SF 2930

Introduction - 86th Legislature (2009 - 2010)

Posted on 02/26/2010 11:46 a.m.

1.1A bill for an act 1.2relating to gambling; establishing video lottery terminals; imposing a tax on 1.3and providing for video lottery revenue; modifying certain lawful gambling 1.4taxes; modifying conduct of electronic bingo; authorizing gambling control 1.5board to establish video pull-tab games;amending Minnesota Statutes 2008, 1.6sections 297E.02, subdivision 1; 299L.02, subdivision 1; 299L.07, subdivisions 1.72, 2a; 340A.410, subdivision 5; 349.12, subdivisions 5, 25b, 25c, 25d, by 1.8adding subdivisions; 349.151, subdivision 4c, by adding a subdivision; 349.16, 1.9subdivision 7; 349.1635, subdivision 1; 349.17, subdivision 8; 349.211, 1.10subdivision 1a; 349A.01, subdivisions 10, 11, 12, by adding subdivisions; 1.11349A.04; 349A.06, subdivisions 1, 5, 8, 10, by adding subdivisions; 349A.08, 1.12subdivisions 1, 5, 8; 349A.09, subdivision 1; 349A.10, subdivisions 2, 3, 4, 6; 1.13349A.11, subdivision 1; 349A.12, subdivisions 1, 2; 349A.13; 541.20; 541.21; 1.14609.651, subdivision 1; 609.75, subdivisions 3, 4; 609.761, subdivision 2; 1.15Minnesota Statutes 2009 Supplement, sections 297A.94; 349.12, subdivision 1.1612a; 349.15, subdivision 1; 349.17, subdivisions 6, 7; 349.18, subdivision 1; 1.17proposing coding for new law in Minnesota Statutes, chapters 297A; 349; 349A; 1.18repealing Minnesota Statutes 2008, sections 297E.01, subdivision 7; 297E.02, 1.19subdivisions 4, 6, 7. 1.20BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.21ARTICLE 1 1.22VIDEO LOTTERY TERMINALS 1.23    Section 1. new text begin [297A.652] LOTTERY GAMING MACHINES; IN-LIEU TAX. new text end 1.24     new text begin Net terminal income from the operation of video lottery terminals authorized under new text end 1.25 new text begin section 349A.071 is exempt from the tax imposed under section 297A.62. The State new text end 1.26 new text begin Lottery must on or before the 20th day of each month transmit to the commissioner an new text end 1.27 new text begin amount equal to the net terminal income from the operation of video lottery terminals new text end 1.28 new text begin as defined in section 349A.01, for the previous month multiplied by 28 percent. The new text end 2.1 new text begin commissioner shall deposit the money transmitted under this section in the state treasury new text end 2.2 new text begin to be credited as provided in section 297A.94. new text end 2.3    Sec. 2. Minnesota Statutes 2009 Supplement, section 297A.94, is amended to read: 2.4297A.94 DEPOSIT OF REVENUES. 2.5(a) Except as provided in this section, the commissioner shall deposit the revenues, 2.6including interest and penalties, derived from the taxes imposed by this chapter in the state 2.7treasury and credit them to the general fund. 2.8(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic 2.9account in the special revenue fund if: 2.10(1) the taxes are derived from sales and use of property and services purchased for 2.11the construction and operation of an agricultural resource project; and 2.12(2) the purchase was made on or after the date on which a conditional commitment 2.13was made for a loan guaranty for the project under section 41A.04, subdivision 3. 2.14The commissioner of management and budget shall certify to the commissioner the date 2.15on which the project received the conditional commitment. The amount deposited in 2.16the loan guaranty account must be reduced by any refunds and by the costs incurred by 2.17the Department of Revenue to administer and enforce the assessment and collection of 2.18the taxes. 2.19(c) The commissioner shall deposit the revenues, including interest and penalties, 2.20derived from the taxes imposed on sales and purchases included in section 297A.61, 2.21subdivision 3 , paragraph (g), clauses (1) and (4), in the state treasury, and credit them 2.22as follows: 2.23(1) first to the general obligation special tax bond debt service account in each fiscal 2.24year the amount required by section 16A.661, subdivision 3, paragraph (b); and 2.25(2) after the requirements of clause (1) have been met, the balance to the general 2.26fund. 2.27(d) The commissioner shall deposit the revenues, including interest and penalties, 2.28collected under section 297A.64, subdivision 5, in the state treasury and credit them to the 2.29general fund. By July 15 of each year the commissioner shall transfer to the highway user 2.30tax distribution fund an amount equal to the excess fees collected under section 297A.64, 2.31subdivision 5 , for the previous calendar year. 2.32(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and 2.33for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and 2.34penalties, transmitted to the commissioner under section 297A.65, must be deposited by 2.35the commissioner in the state treasury as follows: 3.1(1) 50 percent of the receipts must be deposited in the heritage enhancement account 3.2in the game and fish fund, and may be spent only on activities that improve, enhance, or 3.3protect fish and wildlife resources, including conservation, restoration, and enhancement 3.4of land, water, and other natural resources of the state; 3.5(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and 3.6may be spent only for state parks and trails; 3.7(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and 3.8may be spent only on metropolitan park and trail grants; 3.9(4) three percent of the receipts must be deposited in the natural resources fund, and 3.10may be spent only on local trail grants; and 3.11(5) two percent of the receipts must be deposited in the natural resources fund, 3.12and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and 3.13Conservatory, and the Duluth Zoo. 3.14 new text begin (f) Revenues transmitted to the commissioner under section 297A.652 must be new text end 3.15 new text begin deposited by the commissioner in the state treasury in the general fund. new text end 3.16(f) new text begin (g) new text end The revenue dedicated under paragraph new text begin paragraphs new text end (e) new text begin and (f) new text end may not be 3.17used as a substitute for traditional sources of funding for the purposes specified, but the 3.18dedicated revenue shall supplement traditional sources of funding for those purposes. Land 3.19acquired with money deposited in the game and fish fund under paragraph (e) must be open 3.20to public hunting and fishing during the open season, except that in aquatic management 3.21areas or on lands where angling easements have been acquired, fishing may be prohibited 3.22during certain times of the year and hunting may be prohibited. At least 87 percent of the 3.23money deposited in the game and fish fund for improvement, enhancement, or protection 3.24of fish and wildlife resources under paragraph (e) must be allocated for field operations. 3.25(g) new text begin (h) new text end The revenues deposited under paragraphs (a) to (f) new text begin (g) new text end do not include 3.26the revenues, including interest and penalties, generated by the sales tax imposed 3.27under section 297A.62, subdivision 1a, which must be deposited as provided under the 3.28Minnesota Constitution, article XI, section 15. 3.29    Sec. 3. Minnesota Statutes 2008, section 297E.02, subdivision 1, is amended to read: 3.30    Subdivision 1. Imposition. A tax is imposed on all lawful gambling other than 3.31(1) pull-tab deals or games; (2) tipboard deals or games; and (3) items listed in section 3.32297E.01, subdivision 8, clauses (4) and (5), at the rate of 8.5 percent on the gross receipts 3.33as defined in section 297E.01, subdivision 8, less prizes actually paid. The tax imposed 3.34by this subdivision is in lieu of the tax imposed by section 297A.62 and all local taxes 4.1and license fees except a fee authorized under section 349.16, subdivision 8, or a tax 4.2authorized under subdivision 5. 4.3     The tax imposed under this subdivision is payable by the organization or party 4.4conducting, directly or indirectly, the gambling. 4.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 4.6    Sec. 4. Minnesota Statutes 2008, section 299L.02, subdivision 1, is amended to read: 4.7    Subdivision 1. Lottery. (a) The director shall when required under chapter 349A or 4.8when requested by the director of the lottery conduct background checks on employees of 4.9the State Lottery, lottery retailers, and bidders of lottery procurement contracts. 4.10    (b) The director shall, when so requested by the director of the State Lottery or when 4.11the director believes it to be reasonable and necessary, conduct investigations of lottery 4.12retailers, applicants for lottery retailer contracts, suppliers of goods or services to the State 4.13Lottery, and persons bidding on contracts for goods or services with the State Lottery. 4.14    (c) The director shall conduct an annual security audit of the State Lottery, or arrange 4.15for such an audit by an outside agency or person, firm, or corporation. The director shall 4.16report to the director of the lottery on the results of the audit. 