SF 2596

as introduced - 87th Legislature (2011 - 2012) Posted on 04/09/2012 10:34am

A bill for an act
relating to gambling; authorizing the operation of lottery gaming machines and
conduct of other nonlottery games at a gaming facility; licensing and regulating
the gaming facility; imposing a gaming transaction fee on gaming at the gaming
facility; appropriating money; amending Minnesota Statutes 2010, sections
240.135; 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; 609.75, subdivision 3; 609.761, by adding a
subdivision; proposing coding for new law in Minnesota Statutes, chapters
299L; 349A.

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

ARTICLE 1

LOTTERY OPERATIONS

Section 1. new text begin PURPOSE.
new text end

new text begin The purpose of articles 1 to 5 is to:
new text end

new text begin (1) recognize the significant inequities created by the current status of casino gaming
in Minnesota given the extreme disparity in revenues generated by tribal casinos for
Minnesota's Indian tribes and tribal members and the lack of any significant direct revenue
to the state of Minnesota;
new text end

new text begin (2) provide an opportunity for increased economic development and tribal
self-sufficiency to tribal governments which, because of their locations and tribal
populations, have not benefited significantly from gaming opportunities under the federal
Indian Gaming Regulatory Act, United States Code, title 25, sections 2701 to 2721;
new text end

new text begin (3) provide for the generation of revenues to the state, including proceeds for
distribution as set forth in the Minnesota Constitution, article XI, section 14;
new text end

new text begin (4) establish a structure that promotes tribal sovereignty and self-governance and
that provides revenues from casino gaming to tribal governments for the development of
programs to alleviate persistent poverty conditions and to advance tribal goals; and
new text end

new text begin (5) provide for a 30-year moratorium against gambling expansion in this state.
new text end

Sec. 2.

Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:

Subd. 10.

Lottery procurement contract.

"Lottery procurement contract" means a
contract to provide lottery products, new text begin gaming machines, maintenance of gaming machines,
new text end computer hardware and software used to monitor sales of lottery tickets, new text begin and gaming
machine plays, equipment used to conduct and monitor other lottery games at a gaming
facility, equipment used for the conduct 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. 3.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Gaming facility. new text end

new text begin "Gaming facility" means the site selected for the
location of gaming machines and the conduct of other lottery games pursuant to a location
contract under section 349A.17 and nonlottery casino games pursuant to a plan of
operation approved under section 299L.094.
new text end

Sec. 4.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 15. 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. 5.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 16. 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. 6.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 17. 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. 7.

Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:

new text begin Subd. 18. 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 and for gaming machine games and promotional allowances
approved by the director under section 349A.17.
new text end

Sec. 8.

Minnesota Statutes 2010, 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 begin and
deleted text end

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

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

new text begin (7) cost of gaming machine plays;
new text end

new text begin (8) other lottery games; and
new text end

new text begin (9) cost to participate in other games new text end .

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

Sec. 9.

Minnesota Statutes 2010, 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 compensation new text begin and amounts transferred to or retained by the tribal entity 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 operation account which when totaled exceed ten percent of
adjusted gross revenue from the operation of gaming machines.
new text end

Sec. 10.

Minnesota Statutes 2010, 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 management and budget. 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 begin and deleted text end
amounts paid to an outside vendor to operate and maintain an online gaming system new text begin ,
amounts paid to an outside vendor to operate and maintain a central system for gaming
machines and for other lottery games, and amounts paid to acquire and maintain gaming
machines and equipment used to conduct other lottery games 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. 11.

Minnesota Statutes 2010, section 349A.13, is amended to read:

349A.13 RESTRICTIONS.

Nothing in this chapter:

(1) authorizes the director to conduct a lottery game or contest the winner or winners
of which are determined by the result of a sporting event other than a horse race conducted
under chapter 240;

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

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

Sec. 12.

