1.1 	A bill for an act
1.2 	relating to gambling; modifying certain rates of tax on lawful gambling; 
1.3 	providing for linked bingo and electronic pull-tabs; making clarifying, 
1.4 	conforming, and technical changes; appropriating money;amending Minnesota 
1.5 	Statutes 2010, sections 297E.02; 349.12, subdivisions 5, 12a, 25b, 25c, 25d, 
1.6 	29, 32, 32a; 349.13; 349.151, subdivisions 4b, 4c; 349.155, subdivisions 3, 4; 
1.7 	349.161, subdivision 1; 349.163, subdivisions 1, 6; 349.1635, subdivision 2, 
1.8 	by adding a subdivision; 349.165, subdivision 2; 349.17, subdivisions 6, 7, 8; 
1.9 	349.1721, by adding subdivisions; 349.18, subdivision 1; 349.211, subdivision 
1.10 	1a; proposing coding for new law in Minnesota Statutes, chapter 349.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2010, section 297E.02, is amended to read:
1.13 	297E.02 TAX IMPOSED.
1.14 		Subdivision 1.Imposition. (a) A tax is imposed on all lawful gambling other than 
1.15 	(1) paper pull-tab deals or games; (2) tipboard deals or games; and (3) items listed in 
1.16 	section 297E.01, subdivision 8, clauses (4) and (5), at the rate of 8.5 percent on the gross 
1.17 	receipts as defined in section 297E.01, subdivision 8, less prizes actually paid. This 
1.18 	paragraph expires effective for gross receipts received after June 30, 2012.
1.19 	(b) Effective July 1, 2012, a tax is imposed on all lawful gambling at the rate of nine 
1.20 	percent of the gross receipts as defined in section 297E.01, subdivision 8, less prizes 
1.21 	actually paid.
1.22 	(c) The tax imposed by this subdivision is in lieu of the tax imposed by section 
1.23 	297A.62 and all local taxes and license fees except a fee authorized under section 349.16, 
1.24 	subdivision 8, or a tax authorized under subdivision 5.
1.25 	(d) The tax imposed under this subdivision is payable by the organization or party 
1.26 	conducting, directly or indirectly, the gambling.
2.1 	(e) Effective July 1, 2012, for any pull-tab and tipboard game sold to the distributor 
2.2 	by a manufacturer, which the distributor cannot account for, the distributor incurs the tax 
2.3 	in this subdivision on the ideal gross receipts as defined in section 297E.01, subdivision 
2.4 	8, less the ideal prizes of the pull-tab or tipboard game. 
2.5 		Subd. 1a.Paper pull-tab. For purposes of this section, the term "paper pull-tab" 
2.6 	excludes pull-tabs played using a pull-tab (electronic) dispensing device that displays 
2.7 	a facsimile of a paper pull-tab.
2.8 		Subd. 2.Tax-exempt gambling. An organization's receipts from lawful gambling 
2.9 	that are excluded or exempt from licensing under section 349.166, are not subject to the 
2.10 	tax imposed by this section or section 297A.62. This exclusion from tax is only valid if 
2.11 	at the time of the event giving rise to the tax the organization either has an exclusion 
2.12 	under section 349.166, subdivision 1, or has applied for and received a valid exemption 
2.13 	from the lawful gambling control board.
2.14 		Subd. 2a.Tax credit for certain raffles. An organization may claim a credit equal 
2.15 	to the tax reported under subdivision 1 resulting from a raffle the net proceeds of which 
2.16 	have been used exclusively for the purposes of section 349.12, subdivision 25, paragraph 
2.17 	(a), clause (2). The organization claiming the credit must do so on the monthly gambling 
2.18 	tax return on which the raffle activity is reported under subdivision 1.
2.19 		Subd. 3.Collection; disposition. (a) Taxes imposed by this section other than in 
2.20 	subdivision 4 are due and payable to the commissioner when the gambling tax return is 
2.21 	required to be filed. 
2.22 	(b) Taxes imposed by subdivision 4 are due and payable to the commissioner on or 
2.23 	before the last business day of the month following the month in which the taxable sale 
2.24 	was made.  This paragraph expires after June 30, 2012.
2.25 	(c) Returns covering the taxes imposed under this section must be filed with the 
2.26 	commissioner on or before the 20th day of the month following the close of the previous 
2.27 	calendar month. The commissioner may require that the returns be filed via magnetic 
2.28 	media or electronic data transfer. The proceeds, along with the revenue received from all 
2.29 	license fees and other fees under sections 349.11 to 349.191, 349.211, and 349.213, must 
2.30 	be paid to the commissioner of management and budget for deposit in the general fund.
2.31 	(d) One-half of one percent of the revenue deposited in the general fund under 
2.32 	paragraph (c) is appropriated to the commissioner of human services for the compulsive 
2.33 	gambling treatment program established under section 245.98. One-half of one percent 
2.34 	of the revenue deposited in the general fund under paragraph (c) is appropriated to the 
2.35 	Gambling Control Board for a grant to the state affiliate recognized by the National 
2.36 	Council on Problem Gambling to increase public awareness of problem gambling, 
3.1 	education and training for individuals and organizations providing effective treatment 
3.2 	services to problem gamblers and their families, and research relating to problem 
3.3 	gambling. Money appropriated by this paragraph must supplement and must not replace 
3.4 	existing state funding for these programs.
3.5 		Subd. 4.Pull-tab and tipboard tax. (a) A tax is imposed on the sale of each deal 
3.6 	of paper pull-tabs and tipboards sold by a distributor. The rate of the tax is 1.7 percent 
3.7 	of the ideal gross of the paper pull-tab or tipboard deal. This paragraph expires after 
3.8 	June 30, 2012.
3.9 	(b) The sales tax imposed by chapter 297A on the sale of the pull-tabs and tipboards 
3.10 	by the distributor is imposed on the retail sales price less the tax imposed by this 
3.11 	subdivision. The retail sale of pull-tabs or tipboards by the organization is exempt from 
3.12 	taxes imposed by chapter 297A and is exempt from all local taxes and license fees except 
3.13 	a fee authorized under section 349.16, subdivision 8.
3.14 	(b) (c)  The liability for the tax imposed by this section subdivision is incurred 
3.15 	when the pull-tabs and tipboards are delivered by the distributor to the customer or to 
3.16 	a common or contract carrier for delivery to the customer, or when received by the 
3.17 	customer's authorized representative at the distributor's place of business, regardless of the 
3.18 	distributor's method of accounting or the terms of the sale. This paragraph applies to sales 
3.19 	by distributors made before July 1, 2012.
3.20 	(d) The tax imposed by this subdivision section is imposed on all sales of pull-tabs 
3.21 	and tipboards, except the following:
3.22 	(1) sales to the governing body of an Indian tribal organization for use on an Indian 
3.23 	reservation;
3.24 	(2) sales to distributors licensed under the laws of another state or of a province of 
3.25 	Canada, as long as all statutory and regulatory requirements are met in the other state or 
3.26 	province;
3.27 	(3) sales of promotional tickets as defined in section 349.12; and
3.28 	(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards 
3.29 	under the exemption from licensing in section 349.166, subdivision 2. A distributor shall 
3.30 	require an organization conducting exempt gambling to show proof of its exempt status 
3.31 	before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor 
3.32 	shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and 
3.33 	tipboards that are exempt from tax under this subdivision.
3.34 	(c) (e) A distributor having a liability of $10,000 or more during a fiscal year ending 
3.35 	June 30 must remit all liabilities in the subsequent calendar year by electronic means.
4.1 	(d) (f) Any customer who purchases deals of pull-tabs or tipboards from a distributor 
4.2 	may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision 
4.3 	for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on 
4.4 	a form prescribed by the commissioner by March 20 of the year following the calendar 
4.5 	year for which the refund is claimed. The refund must be filed as part of the customer's 
4.6 	February monthly return. The refund or credit is equal to 1.7 percent of the face value 
4.7 	of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be 1.75 
4.8 	percent of the face value of the unsold pull-tab or tipboard tickets for claims for a refund 
4.9 	or credit of taxes filed on the February 2001 monthly return. The refund claimed will be 
4.10 	applied as a credit against tax owing under this chapter on the February monthly return. If 
4.11 	the refund claimed exceeds the tax owing on the February monthly return, that amount 
4.12 	will be refunded. The amount refunded will bear interest pursuant to section 270C.405 
4.13 	from 90 days after the claim is filed. This paragraph does not apply to games purchased 
4.14 	after June 30, 2012.
4.15 		Subd. 6.Combined receipts tax. In addition to the taxes imposed under 
4.16 	subdivisions 1 and 4, a tax is imposed on the combined receipts of the organization. As 
4.17 	used in this section, "combined receipts" is the sum of the organization's gross receipts 
4.18 	from lawful gambling less gross receipts directly derived from the conduct of bingo, 
4.19 	raffles, and paddle wheels, as defined in section 297E.01, subdivision 8, for the fiscal year. 
4.20 	The gross receipts of pull-tabs played using a pull-tab (electronic) dispensing device 
4.21 	that displays a facsimile of a paper pull-tab are not subject to the combined receipts tax. 
4.22 	The combined receipts of an organization are subject to a tax computed according to 
4.23 	the following schedule:

4.24
4.25		If the combined receipts 
for the fiscal year are:
		The tax is:
		
4.26		Not over $500,000
		zero
		
4.27		Over $500,000, 
				
4.28
4.29		but not over $700,000
		1.7 percent of the amount over 
$500,000, but not over $700,000
		
4.30		Over $700,000, 
				
4.31
4.32		but not over $900,000
		$3,400 plus 3.4 percent of the amount 
over $700,000, but not over $900,000
		
4.33
4.34		Over $900,000
		$10,200 plus 5.1 percent of the 
amount over $900,000
		
4.35 	This subdivision expires after June 30, 2012.
4.36 		Subd. 7.Untaxed gambling product. (a) In addition to penalties or criminal 
4.37 	sanctions imposed by this chapter, a person, organization, or business entity possessing or 
4.38 	selling a pull-tab or tipboard upon which the tax imposed by subdivision 4 this chapter
5.1 	has not been paid is liable for a tax of six percent of the ideal gross of each pull-tab or 
5.2 	tipboard. The tax on a partial deal must be assessed as if it were a full deal.
5.3 	(b) In addition to penalties and criminal sanctions imposed by this chapter, a person 
5.4 	not licensed by the board who conducts bingo, raffles, or paddle wheel games is liable for 
5.5 	a tax of six percent of the gross receipts from that activity.
5.6 	(c) The tax must be assessed by the commissioner. An assessment must be 
5.7 	considered a jeopardy assessment or jeopardy collection as provided in section 270C.36. 
5.8 	The commissioner shall assess the tax based on personal knowledge or information 
5.9 	available to the commissioner. The commissioner shall mail to the taxpayer at the 
5.10 	taxpayer's last known address, or serve in person, a written notice of the amount of tax, 
5.11 	demand its immediate payment, and, if payment is not immediately made, collect the tax 
5.12 	by any method described in chapter 270C, except that the commissioner need not await the 
5.13 	expiration of the times specified in chapter 270C. The tax assessed by the commissioner 
5.14 	is presumed to be valid and correctly determined and assessed. The burden is upon the 
5.15 	taxpayer to show its incorrectness or invalidity. The tax imposed under this subdivision 
5.16 	does not apply to gambling that is exempt from taxation under subdivision 2.
5.17 		Subd. 8.Personal debt. The tax imposed by this section, and interest and penalties 
5.18 	imposed with respect to it, are a personal debt of the person required to file a return from 
5.19 	the time the liability for it arises, irrespective of when the time for payment of the liability 
5.20 	occurs. The debt must, in the case of the executor or administrator of the estate of a 
5.21 	decedent and in the case of a fiduciary, be that of the person in the person's official or 
5.22 	fiduciary capacity only unless the person has voluntarily distributed the assets held in that 
5.23 	capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which 
5.24 	event the person is personally liable for any deficiency.
5.25 		Subd. 9.Public information. All records concerning the administration of the taxes 
5.26 	under this chapter are classified as public information.
5.27 		Subd. 10.Refunds; appropriation. A person who has, under this chapter, paid 
5.28 	to the commissioner an amount of tax for a period in excess of the amount legally due 
5.29 	for that period, may file with the commissioner a claim for a refund of the excess. The 
5.30 	amount necessary to pay the refunds under this subdivision and subdivision 4, paragraph 
5.31 	(d) section, is appropriated from the general fund to the commissioner.
5.32 		Subd. 11.Unplayed or defective pull-tabs or tipboards. (a) If a deal of pull-tabs 
5.33 	or tipboards registered with the board or bar coded in accordance with this chapter and 
5.34 	chapter 349 and upon which the tax imposed by subdivision 4 has been paid is returned 
5.35 	unplayed to the distributor, the commissioner shall allow a refund of the tax paid. This 
5.36 	paragraph expires after June 30, 2012.
6.1 	(b) If a defective deal registered with the board or bar coded in accordance with 
6.2 	this chapter and chapter 349 and upon which the taxes have been paid is returned to the 
6.3 	manufacturer, the distributor shall submit to the commissioner of revenue certification 
6.4 	from the manufacturer that the deal was returned and in what respect it was defective. 
6.5 	The certification must be on a form prescribed by the commissioner and must contain 
6.6 	additional information the commissioner requires.
6.7 	(c) The commissioner may require that no refund under this subdivision be made 
6.8 	unless the returned pull-tabs or tipboards have been set aside for inspection by the 
6.9 	commissioner's employee.
6.10 	(d) Reductions in previously paid taxes authorized by this subdivision must be made 
6.11 	when and in the manner prescribed by the commissioner.