4.17     new text begin (d) The director shall deposit in a separate account in the state treasury all money new text end 4.18 new text begin received from the director of the State Lottery for charges for investigations and new text end 4.19 new text begin background checks relating to the owning and operating of video lottery terminals under new text end 4.20 new text begin chapter 349A. Money in the account is appropriated to the director for the purpose of new text end 4.21 new text begin carrying out the director's powers and duties under this subdivision. new text end 4.22    Sec. 5. Minnesota Statutes 2008, section 299L.07, subdivision 2, is amended to read: 4.23    Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device: 4.24(1) may be sold by a person who is not licensed under this section, if the person (i) is 4.25not engaged in the trade or business of selling gambling devices, and (ii) does not sell 4.26more than one gambling device in any calendar year; 4.27(2) may be sold by the governing body of a federally recognized Indian tribe 4.28described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this 4.29section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to 4.30a distributor licensed under this section, and (iii) the licensed distributor notifies the 4.31commissioner of the purchase, in the same manner as is required when the licensed 4.32distributor ships a gambling device into Minnesota; 4.33(3) may be possessed by a person not licensed under this section if the person holds 4.34a permit issued under section 299L.08; and 5.1(4) may be possessed by a state agency, with the written authorization of the director, 5.2for display or evaluation purposes only and not for the conduct of gambling new text begin ; and new text end 5.3 new text begin (5) may be possessed by the State Lottery as authorized under chapter 349A new text end . 5.4    Sec. 6. Minnesota Statutes 2008, section 299L.07, subdivision 2a, is amended to read: 5.5    Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell, 5.6offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor 5.7licensed under this section new text begin or to the State Lottery as authorized under chapter 349A new text end . 5.8(b) A distributor licensed under this section may sell, offer to sell, market, rent, 5.9lease, or otherwise provide, in whole or in part, a gambling device only to: 5.10(1) the governing body of a federally recognized Indian tribe that is authorized 5.11to operate the gambling device under a tribal state compact under the Indian Gaming 5.12Regulatory Act, Public Law 100-497, and future amendments to it; 5.13(2) a person for use in the person's dwelling for display or amusement purposes in a 5.14manner that does not afford players an opportunity to obtain anything of value; 5.15(3) another distributor licensed under this section; or 5.16(4) a person in another state who is authorized under the laws of that state to possess 5.17the gambling device new text begin ; or new text end 5.18 new text begin (5) the State Lottery as authorized under chapter 349A new text end . 5.19    Sec. 7. Minnesota Statutes 2008, section 340A.410, subdivision 5, is amended to read: 5.20    Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this 5.21subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess, 5.22or operate, or permit the keeping, possession, or operation on the licensed premises of dice 5.23or any gambling device as defined in section 349.30, or permit gambling therein. 5.24(b) Gambling equipment may be kept or operated and raffles conducted on licensed 5.25premises and adjoining rooms when the use of the gambling equipment is authorized by 5.26(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory 5.27Act, Public Law 100-497, or (3) a tribal-state compact authorized under section 3.9221. 5.28(c) Lottery tickets may be purchased and sold within the licensed premises as 5.29authorized by the director of the lottery under chapter 349A. 5.30(d) Dice may be kept and used on licensed premises and adjoining rooms as 5.31authorized by section 609.761, subdivision 4. 5.32 new text begin (e) Gambling devices may be operated and gambling permitted as authorized by new text end 5.33 new text begin chapter 349A. new text end 6.1    Sec. 8. Minnesota Statutes 2009 Supplement, section 349.15, subdivision 1, is 6.2amended to read: 6.3    Subdivision 1. Expenditure restrictions, requirements, and civil penalties. 6.4    (a) Gross profits from lawful gambling may be expended only for lawful purposes or 6.5allowable expenses as authorized by the membership of the conducting organization at a 6.6monthly meeting of the organization's membership. 6.7(b) Provided that new text begin Except as provided in paragraph (e), new text end no more than 70 percent of 6.8the gross profit from bingo, and no more than 60 percent of the gross profit from other 6.9forms of lawful gambling, may be expended biennially during the term of the license for 6.10allowable expenses related to lawful gambling, except that for the period of July 1, 2008, 6.11to June 30, 2009, no more than 75 percent of the gross profit from bingo, and no more than 6.1265 percent of the gross profit from other forms of lawful gambling, may be expended for 6.13allowable expenses related to lawful gambling. This provision expires June 30, 2009. 6.14(c) For each 12-month period beginning July 1, 2009, a licensed organization will 6.15be evaluated by the board to determine a rating based on the percentage of annual lawful 6.16purpose expenditures when compared to available gross profits for the same period. The 6.17rating will be used to determine the organization's profitability percent and is not a rating 6.18of the organization's lawful gambling operation. An organization will be evaluated 6.19according to the following criteria: 6.20(1) an organization that expends 50 percent or more of gross profits on lawful 6.21purposes will receive a five-star rating; 6.22(2) an organization that expends 40 percent or more but less than 50 percent of gross 6.23profits on lawful purposes will receive a four-star rating; 6.24(3) an organization that expends 30 percent or more but less than 40 percent of gross 6.25profits on lawful purposes will receive a three-star rating; 6.26(4) an organization that expends 20 percent or more but less than 30 percent of gross 6.27profits on lawful purposes will receive a two-star rating; and 6.28(5) an organization that expends less than 20 percent of gross profits on lawful 6.29purposes will receive a one-star rating. 6.30(d) An organization that fails to expend a minimum of 30 percent annually of gross 6.31profits on lawful purposes is automatically on probation effective July 1 for a period of 6.32one year. The organization must increase its rating to a minimum of 30 percent or be 6.33subject to sanctions by the board. If an organization fails to meet the minimum after a 6.34one-year probation, the board may suspend the organization's license or impose a civil 6.35penalty as follows: 7.1(1) in determining any suspension or penalty for a violation of this paragraph, the 7.2board must consider any unique factors or extraordinary circumstances that caused the 7.3organization to not meet the minimum rate of profitability. Unique factors or extraordinary 7.4circumstances include, but are not limited to, the purchase of capital assets necessary to 7.5conduct lawful gambling; road or other construction causing impaired access to the lawful 7.6gambling premises; and flood, tornado, or other catastrophe that had a direct impact on the 7.7continuing lawful gambling operation; and 7.8(2) notwithstanding section 349.151, subdivision 4, paragraph (a), clause (10), the 7.9board may impose a civil penalty under this subdivision up to $10,000. 7.10 new text begin (e) Money received by an organization from net video lottery terminal income under new text end 7.11 new text begin section 349A.06, subdivision 6a, may be expended only for lawful purposes. new text end 7.12    Sec. 9. Minnesota Statutes 2008, section 349A.01, is amended by adding a subdivision 7.13to read: 7.14     new text begin Subd. 9a. new text end new text begin Lottery game. new text end new text begin "Lottery game" means any game operated by the lottery new text end 7.15 new text begin where the prize is determined primarily by chance. new text end 7.16    Sec. 10. Minnesota Statutes 2008, section 349A.01, subdivision 10, is amended to read: 7.17    Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a 7.18contract to provide lottery products, computer hardware and software used to monitor sales 7.19of lottery tickets new text begin and sales on a video lottery terminal new text end , and lottery tickets new text begin , video lottery new text end 7.20 new text begin terminals, and maintenance of video lottery terminals new text end . "Lottery procurement contract" 7.21does not include a contract to provide an annuity or prize payment agreement or materials, 7.22supplies, equipment, or services common to the ordinary operation of a state agency. 7.23    Sec. 11. Minnesota Statutes 2008, section 349A.01, subdivision 11, is amended to read: 7.24    Subd. 11. Lottery retailer. "Lottery retailer" means a person with whom the 7.25director has contracted to sell lottery tickets to the public. new text begin A lottery retailer includes a new text end 7.26 new text begin person with whom the director has contracted to place a video lottery terminal within its new text end 7.27 new text begin premises where video lottery terminal plays are sold. new text end 7.28    Sec. 12. Minnesota Statutes 2008, section 349A.01, subdivision 12, is amended to read: 7.29    Subd. 12. Lottery ticket or ticket. "Lottery ticket" or "ticket" means any tangible 7.30evidence issued by the lottery to prove participation in a lottery game new text begin other than a video new text end 7.31 new text begin lottery game new text end . 8.1    Sec. 13. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.2subdivision to read: 8.3     new text begin Subd. 14. new text end new text begin Net terminal income. new text end new text begin "Net terminal income" means the sum of all new text end 8.4 new text begin money spent for video lottery terminal plays less the value of video lottery credit receipts. new text end 8.5    Sec. 14. