SF 964

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

A bill for an act
relating to the State Lottery; authorizing the
director of the State Lottery to establish video
lottery terminals; providing duties and powers to the
director of the State Lottery; providing for the use
of video lottery revenues; amending Minnesota Statutes
2004, sections 297E.02, subdivision 1; 299L.02,
subdivision 1; 349.15, subdivision 1; 349A.01,
subdivisions 10, 11, 12, by adding subdivisions;
349A.06, subdivisions 1, 5, 8, 10, by adding
subdivisions; 349A.08, subdivisions 1, 5, 8; 349A.09,
subdivision 1; 349A.10, subdivisions 2, 3, 4; 349A.11,
subdivision 1; 349A.12, subdivisions 1, 2; 349A.13;
609.651, subdivision 1; 609.75, subdivision 4;
609.761, subdivision 2; proposing coding for new law
in Minnesota Statutes, chapters 297A; 349A; repealing
Minnesota Statutes 2004, sections 297E.01, subdivision
7; 297E.02, subdivisions 4, 6, 7.

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

Section 1.

new text begin [297A.652] LOTTERY GAMING MACHINES; IN-LIEU
TAX.
new text end

new text begin Net terminal income from the operation of video lottery
terminals authorized under section 349A.071 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 net terminal income from the operation of
video lottery terminals as defined in section 349A.01, for the
previous month multiplied by 30 percent. The commissioner shall
deposit the money transmitted under this section in the state
treasury to be credited as provided in section 297A.94.
new text end

Sec. 2.

Minnesota Statutes 2004, section 297E.02,
subdivision 1, is amended to read:

Subdivision 1.

Imposition.

A tax is imposed on all
lawful gambling deleted text begin other than (1) pull-tab deals or games; (2)
tipboard deals or games; and (3) items listed in section
297E.01, subdivision 8, clauses (4) and (5), deleted text end at the rate of 8.5
percent on the gross receipts as defined in section 297E.01,
subdivision 8, less prizes actually paid. The tax imposed by
this subdivision is in lieu of the tax imposed by section
297A.62 and all local taxes and license fees except a fee
authorized under section 349.16, subdivision 8, or a tax
authorized under subdivision 5.

The tax imposed under this subdivision is payable by the
organization or party conducting, directly or indirectly, the
gambling.

Sec. 3.

Minnesota Statutes 2004, 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 video lottery terminals
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. 4.

Minnesota Statutes 2004, section 349.15,
subdivision 1, is amended to read:

Subdivision 1.

Expenditure restrictions.

new text begin (a) new text end Gross
profits from lawful gambling may be expended only for lawful
purposes or allowable expenses as authorized by the membership
of the conducting organization at a monthly meeting of the
organization's membership.

deleted text begin Provided that deleted text end new text begin (b) Except as provided in paragraph (c), new text end no
more than 70 percent of the gross profit less the tax imposed
under section 297E.02, subdivision 1, from bingo, and no more
than 55 percent of the gross profit from other forms of lawful
gambling, may be expended for allowable expenses related to
lawful gambling.

new text begin (c) Money received by an organization from net video
lottery terminal income under section 349A.06, subdivision 6a,
may be expended only for lawful purposes.
new text end

Sec. 5.

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

new text begin Subd. 9a. new text end

new text begin Lottery game. new text end

new text begin "Lottery game" means any game
operated by the lottery where the prize is determined primarily
by chance.
new text end

Sec. 6.

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, computer hardware and software used to monitor sales
of lottery tickets new text begin and sales on a video lottery terminal new text end , deleted text begin and
deleted text end lottery tickets new text begin , video lottery terminals, and maintenance of
video lottery terminals new text end . deleted text begin " deleted text end Lottery procurement contract deleted text begin " deleted text end 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. 7.

Minnesota Statutes 2004, section 349A.01,
subdivision 11, is amended to read:

Subd. 11.

Lottery retailer.

"Lottery retailer" means a
person with whom the director has contracted to sell lottery
tickets to the public. new text begin A lottery retailer includes a person
with whom the director has contracted to place a video lottery
terminal within its premises where video lottery terminal plays
are sold.
new text end

Sec. 8.

Minnesota Statutes 2004, section 349A.01,
subdivision 12, is amended to read:

Subd. 12.

Lottery ticket or ticket.

"Lottery ticket" or
"ticket" means any tangible evidence issued by the lottery to
prove participation in a lottery game new text begin other than a video lottery
game new text end .

Sec. 9.