6.12 	Sec. 2. Minnesota Statutes 2010, section 349.12, subdivision 5, is amended to read:
6.13 		Subd. 5.Bingo occasion. "Bingo occasion" means a single gathering or session at 
6.14 	which a series of one or more successive bingo games is played. There is no limit on the 
6.15 	number of games conducted during a bingo occasion but. A bingo occasion must not last 
6.16 	longer than eight consecutive hours., except that linked bingo games played on electronic 
6.17 	bingo devices may be played during regular business hours of the permitted premises and 
6.18 	all play during this period is considered a bingo occasion for reporting purposes. For 
6.19 	premises where the primary business is bingo, regular business hours shall be defined as 
6.20 	the hours between 8:00 a.m. and 2:00 a.m.

6.21 	Sec. 3. Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read:
6.22 		Subd. 12a.Electronic bingo device. "Electronic bingo device" means an electronic
6.23 	bingo device used by a bingo player to (1) monitor bingo paper sheets or a facsimile of 
6.24 	a bingo paper sheet when purchased at the time and place of an organization's bingo 
6.25 	occasion and which (1) provides a means for bingo players to, (2) activate numbers 
6.26 	announced by a bingo caller; (2) compares or displayed and compare the numbers entered 
6.27 	by the player to the bingo faces previously stored in the memory of the device;, and (3) 
6.28 	identifies identify a winning bingo pattern or game requirement.
6.29 	Electronic bingo device does not mean any device into which coin, currency, or tokens 
6.30 	are inserted to activate play. An electronic bingo device that plays linked bingo games 
6.31 	may only be a device that is handheld and portable. Linked bingo games played on an 
6.32 	electronic bingo device may only be activated by coded data entry. An electronic bingo 
6.33 	device may only be used by a bingo player for play against other electronic bingo players 
6.34 	and may not be used by a bingo player for play against the electronic bingo device itself.

7.1 	Sec. 4. Minnesota Statutes 2010, section 349.12, subdivision 25b, is amended to read:
7.2 		Subd. 25b.Linked bingo game provider. "Linked bingo game provider" means 
7.3 	any person who provides the means to link bingo prizes in a linked bingo game, who 
7.4 	provides linked bingo paper sheets to the participating organizations games, who provides 
7.5 	linked bingo prize management, and who provides the linked bingo game system.

7.6 	Sec. 5. Minnesota Statutes 2010, section 349.12, subdivision 25c, is amended to read:
7.7 		Subd. 25c.Linked bingo game system. "Linked bingo game system" means the 
7.8 	equipment used by the linked bingo provider to conduct, transmit, and track a linked 
7.9 	bingo game. The system must be approved by the board before its use in this state and it 
7.10 	must have dial-up or otherthe capability to permit the board to electronically monitor its 
7.11 	operation remotely.

7.12 	Sec. 6. Minnesota Statutes 2010, section 349.12, subdivision 25d, is amended to read:
7.13 		Subd. 25d.Linked bingo prize pool. "Linked bingo prize pool" means the total 
7.14 	of all prize money that each participating organization has contributed to a linked bingo 
7.15 	game prize and includes any portion of the prize pool that is carried over from one 
7.16 	occasion game to another in a progressive linked bingo game.

7.17 	Sec. 7. Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read:
7.18 		Subd. 29.Paddle wheel. "Paddle wheel" means a wheel marked off into sections 
7.19 	containing one or more numbers, and which, after being turned or spun manually or 
7.20 	electronically, uses a pointer or marker to indicate winning chances. An electronic paddle 
7.21 	wheel would only be allowed to be used to determine a winning number that would match 
7.22 	a paper paddle ticket held by a player.

7.23 	Sec. 8. Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read:
7.24 		Subd. 32.Pull-tab. "Pull-tab" means a single folded or banded paper  ticket or, a 
7.25 	multi-ply card with perforated break-open tabs, or a facsimile of a paper pull-tab when 
7.26 	used in conjunction with a pull-tab dispensing device, the face of which is initially covered 
7.27 	to conceal one or more numbers or symbols, where one or more of each set of tickets,or
7.28 	cards, or facsimiles has been designated in advance as a winner.

7.29 	Sec. 9. Minnesota Statutes 2010, section 349.12, subdivision 32a, is amended to read:
7.30 		Subd. 32a.Pull-tab dispensing device. "Pull-tab dispensing device" means a 
7.31 	mechanical or electronic device that dispenses paper pull-tabs and has no additional 
8.1 	function as an amusement or gambling device or displays facsimiles of paper pull-tabs. A 
8.2 	pull-tab dispensing device may have as a component an auditory or visual enhancement to 
8.3 	promote or provide information about a game being dispensed or displayed, provided the 
8.4 	component does not affect the outcome of a game or display the results of a game or an 
8.5 	individual ticket. A pull-tab dispensing device that displays facsimiles of paper pull-tabs 
8.6 	is not allowed to accept any coin, currency, or tokens, but does allow for activation by 
8.7 	coded data entry. A pull-tab dispensing device that displays facsimiles of paper pull-tabs 
8.8 	may only be a device that is handheld and portable.

