SF 449

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

A bill for an act
relating to gambling; authorizing the state lottery to
offer games involving sports wagering and sports
wagering pools; authorizing sports bookmaking under
licenses issued by the director of the state lottery;
imposing a tax on licensed sports bookmaking; creating
a Minnesota active recreation fund; amending Minnesota
Statutes 2004, sections 349A.01, by adding a
subdivision; 349A.02, subdivision 3; 349A.04; 349A.06,
subdivisions 1, 5, 6, 7, 8, 11; 349A.08; 349A.09;
349A.10, subdivisions 4, 5; 349A.11, subdivision 1;
349A.12; 349A.13; 609.75, subdivision 7; proposing
coding for new law in Minnesota Statutes, chapter 349A.

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

Section 1.

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 Sports games. new text end

new text begin "Sports games" are wagering
pools and sports wagering systems in which winning chances or
wagers are determined by the outcome of professional sports
events.
new text end

Sec. 2.

Minnesota Statutes 2004, section 349A.02,
subdivision 3, is amended to read:

Subd. 3.

Powers and duties.

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

(1) adopt rules and game procedures new text begin , including game
procedures for sports games new text end ;

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

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

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

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

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

(7) take all necessary steps to ensure the integrity of,
and public confidence in, the State Lottery.

Sec. 3.

Minnesota Statutes 2004, 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 new text begin , including sports games new text end ;

(2) ticket prices;

(3) number and size of prizes;

(4) methods of selecting winning tickets new text begin and determining
winners of sports games new text end ; and

(5) frequency and method of drawings.

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

Sec. 4.

Minnesota Statutes 2004, section 349A.06,
subdivision 1, is amended to read:

Subdivision 1.

Contracts.

The director shall sell
tickets for the lottery new text begin and conduct sports games new text end through lottery
retailers with whom the director contracts. Contracts under
this section are not subject to the provisions of sections
16C.03, 16C.05, 16C.06, 16C.08, 16C.09, and 16C.10, and are
valid for a period of one year. The director may permit a
retailer to sell tickets new text begin and participate in the conduct of
sports games new text end at more than one business location under a contract
entered into under this section.

Sec. 5.

Minnesota Statutes 2004, section 349A.06,
subdivision 5, is amended to read:

Subd. 5.

Restrictions on lottery retailers.

(a) A
lottery retailer may sell lottery tickets new text begin and participate in the
conduct of sports games new text end only on the premises described in the
contract.

(b) A lottery retailer must prominently display a
certificate issued by the director on the premises where lottery
tickets will be sold new text begin and sports games conducted new text end .

(c) A lottery retailer must keep a complete set of books of
account, correspondence, and all other records necessary to show
fully the retailer's lottery transactions, and make them
available for inspection by employees of the lottery at all
times during business hours. The director may require a lottery
retailer to furnish information as the director deems necessary
to carry out the purposes of this chapter, and may require an
audit to be made of the books of account and records. The
director may select an auditor to perform the audit and may
require the retailer to pay the cost of the audit. The auditor
has the same right of access to the books of account,
correspondence, and other records as is given to employees of
the lottery.

(d) A contract issued under this section may not be
transferred or assigned.

(e) The director shall require that lottery tickets may be
sold by retailers only for cash.

(f) A lottery retailer must prominently post at the point
of sale of lottery tickets new text begin and location where sports games are
conducted new text end , in a manner approved by the commissioner of human
services, the toll-free telephone number established by the
commissioner of human services in connection with the compulsive
gambling program established under section 245.98.

Sec. 6.

Minnesota Statutes 2004, section 349A.06,
subdivision 6, is amended to read:

Subd. 6.

Retention by retailers.

The director may by
rule provide for:

(1) amounts which a lottery retailer may retain from gross
receipts from the sale of lottery tickets new text begin and from sports games
new text end in order to pay prizes to holders of winning tickets new text begin and make
payments on winning wagers new text end ; and

(2) amounts which a lottery retailer may retain from gross
receipts deleted text begin from the sale of lottery tickets deleted text end as a commission.

Sec. 7.

Minnesota Statutes 2004, section 349A.06,
subdivision 7, is amended to read:

Subd. 7.

Retailer rental payments.

