1.1 	A bill for an act
1.2 	relating to gambling; providing for lottery gaming
1.3 	machines; authorizing the director of the State
1.4 	Lottery to contract for placement of gaming machines;
1.5 	establishing horse racing purse payments; imposing a
1.6 	tax on gaming machine and card club revenue; providing
1.7 	powers and duties to the director; authorizing
1.8 	blackjack and other card games; amending Minnesota
1.9 	Statutes 2004, sections 240.13, by adding a
1.10 	subdivision; 240.15, subdivision 1; 240.30,
1.11 	subdivision 8; 240.35, subdivision 1; 299L.07,
1.12 	subdivisions 2, 2a; 340A.410, subdivision 5; 349A.01,
1.13 	subdivision 10, by adding subdivisions; 349A.10,
1.14 	subdivision 3; 349A.13; 541.20; 541.21; 609.75,
1.15 	subdivision 3; 609.761, subdivision 2; proposing
1.16 	coding for new law in Minnesota Statutes, chapters
1.17 	297A; 349A.
1.18 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.19 	Section 1. Minnesota Statutes 2004, section 240.13, is
1.20 	amended by adding a subdivision to read:
1.21 		Subd. 5a.Purses; gaming machines. From the commission
1.22 	received by a licensee pursuant to a gaming machine location
1.23 	contract entered into under section 349A.17, the licensee must
1.24 	set aside an amount equal to not less than 7.25 percent of the
1.25 	adjusted gross gaming machine revenues as defined under chapter
1.26 	349A, for purses for live horse races conducted by the
1.27 	licensee.  Purse payments made pursuant to this subdivision are
1.28 	in addition to purse payments otherwise established by law or
1.29 	contract.  Twenty percent of the money set aside for purses
1.30 	pursuant to this subdivision shall be transferred to the
1.31 	commission and used for the purposes in section 240.18,
2.1 	subdivisions 2, paragraph (d), and 3, paragraph (b), subject to
2.2 	the proportionality requirement in section 240.18, subdivision
2.3 	1.  The licensee and the horseperson's organization representing
2.4 	the majority of horsepersons who have raced at the racetrack
2.5 	during the preceding 12 months may negotiate percentages
2.6 	different from those stated in this section if the agreement is
2.7 	in writing and filed with the racing commission.

2.8 	Sec. 2. Minnesota Statutes 2004, section 240.15,
2.9 	subdivision 1, is amended to read:
2.10 		Subdivision 1.Taxes imposed.  (a) There is imposed a tax
2.11 	at the rate of six percent of the amount in excess of
2.12 	$12,000,000 annually withheld from all pari-mutuel pools by the
2.13 	licensee, including breakage and amounts withheld under section
2.14 	240.13, subdivision 4.  For the purpose of this subdivision,
2.15 	"annually" is the period from July 1 to June 30 of the next year.
2.16 	In addition to the above tax, the licensee must designate
2.17 	and pay to the commission a tax of one percent of the total
2.18 	amount bet on each racing day, for deposit in the Minnesota
2.19 	breeders fund.
2.20 	The taxes imposed by this clause must be paid from the
2.21 	amounts permitted to be withheld by a licensee under section
2.22 	240.13, subdivision 4.
2.23 	(b) The commission may impose an admissions tax of not more
2.24 	than ten cents on each paid admission at a licensed racetrack on
2.25 	a racing day if:
2.26 	(1) the tax is requested by a local unit of government
2.27 	within whose borders the track is located;
2.28 	(2) a public hearing is held on the request; and
2.29 	(3) the commission finds that the local unit of government
2.30 	requesting the tax is in need of its revenue to meet
2.31 	extraordinary expenses caused by the racetrack.
2.32 	(c) There is imposed a tax at the rate of five percent on
2.33 	amounts annually received from charges authorized under section
2.34 	240.30, subdivision 4, less amounts set aside for purse payments
2.35 	and the breeders fund, as required by section 240.135.

