and the identification of the
23.14 	licensed distributor from whom all gambling equipment was
23.15 	purchased.
23.16 	(b) If the organization fails to file a timely report as
23.17 	required by paragraph (a), clause (3) or (6), the board shall
23.18 	not issue any authorization, license, or permit to the
23.19 	organization to conduct lawful gambling on an exempt, excluded,
23.20 	or licensed basis until the report has been filed and the
23.21 	organization may be subject to penalty as determined by the
23.22 	board.
23.23 	(c) Merchandise prizes must be valued at their fair market
23.24 	value.
23.25 	(d) Organizations that qualify to conduct exempt raffles
23.26 	under paragraph (a), are exempt from section 349.173, paragraph
23.27 	(b), clause (2), if the raffle tickets are sold only in
23.28 	combination with an organization's membership or a ticket for an
23.29 	organization's membership dinner and are not included with any
23.30 	other raffle conducted under the exempt permit.
23.31 	(e) Unused pull-tab and tipboard deals must be returned to
23.32 	the distributor within seven working days after the end of the
23.33 	lawful gambling occasion.  The distributor must accept and pay a
23.34 	refund for all returns of unopened and undamaged deals returned
23.35 	under this paragraph.
23.36 	(e) (f) An organization that is exempt from taxation on
24.1 	purchases of pull-tabs and tipboards under section 297E.02,
24.2 	subdivision 4, paragraph (b), clause (4), must return to the
24.3 	distributor any tipboard or pull-tab deal no part of which is
24.4 	used at the lawful gambling occasion for which it was purchased
24.5 	by the organization.
24.6 	(f) (g) The organization must maintain all required records
24.7 	of exempt gambling activity for 3-1/2 years.

24.8 	Sec. 24. Minnesota Statutes 2004, section 349.167,
24.9 	subdivision 1, is amended to read:
24.10 		Subdivision 1.Gambling manager required.  (a) All lawful
24.11 	gambling conducted by a licensed organization must be under the
24.12 	supervision of a gambling manager.  A gambling manager
24.13 	designated by an organization to supervise lawful gambling is
24.14 	responsible for the gross receipts of the organization and for
24.15 	its conduct in compliance with all laws and rules.  A person
24.16 	designated as a gambling manager shall maintain a fidelity 
24.17 	dishonesty bond in the sum of $10,000 in favor of the
24.18 	organization conditioned on the faithful performance of the
24.19 	manager's duties.  The terms of the bond must provide that
24.20 	notice be given to the board in writing not less than 30 days
24.21 	before its cancellation.
24.22 	(b) A person may not act as a gambling manager for more
24.23 	than one organization.
24.24 	(c) An organization may not conduct lawful gambling without
24.25 	having a gambling manager.
24.26 	(d) An organization may not have more than one gambling
24.27 	manager at any time.

24.28 	Sec. 25. Minnesota Statutes 2004, section 349.168,
24.29 	subdivision 8, is amended to read:
24.30 		Subd. 8.Percentage of gross profit paid. (a) A licensed
24.31 	organization may pay a percentage of the gross profit from
24.32 	raffle ticket sales to a nonprofit organization that sells
24.33 	raffle tickets for the licensed organization.
24.34 	(b) A licensed organization may compensate an employee of
24.35 	the organization for the sale of gambling equipment at a bar
24.36 	operation if the frequency of the activity is one day or less
25.1 	per week and the games are limited to 32 chances or less per
25.2 	game.  For purposes of this paragraph, an employee must not be a
25.3 	lessor, employee of the lessor, or an immediate family member of
25.4 	the lessor.

25.5 	Sec. 26. Minnesota Statutes 2004, section 349.17,
25.6 	subdivision 5, is amended to read:
25.7 		Subd. 5.Bingo cards and sheets.  (a) The board shall by
25.8 	rule require that all licensed organizations:  (1) conduct bingo
25.9 	only using liquid daubers on bingo paper sheets that bear an
25.10 	individual number recorded by the distributor or linked bingo
25.11 	game provider; and (2) use each bingo paper sheet for no more
25.12 	than one bingo occasion.  In lieu of the requirements of clause
25.13 	(2), a licensed organization may electronically record the sale
25.14 	of each bingo hard card or paper sheet at each bingo occasion
25.15 	using an electronic recording system approved by the board.
25.16 	(b) The requirements of paragraph (a) shall only apply to a
25.17 	licensed organization that received gross receipts from bingo in
25.18 	excess of $150,000 in the organization's last fiscal year.

