HF 1512

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:52am

A bill for an act
relating to lawful gambling; providing for electronic bingo; making clarifying
and conforming changes; amending Minnesota Statutes 2008, sections 349.12,
subdivisions 5, 12a, 18, 25b, 25c, 25d; 349.151, subdivision 4c; 349.16,
subdivision 7; 349.1635, subdivision 1; 349.17, subdivisions 6, 7, 8; 349.18,
subdivision 1; 349.211, subdivision 1a; proposing coding for new law in
Minnesota Statutes, chapter 349.

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

Section 1.

Minnesota Statutes 2008, section 349.12, subdivision 5, is amended to read:

Subd. 5.

Bingo occasion.

"Bingo occasion" means a single gathering or session
at which a series of one or more successive bingo games is played. There is no limit on
the number of games conducted during a bingo occasion deleted text begin but deleted text end new text begin . new text end A bingo occasion must not
last longer than eight consecutive hours new text begin , except that all linked bingo games played on
stationary electronic bingo devices during the regular daily business hours of the permitted
premises are considered a separate bingo occasion new text end .

Sec. 2.

Minnesota Statutes 2008, section 349.12, subdivision 12a, is amended to read:

Subd. 12a.

Electronic bingo device.

new text begin (a) new text end "Electronic bingo device" means deleted text begin an deleted text end new text begin a
portable or stationary new text end electronic new text begin bingo new text end device used by a bingo player to new text begin (1) new text end monitor bingo
paper sheets or facsimile of a bingo paper sheet when purchased at the time and place of an
organization's bingo occasion deleted text begin and which (1) provides a means for bingo players to input deleted text end new text begin ;
(2) activate new text end numbers announced deleted text begin by a bingo caller; (2) compares deleted text end new text begin or displayed and compare new text end
the numbers deleted text begin entered by the player deleted text end to the bingo faces previously stored in the memory of
the device; and (3) deleted text begin identifies deleted text end new text begin identify new text end a winning bingo pattern.

new text begin (b) An electronic bingo device may be used only in the conduct of bingo permitted
under this chapter and may not display or simulate any other form of gambling or
entertainment. A portable electronic bingo device is considered a device that is handheld
and portable and must be provided by a licensed distributor. A stationary electronic bingo
device is considered a device that is not readily portable and must be provided by a linked
bingo game provider as part of its linked bingo game system. new text end Electronic bingo device does
not mean any device into which coin, currency, or tokens are inserted to activate play.

Sec. 3.

Minnesota Statutes 2008, section 349.12, subdivision 18, is amended to read:

Subd. 18.

Gambling equipment.

"Gambling equipment" means: bingo hard cards
or paper sheets, linked bingo paper sheets, devices for selecting bingo numbers, new text begin portable
new text end electronic bingo devices, pull-tabs, jar tickets, paddle wheels, paddle wheel tables, paddle
tickets, paddle ticket cards, tipboards, tipboard tickets, promotional tickets that mimic a
pull-tab or tipboard, and pull-tab dispensing devices.

Sec. 4.

Minnesota Statutes 2008, section 349.12, subdivision 25b, is amended to read:

Subd. 25b.

Linked bingo game provider.

"Linked bingo game provider" means
any person who provides the means to link bingo deleted text begin prizes in a linked bingo game, who
provides linked bingo paper sheets to the participating organizations deleted text end new text begin games new text end , who provides
linked bingo prize management, and who provides the linked bingo game system.

Sec. 5.

Minnesota Statutes 2008, section 349.12, subdivision 25c, is amended to read:

Subd. 25c.

Linked bingo game system.

"Linked bingo game system" means the
equipment used by the linked bingo provider to conduct, transmit, and track a linked bingo
game. The system must be approved by the board before its use in this state and it must
have deleted text begin dial-up or other deleted text end new text begin the new text end capability to permit the board to monitor its operation remotely.

Sec. 6.

Minnesota Statutes 2008, section 349.12, subdivision 25d, is amended to read:

Subd. 25d.

Linked bingo prize pool.

"Linked bingo prize pool" means the total
of all prize money that each participating organization has contributed to a linked bingo
game prize and includes any portion of the prize pool that is carried over from one
deleted text begin occasion deleted text end new text begin game new text end to another in a progressive linked bingo game.

Sec. 7.

Minnesota Statutes 2008, section 349.151, subdivision 4c, is amended to read:

Subd. 4c.

Electronic bingo.

(a) The board may by rule authorize but not require the
use of electronic bingo devices.