2.36 	Sec. 3. Minnesota Statutes 2004, section 240.30,
3.1 	subdivision 8, is amended to read:
3.2 		Subd. 8.Limitations.  The commission may not approve any
3.3 	plan of operation under subdivision 6 that exceeds any of the
3.4 	following limitations:
3.5 	(1) the maximum number of tables used for card playing at
3.6 	the card club at any one time, other than tables used for
3.7 	instruction, demonstrations, or tournament play, may not exceed
3.8 	50.  The table limit exception for tournament play is allowed
3.9 	for only one tournament per year that lasts for no longer than
3.10 	14 days;
3.11 	(2) except as provided in clause (3) (2), no wager may
3.12 	exceed $60;
3.13 	(3) (2) for games in which each player is allowed to make
3.14 	only one wager or has a limited opportunity to change that
3.15 	wager, no wager may exceed $300.

3.16 	Sec. 4. Minnesota Statutes 2004, section 240.35,
3.17 	subdivision 1, is amended to read:
3.18 		Subdivision 1.Generally.  A licensee of the commission
3.19 	may detain a person if the licensee has probable cause to
3.20 	believe that the person detained has violated section 609.76
3.21 	while at a card club authorized by section 240.30or at a
3.22 	facility where gaming machines are located under section
3.23 	349A.17.  For purposes of this section, "licensee" means the
3.24 	commission's director of racing security or a security officer
3.25 	licensed under Minnesota Rules, chapter 7878.

3.26 	Sec. 5. [297A.651] LOTTERY GAMING MACHINES; IN-LIEU TAX.
3.27 	Adjusted gross revenue from the operation of gaming
3.28 	machines authorized under chapter 349A are exempt from the tax
3.29 	imposed under section 297A.62.  The state lottery must on or
3.30 	before the 20th day of each month transmit to the commissioner
3.31 	an amount equal to the adjusted gross revenue from the operation
3.32 	of gaming machines, as defined in section 349A.01, for the
3.33 	previous month multiplied by 35 percent.  The commissioner shall
3.34 	deposit the money transmitted under this paragraph in the state
3.35 	treasury in the general fund.

3.36 	Sec. 6. Minnesota Statutes 2004, section 299L.07,
4.1 	subdivision 2, is amended to read:
4.2 		Subd. 2.Exclusions.  Notwithstanding subdivision 1, a
4.3 	gambling device:
4.4 	(1) may be sold by a person who is not licensed under this
4.5 	section, if the person (i) is not engaged in the trade or
4.6 	business of selling gambling devices, and (ii) does not sell
4.7 	more than one gambling device in any calendar year;
4.8 	(2) may be sold by the governing body of a federally
4.9 	recognized Indian tribe described in subdivision 2a, paragraph
4.10 	(b), clause (1), which is not licensed under this section, if
4.11 	(i) the gambling device was operated by the Indian tribe, (ii)
4.12 	the sale is to a distributor licensed under this section, and
4.13 	(iii) the licensed distributor notifies the commissioner of the
4.14 	purchase, in the same manner as is required when the licensed
4.15 	distributor ships a gambling device into Minnesota;
4.16 	(3) may be possessed by a person not licensed under this
4.17 	section if the person holds a permit issued under section
4.18 	299L.08; and 
4.19 	(4) may be possessed by a state agency, with the written
4.20 	authorization of the director, for display or evaluation
4.21 	purposes only and not for the conduct of gambling; and 
4.22 	(5) may be possessed by the state lottery as authorized
4.23 	under chapter 349A.

4.24 	Sec. 7. Minnesota Statutes 2004, section 299L.07,
4.25 	subdivision 2a, is amended to read:
4.26 		Subd. 2a.Restrictions.  (a) A manufacturer licensed
4.27 	under this section may sell, offer to sell, lease, or rent, in
4.28 	whole or in part, a gambling device only to a distributor
4.29 	licensed under this section or to the state lottery as
4.30 	authorized under chapter 349A.
4.31 	(b) A distributor licensed under this section may sell,
4.32 	offer to sell, market, rent, lease, or otherwise provide, in
4.33 	whole or in part, a gambling device only to:
4.34 	(1) the governing body of a federally recognized Indian
4.35 	tribe that is authorized to operate the gambling device under a
4.36 	tribal state compact under the Indian Gaming Regulatory Act,
5.1 	Public Law 100-497, and future amendments to it;
5.2 	(2) a person for use in the person's dwelling for display
5.3 	or amusement purposes in a manner that does not afford players
5.4 	an opportunity to obtain anything of value;
5.5 	(3) another distributor licensed under this section; or 
5.6 	(4) a person in another state who is authorized under the
5.7 	laws of that state to possess the gambling device; or 
5.8 	(5) the state lottery as authorized under chapter 349A.