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 Net terminal income. new text end

new text begin "Net terminal income"
means the sum of all money spent for video lottery terminal
plays less the amount paid out to winning players.
new text end

Sec. 10.

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 Video lottery credit. new text end

new text begin "Video lottery credit"
means the basic unit of play for a video lottery terminal which
has a value of 25 cents.
new text end

Sec. 11.

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 Video lottery credit receipt. new text end

new text begin "Video lottery
credit receipt" means a receipt generated by a video lottery
terminal that provides evidence of cash payment due a player
from play on a video lottery terminal.
new text end

Sec. 12.

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 Video lottery game. new text end

new text begin "Video lottery game" means
an electronically simulated game authorized by the director that
is displayed and played on a video lottery terminal for
consideration and with prizes awarded for designated results.
new text end

Sec. 13.

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

new text begin Subd. 18. new text end

new text begin Video lottery terminal. new text end

new text begin "Video lottery
terminal" means an electronic machine that, upon the insertion
of a coin, token, or currency, is available to play or simulate
the play of a game utilizing a video display and microprocessors
in which, primarily by chance, the player may receive free plays
or video lottery credits that can be redeemed for cash.
new text end

Sec. 14.

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

new text begin Subd. 19. new text end

new text begin Video lottery terminal play. new text end

new text begin "Video lottery
terminal play" means an electronic record that proves
participation in a video lottery game.
new text end

Sec. 15.

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

new text begin Subd. 20. new text end

new text begin Win percentage. new text end

new text begin "Win percentage" means the
portion of the money wagered by players on a video lottery
terminal that is available for the payment of prizes to winning
players.
new text end

Sec. 16.

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

Subdivision 1.

Contracts.

The director shall sell
tickets new text begin and operate video lottery terminals new text end for the lottery
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 operate video lottery terminals
new text end at more than one business location under a contract entered into
under this section.

Sec. 17.

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 or have a video
lottery terminal placed 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 or where video lottery terminals are
operated 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 the area where video lottery
terminals are located 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. 18.

Minnesota Statutes 2004, section 349A.06, is
amended by adding a subdivision to read:

new text begin Subd. 5a. new text end

new text begin Restrictions on lottery retailers; video
lottery terminals. new text end

new text begin (a) The director may only enter into a
lottery retailer contract for games operated by a video lottery
terminal with a retailer that has a license to sell alcoholic
beverages for consumption on the premises where sold. This does
not include a retailer who has only a temporary on-sale license
or a retailer of 3.2 percent malt liquor whose total gross
receipts from the premises were less than 50 percent
attributable to the sale of 3.2 percent malt liquor.
new text end

new text begin (b) The director may not contract with a retailer for games
operated by a video lottery terminal unless the retailer has an
organization licensed under chapter 349 authorized and
conducting lawful gambling on the premises.
new text end

new text begin (c) A lottery retailer authorized to sell games operated by
a video lottery terminal may not cancel or refuse to renew a
lease with an organization licensed under chapter 349 authorized
and conducting lawful gambling on its premises for three years
following the effective date of this act, unless the
organization has failed to comply with its lease with the
retailer.
new text end

new text begin (d) A lottery retailer may have up to five video lottery
terminals on the retailer's premises, as determined by the
director.
new text end

new text begin (e) A lottery retailer that is authorized to operate a
video lottery terminal may not make reference to the
establishment being a "casino," or use the word "casino" in its
name or in any of its advertisements.
new text end

new text begin (f) The director, or any employee of the director, may
inspect any video lottery terminal at any time during the hours
when alcoholic beverages may be sold at on-sale under section
340A.504, subdivisions 1, 2, and 3, without notice, to ensure
compliance with this chapter and any rules adopted by the
director.
new text end

Sec. 19.

Minnesota Statutes 2004, section 349A.06, is
amended by adding a subdivision to read:

new text begin Subd. 6a. new text end

new text begin Retention by retailers; video lottery
terminals. new text end

new text begin A lottery retailer who has a contract for placement
of video lottery terminals may retain 33 percent of the net
terminal income from the terminals located within its premises
as commission. The lottery retailer receiving commission under
this subdivision shall transmit to an organization licensed
under chapter 349, and conducting lawful gambling on the
premises of the retailer, 31 percent of the lottery retailer's
commission received under this subdivision. If more than one
organization conducts lawful gambling on the premises, the
payment must be reasonably allocated between the organizations,
pro rata based on their respective gross receipts.
new text end

Sec. 20.