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.6subdivision to read: 8.7     new text begin Subd. 15. new text end new text begin Video lottery credit. new text end new text begin "Video lottery credit" means the basic unit of new text end 8.8 new text begin play for a video lottery terminal. new text end 8.9    Sec. 15. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.10subdivision to read: 8.11     new text begin Subd. 16. new text end new text begin Video lottery credit receipt. new text end new text begin "Video lottery credit receipt" means a new text end 8.12 new text begin receipt generated by a video lottery terminal that provides evidence of cash payment due a new text end 8.13 new text begin player from play on a video lottery terminal. new text end 8.14    Sec. 16. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.15subdivision to read: 8.16     new text begin Subd. 17. new text end new text begin Video lottery game. new text end new text begin "Video lottery game" means an electronically new text end 8.17 new text begin simulated game authorized by the director that is displayed and played on a video lottery new text end 8.18 new text begin terminal for consideration and with prizes awarded for designated results. Video lottery new text end 8.19 new text begin game includes video poker games, keno, and video pull-tabs. new text end 8.20    Sec. 17. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.21subdivision to read: 8.22     new text begin Subd. 18. new text end new text begin Video lottery terminal. new text end new text begin "Video lottery terminal" means any machine, new text end 8.23 new text begin system, or device which upon payment of consideration permits the play of a video new text end 8.24 new text begin lottery game. new text end 8.25    Sec. 18. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.26subdivision to read: 8.27     new text begin Subd. 19. new text end new text begin Video lottery terminal play. new text end new text begin "Video lottery terminal play" means an new text end 8.28 new text begin electronic record that proves participation in a video lottery game. new text end 8.29    Sec. 19. Minnesota Statutes 2008, section 349A.01, is amended by adding a 8.30subdivision to read: 9.1     new text begin Subd. 20. new text end new text begin Win percentage. new text end new text begin "Win percentage" means the portion of the money new text end 9.2 new text begin wagered by players on a video lottery terminal that is available for the payment of prizes new text end 9.3 new text begin to winning players. new text end 9.4    Sec. 20. Minnesota Statutes 2008, section 349A.04, is amended to read: 9.5349A.04 LOTTERY GAME PROCEDURES. 9.6The director may adopt game procedures governing the following elements of the 9.7lottery: 9.8(1) lottery games; 9.9(2) ticket prices; 9.10(3) number and size of prizes; 9.11(4) methods of selecting winning tickets; and 9.12(5) frequency and method of drawings. new text begin ; new text end 9.13 new text begin (6) video lottery terminals; and new text end 9.14 new text begin (7) cost of video lottery plays. new text end 9.15The adoption of lottery game procedures is not subject to chapter 14. 9.16    Sec. 21. Minnesota Statutes 2008, section 349A.06, subdivision 1, is amended to read: 9.17    Subdivision 1. Contracts. The director shall sell tickets new text begin and operate video lottery new text end 9.18 new text begin terminals new text end for the lottery through lottery retailers with whom the director contracts. 9.19Contracts under this section are not subject to the provisions of sections 16C.03, 16C.05, 9.2016C.06, 16C.08, 16C.09, and 16C.10, and are valid for a period of one year. The director 9.21may permit a retailer to sell tickets new text begin and operate video lottery terminals new text end at more than one 9.22business location under a contract entered into under this section. 9.23    Sec. 22. Minnesota Statutes 2008, section 349A.06, subdivision 5, is amended to read: 9.24    Subd. 5. Restrictions on lottery retailers. (a) A lottery retailer may sell lottery 9.25tickets new text begin or have a video lottery terminal placed new text end only on the premises described in the 9.26contract. 9.27    (b) A lottery retailer must prominently display a certificate issued by the director 9.28on the premises where lottery tickets will be sold new text begin or where video lottery terminals are new text end 9.29 new text begin operated new text end . 9.30    (c) A lottery retailer must keep a complete set of books of account, correspondence, 9.31and all other records necessary to show fully the retailer's lottery transactions, and make 9.32them available for inspection by employees of the lottery at all times during business 9.33hours. The director may require a lottery retailer to furnish information as the director 10.1deems necessary to carry out the purposes of this chapter, and may require an audit to be 10.2made of the books of account and records. The director may select an auditor to perform 10.3the audit and may require the retailer to pay the cost of the audit. The auditor has the same 10.4right of access to the books of account, correspondence, and other records as is given to 10.5employees of the lottery. 10.6    (d) A contract issued under this section may not be transferred or assigned. 10.7    (e) The director shall require that lottery tickets may be sold by retailers only for 10.8cash. 10.9    (f) A lottery retailer must prominently post at the point of sale of lottery tickets new text begin new text end 10.10 new text begin and the area where video lottery terminals are located new text end , in a manner approved by the 10.11commissioner of human services, the toll-free telephone number established by the 10.12commissioner of human services in connection with the compulsive gambling program 10.13established under section 245.98. 10.14    Sec. 23. Minnesota Statutes 2008, section 349A.06, is amended by adding a 10.15subdivision to read: 10.16     new text begin Subd. 5a. new text end new text begin Restrictions on lottery retailers; video lottery terminals. new text end new text begin (a) The new text end 10.17 new text begin director may only enter into a lottery retailer contract for games operated by a video lottery new text end 10.18 new text begin terminal with a retailer that has a license to sell alcoholic beverages for consumption on new text end 10.19 new text begin the premises where sold. This does not include a retailer who has only a temporary on-sale new text end 10.20 new text begin license or a retailer of 3.2 percent malt liquor whose total gross receipts from the premises new text end 10.21 new text begin were less than 50 percent attributable to the sale of 3.2 percent malt liquor. new text end 10.22     new text begin (b) The director may not contract with a retailer for games operated by a video new text end 10.23 new text begin lottery terminal unless the retailer has an organization licensed under chapter 349 new text end 10.24 new text begin authorized and conducting lawful gambling on the premises. new text end 10.25     new text begin (c) A lottery retailer authorized to sell games operated by a video lottery terminal new text end 10.26 new text begin may not cancel or refuse to renew a lease with an organization licensed under chapter 349 new text end 10.27 new text begin authorized and conducting lawful gambling on its premises for three years following new text end 10.28 new text begin the effective date of this act, unless the organization has failed to comply with its lease new text end 10.29 new text begin with the retailer. new text end 10.30     new text begin (d) A lottery retailer may have up to five video lottery terminals on the retailer's new text end 10.31 new text begin premises, as determined by the director. new text end 10.32     new text begin (e) A lottery retailer that is authorized to operate a video lottery terminal may not new text end 10.33 new text begin make reference to the establishment being a "casino," or use the word "casino" in its name new text end 10.34 new text begin or in any of its advertisements. new text end 11.1     new text begin (f) The director, or any employee of the director, may inspect any video lottery new text end 11.2 new text begin terminal at any time during the hours when alcoholic beverages may be sold at on-sale new text end 11.3 new text begin under section 340A.504, subdivisions 1, 2, and 3, without notice, to ensure compliance new text end 11.4 new text begin with this chapter and any rules adopted by the director. new text end 11.5    Sec. 24. Minnesota Statutes 2008, section 349A.06, is amended by adding a 11.6subdivision to read: 11.7     new text begin Subd. 6a. new text end new text begin Retention by retailers; video lottery terminals. new text end new text begin A lottery retailer who new text end 11.8 new text begin has a contract for placement of video lottery terminals may retain 31 percent of the net new text end 11.9 new text begin terminal income from the terminals located within its premises as commission. The lottery new text end 11.10 new text begin retailer receiving commission under this subdivision shall transmit to an organization new text end 11.11 new text begin licensed under chapter 349, and conducting lawful gambling on the premises of the new text end 11.12 new text begin retailer, 29 percent of the lottery retailer's commission received under this subdivision. new text end 11.13 new text begin If more than one organization conducts lawful gambling on the premises, the payment new text end 11.14 new text begin must be reasonably allocated between the organizations, pro rata based on their respective new text end 11.15 new text begin gross receipts. new text end 11.16    Sec. 25. Minnesota Statutes 2008, section 349A.06, subdivision 8, is amended to read: 11.17    Subd. 8. Proceeds of sales. All proceeds from the sale of lottery tickets new text begin or proceeds new text end 11.18 new text begin from the sale of video lottery terminal plays new text end received by a lottery retailer constitute a trust 11.19fund until paid to the director. The lottery retailer is personally liable for all proceeds. 