5.9 	Sec. 8. Minnesota Statutes 2004, section 340A.410,
5.10 	subdivision 5, is amended to read:
5.11 		Subd. 5.Gambling prohibited.  (a) Except as otherwise
5.12 	provided in this subdivision, no retail establishment licensed
5.13 	to sell alcoholic beverages may keep, possess, or operate, or
5.14 	permit the keeping, possession, or operation on the licensed
5.15 	premises of dice or any gambling device as defined in section
5.16 	349.30, or permit gambling therein.
5.17 	(b) Gambling equipment may be kept or operated and raffles
5.18 	conducted on licensed premises and adjoining rooms when the use
5.19 	of the gambling equipment is authorized by (1) chapter 349, (2)
5.20 	a tribal ordinance in conformity with the Indian Gaming
5.21 	Regulatory Act, Public Law 100-497, or (3) a tribal-state
5.22 	compact authorized under section 3.9221.
5.23 	(c) Lottery tickets may be purchased and sold within the
5.24 	licensed premises as authorized by the director of the lottery
5.25 	under chapter 349A.
5.26 	(d) Dice may be kept and used on licensed premises and
5.27 	adjoining rooms as authorized by section 609.761, subdivision 4.
5.28 	(e) Gambling devices may be operated on the premises of a
5.29 	licensed racetrack as authorized by chapter 349A.

5.30 	Sec. 9. Minnesota Statutes 2004, section 349A.01,
5.31 	subdivision 10, is amended to read:
5.32 		Subd. 10.Lottery procurement contract.  "Lottery
5.33 	procurement contract" means a contract to provide lottery
5.34 	products, gaming machines, maintenance of gaming machines,
5.35 	computer hardware and software used to monitor sales of lottery
5.36 	tickets and gaming machine plays, and lottery tickets.  "Lottery
6.1 	procurement contract" does not include a contract to provide an
6.2 	annuity or prize payment agreement or materials, supplies,
6.3 	equipment, or services common to the ordinary operation of a
6.4 	state agency.

6.5 	Sec. 10. Minnesota Statutes 2004, section 349A.01, is
6.6 	amended by adding a subdivision to read:
6.7 		Subd. 14.Gaming machine. "Gaming machine" means any
6.8 	machine in which a coin token or other currency is deposited to
6.9 	play a game that uses a video display and microprocessors or an
6.10 	electromechanical device with a spinning reel.

6.11 	Sec. 11. Minnesota Statutes 2004, section 349A.01, is
6.12 	amended by adding a subdivision to read:
6.13 		Subd. 15.Gaming machine game. "Gaming machine game"
6.14 	means a game operated by a gaming machine as authorized by the
6.15 	director.

6.16 	Sec. 12. Minnesota Statutes 2004, section 349A.01, is
6.17 	amended by adding a subdivision to read:
6.18 		Subd. 16.Gaming machine play. "Gaming machine play"
6.19 	means an electronic record that proves participation in a gaming
6.20 	machine game.

6.21 	Sec. 13. Minnesota Statutes 2004, section 349A.01, is
6.22 	amended by adding a subdivision to read:
6.23 		Subd. 17.Adjusted gross gaming machine revenue.
 6.24 	"Adjusted gross gaming machine revenue" means the sum of all
6.25 	money received by the lottery for gaming machine plays, less the
6.26 	amount paid out in prizes for gaming machine games.