8.9 	Sec. 10. Minnesota Statutes 2010, section 349.13, is amended to read:
8.10 	349.13 LAWFUL GAMBLING.
8.11 	Lawful gambling is not a lottery or gambling within the meaning of sections 609.75
8.12 	to 609.76 if it is conducted under this chapter. A pull-tab dispensing device permitted by 
8.13 	board rule is not a gambling device within the meaning of sections 609.75 to 609.76
8.14 	and chapter 299L.  Electronic game devices including but not limited to electronic bingo 
8.15 	devices, electronic paddlewheels, and electronic pull-tab dispensing devices authorized 
8.16 	under this chapter may only be used in the conduct of lawful gambling permitted under 
8.17 	this chapter and may not display or simulate any other form of gambling or entertainment.

8.18 	Sec. 11. Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read:
8.19 		Subd. 4b.Pull-tab sales from dispensing devices. (a) The board may by rule 
8.20 	authorize but not require the use of pull-tab dispensing devices.
8.21 	(b) Rules adopted under paragraph (a):
8.22 	(1) must limit the number of pull-tab dispensing devices on any permitted premises 
8.23 	to three; and
8.24 	(2) must limit the use of pull-tab dispensing devices to a permitted premises which is 
8.25 	(i) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt beverages; 
8.26 	or (ii) a premises where bingo is conducted and admission is restricted to persons 18 
8.27 	years or older.
8.28 	(c) Notwithstanding rules adopted under paragraph (b), pull-tab dispensing devices 
8.29 	may be used in establishments licensed for the off-sale of intoxicating liquor, other than 
8.30 	drugstores and general food stores licensed under section 340A.405, subdivision 1.

8.31 	Sec. 12. Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read:
8.32 		Subd. 4c.Electronic bingo. (a) The board may by rule authorize but not require the 
8.33 	use of electronic bingo devices.
9.1 	(b) Rules adopted under paragraph (a):
9.2 	(1) must limit the number of bingo faces that can be played using an electronic 
9.3 	bingo device to 36;
9.4 	(2) must require that an electronic bingo device be used with corresponding bingo 
9.5 	paper sheets or a facsimile, printed at the point of sale, of a bingo paper sheet as approved 
9.6 	by the board;
9.7 	(3) must require that the electronic bingo device site system have dial-up the
9.8 	capability to permit the board to remotely monitor the operation of the device and the 
9.9 	internal accounting systems; and
9.10 	(4) must prohibit the price of a face played on an electronic bingo device from 
9.11 	being less than the price of a face on a bingo paper sheet sold for the same game at the 
9.12 	same occasion.

9.13 	Sec. 13. Minnesota Statutes 2010, section 349.155, subdivision 3, is amended to read:
9.14 		Subd. 3.Mandatory disqualifications. (a) In the case of licenses for manufacturers, 
9.15 	distributors, distributor salespersons, linked bingo game providers, and gambling 
9.16 	managers, the board may not issue or renew a license under this chapter, and shall revoke 
9.17 	a license under this chapter, if the applicant or licensee, or a director, officer, partner, 
9.18 	governor, or person in a supervisory or management position of the applicant or licensee:
9.19 	(1) has ever been convicted of a felony or a crime involving gambling;
9.20 	(2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use 
9.21 	of a firearm, or (iii) making terroristic threats;
9.22 	(3) is or has ever been connected with or engaged in an illegal business;
9.23 	(4) owes $500 or more in delinquent taxes as defined in section 270C.72;
9.24 	(5) had a sales and use tax permit revoked by the commissioner of revenue within 
9.25 	the past two years; or
9.26 	(6) after demand, has not filed tax returns required by the commissioner of revenue. 
9.27 	The board may deny or refuse to renew a license under this chapter, and may revoke a 
9.28 	license under this chapter, if any of the conditions in this paragraph are applicable to 
9.29 	an affiliate or direct or indirect holder of more than a five percent financial interest in 
9.30 	the applicant or licensee.
9.31 	(b) In the case of licenses for organizations, the board may not issue a license under 
9.32 	this chapter, and shall revoke a license under this chapter, if the organization, or an officer 
9.33 	or member of the governing body of the organization:
9.34 	(1) has been convicted of a felony or gross misdemeanor involving theft or fraud; or
9.35 	(2) has ever been convicted of a crime involving gambling; or.
10.1 	(3) has had a license issued by the board or director permanently revoked for 
10.2 	violation of law or board rule.