If a lottery
retailer's rental payments for the business premises are
contractually computed, in whole or in part, on the basis of a
percentage of retail sales, and the computation of retail sales
is not explicitly defined to include the sale of lottery tickets
new text begin and wagering in sports games new text end , the compensation retained by the
sales agent for the sale of lottery tickets new text begin and from
participation in sports games new text end shall be considered the amount of
the retail sale for purposes of computing the rental payments.

Sec. 8.

Minnesota Statutes 2004, section 349A.06,
subdivision 8, is amended to read:

Subd. 8.

Proceeds of sales.

All proceeds from the sale
of lottery tickets new text begin and from participation in sports games
new text end received by a lottery retailer constitute a trust fund until
paid to the director. The lottery retailer is personally liable
for all proceeds.

Sec. 9.

Minnesota Statutes 2004, section 349A.06,
subdivision 11, is amended to read:

Subd. 11.

Cancellation, suspension, and refusal to renew
contracts or locations.

(a) The director shall cancel the
contract of any lottery retailer or prohibit a lottery retailer
from selling lottery tickets new text begin or participating in the conduct of
sports games new text end at a business location who:

(1) has been convicted of a felony or gross misdemeanor;

(2) has committed fraud, misrepresentation, or deceit;

(3) has provided false or misleading information to the
lottery; or

(4) has acted in a manner prejudicial to public confidence
in the integrity of the lottery.

(b) The director may cancel, suspend, or refuse to renew
the contract of any lottery retailer or prohibit a lottery
retailer from selling lottery tickets new text begin or participating in the
conduct of sports games new text end at a business location who:

(1) changes business location;

(2) fails to account for lottery tickets received deleted text begin or deleted text end new text begin , new text end the
proceeds from tickets sold new text begin , or the proceeds from sports games new text end ;

(3) fails to remit funds to the director in accordance with
the director's rules;

(4) violates a law or a rule or order of the director;

(5) fails to comply with any of the terms in the lottery
retailer's contract;

(6) fails to file a bond, securities, or a letter of credit
as required under subdivision 3;

(7) in the opinion of the director fails to maintain a
sufficient sales volume to justify continuation as a lottery
retailer; or

(8) has violated section 340A.503, subdivision 2, clause
(1), two or more times within a two-year period.

(c) The director may also cancel, suspend, or refuse to
renew a lottery retailer's contract or prohibit a lottery
retailer from selling lottery tickets new text begin or participating in the
conduct of sports games new text end at a business location if there is a
material change in any of the factors considered by the director
under subdivision 2.

(d) A contract cancellation, suspension, refusal to renew,
or prohibiting a lottery retailer from selling lottery tickets
new text begin or participating in the conduct of sports games new text end at a business
location under this subdivision is a contested case under
sections 14.57 to 14.69 and is in addition to any criminal
penalties provided for a violation of law or rule.

(e) The director may temporarily suspend a contract or
temporarily prohibit a lottery retailer from selling lottery
tickets at a business location without notice for any of the
reasons specified in this subdivision provided that a hearing is
conducted within seven days after a request for a hearing is
made by a lottery retailer. Within 20 days after receiving the
administrative law judge's report, the director shall issue an
order vacating the temporary suspension or prohibition or making
any other appropriate order. If no hearing is requested within
30 days of the temporary suspension or prohibition taking
effect, the suspension or prohibition becomes permanent unless
the director vacates or modifies the order.

Sec. 10.

Minnesota Statutes 2004, section 349A.08, is
amended to read:

349A.08 LOTTERY PRIZES.

Subdivision 1.

Agreement by players.

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

Subd. 2.

Prizes not assignable.

A prize new text begin or sports game
payout on a winning wager new text end in the state lottery is not assignable
except as provided in subdivision 3 and except that:

(1) if a prize winner dies before the prize new text begin or payout new text end is
paid, the director shall pay the prize new text begin or payout new text end to the prize
winner's estate; and

(2) the director may pay a prize new text begin or payout new text end to a person
other than the winner of that prize new text begin or payout new text end under an
appropriate court order.

Subd. 3.

Prizes won by persons under age 18.