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 or proceeds from the sale of video lottery
terminal plays 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. 21.

Minnesota Statutes 2004, section 349A.06,
subdivision 10, is amended to read:

Subd. 10.

Local licenses.

No political subdivision may
require a local license to operate as a lottery retailer new text begin ,
restrict or regulate the placement of a video lottery terminal,
new text end or impose a tax or fee on the business of operating as a lottery
retailer.

Sec. 22.

new text begin [349A.071] VIDEO LOTTERY TERMINALS.
new text end

new text begin Subdivision 1. new text end

new text begin Specifications. new text end

new text begin Each video lottery
terminal 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
terminal and all entries into the terminal; 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. 2. new text end

new text begin Limit on amount played. new text end

new text begin A video lottery
terminal may not allow less than 25 cents and not more than $2
to be played on a single game.
new text end

new text begin Subd. 3. new text end

new text begin Maximum prize. new text end

new text begin The maximum prize on any single
game played on a video lottery terminal may not exceed $1,000.
new text end

new text begin Subd. 4. new text end

new text begin Testing and examination of terminals. new text end

new text begin The
director may require working models of a video lottery terminal
transported to the location the director designates for testing,
examination, and analysis. The manufacturer shall pay all costs
of any testing, examination, analysis, and transportation of the
terminal model.
new text end

new text begin Subd. 5. new text end

new text begin Deactivation of terminal. new text end

new text begin The director may
deactivate a video lottery terminal without notice if the
lottery retailer has violated any provision of this chapter,
rule, or provision of its contract with the director.
new text end

Sec. 23.

Minnesota Statutes 2004, section 349A.08,
subdivision 1, is amended to read:

Subdivision 1.

Agreement by players.

A person who buys a
lottery ticket new text begin or plays a video lottery game new text end agrees to be bound
by the rules new text begin and game procedures new text end applicable to deleted text begin the deleted text end new text begin that
new text end particular lottery game deleted text begin for which the ticket is purchased deleted text end . The
player acknowledges that the determination of whether a
ticket new text begin or video lottery credit receipt new text end is deleted text begin a deleted text end valid deleted text begin winning ticket
is subject to deleted text end new text begin under new text end the rules deleted text begin of deleted text end new text begin and game procedures adopted by
new text end 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.

Sec. 24.

Minnesota Statutes 2004, section 349A.08,
subdivision 5, is amended to read:

Subd. 5.

Payment; unclaimed prizes.

new text begin (a) Except as
provided in this subdivision, new text end a prize in the State Lottery must
be claimed by the winner within one year of 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. If a valid claim is
not made for a prize payable directly by the lottery by the end
of this period, the prize money is considered unclaimed and the
winner of the prize shall have no further claim to the prize.

new text begin (b) A video lottery credit receipt from a video lottery
terminal must be presented for payment before the close of the
business day on the date the video lottery credit receipt was
printed. If a valid claim is not made for a prize from a video
lottery terminal by the end of this period, the unclaimed prize
must be paid by the lottery retailer to the lottery.
new text end

new text begin (c) new text end A prize won by a person who purchased the winning
ticket new text begin or played a video lottery game new text end in violation of section
349A.12, subdivision 1, or won by a person ineligible to be
awarded a prize under subdivision 7 must be treated as an
unclaimed prize under this section. The director must transfer
all unclaimed prize money at the end of each fiscal year from
the lottery cash flow account to the general fund.

Sec. 25.

Minnesota Statutes 2004, section 349A.08,
subdivision 8, is amended to read:

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 of $600 or
more new text begin , excluding any winner of a prize from a video lottery game,
new text end 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.

Sec. 26.

Minnesota Statutes 2004, section 349A.09,
subdivision 1, is amended to read:

Subdivision 1.

Odds; required information.

new text begin (a) new text end The
director shall include on each brochure, pamphlet, booklet, or
other similar material the director publishes to promote or
explain any lottery game, a prominent and clear statement of the
approximate odds of winning each prize offered in that lottery
game.

new text begin (b) Except for the operation of a video lottery terminal,
new text end each lottery retailer must post prominently at or near the point
of ticket sale 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 (c) The approximate odds of winning a prize from a video
lottery terminal must be displayed on the face or screen of the
video lottery terminal.
new text end

Sec. 27.

Minnesota Statutes 2004, section 349A.10,
subdivision 2, is amended to read:

Subd. 2.

deleted text begin deposit in deleted text end prize fund.

