Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

HF 2339

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:03am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 04/20/2009

Current Version - as introduced

Line numbers 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12
1.13 1.14
1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24
1.25 1.26 2.1 2.2 2.3 2.4
2.5 2.6 2.7 2.8
2.9 2.10 2.11 2.12
2.13 2.14 2.15 2.16 2.17
2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29
2.30 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25
3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 4.1 4.2 4.3 4.4 4.5
4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16
4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 5.34 5.35 5.36 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 6.34 6.35 6.36 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14
7.15 7.16
7.17 7.18
7.19 7.20 7.21 7.22 7.23 7.24 7.25
7.26 7.27 7.28 7.29 7.30 7.31 7.32 7.33 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8
8.9 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 8.20 8.21 8.22 8.23 8.24
8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 9.1 9.2 9.3 9.4 9.5 9.6
9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21
9.22 9.23 9.24 9.25 9.26 9.27 9.28 9.29 9.30 9.31
9.32 9.33 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13
10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26
10.27 10.28 10.29 10.30 10.31 10.32 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13
11.14 11.15 11.16 11.17 11.18 11.19 11.20
11.21 11.22 11.23 11.24
11.25 11.26
11.27 11.28
11.29 11.30 11.31 11.32 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10
12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18
12.19 12.20 12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32 12.33 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11 13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19 13.20 13.21 13.22 13.23 13.24 13.25 13.26 13.27 13.28 13.29 13.30 13.31 13.32 13.33 13.34 13.35 13.36 14.1 14.2 14.3 14.4 14.5 14.6
14.7 14.8
14.9 14.10
14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18
14.19 14.20 14.21 14.22 14.23 14.24
14.25 14.26

A bill for an act
relating to gambling; authorizing the director of the State Lottery to establish
lottery gaming machines and enter into a contract for the management and
placement of the machines; providing powers and duties to the director;
providing for gaming machine revenue; amending Minnesota Statutes 2008,
sections 240.13, by adding a subdivision; 240.35, subdivision 1; 297A.94;
299L.02, subdivision 1; 299L.07, subdivisions 2, 2a; 340A.410, subdivision
5; 349A.01, subdivision 10, by adding subdivisions; 349A.04; 349A.10,
subdivisions 3, 6; 349A.13; 541.20; 541.21; 609.651, subdivision 1; 609.75,
subdivisions 3, 4; 609.761, by adding a subdivision; proposing coding for new
law in Minnesota Statutes, chapters 297A; 349A.

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

ARTICLE 1

OPERATIONS

Section 1.

Minnesota Statutes 2008, 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 begingaming machines, maintenance of gaming machines,
new text endcomputer hardware and software used to monitor sales of lottery ticketsnew text begin and gaming
machine plays, equipment used to conduct and monitor other lottery games at a gaming
facility, equipment used for the conducting of other lottery games
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. 2.

Minnesota Statutes 2008, 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, system, or
device which, upon payment of consideration in order to play a game, may award or
entitle a player to a prize by reason of skill of the player or application of the element
of chance, or both.
new text end

Sec. 3.

Minnesota Statutes 2008, 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. 4.

Minnesota Statutes 2008, 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 a record that
proves participation in a gaming machine game.
new text end

Sec. 5.

Minnesota Statutes 2008, 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 for gaming machine plays less the
amount paid out in prizes.
new text end

Sec. 6.

Minnesota Statutes 2008, 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 beginand
deleted text end

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

new text begin (6) gaming machine games; and
new text end

new text begin (7) cost of gaming machine playsnew text end.

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

Sec. 7.

Minnesota Statutes 2008, 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
nine 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 compensationnew text begin and amounts transferred to or retained by a racetrack 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.

new text begin (f) Notwithstanding the provisions of this subdivision, the director may not credit, in
any fiscal year, to the lottery operations account which when totaled exceed ten percent of
adjusted gross revenue from the operation of gaming machines at the racetrack.
new text end

Sec. 8.

Minnesota Statutes 2008, section 349A.10, subdivision 6, is amended to read:


Subd. 6.

Budget; plans.