11.20    Sec. 26. Minnesota Statutes 2008, section 349A.06, subdivision 10, is amended to read: 11.21    Subd. 10. Local licenses. No political subdivision may require a local license to 11.22operate as a lottery retailer new text begin , restrict or regulate the placement of a video lottery terminal, new text end 11.23or impose a tax or fee on the business of operating as a lottery retailer. 11.24    Sec. 27. new text begin [349A.071] VIDEO LOTTERY TERMINALS. new text end 11.25     new text begin Subdivision 1. new text end new text begin Operation. new text end new text begin (a) All video lottery terminals must be operated and new text end 11.26 new text begin controlled by the director. new text end 11.27 new text begin (b) Video lottery terminals must be owned or leased by the director. new text end 11.28 new text begin (c) Video lottery terminals must be maintained by the lottery, or by a vendor that is new text end 11.29 new text begin under the control and direction of the director. new text end 11.30 new text begin (d) The director must have a central communications system that monitors activities new text end 11.31 new text begin and provides auditing program information on each video lottery terminal. new text end 12.1 new text begin (e) The director must approve the general security arrangements associated with and new text end 12.2 new text begin relating to the operation of the video lottery terminal. new text end 12.3 new text begin (f) Video lottery terminals must maintain on nonresettable meters, a permanent new text end 12.4 new text begin record, capable of being printed out, of all transactions by the terminal and all entries new text end 12.5 new text begin into the terminal. new text end 12.6 new text begin (g) The director may implement other controls as are deemed necessary to ensure new text end 12.7 new text begin and maintain the integrity of video lottery terminals operated under this section. new text end 12.8     new text begin Subd. 2. new text end new text begin Testing and examination of machines. new text end new text begin The director shall examine new text end 12.9 new text begin prototypes of video lottery terminals and require that the manufacturer of the terminal new text end 12.10 new text begin pay the cost of the examination. The director may contract for the examination of new text end 12.11 new text begin video lottery terminals. The director may require working models of a video lottery new text end 12.12 new text begin terminal transported to the locations the director designates for testing, examination, new text end 12.13 new text begin and analysis. The manufacturer shall pay all costs of any testing, examination, analysis, new text end 12.14 new text begin and transportation of the terminal model. new text end 12.15     new text begin Subd. 3. new text end new text begin Deactivation of terminal. new text end new text begin The director may deactivate a video lottery new text end 12.16 new text begin terminal without notice if the lottery retailer has violated any provision of this chapter, new text end 12.17 new text begin rule, or provision of its contract with the director. new text end 12.18    Sec. 28. Minnesota Statutes 2008, section 349A.08, subdivision 1, is amended to read: 12.19    Subdivision 1. Agreement by players. A person who buys a lottery ticket new text begin or plays a new text end 12.20 new text begin video lottery game new text end agrees to be bound by the rules new text begin and game procedures new text end applicable to the 12.21 new text begin that new text end particular lottery game for which the ticket is purchased. The player acknowledges 12.22that the determination of whether a ticket new text begin or video lottery credit receipt new text end is a valid winning 12.23ticket is subject to new text begin under new text end the rules of new text begin and game procedures adopted by new text end the director, claims 12.24procedures established by the director for that game, and any confidential or public 12.25validation tests established by the director for that game. 12.26    Sec. 29. Minnesota Statutes 2008, section 349A.08, subdivision 5, is amended to read: 12.27    Subd. 5. Payment; unclaimed prizes. new text begin (a) Except as provided in this subdivision, new text end a 12.28prize in the state lottery must be claimed by the winner within one year of the date of the 12.29drawing at which the prize was awarded or the last day sales were authorized for a game 12.30where a prize was determined in a manner other than by means of a drawing. If a valid 12.31claim is not made for a prize payable directly by the lottery by the end of this period, the 12.32prize money is considered unclaimed and the winner of the prize shall have no further 12.33claim to the prize. 13.1     new text begin (b) A video lottery credit receipt from a video lottery terminal must be presented new text end 13.2 new text begin for payment within 60 days of the date the video lottery credit receipt was printed. If a new text end 13.3 new text begin valid claim for a video lottery credit receipt is not made by the end of this period, the new text end 13.4 new text begin video lottery credit receipt is considered unclaimed and the player shall have no further new text end 13.5 new text begin claim to the amount due from the video lottery credit receipt. new text end 13.6     new text begin (c) new text end A prize won by a person who purchased the winning ticket new text begin or played a video new text end 13.7 new text begin lottery game new text end in violation of section 349A.12, subdivision 1, or won by a person ineligible 13.8to be awarded a prize under subdivision 7 must be treated as an unclaimed prize under this 13.9section. The director must transfer all unclaimed prize money at the end of each fiscal 13.10year from the lottery cash flow account to the general fund. 13.11    Sec. 30. Minnesota Statutes 2008, section 349A.08, subdivision 8, is amended to read: 13.12    Subd. 8. Withholding of delinquent state taxes or other debts. The director 13.13shall report the name, address, and Social Security number of each winner of a lottery 13.14prize of $600 or more new text begin , or a video lottery prize of $1,200 or more, new text end to the Department of 13.15Revenue to determine whether the person who has won the prize is delinquent in payment 13.16of state taxes or owes a debt as defined in section 270A.03, subdivision 5. If the person 13.17is delinquent in payment of state taxes or owes a debt as defined in section 270A.03, 13.18subdivision 5, the director shall withhold the delinquent amount from the person's prize 13.19for remittance to the Department of Revenue for payment of the delinquent taxes or 13.20distribution to a claimant agency in accordance with chapter 270A. Section 270A.10 13.21applies to the priority of claims. 13.22    Sec. 31. Minnesota Statutes 2008, section 349A.09, subdivision 1, is amended to read: 13.23    Subdivision 1. Odds; required information. new text begin (a) new text end The director shall include on each 13.24brochure, pamphlet, booklet, or other similar material the director publishes to promote 13.25or explain any lottery game, a prominent and clear statement of the approximate odds of 13.26winning each prize offered in that lottery game. 13.27     new text begin (b) Except for the operation of a video lottery terminal, new text end each lottery retailer must 13.28post prominently at or near the point of ticket sale a notice or notices printed and provided 13.29by the director of the approximate odds of winning each prize in each game for which 13.30the lottery retailer sells tickets. 13.31     new text begin (c) The approximate odds of winning a prize from a video lottery terminal must be new text end 13.32 new text begin displayed on the face or screen of the video lottery terminal. new text end 13.33    Sec. 32. Minnesota Statutes 2008, section 349A.10, subdivision 2, is amended to read: 14.1    Subd. 2. Deposit in Prize fund. (a) The director shall establish a lottery prize 14.2fund outside the state treasury. The fund consists of all money deposited in it under this 14.3subdivision and all interest earned thereon. 14.4(b) The director shall deposit in the lottery prize fund, from gross receipts from the 14.5sale of lottery tickets, an amount sufficient to pay lottery prizes from the lottery prize 14.6fund according to the following provisions: 14.7(1) for games which require online terminal connections, the prizes paid in any fiscal 14.8year must be at least 45 percent of gross receipts from those games in that fiscal year; 14.9(2) for games which do not require online terminal connections, the prizes paid in any 14.10fiscal year must be at least the following percentages of gross receipts from those games: 14.11(i) 50 percent through fiscal year 1991; 14.12(ii) 55 percent from July 1, 1991, to June 30, 1992; and 14.13(iii) 60 percent thereafter new text begin of gross receipts from those games in that fiscal year new text end . 