1.1 	A bill for an act
1.2 	relating to gambling; authorizing the operation of
1.3 	lottery gaming machines and conduct of other
1.4 	nonlottery games at a gaming facility; licensing and
1.5 	regulating the gaming facility; imposing a gaming
1.6 	transaction fee on gaming at the gaming facility;
1.7 	appropriating money; amending Minnesota Statutes 2004,
1.8 	sections 240.13, by adding a subdivision; 240.135;
1.9 	240.30, subdivision 1; 299L.07, subdivisions 2, 2a;
1.10 	340A.410, subdivision 5; 349A.01, subdivision 10, by
1.11 	adding subdivisions; 349A.04; 349A.10, subdivisions 3,
1.12 	6; 349A.13; 541.20; 541.21; 609.75, subdivision 3;
1.13 	609.761, by adding a subdivision; proposing coding for
1.14 	new law in Minnesota Statutes, chapters 16A; 299L;
1.15 	349A.
1.16 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.17 	ARTICLE 1
1.18 	LOTTERY OPERATIONS

1.19 	Section 1. PURPOSE.
 1.20 	The purpose of articles 1 to 6 is to:
1.21 	(1) recognize the significant inequities created by the
1.22 	current status of casino gaming in Minnesota given the extreme
1.23 	disparity in revenues generated by tribal casinos for
1.24 	Minnesota's Indian tribes and tribal members and the lack of any
1.25 	significant direct revenue to the state of Minnesota;
1.26 	(2) provide an opportunity for increased economic
1.27 	development and tribal self-sufficiency to tribal governments
1.28 	which, because of their locations and tribal populations, have
1.29 	not benefited significantly from gaming opportunities under the
1.30 	federal Indian Gaming Regulatory Act, United States Code, title
2.1 	25, sections 2701 to 2721;
2.2 	(3) provide for the generation of revenues to the state,
2.3 	including proceeds for distribution as set forth in the
2.4 	Minnesota Constitution, article XI, section 14;
2.5 	(4) establish a structure that promotes tribal sovereignty
2.6 	and self-governance and that provides revenues from casino
2.7 	gaming to tribal governments for the development of programs to
2.8 	alleviate persistent poverty conditions and to advance tribal
2.9 	goals; and 
2.10 	(5) provide for a 25-year moratorium against gambling
2.11 	expansion in this state.

2.12 	Sec. 2. Minnesota Statutes 2004, section 349A.01,
2.13 	subdivision 10, is amended to read:
2.14 		Subd. 10.Lottery procurement contract.  "Lottery
2.15 	procurement contract" means a contract to provide lottery
2.16 	products, gaming machines, maintenance of gaming machines,
2.17 	computer hardware and software used to monitor sales of lottery
2.18 	tickets and gaming machine plays, equipment used to conduct and
2.19 	monitor other lottery games at a gaming facility, equipment used
2.20 	for the conducting of other lottery games, and lottery tickets.
2.21 	"Lottery procurement contract" does not include a contract to
2.22 	provide an annuity or prize payment agreement or materials,
2.23 	supplies, equipment, or services common to the ordinary
2.24 	operation of a state agency.

2.25 	Sec. 3. Minnesota Statutes 2004, section 349A.01, is
2.26 	amended by adding a subdivision to read:
2.27 		Subd. 14.Gaming facility. "Gaming facility" means the
2.28 	site selected for the location of gaming machines and the
2.29 	conduct of other lottery games pursuant to a location contract
2.30 	under section 349A.17 and nonlottery casino games pursuant to a
2.31 	plan of operation approved under section 299L.094.

2.32 	Sec. 4. Minnesota Statutes 2004, section 349A.01, is
2.33 	amended by adding a subdivision to read:
2.34 		Subd. 15.Gaming machine. "Gaming machine" means any
2.35 	machine, system, or device which, upon payment of consideration
2.36 	in order to play a game, may award or entitle a player to a
3.1 	prize by reason of skill of the player or application of the
3.2 	element of chance, or both.

3.3 	Sec. 5. Minnesota Statutes 2004, section 349A.01, is
3.4 	amended by adding a subdivision to read:
3.5 		Subd. 16.Gaming machine game. "Gaming machine game"
3.6 	means a game operated by a gaming machine as authorized by the
3.7 	director.

3.8 	Sec. 6. Minnesota Statutes 2004, section 349A.01, is
3.9 	amended by adding a subdivision to read:
3.10 		Subd. 17.Gaming machine play. "Gaming machine play"
3.11 	means a record that proves participation in a gaming machine
3.12 	game.

3.13 	Sec. 7. Minnesota Statutes 2004, section 349A.01, is
3.14 	amended by adding a subdivision to read:
3.15 		Subd. 18.Adjusted gross gaming machine
3.16 	revenue. "Adjusted gross gaming machine revenue" means the sum
3.17 	of all money received for gaming machine plays less the amount
3.18 	paid out in prizes and for gaming machine games and promotional
3.19 	allowances approved by the director under section 349A.17.

3.20 	Sec. 8. Minnesota Statutes 2004, section 349A.01, is
3.21 	amended by adding a subdivision to read:
3.22 		Subd. 19.Other lottery game. "Other lottery game" means
3.23 	any game operated by the lottery at the gaming facility other
3.24 	than a gaming machine, where money or property are distributed
3.25 	to persons selected primarily by chance from among participants
3.26 	who have paid for a chance of being selected and any other game
3.27 	or activity determined to constitute a lottery within the
3.28 	meaning of the Minnesota Constitution, article XIII, section 5.
3.29 	Other lottery games do not include lottery games that are
3.30 	operated by the lottery at the gaming facility that are also
3.31 	sold by lottery retailers.

3.32 	Sec. 9. Minnesota Statutes 2004, section 349A.01, is
3.33 	amended by adding a subdivision to read:
3.34 		Subd. 20.Other lottery games adjusted gross
3.35 	revenue. "Other lottery games adjusted gross revenue" means the
3.36 	sum of all money from the operation of other lottery games at
4.1 	the gaming facility, less the amount paid out in prizes in the
4.2 	other lottery games and promotional allowances approved by the
4.3 	director under section 349A.17.

4.4 	Sec. 10. Minnesota Statutes 2004, section 349A.04, is
4.5 	amended to read:
4.6 	349A.04 LOTTERY GAME PROCEDURES.
4.7 	The director may adopt game procedures governing the
4.8 	following elements of the lottery:
4.9 	(1) lottery games;
4.10 	(2) ticket prices;
4.11 	(3) number and size of prizes;
4.12 	(4) methods of selecting winning tickets; and 
4.13 	(5) frequency and method of drawings;
4.14 	(6) gaming machine games;
4.15 	(7) cost of gaming machine plays;
4.16 	(8) other lottery games; and 
4.17 	(9) cost to participate in other lottery games.
4.18 	The adoption of lottery game procedures is not subject to
4.19 	chapter 14.

4.20 	Sec. 11. Minnesota Statutes 2004, section 349A.10,
4.21 	subdivision 3, is amended to read:
4.22 		Subd. 3.Lottery operations.  (a) The director shall
4.23 	establish a lottery operations account in the lottery fund.  The
4.24 	director shall pay all costs of operating the lottery, including
4.25 	payroll costs or amounts transferred to the state treasury for
4.26 	payroll costs, but not including lottery prizes, from the
4.27 	lottery operating account.  The director shall credit to the
4.28 	lottery operations account amounts sufficient to pay the
4.29 	operating costs of the lottery.
4.30 	(b) Except as provided in paragraph (e), the director may
4.31 	not credit in any fiscal year thereafter amounts to the lottery
4.32 	operations account which when totaled exceed 15 percent of gross
4.33 	revenue to the lottery fund in that fiscal year.  In computing
4.34 	total amounts credited to the lottery operations account under
4.35 	this paragraph the director shall disregard amounts transferred
4.36 	to or retained by lottery retailers as sales commissions or
5.1 	other compensation and amounts transferred to or retained by the
5.2 	tribal entity or racetrack pursuant to a location contract under
5.3 	section 349A.17.
5.4 	(c) The director of the lottery may not expend after July
5.5 	1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
5.6 	year for contracts for the preparation, publication, and
5.7 	placement of advertising.
5.8 	(d) Except as the director determines, the lottery is not
5.9 	subject to chapter 16A relating to budgeting, payroll, and the
5.10 	purchase of goods and services.
5.11 	(e) In addition to the amounts credited to the lottery
5.12 	operations account under paragraph (b), the director is
5.13 	authorized, if necessary, to meet the current obligations of the
5.14 	lottery and to credit up to 25 percent of an amount equal to the
5.15 	average annual amount which was authorized to be credited to the
5.16 	lottery operations account for the previous three fiscal years
5.17 	but was not needed to meet the obligations of the lottery.
5.18 	(f) Notwithstanding the provisions of this subdivision, the
5.19 	director may not credit, in any fiscal year, to the lottery
5.20 	operations account which when totaled exceed ten percent of
5.21 	adjusted gross revenue from the operation of gaming machines and
5.22 	other lottery games at each gaming facility.

5.23 	Sec. 12. Minnesota Statutes 2004, section 349A.10,
5.24 	subdivision 6, is amended to read:
5.25 		Subd. 6.Budget; plans.  The director shall prepare and
5.26 	submit a biennial budget plan to the commissioner of finance.
5.27 	The governor shall recommend the maximum amount available for
5.28 	the lottery in the budget the governor submits to the
5.29 	legislature under section 16A.11.  The maximum amount available
5.30 	to the lottery for operating expenses and capital expenditures
5.31 	shall be determined by law.  Operating expenses shall not
5.32 	include expenses that are a direct function of lottery sales,
5.33 	which include the cost of lottery prizes, amounts paid to
5.34 	lottery retailers as sales commissions or other compensation,
5.35 	amounts paid to produce and deliver scratch lottery games, and 
5.36 	amounts paid to an outside vendor to operate and maintain an
6.1 	online gaming system, amounts paid to an outside vendor to
6.2 	operate and maintain a central system for gaming machines and
6.3 	for other lottery games, and amounts paid to acquire and
6.4 	maintain gaming machines and equipment used to conduct other
6.5 	lottery games.  In addition, the director shall appear at least
6.6 	once each fiscal year before the senate and house of
6.7 	representatives committees having jurisdiction over gambling
6.8 	policy to present and explain the lottery's plans for future
6.9 	games and the related advertising and promotions and spending
6.10 	plans for the next fiscal year.