10.3 	Sec. 14. Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read:
10.4 		Subd. 4.License revocation, suspension, denial; censure. (a) The board may by 
10.5 	order (i) deny, suspend, revoke, or refuse to renew a license or premises permit, or (ii) 
10.6 	censure a licensee or applicant, if it finds that the order is in the public interest and that the 
10.7 	applicant or licensee, or a director, officer, partner, governor, person in a supervisory or 
10.8 	management position of the applicant or licensee, an employee eligible to make sales on 
10.9 	behalf of the applicant or licensee, or direct or indirect holder of more than a five percent 
10.10 	financial interest in the applicant or licensee:
10.11 	(1) has violated or failed to comply with any provision of this chapter or chapter 
10.12 	297E or 299L, or any rule adopted or order issued thereunder;
10.13 	(2) has filed an application for a license that is incomplete in any material respect, or 
10.14 	contains a statement that, in light of the circumstances under which it was made, is false, 
10.15 	misleading, fraudulent, or a misrepresentation;
10.16 	(3) has made a false statement in a document or report required to be submitted to 
10.17 	the board or the commissioner of revenue, or has made a false statement to the board, the 
10.18 	compliance review group, or the director;
10.19 	(4) has been convicted of a crime in another jurisdiction that would be a felony if 
10.20 	committed in Minnesota;
10.21 	(5) is permanently or temporarily enjoined by any gambling regulatory agency from 
10.22 	engaging in or continuing any conduct or practice involving any aspect of gambling;
10.23 	(6) has had a gambling-related license revoked or suspended, or has paid or been 
10.24 	required to pay a monetary penalty of $2,500 or more, by a gambling regulator in another 
10.25 	state or jurisdiction;
10.26 	(7) has been the subject of any of the following actions by the director of alcohol 
10.27 	and gambling enforcement or commissioner of public safety: (i) had a license under 
10.28 	chapter 299L denied, suspended, or revoked, (ii) been censured, reprimanded, has paid or 
10.29 	been required to pay a monetary penalty or fine, or (iii) has been the subject of any other 
10.30 	discipline by the director or commissioner;
10.31 	(8) has engaged in conduct that is contrary to the public health, welfare, or safety, or 
10.32 	to the integrity of gambling; or
10.33 	(9) based on past activities or criminal record poses a threat to the public interest or 
10.34 	to the effective regulation and control of gambling, or creates or enhances the dangers of 
10.35 	unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling 
11.1 	or the carrying on of the business and financial arrangements incidental to the conduct of 
11.2 	gambling.
11.3 	(b) The revocation or suspension of an organization license may not exceed a period 
11.4 	of ten years, including any revocation or suspension imposed by the board prior to the 
11.5 	effective date of this paragraph, except that:
11.6 	(1) any prohibition placed by the board on who may be involved in the conduct, 
11.7 	oversight, or management of the revoked organization's lawful gambling activity is 
11.8 	permanent; and
11.9 	(2) a revocation or suspension will remain in effect until the payment of any taxes, 
11.10 	fees, and fines that are delinquent have been paid by the organization to the satisfaction of 
11.11 	the board.

11.12 	Sec. 15. Minnesota Statutes 2010, section 349.161, subdivision 1, is amended to read:
11.13 		Subdivision 1.Prohibited acts; licenses required. (a) No person may:
11.14 	(1) sell, offer for sale, or furnish gambling equipment for use within the state other 
11.15 	than for lawful gambling exempt or excluded from licensing, except to an organization 
11.16 	licensed for lawful gambling;
11.17 	(2) sell, offer for sale, or furnish gambling equipment for use within the state 
11.18 	without having obtained a distributor license or a distributor salesperson license under 
11.19 	this section except that an organization authorized to conduct bingo by the board may 
11.20 	loan bingo hard cards and devices for selecting bingo numbers to another organization 
11.21 	authorized to conduct bingo;
11.22 	(3) sell, offer for sale, or furnish gambling equipment for use within the state that is 
11.23 	not purchased or obtained from a manufacturer or distributor licensed under this chapter; or
11.24 	(4) sell, offer for sale, or furnish gambling equipment for use within the state that 
11.25 	has the same serial number as another item of gambling equipment of the same type sold 
11.26 	or offered for sale or furnished for use in the state by that distributor.
11.27 	(b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling 
11.28 	equipment for use within the state without being employed by a licensed distributor or 
11.29 	owning a distributor license.
11.30 	(c) No distributor or distributor salesperson may also be licensed as a linked bingo 
11.31 	game provider under section 349.1635.

11.32 	Sec. 16. Minnesota Statutes 2010, section 349.163, subdivision 1, is amended to read:
11.33 		Subdivision 1.License required. No manufacturer of gambling equipment may 
11.34 	sell any gambling equipment to any person for use or resale within the state, unless the 
12.1 	manufacturer has a current and valid license issued by the board under this section and has 
12.2 	satisfied other criteria prescribed by the board by rule. A manufacturer licensed under this 
12.3 	section may also be licensed as a linked bingo game provider under section 349.1635.
12.4 	A manufacturer licensed under this section may not also be directly or indirectly 
12.5 	licensed as a distributor under section 349.161.

12.6 	Sec. 17. Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read:
12.7 		Subd. 6.Samples of gambling equipment. The board shall require each licensed 
12.8 	manufacturer to submit to the board one or more samples of each item of gambling 
12.9 	equipment the manufacturer manufactures for use or resale in this state. For purposes of 
12.10 	this subdivision, a manufacturer is also required to submit the applicable version of any 
12.11 	software necessary to operate electronic devices and related systems. The board shall 
12.12 	inspect and test all the equipment, including software and software upgrades,  it deems 
12.13 	necessary to determine the equipment's compliance with law and board rules. Samples 
12.14 	required under this subdivision must be approved by the board before the equipment being 
12.15 	sampled is shipped into or sold for use or resale in this state. The board shall impose a fee 
12.16 	of $25 for each item of gambling equipment that the manufacturer submits for approval 
12.17 	or for which the manufacturer requests approval. The board shall impose a fee of $100 
12.18 	for each sample of gambling equipment that it tests. The board may require samples of 
12.19 	gambling equipment to be tested by an independent testing laboratory prior to submission 
12.20 	to the board for approval. All costs of testing by an independent testing laboratory must be 
12.21 	borne by the manufacturer. An independent testing laboratory used by a manufacturer to 
12.22 	test samples of gambling equipment must be approved by the board before the equipment 
12.23 	is submitted to the laboratory for testing. The board may request the assistance of the 
12.24 	commissioner of public safety and the director of the State Lottery in performing the tests.

12.25 	Sec. 18. Minnesota Statutes 2010, section 349.1635, subdivision 2, is amended to read:
12.26 		Subd. 2.License application. The board may issue a license to a linked bingo game 
12.27 	provider or to a manufacturer licensed under section 349.163 who meets the qualifications 
12.28 	of this chapter and the rules promulgated by the board. The application shall be on a form 
12.29 	prescribed by the board. The license is valid for two years and the fee for a linked bingo 
12.30 	game provider license is $5,000 per year.

12.31 	Sec. 19. Minnesota Statutes 2010, section 349.1635, is amended by adding a 
12.32 	subdivision to read:
13.1 		Subd. 5.Linked bingo game services requirements. A linked bingo game 
13.2 	provider shall contract with licensed distributors for linked bingo game services including, 
13.3 	but not limited to, the solicitation of agreements with licensed organizations, and 
13.4 	installation, repair, or maintenance of the linked bingo game system. No linked bingo 
13.5 	game provider may contract with any distributor on an exclusive basis. A linked bingo 
13.6 	game provider may refuse to contract with a licensed distributor if the linked bingo 
13.7 	game provider demonstrates that the licensed distributor is not capable of performing 
13.8 	the services under the contract.