25.19 	Sec. 27. Minnesota Statutes 2004, section 349.17,
25.20 	subdivision 7, is amended to read:
25.21 		Subd. 7.noon hour bar bingo. Notwithstanding
25.22 	subdivisions 1 and 3,An organization may conduct bar bingo
25.23 	subject to the following restrictions:
25.24 	(1) the bingo is conducted only between the hours of 11:00
25.25 	a.m. and 2:00 p.m.;
25.26 	(2) the bingo is conducted at a site the organization owns
25.27 	or leases and which has a license for the sale of intoxicating
25.28 	beverages on the premises under chapter 340A;
25.29 	(3) the bingo is limited to one progressive bingo game per
25.30 	site as defined by section 349.211, subdivision 2;
25.31 	(4) (2) the bingo is conducted using only bingo paper
25.32 	sheets purchased from a licensed distributor;
25.33 	(5) if the premises are leased, the (3) no rent may not
25.34 	exceed $25 per day for each day bingo is conducted be paid for a
25.35 	bar bingo occasion; and
25.36 	(6) (4) linked bingo games may not be conducted at a noon
26.1 	hour bar bingo occasion.

26.2 	Sec. 28. Minnesota Statutes 2004, section 349.1711,
26.3 	subdivision 1, is amended to read:
26.4 		Subdivision 1.Sale of tickets.  Tipboard games must be
26.5 	played using only tipboard tickets that are either (1) attached
26.6 	to a placard and arranged in columns or rows, or (2) separate
26.7 	from the placard and contained in a receptacle while the game is
26.8 	in play.  The placard serves as the game flare.  The placard
26.9 	must contain a seal that conceals the winning number or symbol.
26.10 	When a tipboard ticket is purchased and opened from a game
26.11 	containing more than 32 tickets, each player having a tipboard
26.12 	ticket with one or more predesignated numbers or symbols must
26.13 	sign the placard at the line indicated by the number or symbol
26.14 	on the tipboard ticket.

26.15 	Sec. 29. Minnesota Statutes 2004, section 349.173, is
26.16 	amended to read:
26.17 	349.173 CONDUCT OF RAFFLES.
26.18 	(a) Raffle tickets or certificates of participation at a
26.19 	minimum must list the three most expensive prizes to be
26.20 	awarded.  If additional prizes will be awarded that are not
26.21 	contained on the raffle ticket, the raffle ticket must contain
26.22 	the statement "A complete list of additional prizes is available
26.23 	upon request." , a complete list of additional prizes must be
26.24 	publicly posted at the event and copies of the complete prize
26.25 	list made available upon request.Notwithstanding section
26.26 	349.12, subdivision 33, raffles conducted under the exemptions
26.27 	in section 349.166 may use tickets that contain only the
26.28 	sequential number of the raffle ticket and no other information
26.29 	if the organization makes a list of prizes and a statement of
26.30 	other relevant information required by rule available to persons
26.31 	purchasing tickets and if tickets are only sold at the event and
26.32 	on the date when the tickets are drawn.
26.33 	(b) Raffles must be conducted in a manner that ensures:
26.34 	(1) all entries in the raffle have an equal chance of
26.35 	selection;
26.36 	(2) entry in the raffle is not conditioned upon any other
27.1 	purchase;
27.2 	(3) the method of selection is conducted in a public forum;
27.3 	(4) the method of selection cannot be manipulated or based
27.4 	on the outcome of an event not under the control of the
27.5 	organization;
27.6 	(5) physical presence at the raffle is not a requirement to
27.7 	win; and 
27.8 	(6) all sold and unsold tickets or certificates of
27.9 	participation are accounted for.
27.10 	(c) Methods of selecting winning entries from a raffle
27.11 	other than prescribed in rule may be used with the prior written
27.12 	approval of the board.