14.14 new text begin (c) For lottery games played on a video lottery terminal, the win percentage in any new text end 14.15 new text begin fiscal year will be the win percentage established by the game procedures adopted for the new text end 14.16 new text begin game, but shall be at least 80 percent but not more than 95 percent. new text end 14.17    Sec. 33. Minnesota Statutes 2008, section 349A.10, subdivision 3, is amended to read: 14.18    Subd. 3. Lottery operations. (a) The director shall establish a lottery operations 14.19account in the lottery fund. The director shall pay all costs of operating the lottery, 14.20including payroll costs or amounts transferred to the state treasury for payroll costs, but 14.21not including lottery prizes, from the lottery operating account. The director shall credit to 14.22the lottery operations account amounts sufficient to pay the operating costs of the lottery. 14.23(b) Except as provided in paragraph (e), the director may not credit in any fiscal year 14.24thereafter amounts to the lottery operations account which when totaled exceed nine 14.25percent of gross revenue new text begin , exclusive of net terminal income, and 12 percent of net terminal new text end 14.26 new text begin income new text end to the lottery fund in that fiscal year. In computing total amounts credited to 14.27the lottery operations account under this paragraph the director shall disregard amounts 14.28transferred to or retained by lottery retailers as sales commissions or other compensation. 14.29(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4 14.30percent of gross revenues in a fiscal year for contracts for the preparation, publication, and 14.31placement of advertising. 14.32(d) Except as the director determines, the lottery is not subject to chapter 16A 14.33relating to budgeting, payroll, and the purchase of goods and services. 14.34(e) In addition to the amounts credited to the lottery operations account under 14.35paragraph (b), the director is authorized, if necessary, to meet the current obligations of 15.1the lottery and to credit up to 25 percent of an amount equal to the average annual amount 15.2which was authorized to be credited to the lottery operations account for the previous three 15.3fiscal years but was not needed to meet the obligations of the lottery. 15.4    Sec. 34. Minnesota Statutes 2008, section 349A.10, subdivision 4, is amended to read: 15.5    Subd. 4. Deposit of receipts. (a) The director may require lottery retailers to: 15.6    (1) deposit in a separate account to the credit of the lottery fund, in banks designated 15.7by the director, all money received by the lottery retailer from the sale of lottery tickets new text begin new text end 15.8 new text begin and video lottery terminal plays new text end , less money retained as the lottery retailer's commission 15.9and for payment of prizes; 15.10    (2) file with the director reports of the lottery retailer's receipts and transactions in 15.11ticket sales new text begin and video lottery terminal plays new text end in a form that the director prescribes; and 15.12    (3) allow money deposited by the lottery retailer from the sale of lottery tickets new text begin and new text end 15.13 new text begin video lottery terminal plays new text end to be transferred to the lottery through electronic fund transfer. 15.14    (b) The director may make arrangements for any person, including a financial 15.15institution, to perform functions, activities, or services in connection with the receipt and 15.16distribution of lottery revenues. 15.17    (c) A lottery retailer who fails to pay any money due to the director within the time 15.18prescribed by the director shall pay interest on the amount owed at the rate determined by 15.19rule. 15.20    Sec. 35. Minnesota Statutes 2008, section 349A.10, subdivision 6, is amended to read: 15.21    Subd. 6. Budget; plans. The director shall prepare and submit a biennial budget 15.22plan to the commissioner of management and budget. The governor shall recommend 15.23the maximum amount available for the lottery in the budget the governor submits to 15.24the legislature under section 16A.11. The maximum amount available to the lottery for 15.25operating expenses and capital expenditures shall be determined by law. Operating 15.26expenses shall not include expenses that are a direct function of lottery sales, which 15.27include the cost of lottery prizes, amounts paid to lottery retailers as sales commissions 15.28or other compensation, amounts paid to produce and deliver scratch lottery games, and 15.29amounts paid to an outside vendor to operate and maintain an online gaming system new text begin , new text end 15.30 new text begin amounts paid to an outside vendor to operate and maintain a central system for video new text end 15.31 new text begin lottery terminals, and amounts paid to acquire and maintain video lottery terminals new text end . In 15.32addition, the director shall appear at least once each fiscal year before the senate and house 15.33of representatives committees having jurisdiction over gambling policy to present and 16.1explain the lottery's plans for future games and the related advertising and promotions 16.2and spending plans for the next fiscal year. 16.3    Sec. 36. Minnesota Statutes 2008, section 349A.11, subdivision 1, is amended to read: 16.4    Subdivision 1. Lottery ticket; retailer. The director, an employee of the lottery, 16.5a member of the immediate family of the director or employee residing in the same 16.6household may not: 16.7    (1) purchase a lottery ticket new text begin or play a game on a video lottery terminal new text end ; or 16.8    (2) have any personal pecuniary interest in any vendor holding a lottery procurement 16.9contract, or in any lottery retailer; or 16.10    (3) receive any gift, gratuity, or other thing of value, excluding food or beverage, 16.11from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in 16.12excess of $100 in any calendar year. 16.13    Sec. 37. Minnesota Statutes 2008, section 349A.12, subdivision 1, is amended to read: 16.14    Subdivision 1. Purchase by minors. A person under the age of 18 years may not 16.15buy or redeem for a prize a ticket in the state lottery new text begin and a person under the age of 21 years new text end 16.16 new text begin may not play a game or redeem a video lottery credit receipt from a video lottery terminal new text end . 16.17    Sec. 38. Minnesota Statutes 2008, section 349A.12, subdivision 2, is amended to read: 16.18    Subd. 2. Sale to minors. A lottery retailer may not sell and a lottery retailer or other 16.19person may not furnish or redeem for a prize a ticket in the state lottery to any person 16.20under the age of 18 years new text begin , or allow a person under the age of 21 years to play a game or new text end 16.21 new text begin redeem a video lottery credit receipt from a video lottery terminal new text end . It is an affirmative 16.22defense to a charge under this subdivision for the lottery retailer or other person to prove 16.23by a preponderance of the evidence that the lottery retailer or other person reasonably and 16.24in good faith relied upon representation of proof of age described in section 340A.503, 16.25subdivision 6, in making the sale or furnishing or redeeming the ticket new text begin or allowing the new text end 16.26 new text begin play of a video lottery game or redeem a video lottery credit receipt from a video lottery new text end 16.27 new text begin terminal new text end . 16.28    Sec. 39. Minnesota Statutes 2008, section 349A.13, is amended to read: 16.29349A.13 RESTRICTIONS. 16.30    Nothing in this chapter: 17.1    (1) authorizes the director to conduct a lottery game or contest the winner or winners 17.2of which are determined by the result of a sporting event other than a horse race conducted 17.3under chapter 240; new text begin or new text end 17.4    (2) authorizes the director to install or operate a lottery device operated by coin or 17.5currency which when operated determines the winner of a game; and 17.6    (3) new text begin (2) new text end authorizes the director to sell pull-tabs as defined under section 349.12, 17.7subdivision 32. 17.8    Sec. 40. Minnesota Statutes 2008, section 541.20, is amended to read: 17.9541.20 RECOVERY OF MONEY LOST. 17.10Every person who, by playing at cards, dice, or other game, or by betting on the 17.11hands or sides of such as are gambling, shall lose to any person so playing or betting 17.12any sum of money or any goods, and pays or delivers the same, or any part thereof, to 17.13the winner, may sue for and recover such money by a civil action, before any court 17.14of competent jurisdiction. For purposes of this section, gambling shall not include 17.15pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase 17.16or sale of tickets in the state lottery, new text begin purchase of video lottery plays as authorized under new text end 17.17 new text begin chapter 349A, new text end or gambling authorized under chapters 349 and 349A. 17.18    Sec. 41. Minnesota Statutes 2008, section 541.21, is amended to read: 17.19541.21 COMMITMENTS FOR GAMBLING DEBT VOID. 17.20Every note, bill, bond, mortgage, or other security or conveyance in which the whole 17.21or any part of the consideration shall be for any money or goods won by gambling or 17.22playing at cards, dice, or any other game whatever, or by betting on the sides or hands 17.23of any person gambling, or for reimbursing or repaying any money knowingly lent or 17.24advanced at the time and place of such gambling or betting, or lent and advanced for any 17.25gambling or betting to any persons so gambling or betting, shall be void and of no effect 17.26as between the parties to the same, and as to all persons except such as hold or claim 17.27under them in good faith, without notice of the illegality of the consideration of such 17.28contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel 17.29wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets 17.30in the state lottery new text begin or other wagering authorized new text end under chapter 349A; (3) gaming activities 17.31conducted pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.; or (4) 17.32lawful gambling activities permitted under chapter 349. 