13.9 	Sec. 20. Minnesota Statutes 2010, section 349.165, subdivision 2, is amended to read:
13.10 		Subd. 2.Contents of application. An application for a premises permit must 
13.11 	contain:
13.12 	(1) the name and address of the applying organization;
13.13 	(2) a description of the site for which the permit is sought, including its address and, 
13.14 	where applicable, its placement within another premises or establishment;
13.15 	(3) if the site is leased, the name and address of the lessor and information about the 
13.16 	lease the board requires, including all rents and other charges for the use of the site. The 
13.17 	lease term is concurrent with the term of the premises permit. The lease must contain a 
13.18 	30-day termination clause. No lease is required for the conduct of a raffle; and
13.19 	(4) other information the board deems necessary to carry out its purposes.
13.20 	An organization holding a premises permit must notify the board in writing within 
13.21 	ten days whenever any material change is made in the above information.

13.22 	Sec. 21. Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read:
13.23 		Subd. 6.Conduct of bingo.  A game of bingo begins with the first letter and number 
13.24 	called or displayed. Each player must cover, mark, or activate the numbers when bingo 
13.25 	numbers are randomly selected, and announced, and or displayed to the players, either 
13.26 	manually or with a flashboard and monitor. The game is won when a player, using 
13.27 	bingo paper, bingo hard card, or a facsimile of a bingo paper sheet, has completed, as 
13.28 	described in the bingo program, a previously designated pattern or previously determined 
13.29 	requirements of the game and declared bingo. The game is completed when a winning 
13.30 	card, sheet, or facsimile is verified and a prize awarded pursuant to subdivision 3.

13.31 	Sec. 22. Minnesota Statutes 2010, section 349.17, subdivision 7, is amended to read:
13.32 		Subd. 7.Bar bingo. An organization may conduct bar bingo subject to the 
13.33 	following restrictions:
14.1 	(1) the bingo is conducted at a site the organization owns or leases and which has a 
14.2 	license for the sale of intoxicating beverages on the premises under chapter 340A;
14.3 	(2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper 
14.4 	sheets purchased from a licensed distributor or licensed linked bingo game provider; and
14.5 	(3) no rent may be paid for a bar bingo occasion, except as allowed in section 
14.6 	349.185.

14.7 	Sec. 23. Minnesota Statutes 2010, section 349.17, subdivision 8, is amended to read:
14.8 		Subd. 8.Linked bingo games. (a) A licensed organization may conduct or 
14.9 	participate in not more than two linked bingo games per occasion, one of which may be a
14.10 	including progressive game games in which a portion of the prize is carried over from one 
14.11 	occasion game to another until won by a player achieving a bingo within a predetermined 
14.12 	amount of bingo numbers called.
14.13 	(b) Each participating licensed organization shall contribute to each prize awarded in 
14.14 	a linked bingo game in an amount not to exceed $300 Linked bingo games may only be 
14.15 	conducted by licensed organizations who have a valid agreement with the linked bingo 
14.16 	game provider.
14.17 	(c) An electronic bingo device as defined in section 349.12, subdivision 12a, may 
14.18 	be used for a linked bingo game.
14.19 	(d) Linked bingo games played on an electronic bingo device may be located only at 
14.20 	a permitted premises where the organization conducts another form of lawful gambling 
14.21 	and the premises is:
14.22 	(1) a licensed premises for the on-sale or off-sale of intoxicating liquor or 3.2 percent 
14.23 	malt beverages, except for a general food store or drug store permitted to sell alcoholic 
14.24 	beverages under section 340A.405, subdivision 1; or
14.25 	(2) where bingo is conducted as the primary business, the premises has a seating 
14.26 	capacity of at least 100, and admission is restricted to persons 18 years or older.
14.27 	(e) For linked bingo games played on an electronic bingo device:
14.28 	(1) no more than six electronic bingo devices may be in play at a permitted premises 
14.29 	with 200 seats or less;
14.30 	(2) no more than 12 electronic bingo devices may be in play at a permitted premises 
14.31 	with 201 seats or more; and
14.32 	(3) no more than 50 electronic bingo devices may be in play for premises where 
14.33 	bingo is the primary business.
14.34 	Seating capacity is determined as specified under the local fire code.
15.1 	(f) Prior to a bingo occasion for linked bingo games played on an electronic bingo 
15.2 	device, the linked bingo game provider, on behalf of the participating organizations, must 
15.3 	provide to the board a bingo program in a format prescribed by the board.
15.4 	(d) (g) The board may adopt rules to:
15.5 	(1) specify the manner in which a linked bingo game must be played and how the 
15.6 	linked bingo prizes must be awarded;
15.7 	(2) specify the records to be maintained by a linked bingo game provider;
15.8 	(3) require the submission of periodic reports by the linked bingo game provider and 
15.9 	specify the content of the reports;
15.10 	(4) establish the qualifications required to be licensed as a linked bingo game 
15.11 	provider; and
15.12 	(5) any other matter involving the operation of a linked bingo game.