27.13 	EFFECTIVE DATE. This section is effective the day
27.14 	following final enactment.

27.15 	Sec. 30. Minnesota Statutes 2004, section 349.18,
27.16 	subdivision 1, is amended to read:
27.17 		Subdivision 1.Lease or ownership required; rent
27.18 	limitations.  (a) An organization may conduct lawful gambling
27.19 	only on premises it owns or leases.  Leases must be on a form
27.20 	prescribed by the board.  Except for leases entered into before
27.21 	August 1, 1994, the term of the lease may not begin before the
27.22 	effective date of the premises permit and must expire on the
27.23 	same day that the premises permit expires. Leases approved by
27.24 	the board must specify that the board may authorize an
27.25 	organization to withhold rent from a lessor for a period of up
27.26 	to 90 days if the board determines that illegal gambling
27.27 	occurred on the premises and that the lessor or its employees
27.28 	participated in the illegal gambling or knew of the gambling and
27.29 	did not take prompt action to stop the gambling.  The lease must
27.30 	authorize the continued tenancy of the organization without the
27.31 	payment of rent during the time period determined by the board
27.32 	under this paragraph.Copies of all leases must be made
27.33 	available to employees of the board and the Division of Alcohol
27.34 	and Gambling Enforcement on request.  The board may prescribe by
27.35 	rule limits on the amount of rent which an organization may pay
27.36 	to a lessor for premises leased for bingo.  Any rule adopted by
28.1 	the board limiting the amount of rent to be paid may only be
28.2 	effective for leases entered into, or renewed, after the
28.3 	effective date of the rule.
28.4 	(b) Rent paid by an organization for leased premises for
28.5 	the conduct of pull-tabs, tipboards, and paddlewheels is subject
28.6 	to the following limits:
28.7 	(1) for booth operations, including booth operations where
28.8 	a pull-tab dispensing device is located, booth operations where
28.9 	a bar operation is also conducted, and booth operations where
28.10 	both a pull-tab dispensing device is located and a bar operation
28.11 	is also conducted, the maximum rent is:
28.12 	(i) in any month where the organization's gross profit at
28.13 	those premises does not exceed $4,000, up to $400; and
28.14 	(ii) in any month where the organization's gross profit at
28.15 	those premises exceeds $4,000, up to $400 plus not more than ten
28.16 	percent of the gross profit for that month in excess of $4,000;
28.17 	(2) for bar operations, including bar operations where a
28.18 	pull-tab dispensing device is located but not including bar
28.19 	operations subject to clause (1), and for locations where only a
28.20 	pull-tab dispensing device is located:
28.21 	(i) in any month where the organization's gross profit at
28.22 	those premises does not exceed $1,000, up to $200; and
28.23 	(ii) in any month where the organization's gross profit at
28.24 	those premises exceeds $1,000, up to $200 plus not more than 20
28.25 	percent of the gross profit for that month in excess of $1,000;
28.26 	(3) a lease not governed by clauses (1) and (2) must be
28.27 	approved by the board before becoming effective;
28.28 	(4) total rent paid to a lessor from all organizations from
28.29 	leases governed by clause (1) may not exceed $1,750 per month.
28.30 	Total rent paid to a lessor from all organizations from leases
28.31 	governed by clause (2) may not exceed $2,500 per month.
28.32 	(c) Rent paid by an organization for leased premises for
28.33 	the conduct of bingo is subject to either of the following
28.34 	limits at the option of the parties to the lease:
28.35 	(1) not more than ten percent of the monthly gross profit
28.36 	from all lawful gambling activities held during bingo occasions
29.1 	excluding bar bingo or at a rate based on a cost per square foot
29.2 	not to exceed 110 percent of a comparable cost per square foot
29.3 	for leased space as approved by the director; and 
29.4 	(2) no rent may be paid for bar bingo.
29.5 	(d) Amounts paid as rent under leases are all-inclusive.
29.6 	No other services or expenses provided or contracted by the
29.7 	lessor may be paid by the organization, including, but not
29.8 	limited to, trash removal, janitorial and cleaning services,
29.9 	snow removal, lawn services, electricity, heat, security,
29.10 	security monitoring, storage, other utilities or services, and,
29.11 	in the case of bar operations, cash shortages, unless approved
29.12 	by the director.  Any other expenditure made by an organization
29.13 	that is related to a leased premises must be approved by the
29.14 	director.  An organization may not provide any compensation or
29.15 	thing of value to a lessor or the lessor's employees from any
29.16 	fund source other than its gambling account.  Rent payments may
29.17 	not be made to an individual.
29.18 	(d) (e) Notwithstanding paragraph (b), an organization may
29.19 	pay a lessor for food or beverages or meeting room rental if the
29.20 	charge made is comparable to similar charges made to other
29.21 	individuals or groups.
29.22 	(e) (f) No person, distributor, manufacturer, lessor,
29.23 	linked bingo game provider, or organization other than the
29.24 	licensed organization leasing the space may conduct any activity
29.25 	other than the sale or serving of food and beverages on the
29.26 	leased premises during times when lawful gambling is being
29.27 	conducted on the premises.
29.28 	(f) (g) At a site where the leased premises consists of an
29.29 	area on or behind a bar at which alcoholic beverages are sold
29.30 	and employees of the lessor are employed by the organization as
29.31 	pull-tab sellers at the site, pull-tabs and tipboard tickets may
29.32 	be sold and redeemed by those employees at any place on or
29.33 	behind the bar, but the tipboards and receptacles for pull-tabs
29.34 	and cash drawers for lawful gambling receipts must be maintained
29.35 	only within the leased premises.
29.36 	(g) (h) Employees of a lessor or employees of an
30.1 	organization may participate in lawful gambling on the premises
30.2 	provided (1) if pull-tabs or tipboards are sold, the
30.3 	organization voluntarily posts, or is required to post, the
30.4 	major prizes as specified in section 349.172; and (2) any
30.5 	employee of the lessor participating in lawful gambling is not a
30.6 	gambling employee for the organization conducting lawful
30.7 	gambling on the premises.
30.8 	(h) (i) A gambling employee may purchase pull-tabs or
30.9 	tipboards at the site of the employee's place of employment
30.10 	provided:
30.11 	(1) the organization voluntarily posts, or is required to
30.12 	post, the major prizes for pull-tab or tipboard games as
30.13 	specified in section 349.172; and
30.14 	(2) the employee is not involved in the sale of pull-tabs
30.15 	or tipboards at that site.
30.16 	(i) (j) At a leased site where an organization uses a
30.17 	paddlewheel consisting of 30 numbers or less or a tipboard
30.18 	consisting of 30 tickets or less, tickets may be sold throughout
30.19 	the permitted premises, but winning tickets must be redeemed,
30.20 	the paddlewheel must be located, and the tipboard seal must be
30.21 	opened within the leased premises.
30.22 	(j) (k) A member of the lessor's immediate family may not
30.23 	be a compensated employee of an organization leasing space at
30.24 	the premises.  For purposes of this paragraph, a "member of the
30.25 	immediate family" is a spouse, parent, child, or sibling.

