HF 12

as introduced - 87th Legislature, 2011 1st Special Session (2011 - 2012) Posted on 07/19/2011 02:38pm

A bill for an act
relating to the State Lottery; establishing lottery facility games; imposing a
tax on and providing for facility revenues; providing powers and duties to the
director; making clarifying, conforming, and technical changes; amending
Minnesota Statutes 2010, sections 297A.94; 299L.02, subdivision 1; 299L.07,
subdivisions 2, 2a; 340A.404, by adding a subdivision; 340A.410, subdivision 5;
349A.01, subdivisions 10, 11, 12, by adding subdivisions; 349A.02, subdivision
3; 349A.04; 349A.06, subdivision 8; 349A.08, subdivisions 1, 5, 8; 349A.10,
subdivisions 2, 5; 349A.11, subdivision 1; 349A.13; 541.20; 541.21; 609.75,
subdivision 3; 609.761, subdivision 2; proposing coding for new law in
Minnesota Statutes, chapters 297A; 349A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [297A.651] LOTTERY FACILITY GAMES; IN-LIEU TAX.
new text end

new text begin Lottery gaming facility revenues authorized under section 349A.17 are exempt from
the tax imposed under section 297A.62. The State Lottery must on or before the 20th
day of each month transmit to the commissioner an amount equal to the lottery gaming
facility revenues as defined in section 349A.01, for the previous month multiplied by 20
percent. The commissioner shall deposit the money transmitted under this section in the
state treasury to be credited as provided in section 297A.94.
new text end

Sec. 2.

Minnesota Statutes 2010, section 297A.94, is amended to read:

297A.94 DEPOSIT OF REVENUES.

(a) Except as provided in this section, the commissioner shall deposit the revenues,
including interest and penalties, derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.

(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
account in the special revenue fund if:

(1) the taxes are derived from sales and use of property and services purchased for
the construction and operation of an agricultural resource project; and

(2) the purchase was made on or after the date on which a conditional commitment
was made for a loan guaranty for the project under section 41A.04, subdivision 3.

The commissioner of management and budget shall certify to the commissioner the date
on which the project received the conditional commitment. The amount deposited in
the loan guaranty account must be reduced by any refunds and by the costs incurred by
the Department of Revenue to administer and enforce the assessment and collection of
the taxes.

(c) The commissioner shall deposit the revenues, including interest and penalties,
derived from the taxes imposed on sales and purchases included in section 297A.61,
subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them
as follows:

(1) first to the general obligation special tax bond debt service account in each fiscal
year the amount required by section 16A.661, subdivision 3, paragraph (b); and

(2) after the requirements of clause (1) have been met, the balance to the general
fund.

(d) The commissioner shall deposit the revenues, including interest and penalties,
collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall transfer to the highway user
tax distribution fund an amount equal to the excess fees collected under section 297A.64,
subdivision 5, for the previous calendar year.

(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
penalties, transmitted to the commissioner under section 297A.65, must be deposited by
the commissioner in the state treasury as follows:

(1) 50 percent of the receipts must be deposited in the heritage enhancement account
in the game and fish fund, and may be spent only on activities that improve, enhance, or
protect fish and wildlife resources, including conservation, restoration, and enhancement
of land, water, and other natural resources of the state;

(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only for state parks and trails;

(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only on metropolitan park and trail grants;

(4) three percent of the receipts must be deposited in the natural resources fund, and
may be spent only on local trail grants; and

(5) two percent of the receipts must be deposited in the natural resources fund,
and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
Conservatory, and the Duluth Zoo.

new text begin (f) Revenues transmitted to the commissioner under section 297A.651 must be
deposited by the commissioner in the state treasury in the general fund.
new text end

deleted text begin (f) deleted text end new text begin (g) new text end The revenue dedicated under paragraph (e) may not be used as a substitute
for traditional sources of funding for the purposes specified, but the dedicated revenue
shall supplement traditional sources of funding for those purposes. Land acquired with
money deposited in the game and fish fund under paragraph (e) must be open to public
hunting and fishing during the open season, except that in aquatic management areas or
on lands where angling easements have been acquired, fishing may be prohibited during
certain times of the year and hunting may be prohibited. At least 87 percent of the money
deposited in the game and fish fund for improvement, enhancement, or protection of fish
and wildlife resources under paragraph (e) must be allocated for field operations.

deleted text begin (g) deleted text end new text begin (h) new text end The revenues deposited under paragraphs (a) to (f) do not include the
revenues, including interest and penalties, generated by the sales tax imposed under
section 297A.62, subdivision 1a, which must be deposited as provided under the
Minnesota Constitution, article XI, section 15.

Sec. 3.

Minnesota Statutes 2010, section 299L.02, subdivision 1, is amended to read:

Subdivision 1.

Lottery.

(a) The director shall when required under chapter 349A or
when requested by the director of the lottery conduct background checks on employees of
the State Lottery, lottery retailers, and bidders of lottery procurement contracts.

(b) The director shall, when so requested by the director of the State Lottery or when
the director believes it to be reasonable and necessary, conduct investigations of lottery
retailers, applicants for lottery retailer contracts, suppliers of goods or services to the State
Lottery, and persons bidding on contracts for goods or services with the State Lottery.

(c) The director shall conduct an annual security audit of the State Lottery, or arrange
for such an audit by an outside agency or person, firm, or corporation. The director shall
report to the director of the lottery on the results of the audit.

new text begin (d) The director shall deposit in a separate account in the state treasury all money
received from the director of the State Lottery for charges for investigations and
background checks relating to the lottery gaming facility management contract, the lottery
gaming facility manager and vendor licenses under chapter 349A. Money in the account
is appropriated to the director for the purpose of carrying out the director's powers and
duties under this subdivision.
new text end

Sec. 4.

Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:

Subd. 2.

Exclusions.

Notwithstanding subdivision 1, a gambling device:

(1) may be sold by a person who is not licensed under this section, if the person (i) is
not engaged in the trade or business of selling gambling devices, and (ii) does not sell
more than one gambling device in any calendar year;

(2) may be sold by the governing body of a federally recognized Indian tribe
described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
a distributor licensed under this section, and (iii) the licensed distributor notifies the
commissioner of the purchase, in the same manner as is required when the licensed
distributor ships a gambling device into Minnesota;

(3) may be possessed by a person not licensed under this section if the person holds
a permit issued under section 299L.08; deleted text begin and deleted text end

(4) may be possessed by a state agency, with the written authorization of the director,
for display or evaluation purposes only and not for the conduct of gambling new text begin ; and
new text end

new text begin (5) may be operated by the State Lottery or by the lottery gaming facility manager
authorized by the State Lottery, as authorized under chapter 349A new text end .

Sec. 5.

Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:

Subd. 2a.

Restrictions.