6.11 	Sec. 13. Minnesota Statutes 2004, section 349A.13, is
6.12 	amended to read:
6.13 	349A.13 RESTRICTIONS.
6.14 	Nothing in this chapter:
6.15 	(1) authorizes the director to conduct a lottery game or
6.16 	contest the winner or winners of which are determined by the
6.17 	result of a sporting event other than a horse race conducted
6.18 	under chapter 240;
6.19 	(2) authorizes the director to install or operate a lottery
6.20 	device operated by coin or currency which when operated
6.21 	determines the winner of a game except as authorized under
6.22 	section 349A.17; and
6.23 	(3) authorizes the director to sell pull-tabs as defined
6.24 	under section 349.12, subdivision 32.

6.25 	Sec. 14. [349A.17] GAMING FACILITY.
6.26 		Subdivision 1.Definitions. (a) For the purposes of this
6.27 	section, the terms defined in this subdivision have the meanings
6.28 	given them.
6.29 	(b) "Fiscal year" means the period between July 1 and June
6.30 	30.
6.31 	(c) "Racetrack" means an entity that holds a class A
6.32 	license from the Racing Commission under chapter 240.
6.33 	(d) "Racetrack location" means land owned by a racetrack as
6.34 	set forth in the racetrack's license application with the Racing
6.35 	Commission that is used to conduct horse racing and related
6.36 	activities under chapter 240.
7.1 	(e) "Tribal entity" means one or more entities, whether
7.2 	tribally or federally chartered corporations, or other legal
7.3 	entities, wholly owned by one or more tribal governments that
7.4 	are parties to the location contract under this section.
7.5 	(f) "Tribal government" means the governmental entity that
7.6 	represents one of the 11 federally recognized Indian tribes
7.7 	within the state of Minnesota.
7.8 	(g) "Site" means a parcel or contiguous parcels of land,
7.9 	and may be enlarged by the addition of contiguous parcels of
7.10 	land over time.
7.11 		Subd. 2.Location contract. (a) The director may enter
7.12 	into a contract with a tribal entity and a racetrack to provide
7.13 	locations for the operation of gaming machines and other lottery
7.14 	games.  The director may not enter into more than two location
7.15 	contracts for the operation of gaming machines and other lottery
7.16 	games under this section.
7.17 	(b) The director may enter into a contract with a racetrack
7.18 	under this section if the racetrack has conducted at least 50
7.19 	days of live racing at the racetrack each year within the last
7.20 	five preceding calendar years.
7.21 	(c) The director may enter a location contract with a
7.22 	tribal entity that meets the following criteria:
7.23 	(1) the tribal entity will operate a single gaming facility
7.24 	at one site which is on, adjacent to, or contiguous to a
7.25 	racetrack location on which the racetrack has conducted at least
7.26 	50 days of live racing each year within the last five preceding
7.27 	calendar years;
7.28 	(2) the tribal entity must be comprised of tribal
7.29 	governments which are each federally recognized tribes which
7.30 	operate current casino gaming operations under the federal
7.31 	Indian Gaming Regulatory Act, United States Code, title 25,
7.32 	sections 2701 to 2721, pursuant to a compact with the state of
7.33 	Minnesota;
7.34 	(3) to be eligible to participate in the tribal entity, the
7.35 	tribal government must demonstrate to the director that the
7.36 	revenues generated from current casino operations are less than
8.1 	$....... per tribal member and the revenues available to the
8.2 	tribal government from currently available revenue sources are
8.3 	insufficient to adequately meet the basic needs of tribal
8.4 	members including, but not limited to, housing, medical care,
8.5 	education, or other governmental services to members;
8.6 	(4) each of the tribal governments participating in the
8.7 	tribal entity must within 30 days following final enactment of
8.8 	this act file with the director a formal resolution from its
8.9 	tribal council which provides that:
8.10 	(i) the tribal government intends to participate in a
8.11 	tribal entity which will enter a contract that complies with the
8.12 	requirements of this act;
8.13 	(ii) the tribal government meets the eligibility criteria
8.14 	set forth in this paragraph and provides adequate documentation
8.15 	to supports its eligibility to participate in the tribal entity;
8.16 	(iii) a statement of the tribal government's intent to
8.17 	participate in a tribal entity that waives the entity's
8.18 	sovereign immunity relating to disputes arising out of the
8.19 	location contract or the construction, management, or operation
8.20 	of the gaming facility and that the tribal government expressly
8.21 	consents that the tribal entity will be subject to the
8.22 	jurisdiction of the state court and the administrative and
8.23 	regulatory jurisdiction of the state;
8.24 	(iv) a limited waiver of sovereign immunity and consent by
8.25 	the tribal government to the jurisdiction of state court solely
8.26 	to resolve disputes alleging that assets have been transferred
8.27 	from the tribal entity to the tribe in violation of the location
8.28 	contract or other applicable law and limited to any improperly
8.29 	transferred assets; and 
8.30 	(v) states the intention of the tribal government to ensure
8.31 	that revenues provided to the participating tribal governments
8.32 	from the tribal entity will be distributed between the
8.33 	participating tribal governments in a fair and equitable manner
8.34 	as determined solely by the participating tribal governments.
8.35 	(d) The location contract with the tribal entity shall have
8.36 	no legal effect on the validity of existing tribal-state gaming
9.1 	compacts.
9.2 	(e) A location contract entered into under this section
9.3 	must provide for the following provisions:
9.4 	(1) That the contract shall run for not more than 20 years
9.5 	and shall be negotiable and renewable every 15 years
9.6 	thereafter.  The director, tribal entity, participating tribal
9.7 	government, or racetrack that intends to not renegotiate and
9.8 	renew a location contract must, if reasonably possible, provide
9.9 	notice of its intent to the other parties at least one year
9.10 	before the location contract expires.
9.11 	(2) Liquidated damages to recover the initial investment by
9.12 	the tribal entity or the racetrack in the event the state,
9.13 	through legislation or constitutional amendment, revokes all or
9.14 	substantially all of the forms of gambling authorized under this
9.15 	section.  The liquidated damages may not be greater than the
9.16 	unpaid balance of any debt incurred by the tribal entity or the
9.17 	racetrack after the location contract has been executed and is
9.18 	limited to the debt incurred by the tribal entity or the
9.19 	racetrack for the gaming facility license, initial construction,
9.20 	or acquisition of the gaming facility less the present market
9.21 	value of the property or other assets related to the debt.  Any
9.22 	liquidated damages provision must expire within ten years.
9.23 	(3) All costs associated with managing the routine
9.24 	day-to-day activity of gaming machines and other lottery games,
9.25 	including, but not limited to, routine and minor service and
9.26 	maintenance, security monitoring, verifying winners, paying
9.27 	winners, collecting money from gaming machines, collecting
9.28 	wagers from the operation of other lottery games, and
9.29 	advertising and marketing of gaming machines and other lottery
9.30 	games shall be borne by the tribal entity or the racetrack.
9.31 	(4) All costs associated with purchase or lease of gaming
9.32 	machines, major maintenance of the gaming machines, and
9.33 	monitoring the activity of the gaming machines through a central
9.34 	system shall be borne by the lottery.
9.35 	(5) The tribal entity and the racetrack must maintain
9.36 	adequate liability and casualty insurance for the gaming
10.1 	facility.
10.2 	(6) Payment by each entity that has entered into a location
10.3 	contract to the commissioner of human services in an annual
10.4 	amount equal to the lesser of 0.5 percent of adjusted gross
10.5 	gaming machine revenue, other lottery games' adjusted gross
10.6 	income, and nonlottery casino games' adjusted gross revenue or
10.7 	$2,500,000 at that gaming facility, for problem and compulsive
10.8 	gambling treatment or programs.
10.9 	(7) Payment by each entity that has entered into a location
10.10 	contract to the city and county where the gaming facility is
10.11 	located in an annual amount equal to one percent of adjusted
10.12 	gross gaming machine revenue, other lottery games' adjusted
10.13 	gross income, and nonlottery casino games' adjusted gross
10.14 	revenue at that gaming facility.
10.15 	(8) Any controversy or claim between the parties to a
10.16 	location contract that arises out of a location contract may be
10.17 	settled by arbitration except as provided in paragraphs (j) and
10.18 	(k).
10.19 	(9) Authorization for the operation of gaming machines and
10.20 	the conduct of other lottery games at a temporary facility
10.21 	pending completion of a permanent facility subject to reasonable
10.22 	conditions for the operation of the temporary facility set by
10.23 	the director.  The operation of gaming machines and the
10.24 	conducting of other lottery games at a temporary facility shall
10.25 	be treated in the same manner as if it was conducted in a
10.26 	permanent facility.
10.27 	(10) If the legislature authorizes the operation of gaming
10.28 	machines as defined in section 349A.01, subdivision 15, other
10.29 	than at a gaming facility authorized under this act, within 25
10.30 	years of issuing a gaming facility license to a tribal entity or
10.31 	a racetrack under this act, the state must refund all of the
10.32 	license fees paid by the tribal entity and the racetrack
10.33 	pursuant to section 299L.09, subdivision 4, and notwithstanding
10.34 	section 16A.901, the gaming facility licensees will be relieved
10.35 	of any obligation to pay a gaming transaction fee for the
10.36 	conducting of nonlottery casino games for the remainder of the
11.1 	25-year period or for five years from the date that the other
11.2 	gaming machines are operated within the state, whichever period
11.3 	is longer, and the lottery will be relieved of any obligation to
11.4 	pay a gaming transaction fee for the conducting of gaming
11.5 	machines and bingo at the gaming facility for the remainder of
11.6 	the 25-year period or for five years from the date that the
11.7 	other gaming machines are operated within the state, whichever
11.8 	period is longer, and the lottery will be required to pay the
11.9 	amount that would have been due as a gaming transaction fee to
11.10 	the tribal entity and the racetrack, respectively.  This
11.11 	provision does not apply to the authorization of the operation
11.12 	of any gaming machines pursuant to the federal Indian Gaming
11.13 	Regulatory Act, United States Code, title 25, sections 2701 to
11.14 	2721.
11.15 	(f) In addition to the provisions required under paragraph
11.16 	(e), the location contract with the tribal entity must contain
11.17 	the following provisions:
11.18 	(1) The waiver of sovereign immunity by the tribal entity
11.19 	and the limited waiver of sovereign immunity by the tribal
11.20 	governments consistent with paragraph (c).
11.21 	(2) In the construction of the gaming facility, and the
11.22 	subsequent repair and maintenance of the facility, the tribal
11.23 	entity shall make good faith efforts to contract with American
11.24 	Indian and minority-owned businesses.
11.25 	(3) In operating the gaming facility, the tribal entity
11.26 	shall make good faith efforts to ensure that American Indians
11.27 	and other minorities are employed in entry level, middle
11.28 	management, and upper management positions.
11.29 	(4) If a tribal government participating in the tribal
11.30 	entity opts out of the tribal entity as part of the renewal
11.31 	process it does not affect the ability of the tribal entity to
11.32 	renew the location contract with the participation of any
11.33 	remaining tribal governments.
11.34 	(5) Payment of a fee by the lottery to the tribal entity in