30.26 	Sec. 31. Minnesota Statutes 2004, section 349.19,
30.27 	subdivision 4, is amended to read:
30.28 		Subd. 4.Discrepancies.  If at a bingo occasion a
30.29 	discrepancy of more than $20 $50 is found between the gross
30.30 	receipts as reported by the checkers and the gross receipts
30.31 	determined by adding the cash receipts, the discrepancy must be
30.32 	reported to the board within five days of the bingo occasion.

30.33 	Sec. 32. Minnesota Statutes 2004, section 349.19,
30.34 	subdivision 5, is amended to read:
30.35 		Subd. 5.Reports.  A licensed organization must report to
30.36 	the Department of Revenue and to its membership monthly, or
31.1 	quarterly in the case of a licensed organization which does not
31.2 	report more than $1,000 in gross receipts from lawful gambling
31.3 	in any calendar quarter, on its gross receipts, expenses,
31.4 	profits, and expenditure of profits from lawful gambling.  The
31.5 	report must include a reconciliation of the organization's
31.6 	profit carryover with its cash balance on hand.  If the
31.7 	organization conducts both bingo and other forms of lawful
31.8 	gambling, the figures for both must be reported separately. The
31.9 	organization must report annually to its membership and annually
31.10 	file with the board a financial summary report in a format
31.11 	prescribed by the board that identifies the organization's
31.12 	receipts and use of lawful gambling proceeds, including:
31.13 	(1) gross receipts;
31.14 	(2) prizes paid;
31.15 	(3) allowable expenses;
31.16 	(4) lawful purpose expenditures, including annual totals
31.17 	for types of charitable contributions and all taxes and fees as
31.18 	per section 349.12, subdivision 25, paragraph (a), clauses (8)
31.19 	and (18);
31.20 	(5) the percentage of annual gross profits used for
31.21 	charitable contributions; and 
31.22 	(6) the percentage of annual gross profits used for all
31.23 	taxes and fees as per section 349.12, subdivision 25, paragraph
31.24 	(a), clauses (8) and (18).

31.25 	Sec. 33. Minnesota Statutes 2004, section 349.19,
31.26 	subdivision 10, is amended to read:
31.27 		Subd. 10.Pull-tab records.  (a) The board shall by rule
31.28 	require a licensed organization to require each winner of a
31.29 	pull-tab prize of $50 or more to present identification in the
31.30 	form of a driver's license, Minnesota identification card, or
31.31 	other identification the board deems sufficient to allow the
31.32 	identification and tracing of the winner.  The rule must require
31.33 	the organization to retain winning pull-tabs of $50 or more, and
31.34 	the identification of the winner of the pull-tab, for 3-1/2
31.35 	years.
31.36 	(b) An organization must maintain separate cash banks for
32.1 	each deal of pull-tabs unless (1) two or more deals are
32.2 	commingled in a single receptacle pull-tab dispensing device, or
32.3 	(2) the organization uses a cash register, of a type approved by
32.4 	the board, which records all sales of pull-tabs by separate
32.5 	deals.
32.6 	(c) The board shall:
32.7 	(1) by rule adopt minimum technical standards for cash
32.8 	registers that may be used by organizations, and shall approve
32.9 	for use by organizations any cash register that meets the
32.10 	standards,;and
32.11 	(2) before allowing an organization to use a cash register
32.12 	that commingles receipts from several different pull-tab games
32.13 	in play, adopt rules that define how cash registers may be used
32.14 	and that establish a procedure for organizations to reconcile
32.15 	all pull-tab games in play at the end of each month.