(a) A manufacturer licensed under this section may sell,
offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
licensed under this section new text begin or to the State Lottery or the lottery gaming facility manager
authorized by the State Lottery, as authorized under chapter 349A new text end .

(b) A distributor licensed under this section may sell, offer to sell, market, rent,
lease, or otherwise provide, in whole or in part, a gambling device only to:

(1) the governing body of a federally recognized Indian tribe that is authorized
to operate the gambling device under a tribal state compact under the Indian Gaming
Regulatory Act, Public Law 100-497, and future amendments to it;

(2) a person for use in the person's dwelling for display or amusement purposes in a
manner that does not afford players an opportunity to obtain anything of value;

(3) another distributor licensed under this section; deleted text begin or
deleted text end

(4) a person in another state who is authorized under the laws of that state to possess
the gambling device new text begin ; or
new text end

new text begin (5) the State Lottery or the lottery gaming facility manager authorized by the State
Lottery, as authorized under chapter 349A new text end .

Sec. 6.

Minnesota Statutes 2010, section 340A.404, is amended by adding a
subdivision to read:

new text begin Subd. 2c. new text end

new text begin City of Minneapolis; lottery gaming enterprise; lottery gaming
facility. new text end

new text begin (a) Notwithstanding any other law, local ordinance or charter provision, the city
of Minneapolis may issue one or more on-sale intoxicating liquor licenses to the owner,
manager or operator of the lottery gaming enterprise or lottery gaming facility, or to an
entity holding a concessions contract with the owner, manager, or operator for use on the
premises of the lottery gaming enterprise or lottery gaming facility.
new text end

new text begin (b) The licenses shall authorize sales on all days of the week.
new text end

new text begin (c) The licenses authorized by this subdivision may be issued for space that is
not compact and contiguous, provided that all such space is within or adjacent to the
lottery gaming enterprise and is included in the description of the licensed premises on
the approved license application.
new text end

new text begin (d) The licenses are in addition to the number authorized by law.
new text end

Sec. 7.

Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:

Subd. 5.

Gambling prohibited.

(a) Except as otherwise provided in this
subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
or operate, or permit the keeping, possession, or operation on the licensed premises of dice
or any gambling device as defined in section 349.30, or permit gambling therein.

(b) Gambling equipment may be kept or operated and raffles conducted on licensed
premises and adjoining rooms when the use of the gambling equipment is authorized by
(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
Act, Public Law 100-497, or (3) a tribal-state compact authorized under section 3.9221.

(c) Lottery tickets may be purchased and sold within the licensed premises as
authorized by the director of the lottery under chapter 349A.

(d) Dice may be kept and used on licensed premises and adjoining rooms as
authorized by section 609.761, subdivision 4.

new text begin (e) Gambling devices may be operated and gambling permitted in a lottery gaming
facility as authorized by chapter 349A.
new text end

Sec. 8.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Ancillary lottery gaming facility enterprise operations. new text end

new text begin "Ancillary
lottery gaming facility enterprise operations" means additional nonlottery gaming facility
products and services not owned, operated, or managed by the State Lottery which may
be included in the overall development associated with the lottery gaming facility.
Such operations may include, but are not limited to, restaurants, hotels, motels, parking
structures, retail, spas, museums, or entertainment facilities.
new text end

Sec. 9.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Card club. new text end

new text begin "Card club" means a lottery gaming facility or portion of a
lottery gaming facility where the director has authorized a lottery gaming facility manager
to conduct card games.
new text end

Sec. 10.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 1c. new text end

new text begin Card game. new text end

new text begin "Card game" means a game or activity wherein individuals
compete and wager utilizing a 52-unit system comprised of a series of numbers, numbered
two through ten, and the letters J, Q, K, and A, combined with four symbols commonly
known as hearts, diamonds, spades, and clubs, wherein each individual unit constitutes the
display of one of the 52 possible combinations. The symbol commonly known as a joker
may be incorporated into the system. Card game also includes the tile game of pai gow.
new text end

Sec. 11.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 5a. new text end

new text begin Electronic lottery credit. new text end

new text begin "Electronic lottery credit" means the basic unit
of play for an electronic lottery terminal.
new text end

Sec. 12.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 5b. new text end

new text begin Electronic lottery credit receipt. new text end

new text begin "Electronic lottery credit receipt"
means a receipt generated by an electronic lottery terminal that provides evidence of cash
payment due a player from play on an electronic lottery terminal.
new text end

Sec. 13.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 5c. new text end

new text begin Electronic lottery game. new text end

new text begin "Electronic lottery game" means a game
authorized by the director that is played on an electronic lottery terminal.
new text end

Sec. 14.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 5d. new text end

new text begin Electronic lottery terminal. new text end

new text begin "Electronic lottery terminal" means any
mechanical, electrical, electromechanical, video, or other device, contrivance, or machine
that, upon insertion of cash, tokens, credits, electronic cards, or similar objects therein,
or upon payment of any consideration whatsoever, is available to play or operate, the
play or operation of which, whether by reason of the skill of the operator or application
of the element of chance, or both, may deliver or entitle the person playing or operating
the machine to receive cash, tokens, merchandise, electronic lottery credit receipts or
credits that may be redeemed for cash, whether the payoff is made automatically from the
machine or in any manner whatsoever. Electronic lottery terminals may use bill validators
and may be single-position multigame video electronic games, including, but not limited
to, poker, blackjack, and slot machines. Electronic lottery terminals shall be directly
linked to a central communications system at a location determined by the director for
purposes of security, monitoring, and auditing.
new text end

Sec. 15.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 5e. new text end

new text begin Electronic lottery game revenues. new text end

new text begin "Electronic lottery game revenues"
means the total of all amounts wagered through the operation of electronic lottery games
at a lottery gaming facility, but excluding noncashable credits, including those in the
form of free play, and other promotional items, less the total of all cash, credits, whether
redeemed or unredeemed, or other prizes paid out as winnings to players.
new text end

Sec. 16.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 9a. new text end

new text begin Lottery facility game. new text end

new text begin "Lottery facility game" means any electronic
lottery game, card game, or nonelectronic game that is authorized by the director to be
conducted at the lottery gaming facility.
new text end

Sec. 17.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 9b. new text end

new text begin Lottery gaming enterprise. new text end

new text begin "Lottery gaming enterprise" means an
entertainment enterprise which includes a lottery gaming facility, authorized pursuant to
section 349A.17 and ancillary lottery gaming facility enterprise operations that have a
coordinated business or marketing strategy.
new text end

Sec. 18.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 9c. new text end

new text begin Lottery gaming facility. new text end

new text begin "Lottery gaming facility" means that portion of
a lottery gaming enterprise used for the purposes of operating, managing, and maintaining
lottery facility games.
new text end

