HF 522

as introduced - 88th Legislature (2013 - 2014) Posted on 02/14/2013 01:54pm

A bill for an act
relating to gambling; permitting wagering on the results of certain professional or
collegiate sports or athletic events; proposing coding for new law as Minnesota
Statutes, chapter 349C.

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

Section 1.

[349C.01] DEFINITIONS.

(a) As used in this chapter, the following terms have the meanings given them.

(b) "Collegiate sport or athletic event" means a sport or athletic event offered or
sponsored by or played in connection with a public or private institution that offers
educational services beyond the secondary level.

(c) "Commissioner" means the commissioner of public safety.

(d) "Lottery" means the State Lottery created under chapter 349A.

(e) "Professional sport or athletic event" means an event at which two or more
persons participate in sports or athletic events and receive compensation in excess of
actual expenses for their participation in the event.

(f) "Prohibited sports event" means a collegiate sport or athletic event that takes
place in Minnesota or a sport or athletic event in which any Minnesota college team
participates regardless of where the event takes place.

(g) "Sports event" means a professional sport or athletic event or a collegiate sport
or athletic event, except a prohibited sports event.

(h) "Sports pool" means the business of accepting wagers on a sports event by a
system or method of wagering.

(i) "Sports wagering lounge" means an area where a sports pool is operated.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 2.

[349C.02] SPORTS WAGERING.

Subdivision 1.

Operation.

Interested parties may operate a sports pool upon
the approval of the commissioner of public safety in accordance with this chapter and
applicable rules adopted under this chapter. The commissioner shall hear and decide
promptly and in a reasonable order all applications for a license to operate a sports pool,
shall have the general responsibility for the implementation of this chapter, and shall have
all other duties specified in this chapter with regard to the operation of a sports pool. The
license to operate a sports pool shall be in addition to any other license required to be issued.
No license to operate a sports pool shall be issued by the commissioner to an entity unless it
has established its financial stability, responsibility, good character, honesty, and integrity.

Subd. 2.

State Lottery.

The State Lottery may choose to independently operate
a sports pool or pools, and shall be granted licenses to do so by the commissioner. All
other licensees must have a joint operations agreement with the lottery, and must operate
under that joint agreement. Terms of the agreement are to be determined by the lottery.
The lottery shall be consulted by the commissioner on all rules adopted under this chapter.

Subd. 3.

Renewal of license.

No later than five years after the date of the issuance of
a license and every five years thereafter or within such lesser periods as the commissioner
may direct, a licensee shall submit to the commissioner documentation or information the
commissioner may by rule require, to demonstrate to the satisfaction of the commissioner
that the licensee continues to meet the requirements of law and rule.

Subd. 4.

Lounges; requirements.

A sports pool shall be operated in a sports
wagering lounge located at a site allowed by the commissioner, which may include a
racetrack. The lounge shall conform to all requirements concerning square footage, design,
equipment, security measures, and related matters that the commissioner prescribes by rule.

The operator of a sports pool shall establish or display the odds at which wagers
may be placed on sports events.

An operator shall accept wagers on sports events from persons physically present in
the sports wagering lounge. A person placing a wager shall be at least 21 years of age.

An operator shall not admit into the sports wagering lounge, or accept wagers from,
any person whose name appears on an exclusion list maintained by the commissioner or
on a self-exclusion list maintained by the commissioner.

Subd. 5.

Contract with entity.

The holder of a license to operate a sports pool
may contract with an entity to conduct a sports pool according to the rules of the
commissioner. The entity shall obtain a license as a sports pool operator prior to the
execution of a contract, and the license shall be issued under the requirements adopted by
the commissioner and the lottery.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 3.

[349C.03] EMPLOYEES.

All employees who are working in the sports wagering lounge may be required
to be registered, if appropriate, in accordance with rules of the commissioner adopted
in consultation with the lottery.