The director shall prepare and submit a biennial budget
plan to the commissioner of finance. The governor shall recommend the maximum
amount available for the lottery in the budget the governor submits to the legislature under
section 16A.11. The maximum amount available to the lottery for operating expenses and
capital expenditures shall be determined by law. Operating expenses shall not include
expenses that are a direct function of lottery sales, which include the cost of lottery prizes,
amounts paid to lottery retailers as sales commissions or other compensation, amounts
paid to produce and deliver scratch lottery games, deleted text beginanddeleted text end amounts paid to an outside vendor
to operate and maintain an online gaming systemnew text begin, amounts paid to an outside vendor to
operate and maintain a central system for gaming machines, and amounts paid to acquire
and maintain gaming machines
new text end. In addition, the director shall appear at least once each
fiscal year before the senate and house of representatives committees having jurisdiction
over gambling policy to present and explain the lottery's plans for future games and the
related advertising and promotions and spending plans for the next fiscal year.

Sec. 9.

Minnesota Statutes 2008, 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 gamenew 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. 10.

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 (a) The director may enter into a contract with
a person to provide locations for gaming machines. Contracts entered into under this
section are not subject to chapter 16C. The director may only enter a contract under this
subdivision with a person that holds a class A license under chapter 240. The gaming
machines may only be placed at the racetrack for which the class A license under chapter
240 was issued.
new text end

new text begin (b) In order to be eligible for a contract under this section, at least 50 days of live
racing must have been conducted at the licensee's class A facility in the preceding year. A
contract under this section must contain a provision under which the contract terminates
on the first day of any calendar year following a calendar year during which fewer than 50
days of live racing were conducted at the licensee's class A facility.
new text end

new text begin (c) Contracts entered into must provide for compensation to the licensee in an
amount equal to at least 65 percent of adjusted gross gaming machine revenue. From the
amount received by the licensee under this section, the licensee shall annually remit an
amount equal to one-half of one percent of the adjusted gross gaming machine revenue to
both the city or town and the county where the racetrack is located.
new text end

new text begin (d) The director may cancel, suspend, or refuse to renew the location contract or
impose a civil penalty if the licensee:
new text end

new text begin (1) no longer holds a class A license under chapter 240;
new text end

new text begin (2) fails to account for proceeds from the gaming machines;
new text end

new text begin (3) fails to remit funds to the director in accordance with the location contract;
new text end

new text begin (4) violates a law, rule, or order of the director;
new text end

new text begin (5) fails to comply with any of the terms of the location contract; or
new text end

new text begin (6) has acted in a manner prejudicial to public confidence in the integrity of the
operation of the gaming machines.
new text end

new text begin The cancellation, suspension, or refusal to renew the location contract or imposition
of a civil penalty under this paragraph is a contested case under sections 14.57 to 14.69.
new text end

new text begin (e) No gaming machines may be located within a home rule charter or statutory city
or town unless the governing body of the city or town adopts a resolution approving the
location of the gaming machines within the city or town.
new text end

new text begin (f) The contract entered into under this section must provide for the following
provisions:
new text end

new text begin (1) Liquidated damages to recover the initial investment by the licensee in the event
the state, through legislation or constitutional amendment, revokes all or substantially all
of the forms of gambling authorized under this section. The liquidated damages may not
be greater than the unpaid balance of any debt incurred by the licensee after the location
contract has been executed and is limited to the debt incurred by the licensee for the
gaming facility license, initial construction, or acquisition of the gaming facility less the
present market value of the property or other assets related to the debt. Any liquidated
damages provision must expire within ten years.
new text end

new text begin (2) All costs associated with managing the day-to-day activity of gaming machines,
including, but not limited to, routine and minor service and maintenance, security
monitoring, verifying winners, paying winners, collecting money from gaming machines,
and advertising and marketing of gaming machines shall be borne by the licensee.
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 racetrack 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
and provides auditing program information on each gaming machine. The central
communications system must be located at a lottery office.
new text end

new text begin (e) The director must approve the general security arrangements associated with and
relating to the operation of the gaming machines.
new text end

new text begin (f) Advertising and promotional material produced by the licensee relating to gaming
machines located at the racetrack must be approved by the director.
new text end