Sec. 19.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 9d. new text end

new text begin Lottery gaming facility management contract. new text end

new text begin "Lottery gaming
facility management contract" means a contract or agreement between the director and
the lottery gaming facility manager that authorizes the management, or construction and
management, of a lottery gaming facility, the business of which is owned and operated by
the Minnesota Lottery, negotiated and signed by the director on behalf of the state.
new text end

Sec. 20.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 9e. new text end

new text begin Lottery gaming facility manager. new text end

new text begin "Lottery gaming facility manager"
means an individual, corporation, limited liability company, or other business entity
authorized to construct and manage, or manage alone, a lottery gaming facility pursuant
to a lottery gaming facility management contract with the Minnesota Lottery, on behalf
of the state. A lottery gaming facility manager does not constitute a lottery vendor or a
lottery retailer under this chapter.
new text end

Sec. 21.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 9f. new text end

new text begin Lottery gaming facility revenues. new text end

new text begin "Lottery gaming facility revenues"
means the total of all amounts wagered through the operation of lottery facility games at a
lottery gaming facility, but excluding noncashable credits, including those in the form of
free play, and other promotional items, less the total of all cash; credits, whether redeemed
or unredeemed; or other prizes paid out as winnings to players.
new text end

Sec. 22.

Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:

Subd. 10.

Lottery procurement contract.

"Lottery procurement contract" means
a contract to provide lottery products, computer hardware and software used to monitor
sales of lottery tickets, and lottery tickets new text begin , and play on or maintenance of lottery facility
games. A lottery gaming facility management contract is a lottery procurement contract new text end .
"Lottery procurement contract" does not include a contract to provide an annuity or prize
payment agreement or materials, supplies, equipment, or services common to the ordinary
operation of a state agency.

Sec. 23.

Minnesota Statutes 2010, section 349A.01, subdivision 11, is amended to read:

Subd. 11.

Lottery retailer.

"Lottery retailer" means a person with whom the
director has contracted to sell lottery tickets to the public. new text begin A lottery retailer does not
include a lottery gaming facility manager.
new text end

Sec. 24.

Minnesota Statutes 2010, section 349A.01, subdivision 12, is amended to read:

Subd. 12.

Lottery ticket or ticket.

"Lottery ticket" or "ticket" means any tangible
evidence issued by the lottery to prove participation in a lottery game new text begin other than an
electronic lottery game new text end .

Sec. 25.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 14. new text end

new text begin Nonelectronic game. new text end

new text begin "Nonelectronic game" means any game other
than an electronic lottery game which is authorized by the director to be operated at the
lottery gaming facility.
new text end

Sec. 26.

Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:

new text begin Subd. 15. new text end

new text begin Nonelectronic game revenues. new text end

new text begin "Nonelectronic game revenues" means
the total of all amounts wagered through the operation of nonelectronic games at a lottery
gaming facility, but excluding noncashable credits, including those in the form of free
play, and other promotional items, less the total of all cash; credits, whether redeemed or
unredeemed; or other consideration paid out as winnings to players.
new text end

Sec. 27.

Minnesota Statutes 2010, section 349A.02, subdivision 3, is amended to read:

Subd. 3.

Powers and duties.

In operating the lottery the director shall exercise
the following powers and duties:

(1) adopt rules and game procedures;

(2) issue lottery retailer contracts and rule on appeals of decisions relating to those
contracts;

(3) enter into lottery procurement contracts for the provision of goods and services
to the lottery;

(4) employ personnel as are required to operate the lottery;

(5) enter into written agreements with one or more government-authorized lotteries,
or with an organization created and controlled by those lotteries, for the operation,
marketing, and promotion of a joint lottery;

(6) adopt and publish advertising and promotional materials consistent with section
349A.09; deleted text begin and
deleted text end

new text begin (7) operate a lottery gaming facility, consistent with section 349A.17; and
new text end

deleted text begin (7) deleted text end new text begin (8) new text end take all necessary steps to ensure the integrity of, and public confidence
in, the State Lottery.

Sec. 28.

Minnesota Statutes 2010, section 349A.04, is amended to read:

349A.04 LOTTERY GAME PROCEDURES.

The director may adopt game procedures governing the following elements of the
lottery:

(1) lottery games;

(2) ticket prices;

(3) number and size of prizes;

(4) methods of selecting winning tickets; deleted text begin and
deleted text end

(5) frequency and method of drawings new text begin ; and
new text end

new text begin (6) lottery facility games new text end .

The adoption of lottery game procedures is not subject to chapter 14.

Sec. 29.

Minnesota Statutes 2010, section 349A.06, subdivision 8, is amended to read:

Subd. 8.

Proceeds of sales.

All proceeds from the sale of lottery tickets received by
a lottery retailer new text begin , and proceeds from the management of lottery facility games received by
a lottery gaming facility manager new text end constitute a trust fund until paid to the director. The
lottery retailer new text begin or lottery gaming facility manager new text end is personally liable for all proceeds.

Sec. 30.

Minnesota Statutes 2010, section 349A.08, subdivision 1, is amended to read:

Subdivision 1.

Agreement by players.

A person who buys a lottery ticket new text begin or plays
any lottery facility game new text end agrees to be bound by the rules new text begin and game procedures new text end applicable
to deleted text begin the deleted text end new text begin that new text end particular lottery game for which the ticket is purchased new text begin , or a lottery facility
game new text end . The player acknowledges that the determination of whether a ticket new text begin or electronic
lottery credit receipt new text end is deleted text begin a deleted text end valid deleted text begin winning ticket deleted text end is subject to the rules deleted text begin of deleted text end new text begin and game procedures
adopted by new text end the director, claims procedures established by the director for that game, and
any confidential or public validation tests established by the director for that game.

Sec. 31.

Minnesota Statutes 2010, section 349A.08, subdivision 5, is amended to read:

Subd. 5.

Payment; unclaimed prizes.

new text begin (a) Except as provided in this subdivision, new text end a
prize in the state lottery must be claimed by the winner within one year of the date of the
drawing at which the prize was awarded or the last day sales were authorized for a game
where a prize was determined in a manner other than by means of a drawing. If a valid
claim is not made for a prize payable directly by the lottery by the end of this period, the
prize money is considered unclaimed and the winner of the prize shall have no further
claim to the prize.

new text begin (b) An electronic lottery credit receipt from an electronic lottery terminal must be
presented to a lottery gaming facility manager for payment within six months of the
date the electronic lottery credit receipt was printed. If a valid claim for an electronic
lottery credit receipt is not made within six months, the electronic lottery credit receipt
is considered unclaimed and the player shall have no further claim to the amount due
from the electronic lottery credit receipt.
new text end

new text begin (c) new text end A prize won by a person who purchased the winning ticket new text begin or played an
electronic lottery game new text end in violation of section 349A.12, subdivision 1, or won by a person
ineligible to be awarded a prize under subdivision 7 must be treated as an unclaimed
prize under this section.

new text begin (d) new text end The director must transfer all unclaimed prize money new text begin and money from unclaimed
electronic lottery credit receipts under paragraph (b) new text end at the end of each fiscal year from the
lottery cash flow account to the general fund.

