HF 1570

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to gambling; providing revenue to hospitals
from the operation of gaming machines in licensed
hospitals under contracts with the state lottery;
amending Minnesota Statutes 2004, sections 299L.07,
subdivisions 2, 2a; 340A.410, subdivision 5; 349A.01,
subdivision 10, by adding subdivisions; 349A.10,
subdivision 3; 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 GAMING MACHINES; IN-LIEU
TAX.
new text end

new text begin Adjusted gross revenue from the operation of gaming
machines authorized under chapter 349A is 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 adjusted gross revenue from the operation
of gaming machines, as defined in section 349A.01, for the
previous month multiplied by (1) until June 30, 2007, 55.5
percent, (2) from July 1, 2007 to June 30, 2009, 31.5 percent,
and (3) on and after July 1, 2009, 40 percent. The commissioner
shall deposit the money transmitted under this paragraph in the
state treasury in the general fund. Of the money deposited into
the general fund under this section, the following amounts are
annually appropriated:
new text end

new text begin (1) an amount equal to 2.5 percent of the adjusted gross
revenue from the operation of gaming machines is annually
appropriated to the commissioner of human services for:
new text end

new text begin (i) programs for the treatment of compulsive gamblers under
section 245.98, subdivision 2; and
new text end

new text begin (ii) reimbursements to counties for their costs of
screening offenders for compulsive gambling under section
609.115, subdivision 9, paragraph (c);
new text end

new text begin (2) an amount equal to one percent of the adjusted gross
revenue from the operation of gaming machines is annually
appropriated to the commissioner of corrections to defray the
costs incurred by the department, or community corrections
counties, of conducting presentence investigations and
supervised release of offenders who score five or more on the
South Oaks gambling screen;
new text end

new text begin (3) an amount equal to one percent of the adjusted gross
revenue from the operation of gaming machines is annually
appropriated to the district courts;
new text end

new text begin (4) an amount equal to 0.5 percent of adjusted gross
revenue from the operation of gaming machines is appropriated to
the Board of Public Defense; and
new text end

new text begin (5) an amount equal to the remaining balance of the money
transmitted to the state treasury under this section is annually
appropriated to the commissioner of human services for
distribution to hospitals licensed under section 144.50 in
proportion to the medical assistance provided by each hospital
in the preceding calendar year.
new text end

Sec. 2.

Minnesota Statutes 2004, 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 possessed by the state lottery as authorized
under chapter 349A new text end .

Sec. 3.

Minnesota Statutes 2004, 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 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 as authorized under chapter 349A new text end .

Sec. 4.

Minnesota Statutes 2004, 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 on the premises of a
licensed racetrack as authorized by chapter 349A.
new text end

Sec. 5.

Minnesota Statutes 2004, section 349A.01,
subdivision 10, is amended to read:

Subd. 10.

Lottery procurement contract.

"Lottery
procurement contract" means a contract to provide lottery
products, new text begin gaming machines, maintenance of gaming machines,
new text end computer hardware and software used to monitor sales of lottery
tickets, new text begin and gaming machine plays new text end and lottery tickets. "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. 6.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:

new text begin Subd. 14. new text end

new text begin Gaming machine. new text end

new text begin "Gaming machine" means any
machine in which a coin token or other currency is deposited to
play a game that uses a video display and microprocessors or an
electromechanical device with a spinning reel.
new text end

Sec. 7.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:

new text begin Subd. 15. new text end

new text begin Gaming machine game. new text end

new text begin "Gaming machine game"
means a game operated by a gaming machine as authorized by the
director.
new text end

Sec. 8.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:

new text begin Subd. 16. new text end

new text begin Gaming machine play. new text end

new text begin "Gaming machine play"
means an electronic record that proves participation in a gaming
machine game.
new text end

Sec. 9.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:

new text begin Subd. 17. new text end

new text begin Adjusted gross gaming machine
revenue. new text end

new text begin "Adjusted gross gaming machine revenue" means the sum
of all money received by the lottery for gaming machine plays,
less the amount paid out in prizes for gaming machine games.
new text end

Sec. 10.

Minnesota Statutes 2004, section 349A.10,
subdivision 3, is amended to read:

Subd. 3.

Lottery operations.

(a) The director shall
establish a lottery operations account in the lottery fund. The
director shall pay all costs of operating the lottery, including
payroll costs or amounts transferred to the state treasury for
payroll costs, but not including lottery prizes, from the
lottery operating account. The director shall credit to the
lottery operations account amounts sufficient to pay the
operating costs of the lottery.

(b) Except as provided in paragraph (e), the director may
not credit in any fiscal year thereafter amounts to the lottery
operations account which when totaled exceed 15 percent of gross
revenue to the lottery fund in that fiscal year. In computing
total amounts credited to the lottery operations account under
this paragraph the director shall disregard amounts transferred
to or retained by lottery retailers as sales commissions or
other compensation new text begin and amounts transferred or retained by a
hospital pursuant to a location contract under section 349A.17 new text end .

(c) The director of the lottery may not expend after July
1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
year for contracts for the preparation, publication, and
placement of advertising.

(d) Except as the director determines, the lottery is not
subject to chapter 16A relating to budgeting, payroll, and the
purchase of goods and services.

(e) In addition to the amounts credited to the lottery
operations account under paragraph (b), the director is
authorized, if necessary, to meet the current obligations of the
lottery and to credit up to 25 percent of an amount equal to the
average annual amount which was authorized to be credited to the
lottery operations account for the previous three fiscal years
but was not needed to meet the obligations of the lottery.