17.33    Sec. 42. Minnesota Statutes 2008, section 609.651, subdivision 1, is amended to read: 18.1    Subdivision 1. Felony new text begin Fraud new text end . A person is guilty of a felony and may be sentenced 18.2under subdivision 4 if the person does any of the following with intent to defraud the 18.3State Lottery: 18.4    (1) alters or counterfeits a state lottery ticket new text begin or a video lottery credit receipt from a new text end 18.5 new text begin State Lottery video lottery terminal new text end ; 18.6    (2) knowingly presents an altered or counterfeited state lottery ticket new text begin or video lottery new text end 18.7 new text begin credit receipt from a State Lottery video lottery terminal new text end for payment; 18.8    (3) knowingly transfers an altered or counterfeited state lottery ticket new text begin or video lottery new text end 18.9 new text begin credit receipt from a State Lottery video lottery terminal new text end to another person; or 18.10    (4) new text begin tampers with or manipulates the outcome, prize payable, or operation of a State new text end 18.11 new text begin Lottery video lottery terminal; or new text end 18.12     new text begin (5) new text end otherwise claims a lottery prize by means of fraud, deceit, or misrepresentation. 18.13    Sec. 43. Minnesota Statutes 2008, section 609.75, subdivision 3, is amended to read: 18.14    Subd. 3. What are not bets. The following are not bets: 18.15(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a 18.16harm or loss sustained, even though the loss depends upon chance; 18.17(2) a contract for the purchase or sale at a future date of securities or other 18.18commodities; 18.19(3) offers of purses, prizes or premiums to the actual contestants in any bona fide 18.20contest for the determination of skill, speed, strength, endurance, or quality or to the bona 18.21fide owners of animals or other property entered in such a contest; 18.22(4) the game of bingo when conducted in compliance with sections 349.11 to 349.23; 18.23(5) a private social bet not part of or incidental to organized, commercialized, or 18.24systematic gambling; 18.25(6) the operation of equipment or the conduct of a raffle under sections 349.11 to 18.26349.22 , by an organization licensed by the Gambling Control Board or an organization 18.27exempt from licensing under section 349.166; 18.28(7) pari-mutuel betting on horse racing when the betting is conducted under chapter 18.29240; and 18.30(8) the purchase and sale of state lottery tickets new text begin and plays on a video lottery terminal new text end 18.31under chapter 349A. 18.32    Sec. 44. Minnesota Statutes 2008, section 609.75, subdivision 4, is amended to read: 18.33    Subd. 4. Gambling device. A gambling device is a contrivance the purpose of which 18.34is that for a consideration a player is afforded an opportunity to obtain something of value, 19.1other than free plays, automatically from the machine or otherwise, the award of which 19.2is determined principally by chance, whether or not the contrivance is actually played. 19.3"Gambling device" also includes a video game of chance, as defined in subdivision 8 new text begin , but new text end 19.4 new text begin does not include a video lottery terminal operated by the State Lottery under chapter 349A new text end . 19.5    Sec. 45. Minnesota Statutes 2008, section 609.761, subdivision 2, is amended to read: 19.6    Subd. 2. State lottery. Sections 609.755 and 609.76 do not prohibit the operation 19.7of the state lottery or new text begin ; new text end the sale, possession, or purchase of tickets for the state lottery new text begin ; or new text end 19.8 new text begin the manufacture, possession, or operation of a video lottery terminal for the state lottery new text end 19.9under chapter 349A. 19.10    Sec. 46. new text begin LOTTERY BUDGET; VIDEO LOTTERY TERMINALS. new text end 19.11 new text begin The director of the State Lottery shall submit a budget for the operation of video new text end 19.12 new text begin lottery terminals as authorized under Minnesota Statutes, section 349A.071, to the new text end 19.13 new text begin commissioner of finance. Notwithstanding Minnesota Statutes, section 349A.10, new text end 19.14 new text begin subdivision 6, the director of the State Lottery may expend amounts necessary to operate new text end 19.15 new text begin video lottery terminals. Amounts expended by the director of the State Lottery for the new text end 19.16 new text begin conduct of video lottery terminals in fiscal year 2010 are not subject to the maximum new text end 19.17 new text begin amount set in law for the operation of the lottery. new text end 19.18    Sec. 47. new text begin REPEALER. new text end 19.19 new text begin Minnesota Statutes 2008, sections 297E.01, subdivision 7; and 297E.02, subdivisions new text end 19.20 new text begin 4, 6, and 7, new text end new text begin are repealed. new text end 19.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 19.22    Sec. 48. new text begin EFFECTIVE DATE. new text end 19.23     new text begin Except as otherwise provided, this article is effective the day following final new text end 19.24 new text begin enactment. new text end 19.25ARTICLE 2 19.26ELECTRONIC LINKED BINGO 19.27    Section 1. Minnesota Statutes 2008, section 349.12, subdivision 5, is amended to read: 19.28    Subd. 5. Bingo occasion. "Bingo occasion" means a single gathering or session 19.29at which a series of one or more successive bingo games is played. There is no limit on 19.30the number of games conducted during a bingo occasion but new text begin . new text end A bingo occasion must not 20.1last longer than eight consecutive hours new text begin , except that all linked bingo games played on new text end 20.2 new text begin electronic bingo devices during the regular daily business hours of the permitted premises new text end 20.3 new text begin are considered a separate bingo occasion new text end . 20.4    Sec. 2. Minnesota Statutes 2009 Supplement, section 349.12, subdivision 12a, is 20.5amended to read: 20.6    Subd. 12a. Electronic bingo device. new text begin (a) new text end "Electronic bingo device" means an 20.7electronic new text begin bingo new text end device used by a bingo player to new text begin (1) new text end monitor bingo paper sheets or a 20.8facsimile of a bingo paper sheet when purchased at the time and place of an organization's 20.9bingo occasion and which (1) provides a means for bingo players to new text begin ; (2) new text end activate numbers 20.10announced by a bingo caller; (2) compares new text begin or displayed and compare new text end the numbers entered 20.11by the player to the bingo faces previously stored in the memory of the device; and (3) 20.12identifies new text begin identify new text end a winning bingo pattern. 20.13 new text begin (b) An electronic bingo device may be used only in the conduct of bingo permitted new text end 20.14 new text begin under this chapter and may not display or simulate any other form of gambling or new text end 20.15 new text begin entertainment and must be provided by a licensed distributor to a licensed organization. new text end 20.16     new text begin (c) An electronic bingo device used in conjunction with a linked bingo game system new text end 20.17 new text begin must be provided by a linked bingo game provider as part of its linked bingo game system. new text end 20.18Electronic bingo device does not mean any device into which coin, currency, or tokens are 20.19inserted to activate play. 20.20    Sec. 3. Minnesota Statutes 2008, section 349.12, subdivision 25b, is amended to read: 20.21    Subd. 25b. Linked bingo game provider. "Linked bingo game provider" means 20.22any person who provides the means to link bingo prizes in a linked bingo game, who 20.23provides linked bingo paper sheets to the participating organizations new text begin games new text end , who provides 20.24linked bingo prize management, and who provides the linked bingo game system. 20.25    Sec. 4. Minnesota Statutes 2008, section 349.12, subdivision 25c, is amended to read: 20.26    Subd. 25c. Linked bingo game system. "Linked bingo game system" means the 20.27equipment used by the linked bingo provider to conduct, transmit, and track a linked bingo 20.28game. The system must be approved by the board before its use in this state and it must 20.29have dial-up or other new text begin the new text end capability to permit the board to monitor its operation remotely. 20.30    Sec. 5. Minnesota Statutes 2008, section 349.12, subdivision 25d, is amended to read: 20.31    Subd. 25d. Linked bingo prize pool. "Linked bingo prize pool" means the total of 20.32all prize money that each participating organization has contributed to a linked bingo game 21.1prize and includes any portion of the prize pool that is carried over from one occasion 21.2 new text begin game new text end to another in a progressive linked bingo game. 21.3    Sec. 6. Minnesota Statutes 2008, section 349.151, subdivision 4c, is amended to read: 21.4    Subd. 4c. Electronic bingo. (a) The board may by rule authorize but not require the 21.5use of electronic bingo devices. 