Sec. 32.

Minnesota Statutes 2010, section 349A.08, subdivision 8, is amended to read:

Subd. 8.

Withholding of delinquent state taxes or other debts.

The director
shall report the name, address, and Social Security number of each winner of a lottery
prize of $600 or more new text begin , new text end to the Department of Revenue to determine whether the person
who has won the prize is delinquent in payment of state taxes or owes a debt as defined in
section 270A.03, subdivision 5. If the person is delinquent in payment of state taxes or
owes a debt as defined in section 270A.03, subdivision 5, the director shall withhold the
delinquent amount from the person's prize for remittance to the Department of Revenue
for payment of the delinquent taxes or distribution to a claimant agency in accordance
with chapter 270A. Section 270A.10 applies to the priority of claims. new text begin In the case of a prize
won at a lottery gaming facility under section 349A.17, the director shall report winners of
prizes to the Department of Revenue as required by federal law.
new text end

Sec. 33.

Minnesota Statutes 2010, section 349A.10, subdivision 2, is amended to read:

Subd. 2.

Deposit in prize fund.

(a) The director shall establish a lottery prize
fund outside the state treasury. The fund consists of all money deposited in it under this
subdivision and all interest earned thereon.

(b) The director shall deposit in the lottery prize fund, from gross receipts from the
sale of lottery tickets, an amount sufficient to pay lottery prizes new text begin , other than prizes and
winnings from a lottery gaming facility under section 349A.17, new text end from the lottery prize
fund according to the following provisions:

(1) for games which require online terminal connections, the prizes paid in any fiscal
year must be at least 45 percent of gross receipts from those games in that fiscal year;

(2) for games which do not require online terminal connections, the prizes paid in any
fiscal year must be at least the following percentages of gross receipts from those games:

(i) 50 percent through fiscal year 1991;

(ii) 55 percent from July 1, 1991, to June 30, 1992; and

(iii) 60 percent thereafter.

Sec. 34.

Minnesota Statutes 2010, section 349A.10, subdivision 5, is amended to read:

Subd. 5.

Deposit of net proceeds.

Within 30 days after the end of each month, the
director shall deposit in the state treasury the net proceeds of the lottery, which is the
balance in the lottery fund after transfers to the lottery prize fund and credits to the lottery
operations account new text begin and the balance in the lottery fund from the operation of the lottery
gaming facility after transfers required under section 349A.17, subdivision 12 new text end . Of the net
proceeds, 40 percent must be credited to the Minnesota environment and natural resources
trust fund and the remainder must be credited to the general fund.

Sec. 35.

Minnesota Statutes 2010, section 349A.11, subdivision 1, is amended to read:

Subdivision 1.

Lottery ticket; retailer.

The director, an employee of the lottery,
a member of the immediate family of the director or employee residing in the same
household may not:

(1) purchase a lottery ticket new text begin or participate in gambling at the lottery gaming facility
established under section 349A.17; provided, except in cases where a lottery gaming
facility manager has actual knowledge, a lottery gaming facility manager shall not bear
any liability for violations of this subdivision by the director, an employee of the lottery,
a member of the immediate family of the director or employee residing in the same
household new text end ; or

(2) have any personal pecuniary interest in any vendor holding a lottery procurement
contract, or in any lottery retailer; or

(3) receive any gift, gratuity, or other thing of value, excluding food or beverage,
from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in
excess of $100 in any calendar year.

Sec. 36.

Minnesota Statutes 2010, section 349A.13, is amended to read:

349A.13 RESTRICTIONS.

Nothing in this chapter:

(1) authorizes the director to conduct a lottery game or contest the winner or winners
of which are determined by the result of a sporting event other than a horse race conducted
under chapter 240; new text begin or
new text end

(2) deleted text begin authorizes the director to install or operate a lottery device operated by coin or
currency which when operated determines the winner of a game; and
deleted text end

deleted text begin (3) deleted text end authorizes the director to sell pull-tabs as defined under section 349.12,
subdivision 32.

Sec. 37.

new text begin [349A.17] OPERATION OF LOTTERY GAMING FACILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin (a) The legislature hereby recognizes that gaming
operations and activities are appropriate social and economic activities for state
government to operate and regulate.
new text end

new text begin (b) The legislature hereby finds and declares to be the public policy of this state that:
new text end

new text begin (1) the development of a controlled gaming industry is important to the development
of the economy of the state of Minnesota in that it will assist in the continuing growth of
the tourism industry and thus will benefit the general welfare of our citizens;
new text end

new text begin (2) the growth and success of gaming is dependent upon public confidence and trust
that gaming activities and, in particular, lottery gaming facility activities are conducted
honestly and are free from criminal and corruptive elements; and
new text end

new text begin (3) public confidence and trust can only be maintained by strict regulation of all
persons, practices, associations, and activities related to the operation of the gaming
establishment and the manufacture, supply, and distribution of gaming devices and
supplies.
new text end

new text begin (c) The legislature hereby finds and determines to be the public policy of the state:
new text end

new text begin (1) to authorize the Minnesota lottery director to solicit bids and negotiate and
enter into contracts for the conduct and management of gaming activities at a lottery
gaming facility as provided in this section as a useful economic development tool which
can promote general economic development, increase employment, produce direct and
indirect state and local revenues, and otherwise stimulate the overall economy of the state
and the tourism and hospitality industries therein;
new text end

new text begin (2) that all persons involved with the proposed lottery gaming facility, including the
lottery gaming facility manager and manufacturers, suppliers, and distributors of certain
gaming devices and equipment, shall therefore be licensed, regulated, and controlled in
such a manner as to accomplish and promote the above public policies and, in general, to
protect the public health, safety, morale, good order, and general welfare of our citizens;
and
new text end

new text begin (3) that the most effective method of obtaining and furthering the public policies
and objectives described in this section and to minimize competition with existing
facilities is to provide for the operation of a single official gaming establishment which
is state-operated and permits the management to be publicly bid to a nongovernmental
entity, thus allowing the state to derive revenues from the controlled gaming operation.
new text end

new text begin (d) This section and amendments to it shall be known and cited as the "Minnesota
Lottery Gaming Facility Act." The Minnesota Lottery Gaming Facility Act shall be part of
and supplemental to the Minnesota State Lottery.
new text end