11.35 	an amount equal to 70 percent of the adjusted gross gaming
11.36 	machine revenue and other lottery games' adjusted gross
12.1 	revenue.  Provided that beginning on January 1 following the
12.2 	first full year that the tribal entity's permanent facility has
12.3 	been in operation, (i) if the adjusted gross revenue from the
12.4 	conducting of gaming machines and other lottery games is less
12.5 	than $50,000,000 for that quarter, the fee due to the tribal
12.6 	entity from the lottery will be increased to 72 percent for that
12.7 	quarter; and (ii) if the adjusted gross revenue from the
12.8 	conducting of gaming machines and other lottery games is less
12.9 	than $25,000,000 for that quarter, the fee due to the tribal
12.10 	entity from the lottery will be increased to 74 percent for that
12.11 	quarter.  The lottery will pay an adjustment to the tribal
12.12 	entity to reflect the increased fee payments within 30 days
12.13 	after the end of the quarter.
12.14 	(g) In addition to the provisions required under paragraph
12.15 	(e), the location contract with the racetrack must contain the
12.16 	following provisions:
12.17 	(1) The location contract terminates on the first day of
12.18 	any calendar year following a calendar year during which the
12.19 	class A licensee has not conducted at least 50 days of live
12.20 	racing at the licensee's racetrack.
12.21 	(2) Payment of a fee by the lottery to the racetrack in an
12.22 	amount equal to 64 percent of the adjusted gross gaming machine
12.23 	revenue and other lottery games' adjusted gross revenue.
12.24 	Provided that beginning on January 1 following the first full
12.25 	year that the racetrack's permanent facility has been in
12.26 	operation, (i) if the adjusted gross revenue from the conducting
12.27 	of gaming machines and other lottery games is less than
12.28 	$50,000,000 for that quarter, the fee due to the racetrack from
12.29 	the lottery will be increased to 66 percent for that quarter;
12.30 	and (ii) if the adjusted gross revenue from the conducting of
12.31 	gaming machines and other lottery games is less than $25,000,000
12.32 	for that quarter, the fee due to the racetrack for that quarter
12.33 	will be increased to 68 percent for that quarter.  The lottery
12.34 	will pay an adjustment to the racetrack to reflect the increased
12.35 	fee payments within 30 days after the end of the quarter.
12.36 	(h) No gaming facility may be located within a home rule
13.1 	charter or statutory city, or town, unless the governing body of
13.2 	the city or town adopts a resolution approving the site of the
13.3 	gaming facility within the city or town.
13.4 	(i) The tribal entity and the racetrack may establish
13.5 	reasonable standards for payment of promotional allowances to
13.6 	players and the proportional allocation of promotional
13.7 	allowances between revenue generated from gaming machines, other
13.8 	lottery games, and nonlottery casino games.  Upon approval of
13.9 	the standards for promotional allowances, the director shall
13.10 	reimburse the tribal entity for the cost of promotional
13.11 	allowances paid by the tribal entity.
13.12 	(j) The director may by administrative action cancel or
13.13 	suspend a location contract if the director reasonably
13.14 	determines that the tribal entity or the racetrack has
13.15 	materially breached any material provision of the location
13.16 	contract and has failed to cure that breach in a reasonable
13.17 	time, or if the tribal entity's or racetrack's gaming facility
13.18 	license has been suspended or revoked by the commissioner of
13.19 	public safety.
13.20 	A contract cancellation or suspension under this paragraph
13.21 	is a contested case under sections 14.57 to 14.69 and is in
13.22 	addition to any criminal penalties provided for a violation of
13.23 	law or rule.
13.24 	(k) The director may by administrative action impose a
13.25 	civil penalty, issue correction orders, or resolve in any other
13.26 	manner as determined appropriate by the director, if the
13.27 	director determines that the tribal entity or the racetrack has
13.28 	breached any term of the location contract.  The imposition of a
13.29 	civil penalty is a contested case under sections 14.57 to 14.69
13.30 	and is in addition to any criminal penalties provided for a
13.31 	violation of law or rule.
13.32 	(l) The rights and interests provided by a location
13.33 	contract are specific to the parties to the location contract
13.34 	and are not transferable without the written approval of the
13.35 	director.
13.36 	(m) Gaming machines may only be placed and other lottery
14.1 	games may only be conducted at a gaming facility that is owned
14.2 	or leased by the tribal entity or a racetrack.
14.3 	(n) A contract entered into under this subdivision is not
14.4 	subject to chapter 16C.
14.5 	(o) The amounts paid by the tribal entity and the racetrack
14.6 	to the commissioner of human services pursuant to a location
14.7 	contract under this section are annually appropriated to the
14.8 	commissioner of human services for problem and compulsive
14.9 	gambling treatment or programs, including programs that are
14.10 	designed to address compulsive gambling in American Indian and
14.11 	minority communities.
14.12 		Subd. 3.Operation. (a) All gaming machines that are
14.13 	placed at a gaming facility or other lottery games conducted at
14.14 	a gaming facility must be operated and controlled by the
14.15 	director.
14.16 	(b) Gaming machines must be owned or leased by the director.
14.17 	(c) Major maintenance of the gaming machines shall be
14.18 	controlled by the director or by a vendor that is under the
14.19 	control and direction of the director.
14.20 	(d) The director must establish and control a central
14.21 	communications system that monitors activities on each gaming
14.22 	machine.
14.23 	(e) Equipment used to conduct other lottery games at a
14.24 	gaming facility must be owned or leased by the director.
14.25 	(f) The director must approve the security plans and
14.26 	implementation of security measures associated with and relating
14.27 	to the operation of the gaming machines and the conducting of
14.28 	other lottery games at a gaming facility.
14.29 	(g) Advertising and promotional material produced by a
14.30 	gaming facility relating to gaming machines and the conduct of
14.31 	other lottery games at a gaming facility must be approved by the
14.32 	director in a timely manner.
14.33 	(h) The director may authorize the tribal entity and the
14.34 	racetrack to manage the routine day-to-day operation of the
14.35 	gaming machines and the conducting of other lottery games at a
14.36 	gaming facility, provided that the director shall maintain
15.1 	overall control of the operation of the gaming machines and the
15.2 	conducting of other lottery games at the gaming facility.
15.3 	(i) The costs associated with procuring and maintaining
15.4 	gaming machines and equipment involved in operating other
15.5 	lottery games, and costs associated with acquiring, maintaining,
15.6 	and operating the central system used to monitor the activity of
15.7 	gaming machines, shall be borne by the lottery.
15.8 	(j) All proceeds from the operation of gaming machines and
15.9 	conduct of other lottery games received by the tribal entity and
15.10 	the racetrack constitute a trust fund until transmitted to the
15.11 	director.
15.12 	(k) The director may require the tribal entity and the
15.13 	racetrack to deposit in a trust account or other agreed upon
15.14 	form of account, in a designated bank, all money received by the
15.15 	tribal entity and the racetrack from the operation of gaming
15.16 	machines and the conduct of other lottery games.
15.17 	(l) If the tribal entity or the racetrack fail to pay any
15.18 	money due the director within the time prescribed by the
15.19 	director, the tribal entity or the racetrack shall pay interest
15.20 	on the amount owed at the rate set for lottery retailers under
15.21 	Minnesota Rules, part 7856.7020.
15.22 	(m) The director may implement policies, procedures, and
15.23 	other controls that are determined to be necessary by the
15.24 	director for the operation of gaming machines and the conducting
15.25 	of other lottery games pursuant to this section.
15.26 		Subd. 4.Games. The director shall specify the games
15.27 	that may be played on a gaming machine and the manner in which
15.28 	other lottery games are conducted at a gaming facility as set
15.29 	forth under section 349A.04.
15.30 		Subd. 5.Specifications. Gaming machines must:
15.31 	(1) maintain on nonresettable meters a permanent record,
15.32 	capable of being printed out, of all transactions by the machine
15.33 	and all entries into the machine.  There must be a reasonable
15.34 	number of gaming machines placed at a gaming facility which
15.35 	afford players the option to receive winnings in the form of
15.36 	either coins or tokens;
16.1 	(2) be capable of being linked to a central communications
16.2 	system to provide auditing program information as required by
16.3 	the director; and 
16.4 	(3) there must be a reasonable number of gaming machines at
16.5 	the facility which are accessible to individuals with
16.6 	disabilities.  For the purposes of this subdivision,
16.7 	"individuals with disabilities" includes any person who has a
16.8 	physical or sensory impairment which materially limits one or
16.9 	more life activities.
16.10 		Subd. 6.Examination of machines. The director shall
16.11 	examine prototypes of gaming machines and require that the
16.12 	manufacturer of the machine pay the cost of the examination.
16.13 	The director may contract for the examination of gaming
16.14 	machines.  The director may require working models of a gaming
16.15 	machine transported to the locations the director designates for
16.16 	testing, examination, and analysis.  The manufacturer shall pay
16.17 	all costs of any testing, examination, analysis, and
16.18 	transportation of the machine model.
16.19 		Subd. 7.Prizes. A person who plays a gaming machine or
16.20 	plays any other lottery game at the gaming facility agrees to be
16.21 	bound by the rules and game procedures applicable to that
16.22 	particular game.  The player acknowledges that the determination
16.23 	of whether the player has won a prize is subject to the rules
16.24 	and game procedures adopted by the director, claim procedures
16.25 	established by the director for that game, and any confidential
16.26 	or public validation tests established by the director for that
16.27 	game.  A person under 18 years of age may not claim a prize from
16.28 	the operation of a gaming machine or the conducting of any other
16.29 	lottery game at the gaming facility.  A prize claimed from the
16.30 	play of a gaming machine game or the conduct of any other
16.31 	lottery game is not subject to section 349A.08, subdivision 8.
16.32 		Subd. 8.Prohibitions. A person under the age of 18
16.33 	years may not play a game on a gaming machine or participate in
16.34 	any other lottery game at the gaming facility.
16.35 		Subd. 9.Compulsive gambling notice. The tribal entity
16.36 	or racetrack shall prominently post, in areas of the gaming
17.1 	facility where gaming machines are located or where other
17.2 	lottery games are conducted, the toll-free telephone number
17.3 	established by the commissioner of human services in connection
17.4 	with the problem and compulsive gambling program.  The tribal
17.5 	entity or racetrack shall establish, with the approval of the
17.6 	director, a proactive plan relating to problem and compulsive
17.7 	gambling.
17.8 		Subd. 10.Local licenses; local fees. A political
17.9 	subdivision may not require a license to operate a gaming
17.10 	machine or conduct other lottery games or nonlottery casino
17.11 	games as defined under section 299L.094, restrict or regulate
17.12 	the placement of gaming machines or the conducting of other
17.13 	lottery or nonlottery casino games, or impose a fee or charge on
17.14 	the business of operating gaming machines or the conducting of
17.15 	other lottery or nonlottery casino games at the gaming facility.