32.16 	Sec. 34. Minnesota Statutes 2004, section 349.211,
32.17 	subdivision 2c, is amended to read:
32.18 		Subd. 2c.Tipboard prizes.  The maximum prize which may
32.19 	be awarded for a tipboard ticket is $500 $599, not including any
32.20 	cumulative or carryover prizes.  Cumulative or carryover prizes
32.21 	in tipboard games shall not exceed $2,500.

32.22 	Sec. 35. Minnesota Statutes 2004, section 349.2125,
32.23 	subdivision 1, is amended to read:
32.24 		Subdivision 1.Contraband defined.  The following are
32.25 	contraband:
32.26 	(1) all pull-tab or tipboard deals or paddleticket cards
32.27 	not stamped or bar coded in accordance with this chapter or
32.28 	chapter 297E;
32.29 	(2) all pull-tab or tipboard deals in the possession of any
32.30 	unlicensed person, firm, or organization, whether stamped or
32.31 	unstamped;
32.32 	(3) any container used for the storage and display of any
32.33 	contraband pull-tab or tipboard deals as defined in clauses (1)
32.34 	and (2);
32.35 	(4) all currency, checks, and other things of value used
32.36 	for pull-tab or tipboard transactions not expressly permitted
33.1 	under this chapter, and any cash drawer, cash register, or any
33.2 	other container used for illegal pull-tab or tipboard
33.3 	transactions including its contents;
33.4 	(5) any device including, but not limited to, motor
33.5 	vehicles, trailers, snowmobiles, airplanes, and boats used, with
33.6 	the knowledge of the owner or of a person operating with the
33.7 	consent of the owner, for the storage or transportation of more
33.8 	than five pull-tab or tipboard deals that are contraband under
33.9 	this subdivision.  When pull-tabs and tipboards are being
33.10 	transported in the course of interstate commerce between
33.11 	locations outside this state, the pull-tab and tipboard deals
33.12 	are not contraband, notwithstanding the provisions of clauses
33.13 	(1) and (12);
33.14 	(6) any unaffixed registration stamps except as provided in
33.15 	section 349.162, subdivision 4;
33.16 	(7) any prize used or offered in a game utilizing
33.17 	contraband as defined in this subdivision;
33.18 	(8) any altered, modified, or counterfeit pull-tab or
33.19 	tipboard ticket;
33.20 	(9) any unregistered gambling equipment except as permitted
33.21 	by this chapter;
33.22 	(10) any gambling equipment kept in violation of section
33.23 	349.18;
33.24 	(11) any gambling equipment not in conformity with law or
33.25 	board rule;
33.26 	(12) any pull-tab or tipboard deal in the possession of a
33.27 	person other than a licensed distributor or licensed
33.28 	manufacturer for which the person, upon demand of a licensed
33.29 	peace officer or authorized agent of the commissioner of revenue
33.30 	or director of alcohol and gambling enforcement, does not
33.31 	immediately produce for inspection the invoice or a true and
33.32 	correct copy of the invoice for the acquisition of the deal from
33.33 	a licensed distributor;
33.34 	(13) any pull-tab or tipboard deals or portions of deals on
33.35 	which the tax imposed under chapter 297E has not been paid; and
33.36 	(14) any device prohibited by section 609.76, subdivisions
34.1 	4 to 6.