6.27 	Sec. 14. Minnesota Statutes 2004, section 349A.10,
6.28 	subdivision 3, is amended to read:
6.29 		Subd. 3.Lottery operations.  (a) The director shall
6.30 	establish a lottery operations account in the lottery fund.  The
6.31 	director shall pay all costs of operating the lottery, including
6.32 	payroll costs or amounts transferred to the state treasury for
6.33 	payroll costs, but not including lottery prizes, from the
6.34 	lottery operating account.  The director shall credit to the
6.35 	lottery operations account amounts sufficient to pay the
6.36 	operating costs of the lottery.
7.1 	(b) Except as provided in paragraph (e), the director may
7.2 	not credit in any fiscal year thereafter amounts to the lottery
7.3 	operations account which when totaled exceed 15 percent of gross
7.4 	revenue to the lottery fund in that fiscal year.  In computing
7.5 	total amounts credited to the lottery operations account under
7.6 	this paragraph the director shall disregard amounts transferred
7.7 	to or retained by lottery retailers as sales commissions or
7.8 	other compensation and amounts transferred or retained by a
7.9 	racetrack pursuant to a location contract under section 349A.17.
7.10 	(c) The director of the lottery may not expend after July
7.11 	1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
7.12 	year for contracts for the preparation, publication, and
7.13 	placement of advertising.
7.14 	(d) Except as the director determines, the lottery is not
7.15 	subject to chapter 16A relating to budgeting, payroll, and the
7.16 	purchase of goods and services.
7.17 	(e) In addition to the amounts credited to the lottery
7.18 	operations account under paragraph (b), the director is
7.19 	authorized, if necessary, to meet the current obligations of the
7.20 	lottery and to credit up to 25 percent of an amount equal to the
7.21 	average annual amount which was authorized to be credited to the
7.22 	lottery operations account for the previous three fiscal years
7.23 	but was not needed to meet the obligations of the lottery.

7.24 	Sec. 15. Minnesota Statutes 2004, section 349A.13, is
7.25 	amended to read:
7.26 	349A.13 RESTRICTIONS.
7.27 	Nothing in this chapter:
7.28 	(1) authorizes the director to conduct a lottery game or
7.29 	contest the winner or winners of which are determined by the
7.30 	result of a sporting event other than a horse race conducted
7.31 	under chapter 240;
7.32 	(2) authorizes the director to install or operate a lottery
7.33 	device operated by coin or currency which when operated
7.34 	determines the winner of a game except as authorized under
7.35 	section 349A.17; and
7.36 	(3) authorizes the director to sell pull-tabs as defined
8.1 	under section 349.12, subdivision 32.