(b) Rules adopted under paragraph (a):

(1) must limit the number of bingo faces that can be played using an electronic
bingo device to 36;

(2) must require that an electronic bingo device be used with corresponding bingo
paper sheets or a facsimile deleted text begin , printed at the point of sale, deleted text end new text begin of a bingo paper sheet new text end as approved
by the board;

(3) must require that the electronic bingo device site system have deleted text begin dial-up deleted text end new text begin the new text end
capability to permit the board to remotely monitor the operation of the device and the
internal accounting systems; and

(4) must prohibit the price of a face played on an electronic bingo device from being
less than the price of a face on a bingo paper sheet sold at the same occasion.

Sec. 8.

Minnesota Statutes 2008, section 349.16, subdivision 7, is amended to read:

Subd. 7.

Purchase of gambling equipment.

An organization may purchase new text begin or
lease new text end gambling equipment only from a person licensed as a distributor new text begin or linked bingo
game provider new text end .

Sec. 9.

Minnesota Statutes 2008, section 349.1635, subdivision 1, is amended to read:

Subdivision 1.

License required.

No person may do any of the following without
having first obtained a license from the board:

(1) provide the means to link prizes in a linked bingo game;

(2) provide linked bingo game prize management;

(3) provide the linked bingo system; or

(4) provide linked bingo paper sheets new text begin or stationary electronic bingo devices new text end to an
organization.

Sec. 10.

Minnesota Statutes 2008, section 349.17, subdivision 6, is amended to read:

Subd. 6.

Conduct of bingo.

(a) Each bingo hard card and paper sheets must have
five horizontal rows of spaces with each row except one having five numbers. The center
row must have four numbers and the center space marked "free." Each column must
have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also have
numbers that are not preprinted but are filled in by players.

(b) A game of bingo begins with the first letter and number called new text begin or displayed new text end . Each
player must cover deleted text begin or deleted text end new text begin , new text end mark new text begin , or activate new text end the numbers when bingo numbers are randomly
deleted text begin selected, announced, and deleted text end new text begin selected and announced or new text end displayed to the players deleted text begin , either
manually or with a flashboard and monitor deleted text end . The game is won when a player new text begin , using bingo
paper, bingo hard card, or a facsimile of a bingo paper sheet, new text end has deleted text begin covered or marked deleted text end new text begin
completed, as described in the bingo program, new text end a previously designated deleted text begin arrangement of
numbers on the card or sheet deleted text end new text begin pattern or previously determined requirements of the game new text end
and declared bingo. The game is completed when a winning card deleted text begin or deleted text end new text begin , new text end sheet new text begin , or facsimile new text end
is verified and a prize awarded deleted text begin , except that prizes won in linked bingo games may be
awarded deleted text end pursuant to subdivision 3.

Sec. 11.

Minnesota Statutes 2008, section 349.17, subdivision 7, is amended to read:

Subd. 7.

Bar bingo.

An organization may conduct bar bingo subject to the
following restrictions:

(1) the bingo is conducted at a site the organization owns or leases and which has a
license for the sale of intoxicating beverages on the premises under chapter 340A; new text begin and new text end

deleted text begin (2) the bingo is conducted using only bingo paper sheets purchased from a licensed
distributor;
deleted text end

deleted text begin (3) no rent may be paid for a bar bingo occasion; and
deleted text end

deleted text begin (4) the lessor's immediate family and employees may participate if they are not
involved with the sale or operation of bar bingo. deleted text end

new text begin (2) bingo hard cards are not used.
new text end

Sec. 12.

Minnesota Statutes 2008, section 349.17, subdivision 8, is amended to read:

Subd. 8.

Linked bingo games.

(a) A licensed organization may conduct or
participate in deleted text begin not more than two deleted text end linked bingo games deleted text begin per occasion, one deleted text end new text begin , some new text end of which
may be a progressive game in which a portion of the prize is carried over from one
deleted text begin occasion deleted text end new text begin game new text end to another until won by a player achieving a bingo within a predetermined
amount of bingo numbers called.