34.2 	Sec. 36. Minnesota Statutes 2004, section 349.213, is
34.3 	amended to read:
34.4 	349.213 LOCAL AUTHORITY.
34.5 		Subdivision 1.Local regulation. (a) A statutory or home
34.6 	rule city or county has the authority to adopt more stringent
34.7 	regulation of lawful gambling within its jurisdiction, including
34.8 	the prohibition of lawful gambling, and may require a permit for
34.9 	the conduct of gambling exempt from licensing under section
34.10 	349.166.  The fee for a permit issued under this subdivision may
34.11 	not exceed $100.  The authority granted by this subdivision does
34.12 	not include the authority to require a license or permit to
34.13 	conduct gambling by organizations or sales by distributors or
34.14 	linked bingo game providers licensed by the board.  The
34.15 	authority granted by this subdivision does not include the
34.16 	authority to require an organization to make specific
34.17 	expenditures of more than ten percent per year from its net
34.18 	profits derived from lawful gambling.  For the purposes of this
34.19 	subdivision, net profits are gross profits less amounts expended
34.20 	for allowable expenses and paid in taxes assessed on lawful
34.21 	gambling.  A statutory or home rule charter city or a county may
34.22 	not require an organization conducting lawful gambling within
34.23 	its jurisdiction to make an expenditure to the city or county as
34.24 	a condition to operate within that city or county, except as
34.25 	authorized under section 349.16, subdivision 8, or 297E.02;
34.26 	provided, however, that an ordinance requirement that such
34.27 	organizations must contribute ten percent per year of their net
34.28 	profits derived from lawful gambling conducted at premises
34.29 	within the city's or county's jurisdiction to a fund
34.30 	administered and regulated by the responsible local unit of
34.31 	government without cost to such fund, for disbursement by the
34.32 	responsible local unit of government of the receipts for (i)
34.33 	lawful purposes, or (ii) police, fire, and other emergency or
34.34 	public safety-related services, equipment, and training,
34.35 	excluding pension obligations, is not considered an expenditure
34.36 	to the city or county nor a tax under section 297E.02, and is
35.1 	valid and lawful.  A city or county making expenditures
35.2 	authorized under this paragraph must by March 15 of each year
35.3 	file a report with the board, on a form the board prescribes,
35.4 	that lists all such revenues collected and expenditures for the
35.5 	previous calendar year.
35.6 	(b) A statutory or home rule city or county may by
35.7 	ordinance require that a licensed organization conducting lawful
35.8 	gambling within its jurisdiction expend all or a portion of its
35.9 	expenditures for lawful purposes on lawful purposes conducted or
35.10 	located within the city's or county's trade area.  Such an
35.11 	ordinance must be limited to lawful purpose expenditures of
35.12 	gross profits derived from lawful gambling conducted at premises
35.13 	within the city's or county's jurisdiction, must define the
35.14 	city's or county's trade area, and must specify the percentage
35.15 	of lawful purpose expenditures which must be expended within the
35.16 	trade area.  A trade area defined by a city under this
35.17 	subdivision must include each city and township contiguous to
35.18 	the defining city.
35.19 	(c) A more stringent regulation or prohibition of lawful
35.20 	gambling adopted by a political subdivision under this
35.21 	subdivision must apply equally to all forms of lawful gambling
35.22 	within the jurisdiction of the political subdivision, except a
35.23 	political subdivision may prohibit the use of paddlewheels.
35.24 		Subd. 2.Local approval. Before issuing or renewing a
35.25 	premises permit or bingo hall license, the board must notify the
35.26 	city council of the statutory or home rule city in which the
35.27 	organization's premises or the bingo hall is located or, if the
35.28 	premises or hall is located outside a city, the county board of
35.29 	the county and the town board of the town where the premises or
35.30 	hall is located.  The board may require organizations or bingo
35.31 	halls to notify the appropriate local government at the time of
35.32 	application.  This required notification is sufficient to
35.33 	constitute the notice required by this subdivision.  The board
35.34 	may not issue or renew a premises permit or bingo hall license 
35.35 	unless the organization submits a resolution from the city
35.36 	council or county board approving the premises permit or bingo
36.1 	hall license.  The resolution must have been adopted within 90
36.2 	days of the date of application for the new or renewed permit or
36.3 	license.
36.4 		Subd. 3.Local gambling tax. A statutory or home rule
36.5 	charter city that has one or more licensed organizations
36.6 	operating lawful gambling, and a county that has one or more
36.7 	licensed organizations outside incorporated areas operating
36.8 	lawful gambling, may impose a local gambling tax on each
36.9 	licensed organization within the city's or county's
36.10 	jurisdiction.  The tax may be imposed only if the amount to be
36.11 	received by the city or county is necessary to cover the costs
36.12 	incurred by the city or county to regulate lawful gambling.  The
36.13 	tax imposed by this subdivision may not exceed three percent per
36.14 	year of the gross receipts of a licensed organization from all
36.15 	lawful gambling less prizes actually paid out by the
36.16 	organization.  A city or county may not use money collected
36.17 	under this subdivision for any purpose other than to regulate
36.18 	lawful gambling. All documents pertaining to site inspections,
36.19 	fines, penalties, or other corrective action involving local
36.20 	lawful gambling regulation must be shared with the board within
36.21 	30 days of filing at the city or county of jurisdiction.A tax
36.22 	imposed under this subdivision is in lieu of all other local
36.23 	taxes and local investigation fees on lawful gambling.  A city
36.24 	or county that imposes a tax under this subdivision shall
36.25 	annually, by March 15, file a report with the board in a form
36.26 	prescribed by the board showing (1) the amount of revenue
36.27 	produced by the tax during the preceding calendar year, and (2)
36.28 	the use of the proceeds of the tax.