8.2 	Sec. 16. [349A.17] GAMING MACHINES.
8.3 		Subdivision 1.Location contract. (a) The director may
8.4 	enter into a contract with a person to provide locations for
8.5 	gaming machines.  Contracts entered into under this section are
8.6 	not subject to chapter 16C.  The director may only enter a
8.7 	contract under this subdivision with a person that holds a class
8.8 	A license under chapter 240.  The gaming machines may only be
8.9 	placed at the racetrack for which the class A license under
8.10 	chapter 240 was issued.
8.11 	(b) In order to be eligible for a contract under this
8.12 	section, the class A licensee must have conducted at least 50
8.13 	days of live racing at the racetrack each year within the last
8.14 	five preceding calendar years.  A contract under this section
8.15 	must contain a provision under which the contract terminates on
8.16 	the first day of any calendar year following a calendar year
8.17 	during which the class A licensee has not conducted at least 50
8.18 	days of live racing at the licensee's racetrack.
8.19 	(c) Contracts entered into must provide for compensation to
8.20 	the racetrack in an amount equal to at least 55 percent of
8.21 	adjusted gross gaming machine revenue.  From the amount received
8.22 	by the racetrack under this section, the racetrack shall
8.23 	annually remit an amount equal to one-half of one percent of the
8.24 	adjusted gross gaming machine revenue to both the city or town
8.25 	and the county where the racetrack is located.
8.26 	(d) The director may cancel, suspend, or refuse to renew
8.27 	the location contract if the person:
8.28 	(1) no longer holds a class A license under chapter 240;
8.29 	(2) fails to account for proceeds from the gaming machines;
8.30 	(3) fails to remit funds to the director in accordance with
8.31 	the location contract;
8.32 	(4) violates a law, rule, or order of the director;
8.33 	(5) fails to comply with any of the terms of the location
8.34 	contract; or 
8.35 	(6) has acted in a manner prejudicial to public confidence
8.36 	in the integrity of the operation of the gaming machines.
9.1 	The cancellation, suspension, or refusal to renew the
9.2 	location contract under this paragraph is a contested case under
9.3 	sections 14.57 to 14.69.
9.4 	(e) No gaming machines may be located within a home rule
9.5 	charter or statutory city, or town, unless the governing body of
9.6 	the city or town adopts a resolution approving the location of
9.7 	the gaming machines within the city or town.
9.8 	(f) As a condition of entering into a contract under this
9.9 	section, the person holding a class A license under chapter 240
9.10 	must make to the director, for deposit in the general fund, a
9.11 	onetime payment of $100,000,000.  A contract must include a
9.12 	provision to refund this payment if this section is repealed by
9.13 	the legislature or held unconstitutional by a court of competent
9.14 	jurisdiction.
9.15 		Subd. 2.Operation. (a) All gaming machines that are
9.16 	placed at a racetrack pursuant to subdivision 1 must be operated
9.17 	and controlled by the director.
9.18 	(b) Gaming machines must be owned or leased by the director.
9.19 	(c) Gaming machines must be maintained by the lottery, or
9.20 	by a vendor that is under the control and direction of the
9.21 	director.
9.22 	(d) The director must have a central communications system
9.23 	that monitors activities on each gaming machine.  The central
9.24 	communications system must be located at a lottery office.
9.25 	(e) The director must supervise the counting of money taken
9.26 	from gaming machines.
9.27 	(f) The director must supervise the general security
9.28 	arrangements associated with and relating to the operation of
9.29 	the gaming machines, and implement procedures as deemed
9.30 	appropriate.
9.31 	(g) Advertising and promotional material produced by the
9.32 	racetrack relating to gaming machines located at its facility
9.33 	must be approved by the director.
9.34 	(h) The director may implement such other controls as are
9.35 	deemed necessary for the operation of gaming machines pursuant
9.36 	to this section.
10.1 		Subd. 3.Specifications. Gaming machines must:
10.2 	(1) maintain on nonresettable meters a permanent record,
10.3 	capable of being printed out, of all transactions by the machine
10.4 	and all entries into the machine; and 
10.5 	(2) be capable of being linked electronically to a central
10.6 	communication system to provide auditing program information as
10.7 	required by the director.
10.8 		Subd. 4.Games. The director shall specify the games
10.9 	that may be placed on a gaming machine as set forth under
10.10 	section 349A.04.  Gaming machines may conduct pari-mutuel
10.11 	wagering and display horse races pursuant to specifications set
10.12 	forth by the director.
10.13 		Subd. 5.Examination of machines. The director shall
10.14 	examine prototypes of gaming machines and require that the
10.15 	manufacturer of the machine pay the cost of the examination.
10.16 	The director may contract for the examination of gaming machines.
10.17 		Subd. 6.Testing of machines. The director may require
10.18 	working models of a gaming machine to be transported to the
10.19 	locations the director designates for testing, examination, and
10.20 	analysis.  The manufacturer shall pay all costs for testing,
10.21 	examination, analysis, and transportation of the machine model.
10.22 		Subd. 7.Prizes. A person who plays a gaming machine
10.23 	agrees to be bound by the rules and game procedures applicable
10.24 	to that particular gaming machine game.  The player acknowledges
10.25 	that the determination of whether the player has won a prize is
10.26 	subject to the rules and game procedures adopted by the
10.27 	director, claim procedures established by the director for the
10.28 	game, and any confidential or public validation tests
10.29 	established by the director for that game.  A prize claimed from
10.30 	the play of a gaming machine game is not subject to the
10.31 	provisions of section 349A.08, subdivision 8.
10.32 		Subd. 8.Prohibitions. (a) A person under the age of 18
10.33 	years may not play a game on or claim a prize from a gaming
10.34 	machine.
10.35 	(b) The director or any employee of the lottery, or a
10.36 	member of their immediate family residing in the same household,
11.1 	may not play a game on a gaming machine or receive a prize from
11.2 	the operation of a gaming machine.
11.3 		Subd. 9.Compulsive gambling; report. (a) The director
11.4 	shall prominently post, in the area where the gaming machines
11.5 	are located, the toll-free telephone number established by the
11.6 	commissioner of human services in connection with the compulsive
11.7 	gambling program established under section 245.98.  The director
11.8 	and the location provider shall establish a proactive plan to
11.9 	prevent and control problem gambling, including training of
11.10 	lottery and location provider personnel.
11.11 	(b) By January 15 of each year, the director shall submit a
11.12 	report to the legislature, of not more than five pages in
11.13 	length, setting forth the performance objectives of the plan and
11.14 	the progress that was made toward those objectives during the
11.15 	prior calendar year.  The director may establish a
11.16 	self-exclusion program by which persons, at their request, may
11.17 	be excluded from the facility where the gaming machines are
11.18 	located.
11.19 		Subd. 10.Local licenses. Except as provided in
11.20 	subdivision 1, no political subdivision may require a license to
11.21 	operate a gaming machine, restrict or regulate the placement of
11.22 	gaming machines, or impose a tax or fee on the business of
11.23 	operating gaming machines.
11.24 		Subd. 11.Reimbursement; racing commission. The racing
11.25 	commission under section 240.02 shall require the licensee to
11.26 	reimburse the commission's actual costs, including personnel
11.27 	costs, of regulating the gaming machines under this section.
11.28 	Amounts received under this subdivision must be deposited as
11.29 	provided in section 240.155, subdivision 1.