new text begin Subd. 2. new text end

new text begin Location. new text end

new text begin The director may operate one lottery gaming facility, to be
located in a lottery gaming facility enterprise on Hennepin Avenue in the downtown
entertainment billboard district of the city of Minneapolis, such location to be approved
by the city of Minneapolis. The location must be suitable for both the permanent and an
interim lottery gaming facility. The permanent facility must have a gaming floor plate of
not less than 60,000 square feet. The lottery gaming facility is a nonsmoking facility.
new text end

new text begin Subd. 3. new text end

new text begin Types of gaming. new text end

new text begin The director shall provide for the types of gaming
to be conducted at the lottery gaming facility and game procedures subject to section
349A.04. Lottery facility games are permitted to the extent consistent with law. The
director may permit the operation of up to 3,200 electronic gaming positions at the lottery
gaming facility.
new text end

new text begin Subd. 4. new text end

new text begin Electronic lottery terminals. new text end

new text begin (a) All electronic lottery terminals at a
lottery gaming facility may be owned or leased by the lottery gaming facility manager for
the benefit of the director.
new text end

new text begin (b) Electronic lottery terminals must be maintained by the lottery, or by the manager
of a lottery gaming facility pursuant to this section, who is under the control and direction
of the director.
new text end

new text begin (c) The director must have a central communications system that monitors activities
and provides auditing program information on each electronic lottery terminal at a lottery
gaming facility.
new text end

new text begin (d) The director must approve the general security arrangements associated with and
relating to the operation of the electronic lottery terminals at a lottery gaming facility.
new text end

new text begin (e) The director must own or be the licensee of the software for the electronic lottery
terminals at the lottery gaming facility.
new text end

new text begin (f) The director may implement other controls as are deemed necessary to ensure
and maintain the integrity of electronic lottery terminals at a lottery gaming facility
operated under this section.
new text end

new text begin (g) The director shall examine prototypes of electronic lottery terminals and require
that the manufacturer of the terminal pay the cost of the examination. The director may
contract for the examination of electronic lottery terminals. The director may require
working models of an electronic lottery terminal transported to the locations the director
designates for testing, examination, and analysis. The manufacturer shall pay all costs of
any testing, examination, analysis, and transportation of the terminal model.
new text end

new text begin (h) Deactivation of terminal. The director may deactivate an electronic lottery
terminal without notice if the lottery gaming facility manager has violated any provision
of this chapter, rule, or provision of its contract with the director.
new text end

new text begin Subd. 5. new text end

new text begin Card club. new text end

new text begin (a) The director may authorize a card club or clubs to be
operated at the lottery gaming facility authorized in this section.
new text end

new text begin (b) The lottery gaming facility manager is responsible for conducting and
supervising the card games, providing all necessary equipment, services, and personnel,
and reimbursing the director for costs related to card club regulation and enforcement.
new text end

new text begin (c) The lottery gaming facility manager may charge players for card games by
deducting and retaining money from wagers, by charging a fee based on playing time, or
by any other means authorized by the director.
new text end

new text begin (d) The director may not authorize the lottery gaming facility manager to operate a
card club unless the lottery gaming facility manager has submitted, and the director has
approved, a plan of operation for card games. The director may withdraw authorization
for operation of a card club at any time for a violation of a law or rules governing card
club operations. The plan must set forth all necessary details for conducting card games,
including, among other things:
new text end

new text begin (1) specifying and defining all card games to be played, including all governing
aspects of each game;
new text end

new text begin (2) amount and method by which players will be charged for card games;
new text end

new text begin (3) arrangements to ensure the security of card games;
new text end

new text begin (4) designation of all employees of the operator who undertake supervisory positions
related to card games; and
new text end

new text begin (5) internal control systems for card games.
new text end

new text begin Subd. 6. new text end

new text begin Nonelectronic games. new text end

new text begin Nonelectronic games may be played at the lottery
gaming facility as authorized by the director.
new text end

new text begin Subd. 7. new text end

new text begin Lottery gaming facility management contract; procedure. new text end

new text begin (a) Not more
than 60 days after the effective date of this act, the director shall publish in the Minnesota
State Register a notice regarding the process for soliciting proposals and approval of a
lottery gaming facility management contract.
new text end

new text begin (b) In selecting a lottery gaming facility manager the director must consider, at a
minimum, the following factors:
new text end

new text begin (1) the experience of the applicant in managing gaming facilities;
new text end

new text begin (2) the competence, experience, and timely performance of an applicant in order
to promote and ensure the security, honesty, fairness, and integrity of the operation and
administration of the lottery gaming facility;
new text end

new text begin (3) the financial and gaming controls proposed by the applicant;
new text end

new text begin (4) the financial resources available to the applicant to support the required activities;
new text end

new text begin (5) the proposed infrastructure, design, construction, and equipment proposed to
be utilized for the lottery gaming facility;
new text end

new text begin (6) the total investment that the applicant will make to the project;
new text end

new text begin (7) the proposed start date for the operation of the lottery gaming facility in order to
expedite the flow of revenues to the state;
new text end

new text begin (8) the number and types of games proposed to be conducted at the lottery gaming
facility;
new text end

new text begin (9) the estimate of the total revenue to be received by the state from the operation of
the lottery gaming facility under the management of the applicant;
new text end

new text begin (10) the applicant's responsible gaming plan for the lottery gaming facility;
new text end

new text begin (11) the applicant's experience and record in implementing a responsible gaming
plan for a gaming facility;
new text end

new text begin (12) any agreements or prospective agreements related to ancillary lottery gaming
facility enterprise operations; and
new text end

new text begin (13) the manner in which the applicant proposes that the lottery gaming facility will
promote tourism and economic development.
new text end

new text begin (c) The director shall select a lottery gaming facility manager within 90 days after
the deadline for receipt of proposals, unless the director determines that no applicant who
has submitted a proposal satisfies the standards contained in subdivision 8, paragraph (a)
and accomplishes the policies of this act considering the factors contained in subdivision
7, paragraph (b).
new text end

new text begin (d) Each application for a lottery gaming facility management contract must be
accompanied by an application fee in the amount of $150,000. The director may use this
fee for costs associated with the evaluation of the application. Any balance remaining
after the evaluation and approval of a lottery gaming facility management contract shall be
refunded to all of the applicants on a pro rata basis.
new text end

new text begin Subd. 8. new text end

new text begin Lottery gaming facility management contract. new text end

new text begin (a) The director shall not
enter into a lottery gaming facility management contract unless:
new text end

new text begin (1) the prospective lottery gaming facility manager, or any of its principals, at a
minimum:
new text end

new text begin (i) has sufficient access to financial resources to support the activities required of a
lottery gaming facility manager under the Minnesota lottery act;
new text end

new text begin (ii) is current in filing all applicable tax returns and in payment of all taxes, interest,
and penalties owed to the state of Minnesota and any taxing subdivision where the
prospective manager is located in the state of Minnesota, excluding items under formal
appeal pursuant to applicable statutes;
new text end