Each operator of a sports pool shall designate one or more key employees who shall
be responsible for the operation of the sports pool. At least one such key employee shall
be on the premises whenever sports wagering is conducted.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 4.

[349C.04] AUTHORITY; RULES.

Except as otherwise provided by this chapter, the State Lottery and the commissioner
shall jointly have the authority to regulate sports pools and the conduct of sports wagering
under this chapter. No organization shall be authorized to operate a sports pool unless
it has produced information, documentation, and assurances concerning its financial
background and resources, including cash reserves, that are sufficient to demonstrate
that it has the financial stability, integrity, and responsibility to operate a sports pool.
In developing rules applicable to sports wagering, the commissioner shall examine the
rules implemented in other states where sports wagering is conducted and shall, as far as
practicable, adopt a similar regulatory framework. The commissioner, in consultation with
the State Lottery, shall adopt rules necessary to carry out this chapter including, but not
limited to, rules governing the:

(1) amount of cash reserves to be maintained by operators to cover winning wagers;

(2) acceptance of wagers on a series of sports events;

(3) maximum wagers that may be accepted by an operator from any one patron
on any one sports event;

(4) type of wagering tickets that may be used;

(5) method of issuing tickets;

(6) method of accounting to be used by operators;

(7) types of records that shall be kept;

(8) use of credit and checks by patrons;

(9) type of system for wagering;

(10) protections for a person placing a wager; and

(11) making of problem gambling resources available to gamblers.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 5.

[349C.05] OPERATORS.

Each operator shall adopt comprehensive house rules governing sports wagering
transactions with its patrons. The rules shall specify the amounts to be paid on winning
wagers and the effect of schedule changes. The house rules, together with any other
information the commissioner deems appropriate, shall be conspicuously displayed in the
sports wagering lounge and included in the terms and conditions of the account wagering
system, and copies shall be made readily available to patrons.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 6.

[349C.06] JOINT OPERATIONS.

Subdivision 1.

Lottery role in operations.

The State Lottery must have a role in
the operation of any sports betting lounge, in a manner to be negotiated between the
lottery and the licensee. This role may be oversight and monitoring, joint operation,
or sole operation by the lottery.

Subd. 2.

Joint agreements; revenues.

When a licensee and the lottery enter into an
agreement to jointly establish a sports wagering lounge, and to operate and conduct sports
wagering under this chapter, the agreement shall specify the distribution of revenues from
the joint sports wagering operation among the parties to the agreement. The sums received
by the licensee from the joint sports wagering operation shall be considered gross revenue.
The sums actually received by the licensee from any sports wagering operation, either
jointly established with the lottery or established semi-independently or with nonlottery
partners, less only the total of all sums actually paid out as winnings to patrons, shall be
subject to an eight percent tax to be collected by the commissioner and paid to the State
Lottery fund.

A percentage of the fee paid for a license to operate a sports pool shall be deposited
into the state general fund for appropriation by the legislature to the Department of
Human Services to provide funds for prevention, education, and treatment programs for
compulsive gambling programs. The percentage shall be determined by the commissioner.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 7.

[349C.07] REVENUES.

"Gross revenue" means the total of all sums actually received by a licensee from
operation of a sports pool, less only the total of all sums actually paid out as winnings to
patrons; provided, however, that the cash equivalent value of any merchandise or thing of
value included in a jackpot or payout shall not be included in the total of all sums paid out
as winnings to patrons for purposes of determining gross revenue.

EFFECTIVE DATE.

This section is effective July 1, 2013.

Sec. 8.

[349C.08] INTERNET.

A licensee that has been issued a permit to conduct a sports pool shall not knowingly
make its premises available for placing wagers using the Internet or advertise that its
premises may be used for that purpose. A licensee that is determined by the commissioner
to have knowingly violated this section shall be subject to a penalty of $1,000 per player
per day for making its premises available for placing wagers using the Internet and of
$10,000 per violation for advertising that its premises may be used for that purpose.

EFFECTIVE DATE.

This section is effective July 1, 2013.