21.6(b) Rules adopted under paragraph (a): 21.7(1) must limit the number of bingo faces that can be played using an electronic 21.8bingo device to 36; 21.9(2) must require that an electronic bingo device be used with corresponding bingo 21.10paper sheets or a facsimile, printed at the point of sale, new text begin of a bingo paper sheet new text end as approved 21.11by the board; 21.12(3) must require that the electronic bingo device site system have dial-up new text begin the new text end 21.13capability to permit the board to remotely monitor the operation of the device and the 21.14internal accounting systems; and 21.15(4) must prohibit the price of a face played on an electronic bingo device from being 21.16less than the price of a face on a bingo paper sheet sold at the same occasion. 21.17    Sec. 7. Minnesota Statutes 2008, section 349.16, subdivision 7, is amended to read: 21.18    Subd. 7. Purchase of gambling equipment. An organization may purchase new text begin or new text end 21.19 new text begin lease new text end gambling equipment only from a person licensed as a distributor new text begin or linked bingo new text end 21.20 new text begin game provider new text end . 21.21    Sec. 8. Minnesota Statutes 2008, section 349.1635, subdivision 1, is amended to read: 21.22    Subdivision 1. License required. No person may do any of the following without 21.23having first obtained a license from the board: 21.24(1) provide the means to link prizes in a linked bingo game; 21.25(2) provide linked bingo game prize management; 21.26(3) provide the linked bingo system; or 21.27(4) provide linked bingo paper sheets new text begin or electronic bingo devices new text end to an organization. 21.28    Sec. 9. Minnesota Statutes 2009 Supplement, section 349.17, subdivision 6, is 21.29amended to read: 21.30    Subd. 6. Conduct of bingo. new text begin (a) Each bingo hard card and paper sheet must have new text end 21.31 new text begin five horizontal rows of spaces with each row except one having five numbers. The center new text end 21.32 new text begin row must have four numbers and the center space marked "free." Each column must new text end 22.1 new text begin have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also have new text end 22.2 new text begin numbers that are not preprinted but are filled in by players. new text end 22.3 new text begin (b) new text end A game of bingo begins with the first letter and number called new text begin or displayed new text end . Each 22.4player must cover, mark, or activate the numbers when bingo numbers are randomly 22.5selected, new text begin and new text end announced, and new text begin or new text end displayed to the players, either manually or with a 22.6flashboard and monitor. The game is won when a player, using bingo paper, bingo hard 22.7card, or a facsimile of a bingo paper sheet, has completed, as described in the bingo 22.8program, a previously designated pattern or previously determined requirements of the 22.9game and declared bingo. The game is completed when a winning card, sheet, or facsimile 22.10is verified and a prize awarded pursuant to subdivision 3. 22.11    Sec. 10. Minnesota Statutes 2009 Supplement, section 349.17, subdivision 7, is 22.12amended to read: 22.13    Subd. 7. Bar bingo. An organization may conduct bar bingo subject to the 22.14following restrictions: 22.15    (1) the bingo is conducted at a site the organization owns or leases and which has a 22.16license for the sale of intoxicating beverages on the premises under chapter 340A; new text begin and new text end 22.17    (2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper 22.18sheets purchased from a licensed distributor or licensed linked bingo game provider; and 22.19    (3) no rent may be paid for a bar bingo occasion. 22.20 new text begin (2) bingo hard cards are not used. new text end 22.21    Sec. 11. Minnesota Statutes 2008, section 349.17, subdivision 8, is amended to read: 22.22    Subd. 8. Linked bingo games. (a) A licensed organization may conduct or 22.23participate in not more than two linked bingo games per occasion, one new text begin , some new text end of which 22.24may be a progressive game in which a portion of the prize is carried over from one 22.25occasion new text begin game new text end to another until won by a player achieving a bingo within a predetermined 22.26amount of bingo numbers called. 22.27    (b) Each participating licensed organization shall contribute to each prize awarded 22.28in a linked bingo game in an amount not to exceed $300. 22.29    (c) new text begin (b) new text end An electronic bingo device as defined in section 349.12, subdivision 12a, 22.30may be used for a linked bingo game. new text begin No more than six electronic bingo devices may be new text end 22.31 new text begin located at a permitted premises with 200 seats or less. No more than 12 electronic bingo new text end 22.32 new text begin devices may be located at a permitted premises with 201 seats or more. Seating capacity is new text end 22.33 new text begin determined as specified under local fire code. new text end 23.1 new text begin (c) An electronic bingo device may be located only at a permitted premises where new text end 23.2 new text begin the organization conducts another form of gambling and the premises is: (1) a licensed new text end 23.3 new text begin premises for on-sale or off-sale of intoxicating liquor or 3.2 percent malt beverages except new text end 23.4 new text begin that electronic bingo may not be allowed at a licensee for a general foods store or drug new text end 23.5 new text begin store permitted to operate under section 340A.405, subdivision 1; or (2) where bingo is new text end 23.6 new text begin conducted and admission is restricted to persons 18 years or older. new text end 23.7 new text begin (d) Prior to a bingo occasion for linked bingo games played on electronic bingo new text end 23.8 new text begin devices, the linked bingo game provider, on behalf of the participating organizations, must new text end 23.9 new text begin provide to the board a bingo program in a format prescribed by the board. new text end 23.10    (d) new text begin (e) new text end The board may adopt rules to: 23.11    (1) specify the manner in which a linked bingo game must be played and how the 23.12linked bingo prizes must be awarded; 23.13    (2) specify the records to be maintained by a linked bingo game provider; 23.14    (3) require the submission of periodic reports by the linked bingo game provider and 23.15specify the content of the reports; 23.16    (4) establish the qualifications required to be licensed as a linked bingo game 23.17provider; and 23.18    (5) any other matter involving the operation of a linked bingo game. 23.19    Sec. 12. Minnesota Statutes 2009 Supplement, section 349.18, subdivision 1, is 23.20amended to read: 23.21    Subdivision 1. Lease or ownership required; rent limitations. (a) An organization 23.22may conduct lawful gambling only on premises it owns or leases. Leases must be on a 23.23form prescribed by the board. The term of the lease is concurrent with the premises permit. 23.24Leases approved by the board must specify that the board may authorize an organization 23.25to withhold rent from a lessor for a period of up to 90 days if the board determines that 23.26illegal gambling occurred on the premises or that the lessor or its employees participated 23.27in the illegal gambling or knew of the gambling and did not take prompt action to stop the 23.28gambling. The lease must authorize the continued tenancy of the organization without 23.29the payment of rent during the time period determined by the board under this paragraph. 23.30Copies of all leases must be made available to employees of the board and the Division of 23.31Alcohol and Gambling Enforcement on request. 23.32    (b) Rent paid by an organization for leased premises for the conduct of pull-tabs, 23.33tipboards, and paddle wheels is subject to the following limits: 23.34    (1) for booth operations, including booth operations where a pull-tab dispensing 23.35device is located, booth operations where a bar operation is also conducted, and booth 24.1operations where both a pull-tab dispensing device is located and a bar operation is also 24.2conducted, the maximum rent is: 24.3    (i) in any month where the organization's gross profit at those premises does not 24.4exceed $4,000, up to $400; and 24.5    (ii) in any month where the organization's gross profit at those premises exceeds 24.6$4,000, up to $400 plus not more than ten percent of the gross profit for that month in 24.7excess of $4,000; 24.8    (2) for bar operations, including bar operations where a pull-tab dispensing device 24.9is located but not including bar operations subject to clause (1), and for locations where 24.10only a pull-tab dispensing device is located: 24.11    (i) in any month where the organization's gross profit at those premises does not 24.12exceed $1,000, up to $200; and 24.13    (ii) in any month where the organization's gross profit at those premises exceeds 24.14$1,000, up to $200 plus not more than 20 percent of the gross profit for that month 24.15in excess of $1,000; 24.16    (3) a lease not governed by clauses (1) and (2) must be approved by the board 24.17before becoming effective; 24.18    (4) total rent paid to a lessor from all organizations from leases governed by clause 24.19(1) may not exceed $1,750 per month. 