17.16 	Sec. 15. LOTTERY BUDGET; GAMING FACILITY.
 17.17 	The director of the State Lottery shall submit a budget for
17.18 	the operation of gaming machines and for the conduct of other
17.19 	lottery games at a gaming facility as authorized under Minnesota
17.20 	Statutes, section 349A.17, to the commissioner of finance.
17.21 	Notwithstanding Minnesota Statutes, section 349A.10, subdivision
17.22 	6, the director of the State Lottery may expend amounts
17.23 	necessary to operate gaming at a gaming facility.  Amounts
17.24 	expended by the director of the State Lottery for the conducting
17.25 	of gaming at the gaming facility in fiscal years 2006 and 2007
17.26 	are not subject to the maximum amount set in law for the
17.27 	operation of the lottery.

17.28 	Sec. 16. EFFECTIVE DATE.
 17.29 	This article is effective the day following final enactment.

17.30 	ARTICLE 2
17.31 	DEPARTMENT OF PUBLIC SAFETY

17.32 	Section 1. [299L.09] GAMING FACILITY.
17.33 		Subdivision 1.Definitions. For the purposes of this
17.34 	section and sections 299L.09 to 299L.095, the following terms
17.35 	have the meanings given them.
17.36 	(a) "Direct financial interest" means ownership or control
18.1 	of at least five percent interest in the racetrack, tribal
18.2 	entity or management entity, or other financial interest in the
18.3 	tribal entity or management entity.
18.4 	(b) "Gaming facility" is as defined in section 349A.01.
18.5 	(c) "Lottery director" means the director of the Minnesota
18.6 	State Lottery under chapter 349A.
18.7 	(d) "Management entity" means the entity applying for or
18.8 	holding a management license under section 299L.092.
18.9 	(e) "Racetrack" is as defined in section 349A.17.
18.10 	(f) "Tribal entity" is as defined in section 349A.17.
18.11 		Subd. 2.License required. The tribal entity or
18.12 	racetrack that will own and operate, whether directly or through
18.13 	another tribal or management entity, a gaming facility under
18.14 	section 349A.17 must obtain a gaming facility license from the
18.15 	commissioner.
18.16 		Subd. 3.Application. An application for a license under
18.17 	this section must be on a form prescribed by the commissioner.
18.18 	The commissioner may issue a gaming facility license to the
18.19 	tribal entity or a racetrack that will operate the gaming
18.20 	facility.
18.21 		Subd. 4.License fee. Upon issuance of the license, each
18.22 	licensee must pay a onetime license fee of $100,000,000 to the
18.23 	commissioner.  The racetrack that has received a license under
18.24 	this section must pay an additional $25,000,000, payable to the
18.25 	commissioner, upon opening of a permanent gaming facility or
18.26 	within two years of issuance of the initial license, whichever
18.27 	occurs first.
18.28 		Subd. 5.License issuance. (a) The commissioner shall
18.29 	issue a license under this section unless information obtained
18.30 	from the comprehensive background check establishes that
18.31 	issuance of the license would be adverse to the public interest
18.32 	or to the effective regulation of gaming.  If a license
18.33 	application is denied, the applicant may reapply for a license.
18.34 	(b) The commissioner may only issue a gaming facility
18.35 	license to a tribal entity that, through a valid limited waiver
18.36 	of sovereign immunity, is subject to the jurisdiction of the
19.1 	Minnesota state courts and the administrative jurisdiction and
19.2 	regulation of the state.
19.3 	(c) A license issued under this section may not be
19.4 	transferred without the written approval of the commissioner.
19.5 		Subd. 6.Background investigation. Before issuing a
19.6 	gaming facility license, the commissioner shall conduct a
19.7 	comprehensive background and financial investigation of the
19.8 	applicant, including its officers, directors, managers,
19.9 	supervisory personnel, and persons with a direct financial
19.10 	interest in the applicant.  The commissioner may charge the
19.11 	applicant an investigation fee to cover the cost of the
19.12 	investigation.  The commissioner may require that fingerprints
19.13 	be taken from officers, directors, managers, supervisory
19.14 	personnel, and persons with a direct financial interest in the
19.15 	applicant.  The commissioner may forward the fingerprints to the
19.16 	Federal Bureau of Investigation for a national criminal history
19.17 	check.  As to the tribal entity applying for a license under
19.18 	this section, the provisions of this subdivision do not apply or
19.19 	include the officers and employees of tribal governments who are
19.20 	not officers or employees of the tribal entity.
19.21 		Subd. 7.License refusal; suspension and revocation. (a)
19.22 	The commissioner may refuse to issue, or may revoke or suspend,
19.23 	the gaming facility license if the applicant or licensee or its
19.24 	officers, directors, managers, supervisory personnel, and
19.25 	persons with a direct financial interest in the applicant or
19.26 	licensee has:
19.27 	(1) engaged in a material violation of law, order, or rule
19.28 	relating to gambling within any jurisdiction;
19.29 	(2) operated a gaming facility in violation of approved
19.30 	game procedures or an approved security plan, which in the
19.31 	commissioner's opinion adversely and materially affects the
19.32 	public interest of the state in the effective regulation and
19.33 	control of gaming;
19.34 	(3) made an intentional false statement in a license
19.35 	application related to gaming;
19.36 	(4) failed to perform material covenants or representations
20.1 	made in a license application; or 
20.2 	(5) failed to notify the commissioner of a material change
20.3 	in the information provided in the application.
20.4 	(b) The commissioner may not revoke or suspend a license
20.5 	under this subdivision unless the commissioner has given the
20.6 	licensee and, as to a tribal entity each participating tribal
20.7 	government, express written notice of the reason for the
20.8 	proposed revocation or suspension and has granted the licensee a
20.9 	reasonable amount of time to cure the violation giving rise to
20.10 	the proposed revocation or suspension, and, in the
20.11 	commissioner's reasonable judgment, the tribal entity has failed
20.12 	to do so.  The commissioner is not required to provide a
20.13 	reasonable time to cure the violation before a license
20.14 	suspension if, in the commissioner's reasonable judgment, the
20.15 	violation cannot be cured by the licensee before significant
20.16 	harm will result to the public health, safety, or welfare.  The
20.17 	ability to cure may include creation of a reorganized or
20.18 	reformed licensee, provided that the reorganized or reformed
20.19 	licensee is approved by the commissioner and the lottery
20.20 	director.
20.21 	(c) A license revocation or suspension under this
20.22 	subdivision is conducted as a contested case under sections
20.23 	14.57 to 14.69 of the Administrative Procedure Act, and is in
20.24 	addition to any other civil, administrative, or criminal
20.25 	penalties imposed for a violation of law or rule.
20.26 		Subd. 8.Other license actions. (a) The commissioner may
20.27 	not issue the gaming facility license under this section or may
20.28 	by administrative action impose a civil penalty upon the
20.29 	licensee, issue correction orders, or take other administrative
20.30 	action if the commissioner determines that the licensee, or
20.31 	officer, director, manager, supervisory personnel, or other
20.32 	person with a direct financial or management interest in the
20.33 	licensee:
20.34 	(1) has been convicted of a felony or of a crime in another
20.35 	jurisdiction, which would be a felony in Minnesota;
20.36 	(2) has been convicted of any crime related to gaming;
21.1 	(3) has been found by a court, the lottery director, the
21.2 	commissioner, or other state or governmental body to have
21.3 	engaged in fraud, misrepresentation, or deceit;
21.4 	(4) has provided false or misleading information to the
21.5 	commissioner;
21.6 	(5) has violated or failed to comply with this section or
21.7 	any provision of this chapter or chapter 349A;
21.8 	(6) is permanently or temporarily enjoined by any gambling
21.9 	regulatory agency from engaging in or continuing any conduct or
21.10 	practice involving any aspect of gambling;
21.11 	(7) has had a gambling-related license revoked or
21.12 	suspended, or has paid or been required to pay a monetary
21.13 	penalty of $10,000 or more by a gambling regulator in another
21.14 	state or jurisdiction;
21.15 	(8) has been the subject of any of the following actions by
21.16 	the commissioner:
21.17 	(i) has had a license under this chapter denied, suspended,
21.18 	or revoked;
21.19 	(ii) has been censured or reprimanded, or has paid or been
21.20 	required to pay a monetary penalty or fine; or 
21.21 	(iii) has been the subject of any other discipline by the
21.22 	commissioner; or 
21.23 	(9) based on past activities or criminal record, poses a
21.24 	threat to the public interest or to the effective regulation and
21.25 	control of gambling, or creates or enhances the dangers of
21.26 	unsuitable, unfair, or illegal practices, methods, and
21.27 	activities in the conduct of gambling or the management of the
21.28 	business and financial arrangements incidental to the conduct of
21.29 	gambling.
21.30 	(b) Any conduct in violation of this section, or failure by
21.31 	the licensee to take reasonable action to cure a violation of
21.32 	this section, may be considered by the commissioner in
21.33 	determining whether to order revocation or suspension of the
21.34 	gaming facility license.  Any proposed revocation or suspension
21.35 	is subject to the notice and process requirements of subdivision
21.36 	7, paragraph (b).
22.1 	(c) Administrative action, including, but not limited to,
22.2 	imposition of a civil penalty, corrective order, or other
22.3 	administrative action under this paragraph, is a contested case
22.4 	under sections 14.57 to 14.69 and is in addition to any other
22.5 	civil, administrative, or criminal penalties provided for a
22.6 	violation of law or rule.
22.7 		Subd. 9.Required notification. (a) The licensee has the
22.8 	obligation to immediately report to the commissioner any
22.9 	substantial change in its management or ownership.  Any
22.10 	individual who later becomes an officer, director, or other
22.11 	individual with a direct financial or management interest in the
22.12 	licensee must undergo a comprehensive background and financial
22.13 	investigation as set forth in subdivision 6.  Prior to assuming
22.14 	any duties or responsibilities for the licensee the individual
22.15 	must file the appropriate license application information with
22.16 	the commissioner.
22.17 	(b) Following issuance of a gaming facility license, the
22.18 	licensee must annually certify to the commissioner its
22.19 	compliance with this section.
22.20 		Subd. 10.License review. The gaming facility license
22.21 	must be reviewed by the commissioner every five years.  An
22.22 	application for review must be on a form prescribed by the
22.23 	commissioner.  The commissioner shall review the application and
22.24 	conduct the comprehensive background investigation pursuant to
22.25 	subdivision 6.
22.26 		Subd. 11.Audit; investigation. (a) The licensee shall
22.27 	have an annual certified audit conducted of the licensee's
22.28 	operation of the gaming facility in accordance with generally
22.29 	accepted accounting principles.  The licensee shall file a copy
22.30 	of each audit report with the commissioner.
22.31 	(b) The commissioner has the right to conduct additional
22.32 	reasonable audits or investigations relating to the operation of
22.33 	the gaming facility.  The commissioner shall have access to all
22.34 	information, records, and accounts pertaining to the operation
22.35 	of the gaming facility.  The commissioner may recover the
22.36 	reasonable costs of additional audits and investigations from
23.1 	the licensee.
23.2 		Subd. 12.Sale of intoxicating liquor. Notwithstanding
23.3 	any other law, local ordinance, or charter provision, the host
23.4 	community may issue to the licensee an on-sale license for the
23.5 	sale of intoxicating liquor at the gaming facility pursuant to
23.6 	chapter 340A.  The annual fee for the license issued pursuant to
23.7 	this subdivision shall be set by the host community at an amount
23.8 	comparable to the fee charged by municipalities in the
23.9 	surrounding area for a similar license.  Chapter 340A applies to
23.10 	the sale of intoxicating liquor at the gaming facility, except
23.11 	that the licensed premises need not be compact and contiguous if
23.12 	the licensed premises are limited to the interior and grounds of
23.13 	the gaming facility.
23.14 		Subd. 13.Detention of suspects. (a) The commissioner
23.15 	may designate specific employees of the department, the lottery,
23.16 	or the gaming facility as persons authorized to detain a person
23.17 	if they have probable cause to believe that the person detained
23.18 	has violated section 609.651 or 609.76 while at the gaming
23.19 	facility.
23.20 	(b) A person authorized to detain an individual under
23.21 	paragraph (a) is not criminally or civilly liable for any
23.22 	detention authorized by this subdivision if the person has a
23.23 	good faith belief that probable cause exists for the detention,
23.24 	and the detention was not conducted with unreasonable force or
23.25 	in bad faith.
23.26 	(c) A peace officer or person authorized by the
23.27 	commissioner under paragraph (a) may exclude a person from the
23.28 	gaming facility or remove that person from the gaming facility
23.29 	if the person is suspected to have violated section 609.651 or
23.30 	609.76 or possesses contraband as provided in section 609.762,
23.31 	subdivision 1.
23.32 	(d) The licensee may establish a self-exclusion program by
23.33 	which persons, at their request, may be excluded from the gaming
23.34 	facility.
23.35 		Subd. 14.Reimbursement of costs. The commissioner shall
23.36 	impose a fee on the licensee sufficient to recover the operating
24.1 	costs of the commissioner to license and regulate the gaming
24.2 	facility under this section and sections 299L.091 to 299L.094
24.3 	with the approval of the legislature according to section
24.4 	16A.1283.  Notwithstanding section 16A.1283, when the
24.5 	legislature is not is session, the commissioner of finance may
24.6 	grant interim approval for any new fee or adjustment to existing
24.7 	fees that are not statutorily specified, until such time as the
24.8 	legislature reconvenes, and acts upon the new fees or
24.9 	adjustments.  Money received by the commissioner under this
24.10 	subdivision must be deposited in the state treasury and credited
24.11 	to the commissioner reimbursement account and is annually
24.12 	appropriated to the commissioner to pay the costs of regulating
24.13 	activities at the gaming facility.