The
following provisions govern the payment of a lottery prize new text begin and
sports game payout new text end to a person under age 18:

(1) if the prize new text begin or payout new text end is less than $5,000, the
director may give a draft, payable to the order of the person
under age 18, to the person's parents, custodial parent if one
parent has custody, guardian, or other adult member of the
person's family; and

(2) if the prize new text begin or payout new text end is $5,000 or more, the director
shall deposit the prize with the district court and section
540.08 applies to the investment and distribution of the money.

Subd. 4.

Discharge of liability.

The payment of a
prize new text begin or sports game payout new text end by the director discharges the
director and the state of all liability for the prize.

Subd. 5.

Payment; unclaimed prizes.

A prize in the state
lottery new text begin and payout from a sports game new text end must be claimed by the
winner within one year of new text begin (1) new text end the date of the drawing at which
the prize was awarded or the last day sales were authorized for
a game where a prize was determined in a manner other than by
means of a drawing new text begin , or (2) the date on which the sports game was
entered, whichever applies new text end . If a valid claim is not made for a
prize new text begin or payout new text end payable directly by the lottery by the end of
this period, the prize money new text begin or payout new text end is considered unclaimed
and the winner of the prize new text begin or payout new text end shall have no further
claim to the prize. A prize new text begin or payout new text end won by a person who
purchased the winning ticket new text begin or entered the sports game new text end in
violation of section 349A.12, subdivision 1, or won by a person
ineligible to be awarded a prize new text begin or payout new text end under subdivision 7
must be treated as an unclaimed prize new text begin or payout new text end under this
section. The director must transfer all unclaimed prize new text begin and
payout new text end money at the end of each fiscal year from the lottery
cash flow account to the general fund.

Subd. 6.

Installment payments.

If the director decides
to pay all or part of a prize new text begin or sports game payout new text end in the form
of installments over a period of years, the director shall
provide for the payment of all installments by:

(1) entering into a contract with a financially responsible
person or firm or by purchasing an annuity to provide for the
payment of the installments; or

(2) establishing and maintaining as a separate and
independent fund outside the state treasury a reserve account
with sufficient funds for the payment of the installments as
they become due.

Subd. 7.

Payments prohibited.

(a) No prize new text begin or sports
game payout new text end may be paid to the director or an employee of the
lottery, or a member of their families residing in the same
household of the member, director, or employee. No prize new text begin or
payout new text end may be paid to an officer or employee of a vendor which
at the time the game or drawing was being conducted was involved
with providing goods or services to the lottery under a lottery
procurement contract.

(b) No prize may be paid for a stolen, altered, or
fraudulent ticket.

Subd. 8.

Withholding of delinquent state taxes or other
debts.

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

Subd. 9.

Privacy.

(a) The phone number and street
address of a winner of a lottery prize new text begin or sports game payout new text end is
private data on individuals under chapter 13.

(b) Data on an individual, including name, physical and
electronic address, and telephone number, that are given to the
lottery for direct marketing purposes are private data on
individuals as defined in section 13.02. For purposes of this
subdivision, "direct marketing" means marketing conducted by the
lottery directly with the consumer.

Sec. 11.

Minnesota Statutes 2004, section 349A.09, is
amended to read:

349A.09 LOTTERY ADVERTISING.

Subdivision 1.

Odds; required information.

The director
shall include on each brochure, pamphlet, booklet, or other
similar material the director publishes to promote or explain
any lottery game new text begin or sports game new text end , a prominent and clear statement
of the approximate odds of winning each prize offered in that
lottery game new text begin or sports game new text end . Each lottery retailer must post
prominently at or near the point of ticket sale new text begin or point of
entry into a sports game new text end a notice or notices printed and
provided by the director of the approximate odds of winning each
prize in each game for which the lottery retailer sells
tickets new text begin and each sports game which the retailer conducts on
behalf of the director new text end .

Subd. 2.

Content of advertising.

(a) Advertising and
promotional materials for the lottery new text begin , including advertising and
promotional materials for sports games, new text end adopted or published by
the director must be consistent with the dignity of the state
and may only:

(1) present information on how lottery games new text begin or sports
games new text end are played, prizes new text begin or payouts new text end offered, where and how
tickets may be purchased new text begin or sports games entered new text end , when new text begin lottery
game new text end drawings are held, and odds on the games advertised;

(2) identify state programs supported by lottery net
revenues;

(3) present the lottery new text begin or sports game new text end as a form of
entertainment; or

(4) state the winning numbers or identity of winners of
lottery prizes new text begin or sports game payouts new text end .