(b) deleted text begin Each participating licensed organization shall contribute to each prize awarded
in a linked bingo game in an amount not to exceed $300. deleted text end

deleted text begin (c) deleted text end An electronic bingo device as defined in section 349.12, subdivision 12a, may
be used for a linked bingo game. new text begin No more than six stationary electronic bingo devices
may be located at a permitted premises with 200 seats or less. No more than 12 stationary
electronic bingo devices may be located at a permitted premises with 201 seats or more.
Seating capacity is determined as specified under local fire code.
new text end

deleted text begin (d) deleted text end new text begin (c) A stationary electronic bingo device may be located only at a permitted
premises where the organization conducts another form of gambling and the premises is:
new text end

new text begin (1) a licensed premises for on-sale or off-sale of intoxicating liquor or 3.2 percent
malt beverages except that stationary electronic bingo may not be allowed at a licensee
for a general foods store or drug store permitted to operate under section 340A.405,
subdivision 1; or
new text end

new text begin (2) where bingo is conducted and admission is restricted to persons 18 years or older.
new text end

new text begin (d) Prior to a bingo occasion for linked bingo games played on stationary electronic
bingo devices, the linked bingo game provider, on behalf of the participating organizations,
must provide to the board a bingo program in a format prescribed by the board.
new text end

new text begin (e) new text end The board may adopt rules to:

(1) specify the manner in which a linked bingo game must be played and how the
linked bingo prizes must be awarded;

(2) specify the records to be maintained by a linked bingo game provider;

(3) require the submission of periodic reports by the linked bingo game provider and
specify the content of the reports;

(4) establish the qualifications required to be licensed as a linked bingo game
provider; and

(5) any other matter involving the operation of a linked bingo game.

Sec. 13.

Minnesota Statutes 2008, section 349.18, subdivision 1, is amended to read:

Subdivision 1.

Lease or ownership required; rent limitations.

(a) An organization
may conduct lawful gambling only on premises it owns or leases. Leases must be on a
form prescribed by the board. The term of the lease may not begin before the effective date
of the premises permit and must expire on the same day that the premises permit expires.
Leases approved by the board must specify that the board may authorize an organization
to withhold rent from a lessor for a period of up to 90 days if the board determines that
illegal gambling occurred on the premises and that the lessor or its employees participated
in the illegal gambling or knew of the gambling and did not take prompt action to stop the
gambling. The lease must authorize the continued tenancy of the organization without
the payment of rent during the time period determined by the board under this paragraph.
Copies of all leases must be made available to employees of the board and the Division of
Alcohol and Gambling Enforcement on request. deleted text begin The board may prescribe by rule limits
on the amount of rent which an organization may pay to a lessor for premises leased for
bingo. Any rule adopted by the board limiting the amount of rent to be paid may only be
effective for leases entered into, or renewed, after the effective date of the rule. deleted text end

(b) Rent paid by an organization for leased premises for the conduct of pull-tabs,
tipboards, and paddle wheels is subject to the following limits:

(1) for booth operations, including booth operations where a pull-tab dispensing
device is located, booth operations where a bar operation is also conducted, and booth
operations where both a pull-tab dispensing device is located and a bar operation is also
conducted, the maximum rent is:

(i) in any month where the organization's gross profit at those premises does not
exceed $4,000, up to $400; and

(ii) in any month where the organization's gross profit at those premises exceeds
$4,000, up to $400 plus not more than ten percent of the gross profit for that month in
excess of $4,000;

(2) for bar operations, including bar operations where a pull-tab dispensing device
is located but not including bar operations subject to clause (1), and for locations where
only a pull-tab dispensing device is located:

(i) in any month where the organization's gross profit at those premises does not
exceed $1,000, up to $200; and

(ii) in any month where the organization's gross profit at those premises exceeds
$1,000, up to $200 plus not more than 20 percent of the gross profit for that month
in excess of $1,000;

(3) a lease not governed by clauses (1) and (2) must be approved by the board
before becoming effective;

(4) total rent paid to a lessor from all organizations from leases governed by clause
(1) may not exceed $1,750 per month. Total rent paid to a lessor from all organizations
from leases governed by clause (2) may not exceed $2,500 per month.

(c) Rent paid by an organization for leased premises for the conduct of bingo is
subject to either of the following limits at the option of the parties to the lease:

(1) not more than ten percent of the monthly gross profit from all lawful gambling
activities held during bingo occasions excluding bar bingo or at a rate based on a cost per
square foot not to exceed 110 percent of a comparable cost per square foot for leased space
as approved by the director; and

(2) no rent may be paid for bar bingo new text begin , except as allowed under section 349.185 new text end .

(d) Amounts paid as rent under leases are all-inclusive. No other services or
expenses provided or contracted by the lessor may be paid by the organization, including,
but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn
services, electricity, heat, security, security monitoring, storage, other utilities or services,
and, in the case of bar operations, cash shortages, unless approved by the director. Any
other expenditure made by an organization that is related to a leased premises must be
approved by the director. An organization may not provide any compensation or thing of
value to a lessor or the lessor's employees from any fund source other than its gambling
account. Rent payments may not be made to an individual.