Sec. 11.

Minnesota Statutes 2004, 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;

(2) authorizes the director to install or operate a lottery
device operated by coin or currency which when operated
determines the winner of a game new text begin except as authorized under
section 349A.17 new text end ; and

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

Sec. 12.

new text begin [349A.17] GAMING MACHINES.
new text end

new text begin Subdivision 1. new text end

new text begin Location contract. new text end

new text begin The director may enter
into a contract with a person or persons to provide locations
for gaming machines. Contracts entered into under this section
are not subject to chapter 16C. The director may only enter
contracts under this subdivision with hospitals licensed under
section 144.50 as of the effective date of this act. The gaming
machines may only be placed at such hospitals.
new text end

new text begin Subd. 2. new text end

new text begin Operation. new text end

new text begin (a) All gaming machines that are
placed at a hospital pursuant to subdivision 1 must be operated
and controlled by the director.
new text end

new text begin (b) Gaming machines must be owned or leased by the director.
new text end

new text begin (c) Gaming machines must be maintained by the lottery, or
by a vendor that is under the control and direction of the
director.
new text end

new text begin (d) The director must have a central communications system
that monitors activities on each gaming machine. The central
communication system must be located at a lottery office.
new text end

new text begin (e) The director must supervise the counting of money taken
from gaming machines.
new text end

new text begin (f) The director must supervise the general security
arrangements associated with and relating to the operation of
the gaming machines, and implement procedures as deemed
appropriate.
new text end

new text begin (g) Advertising and promotional material produced by
hospitals relating to gaming machines located at such facilities
must be approved by the director.
new text end

new text begin (h) The director may implement such other controls as are
deemed necessary for the operation of gaming machines pursuant
to this section.
new text end

new text begin Subd. 3. new text end

new text begin Specifications. new text end

new text begin Gaming machines must:
new text end

new text begin (1) maintain on nonresettable meters a permanent record,
capable of being printed out, of all transactions by the machine
and all entries into the machine; and
new text end

new text begin (2) be capable of being linked electronically to a central
communication system to provide auditing program information as
required by the director.
new text end

new text begin Subd. 4. new text end

new text begin Games. new text end

new text begin The director shall specify the games
that may be placed on a gaming machine as set forth under
section 349A.04. Gaming machines may conduct pari-mutuel
wagering and display horse races pursuant to specifications set
forth by the director.
new text end

new text begin Subd. 5. new text end

new text begin Examination of machines. new text end

new text begin The director shall
examine prototypes of gaming machines and require that the
manufacturer of the machine pay the cost of the examination.
The director may contract for the examination of gaming machines.
new text end

new text begin Subd. 6. new text end

new text begin Testing of machines. new text end

new text begin The director may require
working models of a gaming machine to be transported to the
locations the director designates for testing, examination, and
analysis. The manufacturer shall pay all costs for testing,
examination, analysis, and transportation of the machine model.
new text end

new text begin Subd. 7. new text end

new text begin Prizes. new text end

new text begin A person who plays a gaming machine
agrees to be bound by the rules and game procedures applicable
to that particular gaming machine game. The player acknowledges
that the determination of whether the player has won a prize is
subject to the rules and game procedures adopted by the
director, claim procedures established by the director for the
game, and any confidential or public validation tests
established by the director for that game. A person under 18
years of age may not claim a prize from the operation of a
gaming machine. A prize claimed from the play of a gaming
machine game is not subject to the provisions of section
349A.08, subdivision 8.
new text end

new text begin Subd. 8. new text end

new text begin Prohibitions. new text end

new text begin (a) A person under the age of 18
years may not play a game on a gaming machine.
new text end

new text begin (b) The director or any employee of the lottery, or a
member of their immediate family residing in the same household,
may not play a game on a gaming machine or receive a prize from
the operation of a gaming machine.
new text end

new text begin Subd. 9. new text end

new text begin Compulsive gambling notice. new text end

new text begin The director shall
prominently post, in the area where the gaming machines are
located, the toll-free telephone number established by the
commissioner of human services in connection with the compulsive
gambling program established under section 245.98. The director
and the location provider shall establish a proactive plan to
identify problem gamblers and take appropriate action. By
January 15 of each year, the director shall submit a report to
the legislature, of not more than five pages in length, setting
forth the performance objectives of the plan and the progress
that was made toward those objectives during the prior calendar
year.
new text end

new text begin Subd. 10. new text end

new text begin Local licenses. new text end

new text begin Except as provided in
subdivision 1, no political subdivision may require a license to
operate a gaming machine, restrict or regulate the placement of
gaming machines, or impose a tax or fee on the business of
operating gaming machines.
new text end

Sec. 13.

Minnesota Statutes 2004, 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 purchase
of gaming machine plays as authorized under chapter 349A, new text end or
gambling authorized under chapters 349 and 349A.

Sec. 14.

Minnesota Statutes 2004, 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 or other wagering
authorized new text end under chapter 349A; (3) gaming activities conducted
pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et
seq.; or (4) lawful gambling activities permitted under chapter
349.

Sec. 15.

Minnesota Statutes 2004, 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.

(8) The purchase and sale of state lottery tickets new text begin and
plays on a gaming machine new text end under chapter 349A.

Sec. 16.

Minnesota Statutes 2004, 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 under
chapter 349A new text begin , or the manufacture, possession, sale, or operation
of a gaming machine under chapter 349A new text end .

Sec. 17. new text begin EFFECTIVE DATE.
new text end

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