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

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in
this subdivision have the meanings given them.
new text end

new text begin (b) "Fiscal year" means the period between July 1 and June 30.
new text end

new text begin (c) "Tribal entity" means one or more entities, whether tribally or federally chartered
corporations, or other legal entities, wholly owned by a tribal government that is a party
to the location contract under this section.
new text end

new text begin (d) "Tribal government" means the governmental entity that represents a federally
recognized Indian tribe within the state of Minnesota.
new text end

new text begin (e) "Site" means a parcel or contiguous parcels of land, and may be enlarged by the
addition of contiguous parcels of land over time.
new text end

new text begin Subd. 2. new text end

new text begin Location contract. new text end

new text begin (a) The director may enter into a contract with a tribal
entity to provide locations for the operation of gaming machines and other lottery games.
The director may not enter into more than two location contracts for the operation of
gaming machines and other lottery games under this section.
new text end

new text begin (b) The director may enter a location contract with a tribal entity that meets the
following criteria:
new text end

new text begin (1) the tribal entity will operate a single gaming facility at one site; and
new text end

new text begin (2) the tribal entity must be comprised of a tribal government which is a federally
recognized tribe which operates current casino gaming operations under the federal Indian
Gaming Regulatory Act, United States Code, title 25, sections 2701 to 2721, pursuant
to a compact with the state of Minnesota;
new text end

new text begin (i) the tribal government intends to participate in a tribal entity which will enter a
contract that complies with the requirements of this act;
new text end

new text begin (ii) the tribal government meets the eligibility criteria set forth in this paragraph and
provides adequate documentation to supports its eligibility to participate in the tribal entity;
new text end

new text begin (iii) a statement of the tribal government's intent to participate in a tribal entity that
waives the entity's sovereign immunity relating to disputes arising out of the location
contract or the construction, management, or operation of the gaming facility and that the
tribal government expressly consents that the tribal entity will be subject to the jurisdiction
of the state court and the administrative and regulatory jurisdiction of the state;
new text end

new text begin (iv) a limited waiver of sovereign immunity and consent by the tribal government
to the jurisdiction of state court solely to resolve disputes alleging that assets have been
transferred from the tribal entity to the tribe in violation of the location contract or other
applicable law and limited to any improperly transferred assets; and
new text end

new text begin (v) states the intention of the tribal government to ensure that revenues provided
to the participating tribal governments from the tribal entity will be distributed between
the participating tribal government in a fair and equitable manner as determined solely
by the participating tribal governments.
new text end

new text begin (c) The location contract with the tribal entity shall have no legal effect on the
validity of existing tribal-state gaming compacts.
new text end

new text begin (d) A location contract entered into under this section must provide for the following
provisions:
new text end

new text begin (1) that the contract shall run for not more than 30 years and shall be negotiable
and renewable every 15 years thereafter. The director, tribal entity, and participating
tribal government, that intends to not renegotiate and renew a location contract must, if
reasonably possible, provide notice of its intent to the other parties at least one year before
the location contract expires;
new text end

new text begin (2) liquidated damages to recover the initial investment by the tribal entity 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 tribal
entity or the racetrack after the location contract has been executed and is limited to the
debt incurred by the tribal entity 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 (3) all costs associated with managing the routine day-to-day activity of gaming
machines, other lottery games including, but not limited to, routine and minor service and
maintenance, security monitoring, verifying winners, paying winners, collecting money
from gaming machines, collecting wagers from the operation of other lottery games, and
advertising and marketing of gaming machines and other lottery games shall be borne
by the tribal entity;
new text end

new text begin (4) all costs associated with purchase or lease of gaming machines, major
maintenance of the gaming machines, and monitoring the activity of the gaming machines
through a central system shall be borne by the lottery;
new text end

new text begin (5) the tribal entity must maintain adequate liability and casualty insurance for
the gaming facility;
new text end

new text begin (6) payment by each entity that has entered into a location contract to the
commissioner of human services in an annual amount equal to the lesser of 0.5 percent of
adjusted gross gaming machine revenue not to exceed $2,500,000 at that gaming facility,
for problem and compulsive gambling treatment or programs;
new text end