15.13 	Sec. 24. Minnesota Statutes 2010, section 349.1721, is amended by adding a 
15.14 	subdivision to read:
15.15 		Subd. 3.Pull-tab dispensing devices restrictions and requirements. (a) The 
15.16 	number of paper pull-tab dispensing devices located on any permitted premises is limited 
15.17 	to three.
15.18 	(b) The number of pull-tab dispensing devices that use facsimiles of paper pull-tabs 
15.19 	is limited to:
15.20 	(1) no more than six devices in play at any permitted premises with 200 seats or less;
15.21 	(2) no more than 12 devices in play at any permitted premises with 201 seats 
15.22 	or more; and
15.23 	(3) for premises where the primary business is bingo, the number of devices that 
15.24 	may be in play will be determined by the board.
15.25 	Seating capacity is determined as specified under the local fire code.
15.26 	(c) The use of any pull-tab dispensing device must be at a permitted premises 
15.27 	which is:
15.28 	(1) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt 
15.29 	beverages; or
15.30 	(2) a premises where bingo is conducted as the primary business and admission 
15.31 	is restricted to persons 18 years or older.
15.32 	(d) Pull-tab dispensing devices may be used in establishments licensed for the 
15.33 	off-sale of intoxicating liquor, other than drugstores and general food stores licensed under 
15.34 	section 340A.405, subdivision 1.
16.1 	(e) An organization may use pull-tab dispensing devices that use facsimiles of paper 
16.2 	pull-tabs if the organization conducts another form of lawful gambling at the permitted 
16.3 	premises.
16.4 	(f) Pull-tab dispensing devices that use facsimiles of paper pull-tabs must have the 
16.5 	capability to:
16.6 	(1) allow the board to electronically monitor the operation of the electronic pull-tab 
16.7 	devices and the internal accounting systems;
16.8 	(2) maintain a printable, permanent record of all transactions involving the device; 
16.9 	and
16.10 	(3) allow the board to require the deactivation of a device for violation of a law or 
16.11 	rule and to implement any other controls deemed by the board necessary to ensure and 
16.12 	maintain the integrity of games operated under this subdivision.
16.13 	(g) The board shall examine prototypes of pull-tab dispensing devices that use 
16.14 	facsimiles of paper pull-tabs. The board may contract for the examination of the devices 
16.15 	and may require working models of the devices to be transported to locations the board 
16.16 	designates for testing, examination, and analysis. The manufacturer shall pay all costs of 
16.17 	any testing, examination, analysis, and transportation of the model.
16.18 	(h) Pull-tab dispensing devices that use facsimiles of paper pull-tabs shall be limited 
16.19 	to operation between the hours of 8:00 a.m. and 2:00 a.m.

16.20 	Sec. 25. Minnesota Statutes 2010, section 349.1721, is amended by adding a 
16.21 	subdivision to read:
16.22 		Subd. 4.Electronic facsimile of paper pull-tabs. (a) Tickets and deals must be in 
16.23 	conformance with board rules for pull-tabs.
16.24 	(b) Deals must contain:
16.25 	(1) a finite number of tickets in each electronic deal;
16.26 	(2) a predetermined number of winning and losing tickets;
16.27 	(3) serialized tracking for each deal;
16.28 	(4) no regeneration of a serialized deal; and
16.29 	(5) no spinning symbols which mimic a video slot machine.
16.30 	(c) All deals in play must not be transferred electronically or otherwise to any other 
16.31 	location by the licensed organization.
16.32 	(d) Deals must not be shared, commingled, or linked with any other deals or 
16.33 	locations.
16.34 	(e) No electronic facsimile of a paper pull-tab may be sold in a denomination of less 
16.35 	than 25 cents per ticket.
17.1 	(f) A player must activate or open each electronic facsimile of a pull-tab ticket and 
17.2 	each individual line, row, or column of each electronic facsimile of a pull-tab ticket.

17.3 	Sec. 26. Minnesota Statutes 2010, section 349.1721, is amended by adding a 
17.4 	subdivision to read:
17.5 		Subd. 5.Multiple chance games. The board may permit pull-tab games in which 
17.6 	the holders of certain predesignated winning tickets, with a prize value not to exceed $75 
17.7 	each, have the option of turning in the winning tickets for the chance to win a prize of 
17.8 	greater value.

17.9 	Sec. 27. Minnesota Statutes 2010, section 349.18, subdivision 1, is amended to read:
17.10 		Subdivision 1.Lease or ownership required; rent limitations. (a) An organization 
17.11 	may conduct lawful gambling only on premises it owns or leases. Leases must be on a 
17.12 	form prescribed by the board. The term of the lease is concurrent with the premises permit. 
17.13 	Leases approved by the board must specify that the board may authorize an organization 
17.14 	to withhold rent from a lessor for a period of up to 90 days if the board determines that 
17.15 	illegal gambling occurred on the premises or that the lessor or its employees participated 
17.16 	in the illegal gambling or knew of the gambling and did not take prompt action to stop the 
17.17 	gambling. The lease must authorize the continued tenancy of the organization without 
17.18 	the payment of rent during the time period determined by the board under this paragraph. 
17.19 	Copies of all leases must be made available to employees of the board and the Division of 
17.20 	Alcohol and Gambling Enforcement on request.
17.21 	(b) Rent paid by an organization for leased premises for the conduct of pull-tabs, 
17.22 	tipboards, and paddle wheels is subject to the following limits:
17.23 	(1) for booth operations, including booth operations where a paper pull-tab 
17.24 	dispensing device is located, booth operations where a bar operation is also conducted, 
17.25 	and booth operations where both a paper pull-tab dispensing device is located and a bar 
17.26 	operation is also conducted, the maximum rent is: monthly rent is not more than ten 
17.27 	percent of gross profits for that month;
17.28 	(i) in any month where the organization's gross profit at those premises does not 
17.29 	exceed $4,000, up to $400; and
17.30 	(ii) in any month where the organization's gross profit at those premises exceeds 
17.31 	$4,000, up to $400 plus not more than ten percent of the gross profit for that month in 
17.32 	excess of $4,000;
18.1 	(2) for bar operations, including bar operations where a pull-tab dispensing device is 
18.2 	located but not including bar operations subject to clause (1), and for locations where only 
18.3 	a pull-tab dispensing device is located the monthly rent is subject to the following:
18.4 	(i) in any month where the organization's gross profit at those premises does not 
18.5 	exceed $1,000, up to $200; and
18.6 	(ii) in any month where the organization's gross profit at those premises exceeds 
18.7 	$1,000, up to $200 plus not more than 20 percent of the gross profit for that month 
18.8 	in excess of $1,000;
18.9 	(i) not more than 20 percent of the monthly gross profits from the sale of paper 
18.10 	pull-tabs or tipboards; and
18.11 	(ii) not more than 17 percent of the monthly gross profits from sales of electronic 
18.12 	linked bingo games and electronic facsimiles of paper pull-tabs;
18.13 	(3) a lease not governed by clauses (1) and (2) must be approved by the board 
18.14 	before becoming effective;
18.15 	(4) total rent paid to a lessor from all organizations from leases governed by clause 
18.16 	(1) may not exceed $1,750 per month.
18.17 	(c) Rent paid by an organization for leased premises for the conduct of bingo is 
18.18 	subject to either of the following limits at the option of the parties to the lease:
18.19 	(1) not more than ten percent of the monthly gross profit from all lawful gambling 
18.20 	activities held during bingo occasions excluding bar bingo or at a rate based on a cost per 
18.21 	square foot not to exceed 110 percent of a comparable cost per square foot for leased space 
18.22 	as approved by the director; and
18.23 	(2) no rent may be paid for bar bingo except as allowed in section 349.185.
18.24 	(d) Amounts paid as rent under leases are all-inclusive. No other services or expenses 
18.25 	provided or contracted by the lessor may be paid by the organization, including, but not 
18.26 	limited to, trash removal, janitorial and cleaning services, snow removal, lawn services, 
18.27 	electricity, heat, security, security monitoring, storage, other utilities or services, and, in 
18.28 	the case of bar operations, cash shortages, unless approved by the director. The lessor shall 
18.29 	be responsible for the cost of any communications network or service that is required to 
18.30 	conduct electronic gaming. Any other expenditure made by an organization that is related 
18.31 	to a leased premises must be approved by the director. An organization may not provide 
18.32 	any compensation or thing of value to a lessor or the lessor's employees from any fund 
18.33 	source other than its gambling account. Rent payments may not be made to an individual.
18.34 	(e) Notwithstanding paragraph (b), an organization may pay a lessor for food or 
18.35 	beverages or meeting room rental if the charge made is comparable to similar charges 
18.36 	made to other individuals or groups.
19.1 	(f) No entity other than the licensed organization may conduct any activity within 
19.2 	a booth operation on a leased premises.
19.3 	(g) The rent provisions under this subdivision shall be monitored by the board and 
19.4 	shall be reported to the legislature as part of the board's annual report.