(e) Notwithstanding paragraph (b), an organization may pay a lessor for food or
beverages or meeting room rental if the charge made is comparable to similar charges
made to other individuals or groups.

(f) No entity other than the licensed organization may conduct any activity within
a booth operation on a leased premises.

(g) Employees of a lessor not involved in the conduct of lawful gambling on the
premises or nongambling employees of an organization conducting lawful gambling on
the premises may participate in lawful gambling on the premises provided if pull-tabs or
tipboards are sold, the organization posts the major prizes awarded.

(h) A gambling employee may purchase pull-tabs or tipboards at the site of the
employee's place of employment provided:

(1) the organization posts the major prizes for pull-tab or tipboard games; and

(2) the employee is not involved in the sale of pull-tabs or tipboards at that site.

(i) At a leased site where an organization uses a paddle wheel consisting of 32
numbers or less or a tipboard consisting of 32 tickets or less, tickets may be sold
throughout the permitted premises, but winning tickets must be redeemed, the paddle
wheel must be located, and the tipboard seal must be opened within the leased premises.

Sec. 14.

new text begin [349.185] GROSS PROFIT ALLOCATION; STATIONARY
ELECTRONIC BINGO.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, a "year" is determined to
start on the first date of operation of a stationary electronic bingo device at a permitted
premises.
new text end

new text begin Subd. 2. new text end

new text begin Gross profit allocation. new text end

new text begin The allocation of gross profits from the operation
of a stationary electronic bingo device is as follows:
new text end

new text begin (a) The licensed organization shall receive:
new text end

new text begin (1) a minimum of 50 percent of gross profits to be used exclusively for lawful
purpose expenditures as defined under section 349.12, subdivision 25; and
new text end

new text begin (2) no more than 15 percent each year for allowable expenses as defined under
section 349.12, subdivision 3a, including the cost of a lease or purchase of the stationary
electronic bingo devices.
new text end

new text begin (b) A linked bingo game provider shall receive no more than 25 percent of gross
profits in the first year, no more than 19 percent in the second year, and no more than 15
percent thereafter.
new text end

new text begin (c) When a stationary electronic bingo device is placed in a location where the
primary business is not bingo, the allocation for rent to the lessor shall be no more than
ten percent of gross profits in the first year, no more than 16 percent in the second year,
and no more than 20 percent thereafter. The lessor and the lessor's employees shall
operate the devices on behalf of the licensed organization, and the lessor is responsible
for cash shortages.
new text end

new text begin (d) When a stationary electronic bingo device is placed in a location where the
primary business is bingo, the lessor is limited to the rent limitations under section 349.18,
subdivision 1, paragraph (c), clause (1).
new text end

Sec. 15.

Minnesota Statutes 2008, section 349.211, subdivision 1a, is amended to read:

Subd. 1a.

Linked bingo prizes.

Prizes for a linked bingo game shall be limited
as follows:

(1) deleted text begin no deleted text end new text begin for each participating permitted premises, an new text end organization may new text begin not new text end contribute
more than $300 per linked bingo game to a linked bingo prize pool deleted text begin ; deleted text end new text begin , and for a linked bingo
game played with stationary electronic bingo devices an organization may not contribute
more than 85 percent of the gross receipts to a linked bingo game prize pool; new text end

(2) deleted text begin no deleted text end new text begin an new text end organization may new text begin not new text end award more than $200 for a linked bingo game
consolation prize. For purposes of this subdivision, a linked bingo game consolation
prize is a prize awarded by an organization after a prize from the linked bingo prize pool
has been won; and

(3) for a progressive linked bingo game, if no player declares a valid bingo within
the predetermined amount of bingo numbers called, a portion of the prize is carried over to
another deleted text begin occasion deleted text end new text begin game new text end until the accumulated prize is won. The portion of the prize that is
not carried over must be awarded to the first player or players who declares a valid bingo
as additional numbers are called. If a valid bingo is declared within the predetermined
amount of bingo numbers called, the entire prize pool for that game is awarded to the
winner. deleted text begin The annual limit for progressive bingo game prizes contained in subdivision 2
must be reduced by the amount an organization contributes to progressive linked bingo
games during the same calendar year.
deleted text end

Sec. 16. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 15 are effective July 1, 2009.
new text end