new text begin (7) payment by each entity that has entered into a location contract to the city and
county where the gaming facility is located in an annual amount equal to one percent of
adjusted gross gaming machine revenue, other lottery games' adjusted gross income, and
nonlottery casino games' adjusted gross revenue at that gaming facility;
new text end

new text begin (8) any controversy or claim between the parties to a location contract that arises
out of a location contract may be settled by arbitration except as provided in paragraphs
(j) and (k);
new text end

new text begin (9) authorization for the operation of gaming machines and the conduct of other
lottery games at a temporary facility pending completion of a permanent facility subject to
reasonable conditions for the operation of the temporary facility set by the director. The
operation of gaming machines and the conduct of other lottery games at a temporary
facility shall be treated in the same manner as if it was conducted in a permanent facility;
and
new text end

new text begin (10) if the legislature authorizes the operation of gaming machines as defined in
section 349A.01, subdivision 15, other than at a gaming facility authorized under this
act, within 30 years of issuing a gaming facility license to a tribal entity under this act,
the state must refund all of the license fees paid by the tribal entity pursuant to section
299L.09, subdivision 4, and notwithstanding article 4, section 1, the gaming facility
licensees will be relieved of any obligation to pay a gaming transaction fee for the conduct
of nonlottery casino games for the remainder of the 30-year period or for five years from
the date that the other gaming machines are operated within the state, whichever period is
longer, and the lottery will be relieved of any obligation to pay a gaming transaction fee
for the conduct of gaming machines and bingo at the gaming facility for the remainder
of the 30-year period or for five years from the date that the other gaming machines are
operated within the state, whichever period is longer, and the lottery will be required to
pay the amount that would have been due as a gaming transaction fee to the tribal entity
respectively. This provision does not apply to the authorization of the operation of any
gaming machines pursuant to the federal Indian Gaming Regulatory Act, United States
Code, title 25, sections 2701 to 2721.
new text end

new text begin (e) In addition to the provisions required under paragraph (d), the location contract
with the tribal entity must contain the following provisions:
new text end

new text begin (1) the waiver of sovereign immunity by the tribal entity and the limited waiver of
sovereign immunity by the tribal governments consistent with paragraph (c);
new text end

new text begin (2) in the construction of the gaming facility, and the subsequent repair and
maintenance of the facility, the tribal entity shall make good faith efforts to contract with
American Indian and minority-owned businesses;
new text end

new text begin (3) in operating the gaming facility, the tribal entity shall make good faith efforts to
ensure that American Indians and other minorities are employed in entry level, middle
management, and upper management positions;
new text end

new text begin (4) if a tribal government participating in the tribal entity opts out of the tribal entity
as part of the renewal process, it does not affect the ability of the tribal entity to renew the
location contract with the participation of any remaining tribal governments; and
new text end

new text begin (5) payment of a fee by the lottery to the tribal entity in an amount equal to ...
percent of the adjusted gross gaming machine revenue and other lottery games' adjusted
gross revenue. Provided that beginning on January 1 following the first full year that the
tribal entity's permanent facility has been in operation, (i) if the adjusted gross revenue
from the conduct of gaming machines and other lottery games is less than $50,000,000
for that quarter, the fee due to the tribal entity from the lottery will be increased to ...
percent for that quarter; and (ii) if the adjusted gross revenue from the conduct of gaming
machines and other lottery games is less than $25,000,000 for that quarter, the fee due
to the tribal entity from the lottery will be increased to ... percent for that quarter. The
lottery will pay an adjustment to the tribal entity to reflect the increased fee payments
within 30 days after the end of the quarter.
new text end

new text begin (f) No gaming facility 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 site
of the gaming facility within the city or town.
new text end