36.29 	Sec. 37. Minnesota Statutes 2004, section 609.75,
36.30 	subdivision 1, is amended to read:
36.31 		Subdivision 1.Lottery.  (a) A lottery is a plan which
36.32 	provides for the distribution of money, property or other reward
36.33 	or benefit to persons selected by chance from among participants
36.34 	some or all of whom have given a consideration for the chance of
36.35 	being selected.  A participant's payment for use of a 900
36.36 	telephone number or another means of communication that results
37.1 	in payment to the sponsor of the plan constitutes consideration
37.2 	under this paragraph.
37.3 	(b) An in-package chance promotion is not a lottery if all
37.4 	of the following are met:
37.5 	(1) participation is available, free and without purchase
37.6 	of the package, from the retailer or by mail or toll-free
37.7 	telephone request to the sponsor for entry or for a game piece;
37.8 	(2) the label of the promotional package and any related
37.9 	advertising clearly states any method of participation and the
37.10 	scheduled termination date of the promotion;
37.11 	(3) the sponsor on request provides a retailer with a
37.12 	supply of entry forms or game pieces adequate to permit free
37.13 	participation in the promotion by the retailer's customers;
37.14 	(4) the sponsor does not misrepresent a participant's
37.15 	chances of winning any prize;
37.16 	(5) the sponsor randomly distributes all game pieces and
37.17 	maintains records of random distribution for at least one year
37.18 	after the termination date of the promotion;
37.19 	(6) all prizes are randomly awarded if game pieces are not
37.20 	used in the promotion; and
37.21 	(7) the sponsor provides on request of a state agency a
37.22 	record of the names and addresses of all winners of prizes
37.23 	valued at $100 or more, if the request is made within one year
37.24 	after the termination date of the promotion.
37.25 	(c) Except as provided by section 349.40, acts in this
37.26 	state in furtherance of a lottery conducted outside of this
37.27 	state are included notwithstanding its validity where conducted.
37.28 	(d) The distribution of property, or other reward or
37.29 	benefit by an employer to persons selected by chance from among
37.30 	participants who , all of whom:
37.31 	(1) have made a contribution through a payroll or pension
37.32 	deduction campaign to a registered combined charitable
37.33 	organization, within the meaning of section 309.501; or 
37.34 	(2) have paid other consideration to the employer entirely
37.35 	for the benefit of such a registered combined charitable
37.36 	organization, as a precondition to the chance of being selected,
38.1 	is not a lottery if:
38.2 	(1) (i) all of the persons eligible to be selected are
38.3 	employed by or retirees of the employer; and
38.4 	(2) (ii) the cost of the property or other reward or
38.5 	benefit distributed and all costs associated with the
38.6 	distribution are borne by the employer.

38.7 	Sec. 38. REPEALER.
 38.8 	Minnesota Statutes 2004, sections 349.162, subdivision 3;
38.9 	349.164; and 349.17, subdivision 1, are repealed.