24.14 	Sec. 2. [299L.091] GAMING MANAGEMENT.
24.15 		Subdivision 1.License required. The tribal entity or
24.16 	racetrack, or any entity formed by or engaged by the tribal
24.17 	entity or the racetrack to manage the operations of the gaming
24.18 	facility under section 349A.17, must obtain a gaming management
24.19 	license from the commissioner.
24.20 		Subd. 2.Application. An application for a license under
24.21 	this section must be on a form prescribed by the commissioner.
24.22 	The commissioner may issue a gaming management license to the
24.23 	management entity that will manage or operate the gaming
24.24 	facility or gaming operations for the tribal entity or the
24.25 	racetrack.
24.26 		Subd. 3.License issuance. (a) The commissioner shall
24.27 	issue a license under this section unless information obtained
24.28 	from the comprehensive background check establishes that
24.29 	issuance of the license would be adverse to the public interest
24.30 	or to the effective regulation of gaming.
24.31 	(b) The commissioner may only issue a gaming management
24.32 	license to an entity that is subject to the jurisdiction of the
24.33 	Minnesota state courts and the administrative jurisdiction and
24.34 	regulation of the state.
24.35 	(c) Any license issued under this section is
24.36 	nontransferable.
25.1 		Subd. 4.Background investigation. (a) Before issuing a
25.2 	gaming management license, the commissioner must conduct a
25.3 	comprehensive background and financial investigation of the
25.4 	applicant including its officers, directors, managers,
25.5 	supervisory personnel, and persons with a direct financial
25.6 	interest in the management entity, provided that if the
25.7 	management entity applying for the gaming management license and
25.8 	the gaming facility licensee are the same, the commissioner
25.9 	shall utilize the background investigation conducted as part of
25.10 	the application for a gaming facility license.  The commissioner
25.11 	may require that fingerprints be taken and the commissioner may
25.12 	forward the fingerprints to the Federal Bureau of Investigation
25.13 	for a national criminal history check on the officers,
25.14 	directors, managers, supervisory personnel, and persons with a
25.15 	direct financial interest in the management entity, not
25.16 	including the tribal governments that have an interest in the
25.17 	management entity.  The provisions of this paragraph do not
25.18 	apply or include the tribal government having an interest in the
25.19 	management entity.
25.20 	(b) The commissioner may charge an applicant for a gaming
25.21 	management license a reasonable fee to cover the costs of the
25.22 	investigation.  Money received by the commissioner under this
25.23 	subdivision must be deposited in the state treasury and credited
25.24 	to the commissioner reimbursement account and is annually
25.25 	appropriated to the commissioner to pay for costs incurred under
25.26 	this subdivision.
25.27 		Subd. 5.License actions. (a) The commissioner may not
25.28 	issue a license under this section, or may by administrative
25.29 	action revoke, suspend, or refuse to renew the gaming management
25.30 	license, impose a civil penalty upon the licensee, or issue
25.31 	correction orders, if the commissioner determines that the
25.32 	management entity, or officer, director, manager, supervisory
25.33 	personnel, other person with a direct financial interest in the
25.34 	management entity, not including the tribal government that have
25.35 	an interest in the management entity financial or management
25.36 	interest in the licensee:
26.1 	(1) has been convicted of a felony or of a crime in another
26.2 	jurisdiction, which would be a felony in Minnesota;
26.3 	(2) has been convicted of any crime related to gaming;
26.4 	(3) has been found by a court, the lottery director, the
26.5 	commissioner, or other state or governmental body to have
26.6 	engaged in fraud, misrepresentation, or deceit;
26.7 	(4) has provided false or misleading information to the
26.8 	commissioner;
26.9 	(5) has violated or failed to comply with this chapter or
26.10 	chapter 349A;
26.11 	(6) is permanently or temporarily enjoined by any gambling
26.12 	regulatory agency from engaging in or continuing any conduct or
26.13 	practice involving any aspect of gambling;
26.14 	(7) has had a gambling-related license revoked or
26.15 	suspended, or has paid or been required to pay a monetary
26.16 	penalty of $10,000 or more, by a gambling regulator in another
26.17 	state or jurisdiction;
26.18 	(8) has been the subject of any of the following actions by
26.19 	the commissioner:
26.20 	(i) has had a license under chapter 299L denied, suspended,
26.21 	or revoked;
26.22 	(ii) has been censured or reprimanded or has paid or been
26.23 	required to pay a monetary penalty or fine; or 
26.24 	(iii) has been the subject of any other discipline by the
26.25 	commissioner;
26.26 	(9) has engaged in conduct that is contrary to the public
26.27 	health, safety, or welfare, or to the integrity of gambling;
26.28 	(10) based on past activities or criminal record, poses a
26.29 	threat to the public interest or to the effective regulation and
26.30 	control of gambling, or creates or enhances the dangers of
26.31 	unsuitable, unfair, or illegal practices, methods, and
26.32 	activities in the conduct of gambling or the management of the
26.33 	business and financial arrangements incidental to the conduct of
26.34 	gambling;
26.35 	(11) has engaged in a material violation of law, order, or
26.36 	rule relating to gambling within any jurisdiction;
27.1 	(12) has operated gaming in violation of approved game
27.2 	procedures or an approved security plan, which in the
27.3 	commissioner's opinion adversely and materially affects the
27.4 	public interest of the state in the effective regulation and
27.5 	control of gaming;
27.6 	(13) has made an intentional false statement in a license
27.7 	application;
27.8 	(14) has failed to perform material covenants or
27.9 	representations made in a license application; or 
27.10 	(15) has failed to notify the commissioner of a material
27.11 	change in the information provided in a license application.
27.12 	(b) A license revocation, suspension, or imposition of a
27.13 	civil penalty under this paragraph is a contested case under
27.14 	sections 14.57 to 14.69 and is in addition to any criminal
27.15 	penalties provided for a violation of law or rule.
27.16 	(c) The commissioner shall provide notice of any license
27.17 	revocation, suspension, or imposition of a civil penalty to the
27.18 	tribal entity.
27.19 		Subd. 6.Required notification. (a) The gaming
27.20 	management licensee has the obligation to immediately report to
27.21 	the commissioner any change in its management or ownership.  Any
27.22 	individual who later becomes an officer, director, or other
27.23 	individual with a direct financial or management interest in the
27.24 	licensee must undergo a comprehensive background and financial
27.25 	investigation as set forth in subdivision 4.  Prior to assuming
27.26 	any duties or responsibilities for the licensee, the individual
27.27 	must file the appropriate license application information with
27.28 	the commissioner.
27.29 	(b) Following issuance of a gaming management license, the
27.30 	licensee must annually certify to the commissioner its
27.31 	compliance with this section.
27.32 		Subd. 7.License renewal. The gaming management license
27.33 	must be renewed every five years.  The commissioner must review
27.34 	an application for renewal of a gaming management license in the
27.35 	same manner as set forth in this section for issuance of a
27.36 	license, including the assessment of costs related to the
28.1 	background investigation.