new text begin (g) There must be a reasonable number of gaming machines that are accessible
to individuals with disabilities. For the purposes of this subdivision, "individuals with
disabilities" includes any person who has a physical or sensory impairment which
materially limits one or more major life activities.
new text end

new text begin (h) A reasonable number of gaming machines that are placed at a racetrack pursuant
to subdivision 1 must afford players the option to receive winnings in the form of either
coins or tokens rather than in the form of a paper receipt.
new text end

new text begin (i) Gaming machines must maintain on nonresettable meters a permanent record,
capable of being printed out, of all transactions by the machine and all entries into the
machine.
new text end

new text begin (j) The director may implement other controls as are deemed necessary to ensure
and maintain the integrity of gaming machines operated under this section.
new text end

new text begin Subd. 3. 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. 4. 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. The
director may require working models of a gaming machine 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 machine model.
new text end

new text begin Subd. 5. new text end

new text begin Prizes. new text end

new text begin A person who plays a gaming machine or plays any other lottery
game at the gaming facility agrees to be bound by the rules and game procedures
applicable to that particular 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 that game, and any
confidential or public validation tests established by the director for that game. A prize
claimed from the play of a gaming machine game or the conduct of any other lottery game
is not subject to section 349A.08, subdivision 8.
new text end

new text begin Subd. 6. new text end

new text begin Odds. new text end

new text begin The approximate odds of winning a prize from a gaming machine
must be displayed on the face of the screen.
new text end

new text begin Subd. 7. new text end

new text begin Prohibitions. new text end

new text begin A person under the age of 18 years may not play a game on
a gaming machine or claim a prize from the operation of a gaming machine.
new text end

new text begin Subd. 8. new text end

new text begin Compulsive gambling notice. new text end

new text begin The licensee shall prominently post, in
areas of the gaming facility where gaming machines are located, the toll-free telephone
number established by the commissioner of human services in connection with the
problem and compulsive gambling program. The licensee shall establish, with the
approval of the director, a proactive plan relating to problem and compulsive gambling.
new text end

new text begin Subd. 9. new text end

new text begin Local licenses; local fees. new text end

new text begin A political subdivision may not 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

new text begin Subd. 10. new text end

new text begin Reimbursement; racing commission. new text end

new text begin The racing commission under
section 240.02 shall require the licensee to reimburse the commission's actual costs,
including personnel costs, of regulating the licensee under this section. Amounts received
under this subdivision must be deposited as provided in section 240.155, subdivision 1.
new text end

Sec. 11. new text beginEFFECTIVE DATE.
new text end

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

ARTICLE 2

CONFORMING AMENDMENTS

Section 1.

Minnesota Statutes 2008, section 240.35, subdivision 1, is amended to read:


Subdivision 1.

Generally.

A licensee of the commission may detain a person if
the licensee has probable cause to believe that the person detained has violated section
609.76 while at a card club authorized by section 240.30new text begin or at a racetrack where gaming
machines are located under section 349A.17
new text end. For purposes of this section, "licensee"
means the commission's director of racing security or a security officer licensed under
Minnesota Rules, chapter 7878.

Sec. 2.

Minnesota Statutes 2008, 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 owning and operating of gaming machines 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. 3.

Minnesota Statutes 2008, 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 beginand
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 gamblingnew text begin; and
new text end

new text begin (5) may be possessed by the State Lottery as authorized under chapter 349Anew text end.

Sec. 4.

Minnesota Statutes 2008, 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 sectionnew text begin or to the State Lottery as authorized under chapter 349Anew 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 beginor
deleted text end

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

new text begin (5) the State Lottery as authorized under chapter 349Anew text end.

Sec. 5.

Minnesota Statutes 2008, 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 at a racetrack
as authorized by chapter 349A.
new text end

Sec. 6.

Minnesota Statutes 2008, 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 beginpurchase of gaming machine plays as authorized under
chapter 349A,
new text endor gambling authorized under chapters 349 and 349A.

Sec. 7.

Minnesota Statutes 2008, 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 beginor other wagering authorized new text endunder 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. 8.

Minnesota Statutes 2008, section 609.651, subdivision 1, is amended to read:


Subdivision 1.

deleted text beginFelonydeleted text endnew text begin Fraudnew text end.