38.10 	ARTICLE 2
38.11 	 LOTTERY SERVICE BUSINESS

38.12 	Section 1. [299L.09] LOTTERY SERVICE BUSINESS.
38.13 		Subdivision 1.Definition. For purposes of this section:
38.14 	(a) A "lottery service business" is a commercial enterprise
38.15 	that for a fee or commission purchases lottery tickets on behalf
38.16 	of customers or subscribers.
38.17 	(b) "Division" means the Division of Alcohol and Gambling
38.18 	Enforcement in the Department of Public Safety.
38.19 	(c) "Commissioner" means the commissioner of public safety
38.20 	acting through the division.
38.21 	(d) "Disqualifying offense" means any felony, gross
38.22 	misdemeanor, and any criminal offense involving fraud,
38.23 	misrepresentation, or deceit.
38.24 		Subd. 2.Required statements. (a) All print advertising
38.25 	in any medium published by or on behalf of a lottery service
38.26 	business, and all print communications intended to solicit
38.27 	members, including Internet solicitations, for each lottery pool
38.28 	or subscription service offered, must contain a clear and
38.29 	prominent statement that discloses to the subscriber, either in
38.30 	print or in electronic format, a statement that describes how
38.31 	much of each subscriber's fees are used to buy tickets.
38.32 	(b) All advertising and solicitation described in paragraph
38.33 	(a) must contain the following statement in clear and readable
38.34 	type:  "This business is not affiliated with and is not an agent
38.35 	of the Minnesota State Lottery." 
38.36 		Subd. 3.Prohibitions. (a) A lottery service business
39.1 	may not accept as a customer or subscriber any person under age
39.2 	18, or make a payment of lottery winnings to a person under age
39.3 	18.
39.4 	(b) Except as necessary for the lottery service business to
39.5 	fill a pool, a lottery service business and any officer,
39.6 	director, or employee of the business may not have any stake or
39.7 	own any shares in any lottery pool it creates for customers or
39.8 	subscribers.
39.9 		Subd. 4.Lottery prize account. A lottery service
39.10 	business must deposit all money received as winnings from
39.11 	lottery tickets bought for or on behalf of customers or
39.12 	subscribers into a lottery prize account that it maintains
39.13 	separately from all other accounts of the business.  The
39.14 	business may expend money from the account, including interest
39.15 	thereon, only to pay winnings to customers or subscribers and to
39.16 	make payments required under subdivision 5.
39.17 		Subd. 5.Unclaimed prizes. (a) A lottery service
39.18 	business must make all good-faith efforts to distribute money in
39.19 	its lottery prize account to customers and subscribers entitled
39.20 	thereto.
39.21 	(b) Any prizewinning money deposited in the lottery prize
39.22 	account that has not been distributed to customers or
39.23 	subscribers as winnings within one year after the date of the
39.24 	drawing becomes an unclaimed prize.  On July 1 of each year, a
39.25 	lottery service business must transmit all unclaimed prizes,
39.26 	including all interest earned thereon while the prize was in the
39.27 	lottery prize account, to the commissioner.  The commissioner
39.28 	shall deposit all payments under this subdivision in the general
39.29 	fund.  This subdivision does not apply if the amount of
39.30 	prizewinning money in the account is less than $25.
39.31 		Subd. 6.Books and records. A lottery service business
39.32 	must keep a complete accounting and all records necessary to
39.33 	show fully the lottery service business's lottery transactions,
39.34 	including incoming revenue, tickets purchased, and winnings
39.35 	distributed.
39.36 	
EFFECTIVE DATE. This section is effective August 1, 2005.

40.1 	ARTICLE 3
40.2 	VIDEO GAME OF CHANCE

40.3 	Section 1. Minnesota Statutes 2004, section 609.75,
40.4 	subdivision 8, is amended to read:
40.5 		Subd. 8.Video game of chance.  A video game of chance is
40.6 	a game or device that simulates one or more games commonly
40.7 	referred to as poker, blackjack, craps, hi-lo, roulette, or
40.8 	other common gambling forms, though not offering any type of
40.9 	pecuniary award or gain to players.  The term also includes any
40.10 	video game having one or more of the following characteristics:
40.11 	(1) it is primarily a game of chance, and has no
40.12 	substantial elements of skill involved;
40.13 	(2) it awards game credits or replays and contains a meter
40.14 	or device that records unplayed credits or replays. A video
40.15 	game that simulates horse racing that does not involve a prize
40.16 	payout is not a video game of chance.
40.17 	
EFFECTIVE DATE. This section is effective the day
40.18 	following final enactment.

40.19 	ARTICLE 4
40.20 	SOCIAL SKILL GAME

40.21 	Section 1. Minnesota Statutes 2004, section 609.761,
40.22 	subdivision 3, is amended to read:
40.23 		Subd. 3.Social skill game.  Sections 609.755 and 609.76
40.24 	do not prohibit tournaments or contests that satisfy all of the
40.25 	following requirements:
40.26 	(1) the tournament or contest consists of the card games of
40.27 	chance commonly known as cribbage, skat, sheephead, bridge,
40.28 	euchre, pinochle, gin, 500, smear, Texas hold'em,or whist;
40.29 	(2) the tournament or contest does not provide any direct
40.30 	financial benefit to the promoter or organizer; and 
40.31 	(3) the sum value of all prizes awarded for each tournament
40.32 	or contest does not exceed $200; and 
40.33 	(4) for a tournament or contest involving Texas hold'em:
40.34 	(i) no person under 18 years of age may participate;
40.35 	(ii) the payment of an entry fee or other consideration for
40.36 	participating is prohibited;
41.1 	(iii) the value of all prizes awarded to an individual
41.2 	winner of a tournament or contest at a single location may not
41.3 	exceed $200 each day; and 
41.4 	(iv) the organizer or promoter must ensure that reasonable
41.5 	accommodations are made for players with disabilities.
41.6 	Accommodations to the table and the cards shall include the
41.7 	announcement of the cards visible to the entire table and the
41.8 	use of Braille cards for players who are blind.
41.9 	
EFFECTIVE DATE. This section is effective the day
41.10 	following final enactment and applies to acts committed on or
41.11 	after that date.