11.30 	Sec. 17. Minnesota Statutes 2004, section 541.20, is
11.31 	amended to read:
11.32 	541.20 RECOVERY OF MONEY LOST.
11.33 	Every person who, by playing at cards, dice, or other game,
11.34 	or by betting on the hands or sides of such as are gambling,
11.35 	shall lose to any person so playing or betting any sum of money
11.36 	or any goods, and pays or delivers the same, or any part
12.1 	thereof, to the winner, may sue for and recover such money by a
12.2 	civil action, before any court of competent jurisdiction.  For
12.3 	purposes of this section, gambling shall not include pari-mutuel
12.4 	wagering conducted under a license issued pursuant to chapter
12.5 	240, purchase or sale of tickets in the state lottery, purchase
12.6 	of gaming machine plays as authorized under chapter 349A,or
12.7 	gambling authorized under chapters 349 and 349A.

12.8 	Sec. 18. Minnesota Statutes 2004, section 541.21, is
12.9 	amended to read:
12.10 	541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
12.11 	Every note, bill, bond, mortgage, or other security or
12.12 	conveyance in which the whole or any part of the consideration
12.13 	shall be for any money or goods won by gambling or playing at
12.14 	cards, dice, or any other game whatever, or by betting on the
12.15 	sides or hands of any person gambling, or for reimbursing or
12.16 	repaying any money knowingly lent or advanced at the time and
12.17 	place of such gambling or betting, or lent and advanced for any
12.18 	gambling or betting to any persons so gambling or betting, shall
12.19 	be void and of no effect as between the parties to the same, and
12.20 	as to all persons except such as hold or claim under them in
12.21 	good faith, without notice of the illegality of the
12.22 	consideration of such contract or conveyance.  The provisions of
12.23 	this section shall not apply to:  (1) pari-mutuel wagering
12.24 	conducted under a license issued pursuant to chapter 240; (2)
12.25 	purchase of tickets in the state lottery or other wagering
12.26 	authorized under chapter 349A; (3) gaming activities conducted
12.27 	pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et
12.28 	seq.; or (4) lawful gambling activities permitted under chapter
12.29 	349.