new text begin (g) The tribal entity may establish reasonable standards for payment of promotional
allowances to players and the proportional allocation of promotional allowances between
revenue generated from gaming machines, other lottery games, and nonlottery casino
games. Upon approval of the standards for promotional allowances, the director shall
reimburse the tribal entity for the cost of promotional allowances paid by the tribal entity.
new text end

new text begin (h) The director may by administrative action cancel or suspend a location contract
if the director reasonably determines that the tribal entity has materially breached
any material provision of the location contract and has failed to cure that breach in a
reasonable time, or if the tribal entity's gaming facility license has been suspended or
revoked by the commissioner of public safety. A contract cancellation or suspension under
this paragraph 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.
new text end

new text begin (i) The director may by administrative action impose a civil penalty, issue correction
orders, or resolve in any other manner as determined appropriate by the director, if the
director determines that the tribal entity has breached any term of the location contract.
The imposition of a civil penalty 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.
new text end

new text begin (j) The rights and interests provided by a location contract are specific to the parties
to the location contract and are not transferable without the written approval of the director.
new text end

new text begin (k) Gaming machines may only be placed and other lottery games may only be
conducted at a gaming facility that is owned or leased by the tribal entity.
new text end

new text begin (l) A contract entered into under this subdivision is not subject to chapter 16C.
new text end

new text begin (m) The amounts paid by the tribal entity to the commissioner of human services
pursuant to a location contract under this section are annually appropriated to the
commissioner of human services for problem and compulsive gambling treatment or
programs, including programs that are designed to address compulsive gambling in
American Indian and minority communities.
new text end

new text begin Subd. 3. new text end

new text begin Operation. new text end

new text begin (a) All gaming machines that are placed at a gaming facility or
other lottery games conducted at a gaming facility must be operated and controlled by
the director. The director and the commissioner shall cooperate with a designated tribal
liaison in regards to any decision that is not criminal or regulatory in nature.
new text end

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

new text begin (c) Major maintenance of the gaming machines shall be controlled by the director or
by a vendor that is under the control and direction of the director.
new text end

new text begin (d) The director must establish and control a central communications system that
monitors activities on each gaming machine.
new text end

new text begin (e) Equipment used to conduct other lottery games at a gaming facility must be
owned or leased by the director.
new text end

new text begin (f) The director must approve the security plans and implementation of security
measures associated with and relating to the operation of the gaming machines and the
conduct of other lottery games at a gaming facility.
new text end

new text begin (g) Advertising and promotional material produced by a gaming facility relating to
gaming machines and the conduct of other lottery games at a gaming facility must be
approved by the director in a timely manner.
new text end

new text begin (h) The director may authorize the tribal entity gaming machines and the conduct of
other lottery games at a gaming facility, provided that the director shall maintain overall
control of the operation of the gaming machines and the conduct of other lottery games at
the gaming facility.
new text end

new text begin (i) The costs associated with procuring and maintaining gaming machines and
equipment involved in operating other lottery games, and costs associated with acquiring,
maintaining, and operating the central system used to monitor the activity of gaming
machines, shall be borne by the lottery.
new text end

new text begin (j) All proceeds from the operation of gaming machines and conduct of other lottery
games received by the tribal entity constitute a trust fund until transmitted to the director.
new text end

new text begin (k) The director may require the tribal entity to deposit in a trust account or other
agreed upon form of account, in a designated bank, all money received by the tribal entity
from the operation of gaming machines and the conduct of other lottery games.
new text end

new text begin (l) If the tribal entity fails to pay any money due the director within the time
prescribed by the director, the tribal entity shall pay interest on the amount owed at the
rate set for lottery retailers under Minnesota Rules, part 7856.7020.
new text end

new text begin (m) The director may implement policies, procedures, and other controls that are
determined to be necessary by the director for the operation of gaming machines and the
conduct of other lottery games pursuant to this section.
new text end

new text begin Subd. 4. new text end

new text begin Games. new text end

new text begin The director shall specify the games that may be played on a
gaming machine and the manner in which other lottery games are conducted at a gaming
facility as set forth under section 349A.04.
new text end