24.20    (c) Rent paid by an organization for leased premises for the conduct of bingo is 24.21subject to either of the following limits at the option of the parties to the lease: 24.22    (1) not more than ten percent of the monthly gross profit from all lawful gambling 24.23activities held during bingo occasions excluding bar bingo or at a rate based on a cost per 24.24square foot not to exceed 110 percent of a comparable cost per square foot for leased space 24.25as approved by the director; and 24.26    (2) no rent may be paid for bar bingo new text begin , except as allowed under section 349.185 new text end . 24.27    (d) Amounts paid as rent under leases are all-inclusive. No other services or 24.28expenses provided or contracted by the lessor may be paid by the organization, including, 24.29but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn 24.30services, electricity, heat, security, security monitoring, storage, other utilities or services, 24.31and, in the case of bar operations, cash shortages, unless approved by the director. Any 24.32other expenditure made by an organization that is related to a leased premises must be 24.33approved by the director. An organization may not provide any compensation or thing of 24.34value to a lessor or the lessor's employees from any fund source other than its gambling 24.35account. Rent payments may not be made to an individual. 25.1    (e) Notwithstanding paragraph (b), an organization may pay a lessor for food or 25.2beverages or meeting room rental if the charge made is comparable to similar charges 25.3made to other individuals or groups. 25.4    (f) No entity other than the licensed organization may conduct any activity within 25.5a booth operation on a leased premises. 25.6    Sec. 13. new text begin [349.185] GROSS PROFIT ALLOCATION; ELECTRONIC BINGO. new text end 25.7     new text begin Subdivision 1. new text end new text begin Definition. new text end new text begin For the purposes of this section, a "year" is determined to new text end 25.8 new text begin start on the first date of operation of an electronic bingo device at a permitted premises. new text end 25.9     new text begin Subd. 2. new text end new text begin Gross profit allocation. new text end new text begin The allocation of gross profits from the operation new text end 25.10 new text begin of an electronic bingo device is as follows. new text end 25.11 new text begin (a) The license organization shall receive: new text end 25.12 new text begin (1) a minimum of 50 percent of gross profits to be used exclusively for lawful new text end 25.13 new text begin purpose expenditures as defined under section 349.12, subdivision 25; and new text end 25.14 new text begin (2) no more than 15 percent each year for allowable expenses as defined under new text end 25.15 new text begin section 349.12, subdivision 3a, including the cost of a lease or purchase of the electronic new text end 25.16 new text begin bingo devices. new text end 25.17 new text begin (b) A linked bingo game provider shall receive no more than 25 percent of gross new text end 25.18 new text begin profits in the first year, no more than 19 percent in the second year, and no more than 15 new text end 25.19 new text begin percent thereafter. new text end 25.20 new text begin (c) When an electronic bingo device is placed in a location where the primary new text end 25.21 new text begin business is not bingo, the allocation for rent to the lessor shall be no more than ten percent new text end 25.22 new text begin of gross profits in the first year, no more than 16 percent in the second year, and no more new text end 25.23 new text begin than 20 percent thereafter. The lessor and the lessor's employees shall operate the devices new text end 25.24 new text begin on behalf of the licensed organization, and the lessor is responsible for cash shortages. new text end 25.25 new text begin (d) When an electronic bingo device is placed in a location where the primary new text end 25.26 new text begin business is bingo, the lessor is limited to the rent limitations under section 349.18, new text end 25.27 new text begin subdivision 1, paragraph (c), clause (1). new text end 25.28    Sec. 14. Minnesota Statutes 2008, section 349.211, subdivision 1a, is amended to read: 25.29    Subd. 1a. Linked bingo prizes. Prizes for a linked bingo game shall be limited 25.30as follows: 25.31(1) no new text begin for each participating permitted premises, an new text end organization may new text begin not new text end contribute 25.32more than $300 per linked bingo game to a linked bingo prize pool new text begin , and for a linked bingo new text end 25.33 new text begin game played with electronic bingo devices, an organization may not contribute more than new text end 25.34 new text begin 85 percent of the gross receipts to a linked bingo game prize pool new text end ; 26.1(2) no new text begin an new text end organization may new text begin not new text end award more than $200 for a linked bingo game 26.2consolation prize. For purposes of this subdivision, a linked bingo game consolation 26.3prize is a prize awarded by an organization after a prize from the linked bingo prize pool 26.4has been won; and 26.5    (3) for a progressive linked bingo game, if no player declares a valid bingo within 26.6the predetermined amount of bingo numbers called, a portion of the prize is carried over to 26.7another occasion new text begin game new text end until the accumulated prize is won. The portion of the prize that is 26.8not carried over must be awarded to the first player or players who declares a valid bingo 26.9as additional numbers are called. If a valid bingo is declared within the predetermined 26.10amount of bingo numbers called, the entire prize pool for that game is awarded to the 26.11winner. The annual limit for progressive bingo game prizes contained in subdivision 2 26.12must be reduced by the amount an organization contributes to progressive linked bingo 26.13games during the same calendar year. 26.14ARTICLE 3 26.15ELECTRONIC PULL-TABS 26.16    Section 1. Minnesota Statutes 2008, section 349.12, is amended by adding a 26.17subdivision to read: 26.18     new text begin Subd. 12b. new text end new text begin Electronic pull-tab device. new text end new text begin "Electronic pull-tab device" means a new text end 26.19 new text begin terminal, system, or device authorized by the board that permits, upon payment of new text end 26.20 new text begin consideration, the play of electronic pull-tab games. new text end 26.21    Sec. 2. Minnesota Statutes 2008, section 349.12, is amended by adding a subdivision 26.22to read: 26.23     new text begin Subd. 12c. new text end new text begin Electronic pull-tab game. new text end new text begin "Electronic pull-tab game" means an new text end 26.24 new text begin electronically simulated game authorized by the board that is played and displayed on new text end 26.25 new text begin a video monitor device. new text end 26.26    Sec. 3. Minnesota Statutes 2008, section 349.151, is amended by adding a subdivision 26.27to read: 26.28     new text begin Subd. 4d. new text end new text begin Electronic pull-tabs. new text end new text begin (a) The board shall by rule authorize, but not new text end 26.29 new text begin require, the use of electronic pull-tab devices. new text end 26.30 new text begin (b) Rules adopted under this subdivision must follow the guidelines for what is new text end 26.31 new text begin currently allowed for the conduct of pull-tabs under section 349.1721 in terms of the style new text end 26.32 new text begin of the game and prize payout and must additionally include: new text end 26.33 new text begin (1) finite number of tickets in each electronic deal; new text end 27.1 new text begin (2) predetermined number of winning and losing tickets; new text end 27.2 new text begin (3) serialized tracking for each deal; new text end 27.3 new text begin (4) no spinning symbols which mimic a video slot machine; new text end 27.4 new text begin (5) no regeneration of serialized deal; new text end 27.5 new text begin (6) all deals must be sold and played on-site and cannot be transferred electronically new text end 27.6 new text begin or otherwise to any other location by the licensed organization; new text end 27.7 new text begin (7) serialized deals cannot be shared or commingled with any other deals or locations; new text end 27.8 new text begin (8) the number of devices at any single site the organization owns or leases is new text end 27.9 new text begin limited to five; new text end 27.10 new text begin (9) allowance for the board to remotely monitor the operation of the electronic new text end 27.11 new text begin pull-tab devices and the internal accounting systems; new text end 27.12 new text begin (10) requirement that electronic pull-tab devices maintain, on nonresettable meters, new text end 27.13 new text begin a printable, permanent record of all transactions involving the device; and new text end 27.14 new text begin (11) authority for the board to deactivate an electronic pull-tab device without notice new text end 27.15 new text begin for violation of a law or rule and to implement any other controls deemed by the board new text end 27.16 new text begin necessary to ensure and maintain the integrity of electronic pull-tab games operated under new text end 27.17 new text begin this subdivision. new text end 27.18 new text begin (c) The board shall examine prototypes of electronic pull-tab devices. The board new text end 27.19 new text begin may contract for the examination of electronic pull-tab devices and may require working new text end 27.20 new text begin models of electronic pull-tab devices to be transported to the locations the board designates new text end 27.21 new text begin for testing, examination, and analysis. The manufacturer shall pay all costs of any testing, new text end 27.22 new text begin examination, analysis, and transportation of the model. new text end