(b) The director may not adopt or publish any advertising
for the lottery which:

(1) presents directly or indirectly any lottery game new text begin or
sports game new text end as a potential means of relieving any person's
financial difficulties;

(2) is specifically targeted with the intent to exploit a
person, a specific group or economic class of people, or a
religious holiday by use of a religious theme or symbol;

(3) presents the purchase of a lottery ticket new text begin or
participation in a sports game new text end as a financial investment or a
way to achieve financial security;

(4) uses the name or picture of a current elected state
official to promote a lottery new text begin or sports new text end game;

(5) exhorts the public to bet by directly or indirectly
misrepresenting a person's chance of winning a prize new text begin or a
payout new text end ; or

(6) denigrates a person who does not buy a lottery ticket
new text begin or participate in a sports game, new text end or unduly praises a person who
does buy a ticket new text begin or participates in a sports game new text end .

Subd. 3.

Prizes; required information.

The director must
include, in any publication or print advertising which refers to
a prize new text begin or payout new text end which is or may be paid in installments, a
statement to the effect that the prize new text begin or payout new text end will be or may
be paid in installments.

Sec. 12.

Minnesota Statutes 2004, section 349A.10,
subdivision 4, is amended to read:

Subd. 4.

Deposit of receipts.

(a) The director may
require lottery retailers to:

(1) deposit in a separate account to the credit of the
lottery fund, in banks designated by the director, all money
received by the lottery retailer from the sale of lottery
tickets new text begin and participation in sports games new text end , less money retained
as the lottery retailer's commission and for payment of
prizes new text begin and payouts new text end ;

(2) file with the director reports of the lottery
retailer's receipts and transactions in ticket sales new text begin and sports
game wagers new text end in a form that the director prescribes; and

(3) allow money deposited by the lottery retailer from the
sale of lottery tickets new text begin and participation in sports games new text end to be
transferred to the lottery through electronic fund transfer.

(b) The director may make arrangements for any person,
including a financial institution, to perform functions,
activities, or services in connection with the receipt and
distribution of lottery revenues.

(c) A lottery retailer who fails to pay any money due to
the director within the time prescribed by the director shall
pay interest on the amount owed at the rate determined by rule.

Sec. 13.

Minnesota Statutes 2004, section 349A.10,
subdivision 5, is amended to read:

Subd. 5.

Deposit of net proceeds.

new text begin (a) new text end Within 30 days
after the end of each month, the director shall deposit in the
state treasury the net proceeds of the lottery, which is the
balance in the lottery fund after transfers to the lottery prize
fund and credits to the lottery operations account.

new text begin (b) new text end Of the net proceeds new text begin , other than proceeds from sports
games new text end , 40 percent must be credited to the Minnesota environment
and natural resources trust fund and the remainder must be
credited to the general fund.

new text begin (c) The net proceeds from sports games must be deposited in
the Minnesota active recreation fund.
new text end

Sec. 14.

Minnesota Statutes 2004, section 349A.11,
subdivision 1, is amended to read:

Subdivision 1.

Lottery ticket; retailer.

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

(1) purchase a lottery ticket new text begin or participate in a sports
game new text end ; or

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

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

Sec. 15.

Minnesota Statutes 2004, section 349A.12, is
amended to read:

349A.12 PROHIBITED ACTS.

Subdivision 1.

Purchase by minors.

A person under the
age of 18 years may not buy or redeem for a prize a ticket in
the state lottery new text begin , or participate in a sports game new text end .

Subd. 2.

Sale to minors.

A lottery retailer may not sell
and a lottery retailer or other person may not new text begin (1) new text end furnish or
redeem for a prize a ticket in the state lottery to any person
under the age of 18 years new text begin , (2) allow a person under the age of
18 years to participate in a sports game, or (3) make a sports
game payout to a person under the age of 18 years new text end . It is an
affirmative defense to a charge under this subdivision for the
lottery retailer or other person to prove by a preponderance of
the evidence that the lottery retailer or other person
reasonably and in good faith relied upon representation of proof
of age described in section 340A.503, subdivision 6, in making
the sale or furnishing or redeeming the ticket new text begin , or allowing
participation in or making a payout for a sports game new text end .