28.2 	Sec. 3. [299L.092] EMPLOYEE LICENSES.
28.3 		Subdivision 1.Authority. The commissioner may issue
28.4 	employee licenses for persons employed at a gaming facility.
28.5 	All persons employed at a gaming facility must have the
28.6 	appropriate license issued by the commissioner.  The gaming
28.7 	facility licensee must ensure that an employee has a valid
28.8 	employee license before the employee begins work at the gaming
28.9 	facility.
28.10 		Subd. 2.Application information. An application for an
28.11 	employee license must be on a form prescribed by the
28.12 	commissioner and include an affidavit of qualification that the
28.13 	applicant:
28.14 	(1) does not have a felony conviction of record in a state
28.15 	or federal court and does not have a state or federal felony
28.16 	charge pending;
28.17 	(2) is not and never has been connected with or engaged in
28.18 	an illegal business;
28.19 	(3) has never been found guilty of fraud or
28.20 	misrepresentation in connection with gambling; and 
28.21 	(4) has never been found guilty of a violation of law or
28.22 	rule relating to gambling within any jurisdiction.
28.23 		Subd. 3.Background investigations. The commissioner
28.24 	shall investigate each applicant for an employee license to the
28.25 	extent the commissioner deems necessary.  The commissioner must
28.26 	require the applicant to be fingerprinted or to furnish the
28.27 	applicant's fingerprints.  The commissioner may require the
28.28 	tribal entity or racetrack to pay the costs of processing
28.29 	employee licenses, renewing employee licenses, and conducting
28.30 	background investigations on the employee.  Money received by
28.31 	the commissioner under this subdivision must be deposited in the
28.32 	state treasury and credited to the commissioner reimbursement
28.33 	account and are annually appropriated to the commissioner to pay
28.34 	for costs incurred under this subdivision.
28.35 		Subd. 4.License issuance and renewal. If the
28.36 	commissioner determines that the applicant is qualified for the
29.1 	occupation for which licensing is sought and will not adversely
29.2 	affect the public health, safety, and welfare or the integrity
29.3 	of gambling in Minnesota, the commissioner may issue an employee
29.4 	license to the applicant.  If the commissioner makes a similar
29.5 	finding for a renewal of an employee license, the commissioner
29.6 	may renew the license.  Employee licenses are effective for one
29.7 	year.
29.8 		Subd. 5.Revocation and suspension. (a) The commissioner
29.9 	may revoke an employee license for a violation of law or rule
29.10 	which in the commissioner's opinion adversely affects the
29.11 	integrity of gambling in Minnesota, or for an intentional false
29.12 	statement made in a license application.  The commissioner may
29.13 	suspend an employee license for up to one year or refuse to
29.14 	renew the license or impose a civil penalty for a violation of
29.15 	law, order, or rule.  A license revocation or suspension is a
29.16 	contested case under sections 14.57 to 14.69 of the
29.17 	Administrative Procedure Act and is in addition to criminal
29.18 	penalties imposed for a violation of law or rule.
29.19 	(b) The commissioner may summarily suspend an employee
29.20 	license prior to a contested case hearing where it is necessary
29.21 	to ensure the integrity of gambling.  A contested case hearing
29.22 	must be held within 20 days of the summary suspension and the
29.23 	administrative law judge's report must be issued within 20 days
29.24 	from the close of the hearing record.  In all cases involving
29.25 	summary suspension, the commissioner must issue its final
29.26 	decision within 30 days from receipt of the report of the
29.27 	administrative law judge and subsequent exceptions and argument
29.28 	under section 14.61.

29.29 	Sec. 4. [299L.093] VENDOR LICENSES.
29.30 		Subdivision 1.Issuance. The commissioner may issue a
29.31 	vendor license for any person or entity that sells or
29.32 	distributes products or provides services at a gaming facility.
29.33 	No person may sell or distribute products or provide a service
29.34 	at a gaming facility unless the person has obtained a license
29.35 	from the commissioner.  All employees of the vendor whose work
29.36 	requires attendance at a gaming facility must obtain an employee
30.1 	license under section 299L.092.
30.2 		Subd. 2.Application information. An application for a
30.3 	vendor license must be on a form prescribed by the commissioner
30.4 	and include an affidavit of qualification that the applicant,
30.5 	and any officer, director, or person with direct financial
30.6 	interest in the applicant:
30.7 	(1) does not have a felony conviction of record in a state
30.8 	or federal court and does not have a state or federal felony
30.9 	charge pending;
30.10 	(2) is not and never has been connected with or engaged in
30.11 	an illegal business;
30.12 	(3) has never been found guilty of fraud or
30.13 	misrepresentation in connection with gambling; and 
30.14 	(4) has never been found guilty of a violation of law or
30.15 	rule relating to gambling within any jurisdiction.
30.16 		Subd. 3.Background investigations. The commissioner
30.17 	shall investigate each applicant for a vendor license to the
30.18 	extent the commissioner deems necessary.  The commissioner must
30.19 	require the applicant be fingerprinted or furnish the
30.20 	applicant's fingerprints.  The commissioner may require the
30.21 	vendor to pay the costs of processing employee licenses,
30.22 	renewing vendor licenses, and conducting background
30.23 	investigations on the vendor.  Money received by the
30.24 	commissioner under this subdivision must be deposited in the
30.25 	state treasury and credited to the commissioner reimbursement
30.26 	account, and are annually appropriated to the commissioner to
30.27 	pay for costs incurred under this subdivision.
30.28 		Subd. 4.License issuance and renewal. If the
30.29 	commissioner determines that the applicant is qualified and the
30.30 	issuance of the license will not adversely affect the public
30.31 	health, safety, and welfare or the integrity of gambling in
30.32 	Minnesota, the commissioner may issue a vendor license to the
30.33 	applicant.  If the commissioner makes a similar finding for a
30.34 	renewal of a vendor license, the commissioner may renew the
30.35 	license.  Vendor licenses are effective for one year.
30.36 		Subd. 5.Revocation and suspension. (a) The commissioner
31.1 	may revoke a vendor license for a violation of law or rule that,
31.2 	in the commissioner's opinion, adversely affects the integrity
31.3 	of gambling in Minnesota, or for an intentional false statement
31.4 	made in a license application.  The commissioner may suspend a
31.5 	vendor license for up to one year or refuse to renew the license
31.6 	or impose a civil penalty for a violation of law, order, or
31.7 	rule.  A license revocation or suspension is a contested case
31.8 	under sections 14.57 to 14.69 of the Administrative Procedure
31.9 	Act and is in addition to criminal penalties imposed for a
31.10 	violation of law or rule.
31.11 	(b) The commissioner may summarily suspend a vendor license
31.12 	for not more than 90 days prior to a contested case hearing
31.13 	where it is necessary to ensure the integrity of gambling.  A
31.14 	contested case hearing must be held within 20 days of the
31.15 	summary suspension and the administrative law judge's report
31.16 	must be issued within 20 days from the close of the hearing
31.17 	record.  In all cases involving summary suspension, the
31.18 	commissioner must issue its final decision within 30 days from
31.19 	receipt of the report of the administrative law judge and
31.20 	subsequent exceptions and argument under section 14.61.

31.21 	Sec. 5. [299L.094] NONLOTTERY CASINO GAMES.
31.22 		Subdivision 1.Definitions. (a) For the purposes of this
31.23 	section, the following terms have the meanings given them.
31.24 	(b) "Nonlottery casino games" means any game authorized by
31.25 	the commissioner to be conducted by a gaming facility licensee
31.26 	at the gaming facility that is not a gaming machine or other
31.27 	lottery game as defined by section 349A.01.
31.28 	(c) "Nonlottery casino games' adjusted gross revenue" means
31.29 	the sum of all money received from the operation of nonlottery
31.30 	casino games, less the amounts paid out to players in prizes or
31.31 	winnings and promotional allowances approved by the lottery
31.32 	director under section 349A.17 in the nonlottery casino games.
31.33 		Subd. 2.Operation. Nonlottery casino games may be
31.34 	operated by the gaming facility licensee in conformance with a
31.35 	plan of operation approved by the commissioner.  The plan of
31.36 	operation must include, at a minimum:
32.1 	(1) specifying and defining all nonlottery games to be
32.2 	played, including all governing aspects of each nonlottery
32.3 	casino game;
32.4 	(2) arrangements to ensure the security of nonlottery
32.5 	casino gaming;
32.6 	(3) internal control systems for play of nonlottery casino
32.7 	games; and 
32.8 	(4) a plan for the training of nonlottery casino games
32.9 	personnel in identification of problem gamblers and appropriate
32.10 	action to prevent or control problem gambling.
32.11 		Subd. 3.Plan amendment. The plan of operation may be
32.12 	amended only with the approval of the commissioner.
32.13 		Subd. 4.Actions. The commissioner may revoke, suspend,
32.14 	refuse to renew, or impose a civil penalty upon the gaming
32.15 	facility or the gaming management licensee for violation of the
32.16 	plan of operation.  An action under this subdivision shall be
32.17 	conducted as a contested case under sections 14.57 to 14.69 of
32.18 	the Administrative Procedures Act and is in addition to criminal
32.19 	penalties imposed for violation of the plan of operation.
32.20 		Subd. 5.Prizes. A person who plays a nonlottery casino
32.21 	game at a gaming facility agrees to be bound by the rules and
32.22 	game procedures applicable to that particular game.  The player
32.23 	acknowledges that the determination of whether the player has
32.24 	won a prize is subject to the rules and game procedures adopted
32.25 	by the plan of operation, claim procedures established by the
32.26 	plan of operation for that game, and any confidential or public
32.27 	validation tests established by the plan of operation for that
32.28 	game.  A person under 18 years of age may not claim a prize from
32.29 	a nonlottery casino game at a gaming facility.

32.30 	Sec. 6. [299L.095] EMPLOYMENT RESTRICTIONS; CIVIL
32.31 	PENALTY.
32.32 	(a) The lottery director, the commissioner, or any manager,
32.33 	director, or supervisor employed by the lottery or the
32.34 	Department of Public Safety whose job responsibilities include
32.35 	the oversight, audit, investigation, or regulation of gaming at
32.36 	a gaming facility licensed by the commissioner must not, while
33.1 	employed with or within one year after leaving employment,
33.2 	receive compensation directly or indirectly from, or enter into
33.3 	a contractual relationship with the tribal entity, racetrack, or
33.4 	any management entity licensed by the commissioner pursuant to
33.5 	section 299L.09 or 299L.091.
33.6 	(b) The tribal entity, racetrack, or management entity
33.7 	licensed by the commissioner must not negotiate with or offer to
33.8 	employ or compensate the lottery director; commissioner; or any
33.9 	manager, director, or supervisor employed by the lottery or the
33.10 	Department of Public Safety whose job responsibilities include
33.11 	the oversight, audit, investigation, or regulation of gaming at
33.12 	a gaming facility licensed by the commissioner pursuant to
33.13 	section 299L.09 or 299L.091 while the person is employed by the
33.14 	lottery or the Department of Public Safety or within one year
33.15 	after the person's employment has ended.
33.16 	(c) A state employee who violates this section is subject
33.17 	to a civil penalty not to exceed $10,000 for each violation.
33.18 	The attorney general may bring an action in district court to
33.19 	pursue a violation of this section.
33.20 	(d) The commissioner may take administrative action in
33.21 	relation to the gaming facility license or management license
33.22 	for a violation of this section by a tribal entity, racetrack,
33.23 	or management entity.