19.5 	Sec. 28. [349.185] GROSS PROFIT ALLOCATION; LINKED BINGO ON 
19.6 	ELECTRONIC BINGO DEVICES.
19.7 	(a) The allocation of gross profits from the operation of linked bingo on electronic 
19.8 	bingo devices is as provided in this section. The licensed organization shall receive:
19.9 	(1) a minimum of 50 percent of gross profits to be used exclusively for lawful 
19.10 	purpose expenditures as defined under section 349.12, subdivision 25; and
19.11 	(2) no more than 13 percent each fiscal year for allowable expenses as defined 
19.12 	under section 349.12, subdivision 3a, and does not include the expenses allocated under 
19.13 	paragraph (b) or (c).
19.14 	(b) A linked bingo game provider shall receive no more than 20 percent of gross 
19.15 	profits.
19.16 	(c) Where the primary business is not bingo and the premises is leased and linked 
19.17 	bingo is played on electronic bingo devices, the lessor is subject to the limits in section 
19.18 	349.18. The licensed organization shall be responsible for the overall conduct of linked 
19.19 	bingo games but the lessor shall provide staffing to operate the linked bingo games at the 
19.20 	premises in order to receive the percentage of profit allocation and the lessor is responsible 
19.21 	for cash shortages.
19.22 	(d) Where the primary business is bingo and the linked bingo is played on electronic 
19.23 	bingo devices, the lessor is subject to the rent limitations under section 349.18, subdivision 
19.24 	1, paragraph (c), clause (1), and the licensed organization will receive the value identified 
19.25 	under paragraph (c).
19.26 	(e) The allocation of gross profits under this subdivision shall be monitored by the 
19.27 	board and shall be reported to the legislature as part of the board's annual report.

19.28 	Sec. 29. Minnesota Statutes 2010, section 349.211, subdivision 1a, is amended to read:
19.29 		Subd. 1a.Linked bingo prizes. Prizes for a linked bingo game shall be limited 
19.30 	as follows:
19.31 	(1) no organization may contribute more than $300 per linked bingo game to a 
19.32 	linked bingo prize pool for linked bingo games played without electronic bingo devices, 
19.33 	an organization may not contribute to a linked bingo game prize pool more than $300 
19.34 	per linked bingo game per site;
20.1 	(2) for linked bingo games played with electronic bingo devices, an organization 
20.2 	may not contribute more than 85 percent of the gross receipts per permitted premises to 
20.3 	a linked bingo game prize pool;
20.4 	(2) (3) no organization may award more than $200 for a linked bingo game 
20.5 	consolation prize. For purposes of this subdivision, a linked bingo game consolation 
20.6 	prize is a prize awarded by an organization after a prize from the linked bingo prize pool 
20.7 	has been won; and
20.8 	(3) (4) for a progressive linked bingo game, if no player declares a valid bingo 
20.9 	within the for a progressive prize or prizes based on a predetermined amount of bingo 
20.10 	numbers called and posted win determination, a portion of the prize is gross receipts 
20.11 	may be carried over to another occasion game until the accumulated progressive prize 
20.12 	is won. The portion of the prize that is not carried over must be awarded to the first 
20.13 	player or players who declares a valid bingo as additional numbers are called. If a valid 
20.14 	bingo is declared within the predetermined amount of bingo numbers called, the entire 
20.15 	prize pool for that game is awarded to the winner. The annual limit for progressive bingo 
20.16 	game prizes contained in subdivision 2 must be reduced by the amount an organization 
20.17 	contributes to progressive linked bingo games during the same calendar year.; and
20.18 	(5) for linked bingo games played on electronic bingo devices, linked bingo prizes 
20.19 	in excess of $599 shall be paid by the linked bingo game provider to the player within 
20.20 	three business days. Winners of linked bingo prizes in excess of $599 will be given a 
20.21 	receipt or claim voucher as proof of a win.

20.22 	Sec. 30. APPROPRIATION.
 20.23 	$440,000 in fiscal year 2012 and $880,000 in fiscal year 2013 are appropriated 
20.24 	from the lawful gambling regulation account in the special revenue fund to the Gambling 
20.25 	Control Board for operating expenses related to the regulatory oversight of lawful 
20.26 	gambling.