Subd. 3.

Prohibited sales.

(a) A person other than a
lottery retailer may not sell a ticket in the state lottery new text begin or
participate in the conduct of a sports game new text end .

(b) A lottery retailer may not sell a ticket for a price
other than the price set by the director.

Subd. 4.

Lottery retailers and vendors.

A person who is
a lottery retailer, or is applying to be a lottery retailer, a
person applying for a contract with the director, or a person
under contract with the director to supply goods or services to
lottery may not pay, give, or make any economic opportunity,
gift, loan, gratuity, special discount, favor, hospitality, or
service, excluding food or beverage, having an aggregate value
of over $100 in any calendar year to the director, employee of
the lottery, or to a member of the immediate family residing in
the same household as that person.

Subd. 5.

Exceptions.

Nothing in this chapter prohibits
giving a state lottery ticket new text begin or a wager in a sports game new text end as a
gift, provided that a state lottery ticket new text begin or sports game wager
new text end may not be given to a person under the age of 18.

Subd. 6.

Violations.

A violation of subdivision 1 or 2
or a rule adopted by the director is a misdemeanor. A violation
of subdivision 3 or 4 is a gross misdemeanor.

Sec. 16.

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 new text begin , excluding sports games, new text end 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; and

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

Sec. 17.

new text begin [349A.18] MINNESOTA ACTIVE RECREATION FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Fund created. new text end

new text begin A Minnesota active
recreation fund is created in the state treasury, consisting of
money credit to the fund under section 349A.10, subdivision 5,
paragraph (c), and other money credited to the fund by law.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin Money in the Minnesota active
recreation fund may be appropriated by law only for:
new text end

new text begin (1) children's sports programs;
new text end

new text begin (2) amateur sports facilities; and
new text end

new text begin (3) hiking and bicycling trails.
new text end

Sec. 18.

new text begin [349A.19] SPORTS BOOKMAKING LICENSE.
new text end

new text begin Subdivision 1. new text end

new text begin License. new text end

new text begin Notwithstanding sections 609.755
and 609.76, a person may engage in sports bookmaking if the
person holds a license from the director under this section. A
license under this section authorizes the licensee to accept
wagers on professional sports events.
new text end

new text begin Subd. 2. new text end

new text begin License application. new text end

new text begin An application for a
license under this section must be made to the director on a
form the director prescribes. The application must be
accompanied by an affidavit of qualification that the applicant
has not (1) been convicted within the previous five years of a
felony or gross misdemeanor, a crime involving fraud or
misrepresentation, or a gambling-related offense, or (2) been
determined to have violated a rule of the director, the racing
commission, or the gambling control board, or a gambling-related
regulatory body in another state.
new text end

new text begin Subd. 3. new text end

new text begin Investigation. new text end

new text begin The director shall investigate
each applicant for a license under this section to the extent
the director deems necessary, and may request the assistance of
and may reimburse the division of alcohol and gambling
enforcement in investigating applicants. The director may
require by rule that an applicant be fingerprinted or furnish
the applicant's fingerprints. The director may charge an
applicant an investigation fee to cover the cost of the
investigation, and shall from this fee reimburse the division of
alcohol and gambling enforcement for its share of the cost of
the investigation. The director has access to all criminal
history data compiled by the division of alcohol and gambling
enforcement on licensees and applicants under this section. The
director may cooperate with national and international
organizations and agencies in conducting investigations.
new text end

new text begin Subd. 4. new text end

new text begin Issuance. new text end

new text begin If the director determines that an
applicant is not disqualified under subdivision 3 and that
licensing the applicant is consistent with the public health,
welfare, and safety, the director shall issue a license to an
applicant or renew a license already issued. Licenses issued
under this subdivision are valid for one year from the date of
issuance.
new text end

new text begin Subd. 5. new text end

new text begin Revocation; refusal to renew. new text end

new text begin (a) The director
may revoke or refuse to renew a license under this section for
(1) conduct, including a violation of a law or rule, that the
director determines adversely affects the integrity of sports
bookmaking, and (2) intentionally making a false statement in a
license application. The director may suspend a license for a
period of time the director determines for a violation of law or
rule.
new text end