new text begin (iii) has experience developing projects of at least 100,000 square feet and at a cost
which exceeds $100,000,000 in Minnesota within the last five years; and
new text end

new text begin (iv) is comprised of owners the majority of whom are residents of Minnesota at the
time of initial application, or are business entities that have been incorporated or organized
in Minnesota for at least three years;
new text end

new text begin (2) the director determines that the proposed lottery gaming enterprise consists of an
investment in infrastructure, design construction, improvement and equipment, including
the cost of electronic lottery terminals, and including ancillary lottery gaming facility
enterprise operations, of at least $200,000,000. The director, in determining whether the
minimum investment required by this subdivision is met, shall not include any amounts
derived from or financed by state or local retailers' sales tax revenues; and
new text end

new text begin (3) the director determines that the prospective lottery gaming facility manager will
have site control over a facility to house the lottery gaming facility. The lottery gaming
facility manager and the facility owner must negotiate terms for the occupation and use
of the facility.
new text end

new text begin (b) Any lottery gaming facility management contract approved by the director
under this section must:
new text end

new text begin (1) require the lottery gaming facility manager to design, construct, finance, improve,
and equip the lottery gaming facility and lottery gaming facility enterprise;
new text end

new text begin (2) have an initial term of 15 years from the date of opening of the lottery gaming
facility, with at least two five-year automatic extensions, provided that there has been no
uncured, material breach or default of the lottery gaming facility management contract. At
the end of the term, the parties may negotiate in good faith for an additional term;
new text end

new text begin (3) establish a mechanism to facilitate payment of lottery gaming facility expenses
and payment of expenses of the State Lottery, and distribution of the state's share of the
lottery gaming facility revenues;
new text end

new text begin (4) establish the types of lottery facility games to be installed in the lottery gaming
facility and the replacement schedule and cycle;
new text end

new text begin (5) provide for the prospective lottery gaming facility manager, upon approval of
the proposed lottery gaming facility management contract, to pay to the commissioner
of management and budget a privilege fee of $50,000,000. Such fee shall be deposited
in the general fund and may be paid in two equal installments. The first installment
of $25,000,000 is due upon full execution of the lottery gaming facility management
agreement, and the second installment of $25,000,000 is due on or before June 30, 2013;
new text end

new text begin (6) incorporate terms and conditions for the ancillary lottery gaming facility
enterprise operations;
new text end

new text begin (7) provide that the director must approve the electronic lottery terminals; however,
the lottery gaming facility manager may select the electronic lottery terminals to be placed
in operation from those approved by the director and determine the mix and schedule for
replacement, subject to the director's approval;
new text end

new text begin (8) provide that the hours of operation for the lottery gaming facility shall be at
the direction of the lottery gaming facility manager, and may be operated 24 hours per
day, seven days per week;
new text end

new text begin (9) provide that the lottery gaming facility manager may hire personnel, consistent
with the provisions of subdivision 9;
new text end

new text begin (10) designate as key employees, subject to approval of the director, any employees
or contractors providing services or functions which are related to lottery gaming facility
games authorized by a lottery gaming facility management contract;
new text end

new text begin (11) include financing commitments for construction;
new text end

new text begin (12) include a development agreement with the city governing body;
new text end

new text begin (13) include a provision requiring prominent posting in the area where electronic and
nonelectronic games are conducted, in a manner approved by the director, of the toll-free
telephone number established by the commissioner of human services in connection with
the compulsive gambling program established under section 245.98;
new text end

new text begin (14) require the director and lottery gaming facility manager to establish a
responsible gambling plan in consultation with the National Council on Problem
Gambling or the Minnesota affiliate, and by January 15 of each year to submit a report
to the legislature of not more than five pages setting forth the status of the responsible
gambling plan;
new text end

new text begin (15) allow the lottery gaming facility manager to manage the lottery gaming facility
in a manner consistent with this act and applicable law, but shall place full, complete and
ultimate ownership and operational control of the gaming operation of the lottery gaming
facility with the Minnesota lottery. The Minnesota lottery shall not delegate and shall
explicitly retain the power to overrule any action of the lottery gaming facility manager
affecting the gaming operation without prior notice. The Minnesota lottery shall retain full
control over all decisions concerning lottery gaming facility games;
new text end

new text begin (16) include provisions for the director to oversee all lottery gaming facility
operations, including, but not limited to: oversight of internal controls; oversight
of security of facilities; performance of background investigations; determination of
qualifications and credentialing of employees, contractors, and agents of the lottery
gaming facility manager and of ancillary lottery gaming facility enterprise operations,
auditing of lottery gaming facility revenues; enforcement of all state laws and maintenance
of the integrity of gaming operations;
new text end

new text begin (17) include enforceable provisions and liquidated damages to recover the privilege
fee paid under this subdivision, plus interest on such amount, compounded annually at the
statutory rate of interest if (i) for any reason other than a material breach of the lottery
gaming facility manager's obligations under the lottery gaming facility management
contract the lottery gaming facility manager is enjoined or otherwise prevented from
constructing or conducting operations at the lottery gaming facility as provided for in this
section, or (ii) the state authorizes the operation of a lottery gaming facility or a similar
gaming facility prior to August 1, 2036;
new text end

new text begin (18) include provisions requiring that contracts for construction and operation of
the lottery gaming facility must include programs to provide for participation by small
local businesses and minority communities in the workforces of contractors and the lottery
gaming facility manager. The lottery gaming facility manager shall make good faith
efforts to recruit and employ women and members of minority communities. The lottery
gaming facility manager shall make good faith efforts to use minority and women-owned
businesses;
new text end

new text begin (19) include a provision with respect to the extension of credit by the lottery gaming
facility manager;
new text end

new text begin (20) include provisions allowing the director to approve the plan of operation,
advertising, and the budget for the lottery gaming facility on a schedule to be agreed
upon by the parties;
new text end

new text begin (21) include accounting procedures to determine the lottery gaming facility
revenues, promotional games, unclaimed prizes, and credits;
new text end

new text begin (22) include minimum requirements for a lottery gaming facility manager to
provide qualified oversight, security, and supervision of the lottery gaming facility games
including the use of qualified personnel with experience in applicable technology;
new text end

new text begin (23) include eligibility requirements for employees, contractors, or agents of a
lottery gaming facility manager who will have responsibility for or involvement with
actual gaming activities or for the handling of cash or tokens;
new text end

new text begin (24) include background investigations to be performed by the lottery director or
the director's agent;
new text end

new text begin (25) include requirements for any employee, contractor, or agent of the lottery
gaming facility manager or of any ancillary lottery gaming enterprise operation;
new text end

new text begin (26) include provisions for termination of the management contract by either party
for cause; and
new text end

new text begin (27) include any other provision deemed necessary by the parties, including such
other terms and restrictions as necessary to conduct any lottery gaming facility game in
a legal and fair manner.
new text end