33.24 	Sec. 7. EFFECTIVE DATE.
 33.25 	This article is effective the day following final enactment.

33.26 	ARTICLE 3
33.27 	RACING COMMISSION

33.28 	Section 1. Minnesota Statutes 2004, section 240.13, is
33.29 	amended by adding a subdivision to read:
33.30 		Subd. 5a.Purses; gaming machines. From the fee received
33.31 	by a licensee pursuant to a location contract entered into under
33.32 	section 349A.17, the licensee must set aside an amount equal to
33.33 	not less than 7.25 percent of the adjusted gross gaming machine
33.34 	revenues as defined under chapter 349A, for purses for live
33.35 	horse races conducted by the licensee.  Purse payments made
33.36 	pursuant to this subdivision are in addition to purse payments
34.1 	otherwise established by law or contract.  Twenty percent of the
34.2 	money set aside for purses pursuant to this subdivision shall be
34.3 	transferred to the commission and used for the purposes in
34.4 	section 240.18, subdivisions 2, paragraph (d), and 3, paragraph
34.5 	(b), subject to the proportionality requirement in section
34.6 	240.18, subdivision 1.  The licensee and the horseperson's
34.7 	organization representing the majority of horsepersons who have
34.8 	raced at the racetrack during the preceding 12 months may
34.9 	negotiate percentages different from those stated in this
34.10 	section if the agreement is in writing and filed with the Racing
34.11 	Commission.

34.12 	Sec. 2. Minnesota Statutes 2004, section 240.135, is
34.13 	amended to read:
34.14 	240.135 CARD CLUB REVENUE.
34.15 	(a) From the amounts received from charges authorized under
34.16 	section 240.30, subdivision 4, or from revenue received from the
34.17 	conducting of nonlottery casino games under section 299L.04,the
34.18 	licensee shall set aside the amounts specified in this section
34.19 	to be used for purse payments. These amounts are in addition to
34.20 	the breeders fund and purse requirements set forth elsewhere in
34.21 	this chapter.
34.22 	(1) For amounts between zero and $6,000,000, the licensee
34.23 	shall set aside ten percent to be used as purses.
34.24 	(2) For amounts in excess of $6,000,000, the licensee shall
34.25 	set aside 14 percent to be used as purses.
34.26 	(b) From all amounts set aside under paragraph (a), the
34.27 	licensee shall set aside ten percent to be deposited in the
34.28 	breeders fund.  The licensee and the horseperson's organization
34.29 	representing the majority of horsepersons who have raced at the
34.30 	racetrack during the preceding 12 months may negotiate
34.31 	percentages different from those stated in this section if the
34.32 	agreement is in writing and filed with the Racing Commission.
34.33 	(c) It is the intent of the legislature that the proceeds
34.34 	of the card playing activities authorized by this chapter be
34.35 	used to improve the horse racing industry by improving purses.
34.36 	The commission shall annually review the financial details of
35.1 	card playing activities and determine if the present use of card
35.2 	playing proceeds is consistent with the policy established by
35.3 	this paragraph.  If the commission determines that the use of
35.4 	the proceeds does not comply with the policy set forth herein,
35.5 	then the commission shall direct the parties to make the changes
35.6 	necessary to ensure compliance.  If these changes require
35.7 	legislation, the commission shall make the appropriate
35.8 	recommendations to the legislature.

35.9 	Sec. 3. Minnesota Statutes 2004, section 240.30,
35.10 	subdivision 1, is amended to read:
35.11 		Subdivision 1.Card club operation. If a class A
35.12 	licensee is not operating a gaming facility under chapter 299L
35.13 	or 349A,a class B licensee conducting pari-mutuel betting on
35.14 	horse racing at a class A racetrack may operate a card club at
35.15 	the racetrack and offer card playing services to patrons only if
35.16 	the commission has authorized the licensee to operate a card
35.17 	club operation under section 240.07, subdivision 3, paragraph
35.18 	(b), and the commission has approved the licensee's plan of
35.19 	operation under subdivision 6.  The commission may withdraw its
35.20 	authorization for operation of a card club at any time for a
35.21 	violation of a law or rule governing card club operation.

35.22 	ARTICLE 4
35.23 	GAMING TRANSACTION FEE

35.24 	Section 1. [16A.901] GAMING FACILITY.
35.25 		Subdivision 1.State lottery. (a) The State Lottery
35.26 	must, on or before the 20th day of each month, transmit to the
35.27 	commissioner, an amount equal to the adjusted gross gaming
35.28 	machine revenue and other lottery games' adjusted gross revenue,
35.29 	as defined in section 349A.01, for revenue derived from a gaming
35.30 	facility operated by an entity other than a tribal entity as
35.31 	defined in section 349A.17, for the previous month multiplied by
35.32 	26 percent.  Provided that if the lottery pays an adjustment to
35.33 	the racetrack pursuant to section 349A.17, subdivision 2,
35.34 	paragraph (g), clause (2), the lottery must deduct from its next
35.35 	payment to the commissioner the amount paid by the lottery to
35.36 	the racetrack as an adjustment.
36.1 	(b) The State Lottery must, on or before the 20th day of
36.2 	each month, transmit to the commissioner, an amount equal to the
36.3 	adjusted gross gaming machine revenue and other lottery games'
36.4 	adjusted gross revenue as defined in section 349A.01, for
36.5 	revenue derived from a gaming facility operated by a tribal
36.6 	entity as defined in section 349A.17, for the previous month
36.7 	multiplied by 20 percent.  Provided that if the lottery pays an
36.8 	adjustment to the tribal entity pursuant to section 349A.17,
36.9 	subdivision 2, paragraph (f), clause (5), the lottery must
36.10 	deduct from its next payment to the commissioner the amount paid
36.11 	by the lottery to the tribal entity as an adjustment.
36.12 		Subd. 2.Racetrack. A racetrack authorized to conduct
36.13 	nonlottery casino games at a gaming facility under section
36.14 	299L.094, shall pay a gaming transaction fee at the rate of 14
36.15 	percent of nonlottery casino games' adjusted gross revenue, as
36.16 	defined in section 299L.094.  The racetrack authorized to
36.17 	conduct nonlottery casino games at the gaming facility must make
36.18 	the payments due under this subdivision to the commissioner on
36.19 	or before the 20th day of each month for the adjusted gross
36.20 	revenue received for the previous month.  Provided that
36.21 	beginning on January 1 following the first full year that the
36.22 	racetrack's permanent gaming facility has been in operation,
36.23 	there shall be an adjustment in the fee due under this
36.24 	subdivision if (i) the adjusted gross revenue from the
36.25 	conducting of gaming machines at the gaming facility is less
36.26 	than $50,000,000 for that quarter, the gaming transaction fee
36.27 	shall be at the rate of 12 percent of nonlottery casino games'
36.28 	adjusted gross revenue, as defined in section 299L.094, and (ii)
36.29 	the adjusted gross revenue from the conducting of gaming
36.30 	machines at the gaming facility is less than $25,000,000 for
36.31 	that quarter, the gaming transaction fee shall be at the rate of
36.32 	ten percent of nonlottery casino games' adjusted gross revenue,
36.33 	as defined in section 299L.094.
36.34 		Subd. 3.Tribal entity. A tribal entity authorized to
36.35 	conduct nonlottery casino games at a gaming facility under
36.36 	section 299L.094, shall pay a gaming transaction fee at the rate
37.1 	of ten percent of nonlottery casino games' adjusted gross
37.2 	revenue, as defined in section 299L.094.  The tribal entity
37.3 	authorized to conduct nonlottery casino games at the gaming
37.4 	facility must make the payments due under this subdivision to
37.5 	the commissioner on or before the 20th day of each month for the
37.6 	adjusted gross revenue received for the previous month.
37.7 	Provided that beginning on January 1 following the first full
37.8 	year that the tribal entity's permanent gaming facility has been
37.9 	in operation, there shall be an adjustment in the fee due under
37.10 	this subdivision if (i) the adjusted gross revenue from the
37.11 	conduction of gaming machines at the gaming facility is less
37.12 	than $50,000,000 for that quarter, the gaming transaction fee
37.13 	shall be at the rate of eight percent of nonlottery casino
37.14 	games' adjusted gross revenue, as defined in section 299L.094,
37.15 	and (ii) the adjusted gross revenue from the conducting of
37.16 	gaming machines at the gaming facility is less than $25,000,0000
37.17 	for that quarter, the gaming transaction fee shall be at the
37.18 	rate of six percent of nonlottery casino games' adjusted gross
37.19 	revenue, as defined in section 299L.094.
37.20 		Subd. 4.In lieu of tax. The payments imposed by this
37.21 	section are in lieu of the tax imposed by section 297A.62
37.22 	relating to wagering at a gaming facility and any local taxes
37.23 	relating to wagering at the gaming facility.
37.24 		Subd. 5.Deposit of receipts. The commissioner shall
37.25 	deposit the money transmitted under this section in the state
37.26 	treasury to be credited to the general fund.

37.27 	Sec. 2. EFFECTIVE DATE.
 37.28 	This article is effective the day following final enactment.

37.29 	ARTICLE 5
37.30 	MISCELLANEOUS PROVISIONS

37.31 	Section 1. Minnesota Statutes 2004, section 299L.07,
37.32 	subdivision 2, is amended to read:
37.33 		Subd. 2.Exclusions.  Notwithstanding subdivision 1, a
37.34 	gambling device:
37.35 	(1) may be sold by a person who is not licensed under this
37.36 	section, if the person (i) is not engaged in the trade or
38.1 	business of selling gambling devices, and (ii) does not sell
38.2 	more than one gambling device in any calendar year;
38.3 	(2) may be sold by the governing body of a federally
38.4 	recognized Indian tribe described in subdivision 2a, paragraph
38.5 	(b), clause (1), which is not licensed under this section, if
38.6 	(i) the gambling device was operated by the Indian tribe, (ii)
38.7 	the sale is to a distributor licensed under this section, and
38.8 	(iii) the licensed distributor notifies the commissioner of the
38.9 	purchase, in the same manner as is required when the licensed
38.10 	distributor ships a gambling device into Minnesota;
38.11 	(3) may be possessed by a person not licensed under this
38.12 	section if the person holds a permit issued under section
38.13 	299L.08; and 
38.14 	(4) may be possessed by a state agency, with the written
38.15 	authorization of the director, for display or evaluation
38.16 	purposes only and not for the conduct of gambling; and 
38.17 	(5) may be possessed by the State Lottery as authorized
38.18 	under chapter 349A.