new text begin Subd. 5. new text end

new text begin Specifications. new text end

new text begin The requirements for gaming machines are as follows:
new text end

new text begin (1) 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. There must be a reasonable number of gaming machines placed at a gaming
facility which afford players the option to receive winnings in the form of tickets;
new text end

new text begin (2) gaming machines must be capable of being linked to a central communications
system to provide auditing program information as required by the director; and
new text end

new text begin (3) there must be a reasonable number of gaming machines at the facility which
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 life activities.
new text end

new text begin Subd. 6. 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. 7. 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 person
under 18 years of age may not claim a prize from the operation of a gaming machine or
the conduct of any other lottery game at the gaming facility. 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. 8. 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 participate in any other lottery game at the gaming facility.
new text end

new text begin Subd. 9. new text end

new text begin Compulsive gambling notice. new text end

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

new text begin Subd. 10. new text end

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

new text begin A political subdivision shall not require a
license to operate a gaming machine or conduct other lottery games or nonlottery casino
games as defined under section 299L.094, restrict or regulate the placement of gaming
machines or the conduct of other lottery or nonlottery casino games, or impose a fee or
charge on the business of operating gaming machines or the conduct of other lottery or
nonlottery casino games at the gaming facility.
new text end

Sec. 13. new text begin LOTTERY BUDGET; GAMING FACILITY.
new text end

new text begin The director of the State Lottery shall submit a budget for the operation of
gaming machines and for the conduct of other lottery games at a gaming facility 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 at a gaming facility.
Amounts expended by the director of the State Lottery for the conduct of gaming at the
gaming facility in fiscal years 2013 and 2014 are not subject to the maximum amount
set in law for the operation of the lottery.
new text end

Sec. 14. new text begin EFFECTIVE DATE.
new text end

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

ARTICLE 2

DEPARTMENT OF PUBLIC SAFETY

Section 1.

new text begin [299L.091] GAMING FACILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section and sections 299L.091
to 299L.095, the following terms have the meanings given them.
new text end

new text begin (a) "Direct financial interest" means ownership or control of at least five percent
interest in the tribal entity or management entity, or other financial interest in the tribal
entity or management entity.
new text end

new text begin (b) "Gaming facility" is as defined in section 349A.01.
new text end

new text begin (c) "Lottery director" means the director of the Minnesota State Lottery under
chapter 349A.
new text end

new text begin (d) "Management entity" means the entity applying for or holding a management
license under section 299L.092.
new text end

new text begin (e) "Tribal entity" is as defined in section 349A.17.
new text end

new text begin Subd. 2. new text end

new text begin License required. new text end

new text begin The tribal entity that will own and operate, whether
directly or through another tribal or management entity, a gaming facility under section
349A.17 must obtain a gaming facility license from the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin An application for a license under this section must be on
a form prescribed by the commissioner. The commissioner may issue a gaming facility
license to the tribal entity that will operate the gaming facility.
new text end

new text begin Subd. 4. new text end

new text begin License issuance. new text end

new text begin (a) The commissioner shall issue a license under
this section unless information obtained from the comprehensive background check
establishes that issuance of the license would be adverse to the public interest or to the
effective regulation of gaming. If a license application is denied, the applicant may
reapply for a license.
new text end

new text begin (b) The commissioner may only issue a gaming facility license to a tribal entity that,
through a valid limited waiver of sovereign immunity, is subject to the jurisdiction of the
Minnesota state courts and the administrative jurisdiction and regulation of the state.
new text end

new text begin (c) A license issued under this section may not be transferred without the written
approval of the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Background investigation. new text end