(a) The director shall
establish a lottery prize fund outside the state treasury. The
fund consists of all money deposited in it under this
subdivision and all interest earned thereon.

(b) The director shall deposit in the lottery prize fund,
from gross receipts from the sale of lottery tickets, an amount
sufficient to pay lottery prizes from the lottery prize fund
according to the following provisions:

(1) for games which require on-line terminal connections,
the prizes paid in any fiscal year must be at least 45 percent
of gross receipts from those games in that fiscal year;

(2) for games which do not require on-line terminal
connections, the prizes paid in any fiscal year must be at least
deleted text begin the following percentages of gross receipts from those games:
deleted text end

deleted text begin (i) 50 percent through fiscal year 1991;
deleted text end

deleted text begin (ii) 55 percent from July 1, 1991, to June 30, 1992; and
deleted text end

deleted text begin (iii) deleted text end 60 percent deleted text begin thereafter deleted text end new text begin of gross receipts from those
games in that fiscal year new text end .

new text begin (c) For lottery games played on a video lottery terminal,
the win percentage in any fiscal year will be the win percentage
established by the game procedures adopted for the game, but
shall be at least 80 percent but not more than 95 percent.
new text end

Sec. 28.

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 deleted text begin thereafter deleted text end amounts to the lottery
operations account which when totaled exceed 15 percent of gross
revenue new text begin , exclusive of net terminal income, and 20 percent of net
terminal income new text end 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.

(c) The director of the lottery may not expend deleted text begin after July
1, 1991, deleted text end 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) The director shall remit two percent of net terminal
income from the lottery operations account to be held in trust
by the commissioner of human services in a compulsive gambling
trust account. Money and interest earned on money deposited
into this account may not be spent until appropriated by law for
periods beginning July 1, 2005, and thereafter.
new text end

Sec. 29.

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 video lottery terminal plays new text end , less money retained as
the lottery retailer's commission and for payment of prizes;

(2) file with the director reports of the lottery
retailer's receipts and transactions in ticket sales new text begin and video
lottery terminal plays 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 video lottery terminal plays 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. 30.

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 play a game on a video
lottery terminal 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. 31.

Minnesota Statutes 2004, section 349A.12,
subdivision 1, is amended to read:

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 and a person under the age of 21 years may not
play a game on a video lottery terminal new text end .

Sec. 32.

Minnesota Statutes 2004, section 349A.12,
subdivision 2, is amended to read:

Subd. 2.

Sale to minors.

A lottery retailer may not sell
and a lottery retailer or other person may not furnish or redeem
for a prize a ticket in the State Lottery to any person under
the age of 18 years new text begin , or allow a person under the age of 21 years
to play a game on a video lottery terminal 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 the
play on a terminal new text end .

Sec. 33.

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; new text begin or
new text end

(2) deleted text begin 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
deleted text end

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

Sec. 34.

Minnesota Statutes 2004, section 609.651,
subdivision 1, is amended to read:

Subdivision 1.

deleted text begin felony deleted text end new text begin fraud new 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 begin or a
video lottery credit receipt from a state lottery video lottery
terminal new text end ;

(2) knowingly presents an altered or counterfeited state
lottery ticket new text begin or video lottery credit receipt from a state
lottery video lottery terminal new text end for payment;

(3) knowingly transfers an altered or counterfeited state
lottery ticket new text begin or video lottery credit receipt from a state
lottery video lottery terminal new text end to another person; deleted text begin or
deleted text end

(4) new text begin tampers with or manipulates the outcome, prize payable,
or operation of a state lottery video lottery terminal; or
new text end

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

Sec. 35.

Minnesota Statutes 2004, section 609.75,
subdivision 4, is amended to read:

Subd. 4.

Gambling device.

A gambling device is a
contrivance which for a consideration affords the player 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. "Gambling device" also
includes a video game of chance, as defined in subdivision 8 new text begin ,
but does not include a video lottery terminal operated by the
State Lottery under chapter 349A new text end .

Sec. 36.

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 deleted text begin or deleted text end new text begin ; new text end the sale,
possession, or purchase of tickets for the State Lottery new text begin ; or the
manufacture, possession, or operation of a video lottery
terminal for the State Lottery new text end under chapter 349A.

Sec. 37. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 297E.01, subdivision 7;
and 297E.02, subdivisions 4, 6, and 7, are repealed.
new text end

Sec. 38. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 3 to 36 are effective the day following
final enactment. Sections 2 and 37 are effective July 1, 2005.
new text end