new text begin (c) If a lottery gaming facility manager does not pay the first installment of the
privilege fee within 30 days of execution of the lottery gaming facility management
contract, the lottery gaming facility management contract shall be null and void.
new text end

new text begin (d) A lottery gaming facility management contract shall not be transferred or
encumbered without the approval of the director. The lottery facility management contract
may be assignable for benefit of lenders, subject to the approval of the director, which
shall not be unreasonably withheld.
new text end

new text begin (e)(1) The Minnesota lottery shall be the licensee or owner of all software programs
used at a lottery gaming facility for any lottery facility game.
new text end

new text begin (2) A lottery gaming facility manager, on behalf of the state, shall purchase or lease
for the Minnesota lottery all electronic lottery games. All electronic lottery games shall be
subject to the ultimate control of the Minnesota lottery in accordance with this act.
new text end

new text begin (f) The director may authorize the operation of an interim lottery gaming facility at
the location selected in subdivision 2 pending completion of the permanent facility and
may establish reasonable conditions for the interim operation. The operation of the interim
lottery gaming facility shall be treated in the same manner as if it were conducted in the
permanent facility, and must be managed by the lottery gaming facility manager.
new text end

new text begin (g) The establishment and development of a lottery gaming enterprise is not subject
to sections 116D.04, 473.165, and 473.173. Section 116J.994 does not apply to any
transactions of any governmental entity related to the lottery gaming facility or public
infrastructure, or to any tenant or other users of them.
new text end

new text begin Subd. 9. new text end

new text begin Personnel, vendors. new text end

new text begin (a) No person or entity that holds a lottery gaming
facility management contract or a contract for the provision of goods or services to
the director, may employ in any capacity that relates directly to lottery gaming facility
operations, use as a vendor to the lottery gaming facility or have as an owner, officer, or
director, any person who has been convicted within the previous five years of a felony or
any crime involving fraud or misrepresentation or gambling-related offenses except that
if an owner is a publicly traded company, this provision applies only to shareholders of
such publicly traded companies holding five percent or more of such company's issued
and outstanding equity securities.
new text end

new text begin (b) The director shall investigate each employee or vendor under this subdivision
to the extent the director considers necessary and may request the assistance of and may
reimburse the Division of Alcohol and Gambling Enforcement in the investigation. All
employees of the lottery gaming facility manager must be fingerprinted or furnish their
fingerprints to the director. The director may determine classifications of vendors from
which employees and owners of such vendors providing goods or services relating to the
operation of the lottery gaming facility must be fingerprinted or furnish their fingerprints to
the director. The director may charge an applicant an investigation fee to cover the cost of
the investigation and shall from this fee reimburse the Division of Alcohol and Gambling
Enforcement for its share of the cost of the investigation. The director may cooperate with
national and international organizations and agencies in conducting investigations. The
director has access to all criminal history data compiled by the Division of Alcohol and
Gambling Enforcement on applicants and licensees under this subdivision.
new text end

new text begin Subd. 10. new text end

new text begin Prizes. new text end

new text begin A person who plays a lottery facility game at the lottery gaming
facility agrees to be bound by the game procedures applicable to that game. The player
acknowledges that the determination of winnings is subject to the rules of the director,
game procedures and claim procedures established for that game, and any confidential or
public validation procedures established by the director for that game.
new text end

new text begin Subd. 11. new text end

new text begin Restrictions. new text end

new text begin No person under age 21 shall play or make a wager on an
electronic lottery terminal or any lottery facility games.
new text end

new text begin Subd. 12. new text end

new text begin Disposition of lottery gaming facility revenues. new text end

new text begin The lottery gaming
facility manager shall transmit all lottery gaming facility revenue to the director. The
director shall dispose of the lottery gaming facility revenues as follows:
new text end

new text begin (1) 20 percent of the lottery gaming facility revenue shall be disposed of as provided
in section 297A.651;
new text end

new text begin (2) three percent of the lottery gaming facility revenues shall be paid to the city
of Minneapolis, which amount shall be in lieu of any local tax, imposition, or fee in
connection with the operation of the lottery gaming facility;
new text end

new text begin (3) 72 percent of the lottery gaming facility revenue to the lottery gaming facility
manager, subject to the terms of the lottery gaming facility management contract, to cover
the operating expenses of the lottery gaming facility which include, but are not limited
to, salaries and wages, fringe benefits, security, maintenance and repair, rent, occupancy
expenses, debt service, ongoing capital expenditures, capital reserves, equipment
purchase and replacement, and other purposes as provided in the lottery gaming facility
management contract;
new text end

new text begin (4) $1,000,000 shall be paid annually to the general fund and is appropriated to
the commissioner of human services for the compulsive gambling treatment program
established under section 245.98, provided that funds appropriated under this clause shall
supplement and not replace existing state funding for these programs;
new text end

new text begin (5) $500,000 shall be paid annually to the general fund and is appropriated to the
gambling control board for a grant to the state affiliate recognized by the National Council
on Problem Gambling to increase public awareness of problem gambling, education
and training for individuals and organizations providing effective treatment services to
problem gamblers and their families, and research relating to problem gambling, provided
that funds appropriated under this clause shall supplement and not replace existing state
funding for these programs; and
new text end

new text begin (6) the remainder shall be considered net proceeds from the operation of the lottery
gaming facility, from which the expenses of the lottery must be paid.
new text end

new text begin Subd. 13. new text end

new text begin Restrictions on lottery gaming facility manager. new text end

new text begin (a) A lottery gaming
facility manager must keep a complete set of books of account, correspondence, and all
other records necessary to show fully the manager's transactions, and make them available
for inspection by employees of the lottery at all times during business hours. The director
may require a lottery gaming facility manager to furnish information as the director deems
necessary to carry out the purposes of this chapter. The lottery gaming facility manager
will provide for an annual financial audit, at its own expense, and will provide the audited
financial statements to the director.
new text end

new text begin (b) A lottery gaming facility management agreement issued under this section may
not be transferred or assigned without the approval of the director, such approval not to be
unreasonably withheld.
new text end

new text begin (c) Sale or transfer of ownership of the facility in which the lottery gaming facility
is housed is permissible with the approval of the director, such approval not to be
unreasonably withheld.
new text end

new text begin (d) A lottery gaming facility manager must prominently post in the area where
electronic lottery terminals are located, in a manner approved by the commissioner of
human services, the toll-free telephone number established by the commissioner of
human services in connection with the compulsive gambling program established under
section 245.98.
new text end

new text begin Subd. 14. new text end

new text begin Charter limitation. new text end

new text begin Notwithstanding any law, charter, or ordinance to the
contrary, it is hereby found and declared that the development, construction, and operation
of a lottery gaming facility and lottery gaming facility enterprise within the area specified
in this section is consistent with the adopted area plan, is the preferred site location, is a
permitted land use, and constitutes lawful gambling.
new text end