38.19 	Sec. 2. Minnesota Statutes 2004, section 299L.07,
38.20 	subdivision 2a, is amended to read:
38.21 		Subd. 2a.Restrictions.  (a) A manufacturer licensed
38.22 	under this section may sell, offer to sell, lease, or rent, in
38.23 	whole or in part, a gambling device only to a distributor
38.24 	licensed under this section or to the State Lottery as
38.25 	authorized under chapter 349A.
38.26 	(b) A distributor licensed under this section may sell,
38.27 	offer to sell, market, rent, lease, or otherwise provide, in
38.28 	whole or in part, a gambling device only to:
38.29 	(1) the governing body of a federally recognized Indian
38.30 	tribe that is authorized to operate the gambling device under a
38.31 	tribal state compact under the Indian Gaming Regulatory Act,
38.32 	Public Law 100-497, and future amendments to it;
38.33 	(2) a person for use in the person's dwelling for display
38.34 	or amusement purposes in a manner that does not afford players
38.35 	an opportunity to obtain anything of value;
38.36 	(3) another distributor licensed under this section; or 
39.1 	(4) a person in another state who is authorized under the
39.2 	laws of that state to possess the gambling device; or 
39.3 	(5) the State Lottery as authorized under chapter 349A.

39.4 	Sec. 3. Minnesota Statutes 2004, section 340A.410,
39.5 	subdivision 5, is amended to read:
39.6 		Subd. 5.Gambling prohibited.  (a) Except as otherwise
39.7 	provided in this subdivision, no retail establishment licensed
39.8 	to sell alcoholic beverages may keep, possess, or operate, or
39.9 	permit the keeping, possession, or operation on the licensed
39.10 	premises of dice or any gambling device as defined in section
39.11 	349.30, or permit gambling therein.
39.12 	(b) Gambling equipment may be kept or operated and raffles
39.13 	conducted on licensed premises and adjoining rooms when the use
39.14 	of the gambling equipment is authorized by (1) chapter 349, (2)
39.15 	a tribal ordinance in conformity with the Indian Gaming
39.16 	Regulatory Act, Public Law 100-497, or (3) a tribal-state
39.17 	compact authorized under section 3.9221.
39.18 	(c) Lottery tickets may be purchased and sold within the
39.19 	licensed premises as authorized by the director of the lottery
39.20 	under chapter 349A.
39.21 	(d) Dice may be kept and used on licensed premises and
39.22 	adjoining rooms as authorized by section 609.761, subdivision 4.
39.23 	(e) Gambling devices may be operated and gambling permitted
39.24 	at a gaming facility as authorized by chapters 299L and 349A.

39.25 	Sec. 4. Minnesota Statutes 2004, section 541.20, is
39.26 	amended to read:
39.27 	541.20 RECOVERY OF MONEY LOST.
39.28 	Every person who, by playing at cards, dice, or other game,
39.29 	or by betting on the hands or sides of such as are gambling,
39.30 	shall lose to any person so playing or betting any sum of money
39.31 	or any goods, and pays or delivers the same, or any part
39.32 	thereof, to the winner, may sue for and recover such money by a
39.33 	civil action, before any court of competent jurisdiction.  For
39.34 	purposes of this section, gambling shall not include pari-mutuel
39.35 	wagering conducted under a license issued pursuant to chapter
39.36 	240, purchase or sale of tickets in the state lottery, purchase
40.1 	of gaming machine plays as authorized under chapter 349A,
40.2 	conduct of any lottery or nonlottery casino games at a gaming
40.3 	facility as authorized under chapters 299L and 349A,or gambling
40.4 	authorized under chapters 349 and 349A.

40.5 	Sec. 5. Minnesota Statutes 2004, section 541.21, is
40.6 	amended to read:
40.7 	541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
40.8 	Every note, bill, bond, mortgage, or other security or
40.9 	conveyance in which the whole or any part of the consideration
40.10 	shall be for any money or goods won by gambling or playing at
40.11 	cards, dice, or any other game whatever, or by betting on the
40.12 	sides or hands of any person gambling, or for reimbursing or
40.13 	repaying any money knowingly lent or advanced at the time and
40.14 	place of such gambling or betting, or lent and advanced for any
40.15 	gambling or betting to any persons so gambling or betting, shall
40.16 	be void and of no effect as between the parties to the same, and
40.17 	as to all persons except such as hold or claim under them in
40.18 	good faith, without notice of the illegality of the
40.19 	consideration of such contract or conveyance.  The provisions of
40.20 	this section shall not apply to:  (1) pari-mutuel wagering
40.21 	conducted under a license issued pursuant to chapter 240; (2)
40.22 	purchase of tickets in the state lottery or other wagering
40.23 	authorized under chapter 299L or 349A; (3) gaming activities
40.24 	conducted pursuant to the Indian Gaming Regulatory Act, 25
40.25 	U.S.C. 2701 et seq.; or (4) lawful gambling activities permitted
40.26 	under chapter 349.

40.27 	Sec. 6. Minnesota Statutes 2004, section 609.75,
40.28 	subdivision 3, is amended to read:
40.29 		Subd. 3.What are not bets.  The following are not bets:
40.30 	(1) A contract to insure, indemnify, guarantee or otherwise
40.31 	compensate another for a harm or loss sustained, even though the
40.32 	loss depends upon chance.
40.33 	(2) A contract for the purchase or sale at a future date of
40.34 	securities or other commodities.
40.35 	(3) Offers of purses, prizes or premiums to the actual
40.36 	contestants in any bona fide contest for the determination of
41.1 	skill, speed, strength, endurance, or quality or to the bona
41.2 	fide owners of animals or other property entered in such a
41.3 	contest.
41.4 	(4) The game of bingo when conducted in compliance with
41.5 	sections 349.11 to 349.23.
41.6 	(5) A private social bet not part of or incidental to
41.7 	organized, commercialized, or systematic gambling.
41.8 	(6) The operation of equipment or the conduct of a raffle
41.9 	under sections 349.11 to 349.22, by an organization licensed by
41.10 	the Gambling Control Board or an organization exempt from
41.11 	licensing under section 349.166.
41.12 	(7) Pari-mutuel betting on horse racing when the betting is
41.13 	conducted under chapter 240.
41.14 	(8) The purchase and sale of state lottery tickets under
41.15 	chapter 349A.
41.16 	(9) Plays on a gaming machine, or purchase or participating
41.17 	in any lottery or nonlottery casino game at a gaming facility
41.18 	authorized under chapter 299L or 349A.

41.19 	Sec. 7. Minnesota Statutes 2004, section 609.761, is
41.20 	amended by adding a subdivision to read:
41.21 		Subd. 6.Gaming facility. Sections 609.755 and 609.76 do
41.22 	not prohibit the manufacture, possession, sale, or operation of
41.23 	a gaming machine at a gaming facility under chapter 349A, or the
41.24 	conduct of any other lottery or nonlottery casino game at a
41.25 	gaming facility under chapters 299L and 349A.

41.26 	Sec. 8. SEVERABILITY; SAVINGS.
 41.27 	If any part of this act is found to be invalid because it
41.28 	is in conflict with a provision of the Constitution of the State
41.29 	of Minnesota or the Constitution of the United States, or for
41.30 	any other reason, all other provisions of this act shall remain
41.31 	valid and any rights, remedies, and privileges that have been
41.32 	otherwise accrued by this act, shall remain in effect and may be
41.33 	proceeded with and concluded under the provisions of this act.

41.34 	Sec. 9. EFFECTIVE DATE.
 41.35 	This article is effective the day following final enactment.

41.36 	ARTICLE 6
42.1 	APPROPRIATIONS

42.2 	Section 1. APPROPRIATIONS.
 42.3 	Revenue raised by this act is appropriated from the general
42.4 	fund in fiscal years 2006 and 2007 as specified in this article.

42.5 	Sec. 2. EDUCATION.
 42.6 	$....... is appropriated to offset the reduction in
42.7 	spending in H.F. No. 872, article 5, that would become effective
42.8 	if H.F. No. 1664 is not passed by the house of representatives.
42.9 	Reductions in appropriations under H.F. No. 872, article 5,
42.10 	section 13, are negated by the appropriation in this section.

42.11 	Sec. 3. HIGHER EDUCATION.
 42.12 	$....... is appropriated to the agencies and for the
42.13 	purposes indicated in Laws 2005, chapter 107, article 5, if
42.14 	enacted.  This appropriation replaces the appropriations in Laws
42.15 	2005, chapter 107, article 5, if enacted, that otherwise would
42.16 	only become effective if H.F. No. 1664 is passed by the house of
42.17 	representatives.

42.18 	Sec. 4. HEALTH.
 42.19 	$....... is appropriated to the agencies and for the
42.20 	purposes indicated in H.F. No. 1422, article 11.  This
42.21 	appropriation replaces the appropriations in of H.F. No. 1422,
42.22 	article 11, that otherwise would only become effective if H.F.
42.23 	No. 1664 is passed by the house of representatives.

42.24 	Sec. 5. JOBS AND ECONOMIC OPPORTUNITY.
 42.25 	$....... is appropriated to the agencies and for the
42.26 	purposes indicated in H.F. No. 1976, article 7.  This
42.27 	appropriation replaces the appropriations in of H.F. No. 1976,
42.28 	article 7, that otherwise would only become effective if H.F. No.
42.29 	1664 is passed by the house of representatives.

42.30 	Sec. 6. ENVIRONMENT AND NATURAL RESOURCES.
 42.31 	$....... is appropriated to the agencies and for the
42.32 	purposes that would otherwise be reduced in H.F. No. 902,
42.33 	article 2, if H.F. No. 1664 is not passed by the house of
42.34 	representatives.  Reductions in appropriations under H.F. No.
42.35 	902, article 2, are negated by the appropriation in this section.

42.36 	Sec. 7. PUBLIC SAFETY.
 43.1 	$....... is appropriated to the agencies and for the
43.2 	purposes indicated in Laws 2005, chapter 136, article 19, if
43.3 	enacted.  This appropriation replaces the appropriation in Laws
43.4 	2005, chapter 136, article 19, if enacted, that otherwise would
43.5 	only become effective if H.F. No. 1664 is passed by the house of
43.6 	representatives.