new text begin (b) A license revocation or suspension under this
subdivision for more than 90 days is a contested case under
sections 14.57 to 14.69 of the Administrative Procedure Act and
is in addition to criminal penalties imposed for a violation of
law or rule. The director may summarily suspend a license for
more than 90 days prior to a contested case hearing where it is
necessary to ensure the integrity of sports bookmaking. A
contested case hearing must be held within 20 days of the
summary suspension and the administrative law judge's report
must be issued within 20 days from the close of the hearing
record. In all cases involving summary suspension the director
must issue its final decision within 30 days from receipt of the
report of the administrative law judge and subsequent exceptions
and argument under section 14.61.
new text end

new text begin Subd. 6. new text end

new text begin License fee. new text end

new text begin The director shall set the fee for
a license under this section in an amount necessary to defray
all expenses of the director in issuing and enforcing the terms
of the license.
new text end

new text begin Subd. 7. new text end

new text begin Bond. new text end

new text begin The director may require that a licensee
under this section post a bond, securities, or an irrevocable
letter of credit, in an amount as the director deems necessary,
to protect the integrity of sports bookmaking and the interests
of persons making wagers with the licensee. If securities are
deposited or an irrevocable letter of credit filed, the
securities or letter of credit must be of a type or in the form
provided under section 349A.07, subdivision 5, paragraphs (b)
and (c).
new text end

new text begin Subd. 8. new text end

new text begin Nonapplicability. new text end

new text begin Sections 541.20, 541.21,
609.755, 609.76, and 609.762 do not apply to activities licensed
under this section.
new text end

Sec. 19.

new text begin [349A.20] LICENSED SPORTS BOOKMAKING TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Imposition of tax. new text end

new text begin An excise tax is
imposed on the gross revenues of persons licensed under section
349A.19. The rate of the tax is:
new text end

new text begin (1) For a person with gross revenues of $50,000 or less in
the month being reported, three percent of gross revenues.
new text end

new text begin (2) For a person with gross revenues of more than $50,000
but less than $134,000 in the month being reported, four percent
of gross revenues.
new text end

new text begin (3) For a person with gross revenues of $134,000 or more in
the month being reported, 6.25 percent of gross revenues.
new text end

new text begin Subd. 2. new text end

new text begin Gross revenues defined. new text end

new text begin For purposes of this
section, "gross revenues" means the total value of all wagers
accepted by a person licensed under section 349A.19, less
amounts paid out by those persons as payouts on winning wagers.
In determining the value or amount of any wager for purposes of
this section, all charges incident to the placing of the wager
must be included.
new text end

new text begin Subd. 3. new text end

new text begin Tax returns. new text end

new text begin A person licensed under section
349A.19 must file monthly tax returns with the commissioner of
revenue, in the form required by the commissioner, of all
bookmaking activity, and shall include information on all bets
recorded, accepted, forwarded, and placed. The returns must be
filed on or before the 20th day of the month following the month
in which the bets reported were recorded, accepted, forwarded,
or placed. The tax imposed by this section is due and payable
at the time when the returns are filed.
new text end

new text begin Subd. 4. new text end

new text begin Deposit of revenue. new text end

new text begin Net proceeds from the tax
imposed under this section must be deposited in the Minnesota
active recreation fund.
new text end

Sec. 20.

Minnesota Statutes 2004, section 609.75,
subdivision 7, is amended to read:

Subd. 7.

Sports bookmaking.

Sports bookmaking is the
activity of intentionally receiving, recording or forwarding
within any 30-day period more than five bets, or offers to bet,
that total more than $2,500 on any one or more sporting events.
new text begin For purposes of this chapter and chapter 297E, "sports
bookmaking" does not include activities licensed under section
349A.19.
new text end

Sec. 21. new text begin REPORT.
new text end

new text begin The director of the state lottery shall report to the
legislature by January 1, 2006, on the present status and future
prospects of legal and illegal sports bookmaking in Minnesota,
and recommended changes in this act.
new text end

Sec. 22. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 21 are effective July 1, 2005.
new text end