new text begin Subd. 15. new text end

new text begin Local tax. new text end

new text begin No new or additional local sales or use tax shall be imposed on
lottery facility gaming revenues at the lottery gaming facility unless the tax is applicable
throughout the taxing jurisdiction. Notwithstanding charter or ordinance to the contrary, a
local gambling tax may not be applied to the lottery gaming facility operations nor may
any license fee, benefits, contribution, or disposition of revenues of a lottery gaming
facility be assessed or determined by the city in which the lottery gaming facility is located
other than as specifically set forth in this section. The admissions and amusements tax
pursuant to Laws 1969, chapter 1092, may not be imposed on lottery facility gaming
revenues, but may be imposed as authorized by law on ancillary lottery gaming facility
enterprise operations.
new text end

new text begin Subd. 16. new text end

new text begin Local restrictions. new text end

new text begin A political subdivision may not require a license
to operate a gaming machine or a lottery facility game, or to conduct other gambling
devices under section 299L.07, restrict or regulate the placement of gaming machines,
the conducting of other lottery facility games, or the hours of operation, or impose a tax
or fee on the business of operating gaming machines or the conducting of other lottery
facility games at the lottery gaming facility.
new text end

Sec. 38.

Minnesota Statutes 2010, section 541.20, is amended to read:

541.20 RECOVERY OF MONEY LOST.

Every person who, by playing at cards, dice, or other game, or by betting on the hands
or sides of such as are gambling, shall lose to any person so playing or betting any sum of
money or any goods, and pays or delivers the same, or any part thereof, to the winner,
may sue for and recover such money by a civil action, before any court of competent
jurisdiction. For purposes of this section, gambling shall not include pari-mutuel wagering
conducted under a license issued pursuant to chapter 240, purchase or sale of tickets in
the state lottery, new text begin participation in any lottery facility game at a lottery gaming facility
authorized under section 349A.17, new text end or gambling authorized under chapters 349 and 349A.

Sec. 39.

Minnesota Statutes 2010, section 541.21, is amended to read:

541.21 COMMITMENTS FOR GAMBLING DEBT VOID.

Every note, bill, bond, mortgage, or other security or conveyance in which the whole
or any part of the consideration shall be for any money or goods won by gambling or
playing at cards, dice, or any other game whatever, or by betting on the sides or hands
of any person gambling, or for reimbursing or repaying any money knowingly lent or
advanced at the time and place of such gambling or betting, or lent and advanced for any
gambling or betting to any persons so gambling or betting, shall be void and of no effect
as between the parties to the same, and as to all persons except such as hold or claim under
them in good faith, without notice of the illegality of the consideration of such contract or
conveyance. The provisions of this section shall not apply to: (1) pari-mutuel wagering
conducted under a license issued pursuant to chapter 240; (2) purchase of tickets in the
state lottery new text begin and participation in lottery facility games new text end under chapter 349A; (3) gaming
activities conducted pursuant to the Indian Gaming Regulatory Act, United States Code,
title 25, section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.

Sec. 40.

Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:

Subd. 3.

What are not bets.

The following are not bets:

(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
harm or loss sustained, even though the loss depends upon chance;

(2) a contract for the purchase or sale at a future date of securities or other
commodities;

(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
contest for the determination of skill, speed, strength, endurance, or quality or to the bona
fide owners of animals or other property entered in such a contest;

(4) the game of bingo when conducted in compliance with sections 349.11 to 349.23;

(5) a private social bet not part of or incidental to organized, commercialized, or
systematic gambling;

(6) the operation of equipment or the conduct of a raffle under sections 349.11 to
349.22, by an organization licensed by the Gambling Control Board or an organization
exempt from licensing under section 349.166;

(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
240; and

(8) the purchase and sale of state lottery tickets new text begin and participation in lottery facility
games at the state-operated lottery gaming facility new text end under chapter 349A.

Sec. 41.

Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:

Subd. 2.

State lottery.

Sections 609.755 and 609.76 do not prohibit the operation
of the state lottery or the sale, possession, or purchase of tickets for the state lottery new text begin or
participation in lottery facility games at the state-operated lottery gaming facility new text end under
chapter 349A.

Sec. 42. new text begin FEDERAL EXEMPTION.
new text end

new text begin (a) Pursuant to section 2 of the federal act entitled "An Act to Prohibit Transportation
of Gambling Devices in Interstate and Foreign Commerce," United States Code, title 15,
sections 1171 to 1177, the state of Minnesota, acting by and through the duly elected and
qualified members of the legislature, does hereby in this section, and in accordance and
compliance with the provisions of section 2 of such federal act, declare and proclaim that
it is exempt from the provision of section 2 of such federal act to the extent that such
gambling devices as described therein are being transported to or from the Minnesota State
Lottery or to or from a lottery gaming facility or a location within the state of Minnesota
where such gambling devices are authorized pursuant to Minnesota Statutes, chapter 349A.
new text end

new text begin (b) All shipments of gambling devices, including slot machines, into any county of
the state of Minnesota within which gaming operations are authorized, the registering,
recording, and labeling of which has been duly had by the manufacturer or dealer thereof
in accordance with United States Code, title 15, sections 1171 to 1177, sections 4 and 5
of this act, shall be deemed legal shipments thereof into any such county within which
gaming operations are authorized.
new text end

Sec. 43. new text begin LOCAL APPROVAL.
new text end

new text begin Sections 1 to 42 are effective the day after compliance with Minnesota Statutes,
section 645.021, subdivision 3, by the city council of the city of Minneapolis.
new text end

Sec. 44. new text begin LOTTERY BUDGET; LOTTERY GAMING FACILITY.
new text end

new text begin The director of the State Lottery shall submit a budget for the operation and
regulation of the lottery gaming facility authorized under Minnesota Statutes, section
349A.17, to the commissioner of management and budget. Notwithstanding Minnesota
Statutes, section 349A.10, subdivision 6, the director of the State Lottery may expend
amounts necessary to operate and regulate the lottery gaming facility. Amounts expended
by the director of the State Lottery for the operation and regulation of the lottery gaming
facility in fiscal years 2013 and 2014 are not subject to the maximum amount set in law
for the operation of the lottery.
new text end

Sec. 45. new text begin SEVERABILITY; SAVINGS.
new text end

new text begin If any part of this act is found to be invalid because it is in conflict with a provision
of the Constitution of the State of Minnesota or for any other reason, all other provisions
of this act shall remain valid and any rights, remedies, and privileges that have been
otherwise accrued by this act shall remain in effect and may be proceeded with and
concluded under the provisions of this act.
new text end

Sec. 46. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective the day following final enactment.
new text end