12.30 	Sec. 19. Minnesota Statutes 2004, section 609.75,
12.31 	subdivision 3, is amended to read:
12.32 		Subd. 3.What are not bets.  The following are not bets:
12.33 	(1) A contract to insure, indemnify, guarantee or otherwise
12.34 	compensate another for a harm or loss sustained, even though the
12.35 	loss depends upon chance.
12.36 	(2) A contract for the purchase or sale at a future date of
13.1 	securities or other commodities.
13.2 	(3) Offers of purses, prizes or premiums to the actual
13.3 	contestants in any bona fide contest for the determination of
13.4 	skill, speed, strength, endurance, or quality or to the bona
13.5 	fide owners of animals or other property entered in such a
13.6 	contest.
13.7 	(4) The game of bingo when conducted in compliance with
13.8 	sections 349.11 to 349.23.
13.9 	(5) A private social bet not part of or incidental to
13.10 	organized, commercialized, or systematic gambling.
13.11 	(6) The operation of equipment or the conduct of a raffle
13.12 	under sections 349.11 to 349.22, by an organization licensed by
13.13 	the Gambling Control Board or an organization exempt from
13.14 	licensing under section 349.166.
13.15 	(7) Pari-mutuel betting on horse racing when the betting is
13.16 	conducted under chapter 240.
13.17 	(8) The purchase and sale of state lottery tickets and
13.18 	plays on a gaming machine under chapter 349A.

13.19 	Sec. 20. Minnesota Statutes 2004, section 609.761,
13.20 	subdivision 2, is amended to read:
13.21 		Subd. 2.State lottery.  Sections 609.755 and 609.76 do
13.22 	not prohibit the operation of the state lottery or the sale,
13.23 	possession, or purchase of tickets for the state lottery under
13.24 	chapter 349A, or the manufacture, possession, sale, or operation
13.25 	of a gaming machine under chapter 349A.

13.26 	Sec. 21. OTHER GAMES.
 13.27 	(a) A person with a gaming machine location contract under
13.28 	Minnesota Statutes, section 349A.17, may conduct other games
13.29 	that Indian gaming casinos within this state are authorized by
13.30 	compact or law to conduct.  The Minnesota Racing Commission
13.31 	shall adopt game procedures and take other actions necessary to
13.32 	regulate the conduct and ensure the integrity of the games.  A
13.33 	tax is imposed on games conducted under this section, at the
13.34 	rate of 20 percent of the adjusted gross receipts from the
13.35 	conduct of the games.  For purposes of this section, adjusted
13.36 	gross receipts is the gross receipts minus winnings paid to
14.1 	wagerers.
14.2 	(b) From the revenue received from games authorized under
14.3 	this section, the licensee must set aside an amount equal to not
14.4 	less than 7.25 percent of the adjusted gross receipts for purses
14.5 	for live horse races conducted by the licensee.  Purse payments
14.6 	under this section are in addition to any other purse payments
14.7 	established by law or contract.  Twenty percent of the money set
14.8 	aside for purses shall be transferred to the Minnesota Racing
14.9 	Commission and used for the purposes in Minnesota Statutes,
14.10 	section 240.18.  The licensee and the horseperson's organization
14.11 	representing the majority of horsepersons who have raced at the
14.12 	racetrack during the preceding 12 months may negotiate
14.13 	percentages different from those stated in this section if the
14.14 	agreement is in writing and filed with the racing commission.

14.15 	Sec. 22. SEVERABILITY; SAVINGS.
 14.16 	If any part of this act is found to be invalid because it
14.17 	is in conflict with a provision of the Constitution of the state
14.18 	of Minnesota or the Constitution of the United States, or for
14.19 	any other reason, all other provisions of this act shall remain
14.20 	valid and any rights, remedies, and privileges that have been
14.21 	otherwise accrued by this act, shall remain in effect and may be
14.22 	proceeded with and concluded under the provisions of this act.

14.23 	Sec. 23. EFFECTIVE DATE.
 14.24 	This act is effective the day following final enactment.