A person is guilty of a felony and may be sentenced
under subdivision 4 if the person does any of the following with intent to defraud the
State Lottery:

(1) alters or counterfeits a state lottery ticket new text beginor a credit receipt from a state lottery
gaming machine
new text end;

(2) knowingly presents an altered or counterfeited state lottery ticket new text beginor credit receipt
from a state lottery gaming machine
new text endfor payment;

(3) knowingly transfers an altered or counterfeited state lottery ticket new text beginor credit
receipt from a state lottery gaming machine
new text endto another person; deleted text beginor
deleted text end

(4) new text begintampers with or manipulates the outcome, prize payable, or operation of a state
lottery gaming machine; or
new text end

new text begin (5) new text endotherwise claims a lottery prize by means of fraud, deceit, or misrepresentation.

Sec. 9.

Minnesota Statutes 2008, 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 beginand plays on a gaming machine
new text endunder chapter 349A.

Sec. 10.

Minnesota Statutes 2008, section 609.75, subdivision 4, is amended to read:


Subd. 4.

Gambling device.

A gambling device is a contrivance the purpose of which
is that for a consideration a player is afforded an opportunity to obtain something of value,
other than free plays, automatically from the machine or otherwise, the award of which
is determined principally by chance, whether or not the contrivance is actually played.
"Gambling device" also includes a video game of chance, as defined in subdivision 8new text begin, but
does not include a gaming machine operated by the State Lottery under chapter 349A
new text end.

Sec. 11.

Minnesota Statutes 2008, section 609.761, is amended by adding a subdivision
to read:


new text begin Subd. 6. new text end

new text begin Gaming machines. new text end

new text begin Sections 609.755 and 609.76 do not prohibit the
manufacture, possession, sale, or operation of a gaming machine under chapter 349A.
new text end

Sec. 12. new text beginEFFECTIVE DATE.
new text end

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

ARTICLE 3

REVENUE

Section 1.

Minnesota Statutes 2008, section 240.13, is amended by adding a
subdivision to read:


new text begin Subd. 5a. new text end

new text begin Set asides; gaming machines. new text end

new text begin From the commission received by a
licensee pursuant to a gaming machine location contract entered into under section
349A.17, the licensee must set aside an amount equal to not less than the following
percentages of the adjusted gross gaming machine revenues as defined under chapter 349A:
new text end

new text begin (1) 12 percent for purses for live horse races conducted by the licensee. Purse
payments made pursuant to this subdivision are in addition to purse payments otherwise
established by law or contract;
new text end

new text begin (2) one percent to be transferred to the commission and used for the purposes
in section 240.18, subdivisions 2, paragraph (d), and 3, paragraph (b), subject to the
proportionality requirement in section 240.18, subdivision 1; and
new text end

new text begin (3) one percent to be transferred to the commissioner of agriculture to be used for
grants for the purpose of nonracing equine development and promotion.
new text end

Sec. 2.

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 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 adjusted gross revenue from the operation of gaming machines, as defined
in section 349A.01, for the previous month multiplied by 25 percent. The commissioner
shall deposit the money transmitted under this section in the state treasury as provided
in section 297A.94.
new text end

Sec. 3.

Minnesota Statutes 2008, 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 finance 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) deleted text beginFor fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
for fiscal year 2004 and thereafter,
deleted text end 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) Revenue, including interest and penalties, 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 endThe 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.

Sec. 4. new text beginEFFECTIVE DATE.
new text end

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

ARTICLE 4

MISCELLANEOUS

Section 1. new text beginLOTTERY BUDGET; GAMING MACHINES.
new text end

new text begin The director of the State Lottery shall submit a budget for the operation of gaming
machines at a racetrack as authorized under Minnesota Statutes, section 349A.17, to
the commissioner of finance. Notwithstanding Minnesota Statutes, section 349A.10,
subdivision 6, the director of the State Lottery may expend amounts necessary to operate
gaming machines. Amounts expended by the director of the State Lottery for the conduct
of gaming machines in fiscal years 2010 and 2011 are not subject to the maximum amount
set in law for the operation of the lottery.
new text end

Sec. 2. new text beginSEVERABILITY; 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 the Constitution of the United States, 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. 3. new text beginEFFECTIVE DATE.
new text end

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