new text begin Before issuing a gaming facility license, the
commissioner shall conduct a comprehensive background and financial investigation
of the applicant, including its officers, directors, managers, supervisory personnel, and
persons with a direct financial interest in the applicant. The commissioner may charge the
applicant an investigation fee to cover the cost of the investigation. The commissioner
may require that fingerprints be taken from officers, directors, managers, supervisory
personnel, and persons with a direct financial interest in the applicant. The commissioner
may forward the fingerprints to the Federal Bureau of Investigation for a national criminal
history check. As to the tribal entity applying for a license under this section, the
provisions of this subdivision do not apply or include the officers and employees of tribal
governments who are not officers or employees of the tribal entity.
new text end

new text begin Subd. 6. new text end

new text begin License refusal; suspension and revocation. new text end

new text begin (a) The commissioner may
refuse to issue, or may revoke or suspend, the gaming facility license if the applicant or
licensee or its officers, directors, managers, supervisory personnel, and persons with
a direct financial interest in the applicant or licensee has:
new text end

new text begin (1) engaged in a material violation of law, order, or rule relating to gambling within
any jurisdiction;
new text end

new text begin (2) operated a gaming facility in violation of approved game procedures or an
approved security plan, which in the commissioner's opinion adversely and materially
affects the public interest of the state in the effective regulation and control of gaming;
new text end

new text begin (3) made an intentional false statement in a license application related to gaming;
new text end

new text begin (4) failed to perform material covenants or representations made in a license
application; or
new text end

new text begin (5) failed to notify the commissioner of a material change in the information
provided in the application.
new text end

new text begin (b) The commissioner may not revoke or suspend a license under this subdivision
unless the commissioner has given the licensee, and as to a tribal entity, each participating
tribal government, express written notice of the reason for the proposed revocation
or suspension and has granted the licensee a reasonable amount of time to cure the
violation giving rise to the proposed revocation or suspension, and, in the commissioner's
reasonable judgment, the tribal entity has failed to do so. The commissioner is not required
to provide a reasonable time to cure the violation before a license suspension if, in the
commissioner's reasonable judgment, the violation cannot be cured by the licensee before
significant harm will result to the public health, safety, or welfare. The ability to cure may
include creation of a reorganized or reformed licensee, provided that the reorganized or
reformed licensee is approved by the commissioner and the lottery director.
new text end

new text begin (c) A license revocation or suspension under this subdivision is conducted as a
contested case under sections 14.57 to 14.69 of the Administrative Procedure Act, and is
in addition to any other civil, administrative, or criminal penalties imposed for a violation
of law or rule.
new text end

new text begin Subd. 7. new text end

new text begin Other license actions. new text end

new text begin (a) The commissioner may not issue the gaming
facility license under this section or may by administrative action impose a civil penalty
upon the licensee, issue correction orders, or take other administrative action if the
commissioner determines that the licensee, or officer, director, manager, supervisory
personnel, or other person with a direct financial or management interest in the licensee:
new text end

new text begin (1) has been convicted of a felony or of a crime in another jurisdiction, which would
be a felony in Minnesota;
new text end

new text begin (2) has been convicted of any crime related to gaming;
new text end

new text begin (3) has been found by a court, the lottery director, the commissioner, or other state or
governmental body to have engaged in fraud, misrepresentation, or deceit;
new text end

new text begin (4) has provided false or misleading information to the commissioner;
new text end

new text begin (5) has violated or failed to comply with this section or any provision of this chapter
or chapter 349A;
new text end

new text begin (6) is permanently or temporarily enjoined by any gambling regulatory agency from
engaging in or continuing any conduct or practice involving any aspect of gambling;
new text end

new text begin (7) has had a gambling-related license revoked or suspended, or has paid or been
required to pay a monetary penalty of $10,000 or more by a gambling regulator in another
state or jurisdiction;
new text end

new text begin (8) has been the subject of any of the following actions by the commissioner:
new text end

new text begin (i) has had a license under this chapter denied, suspended, or revoked;
new text end

new text begin (ii) has been censured or reprimanded, or has paid or been required to pay a
monetary penalty or fine; or
new text end

new text begin (iii) has been the subject of any other discipline by the commissioner; or
new text end

new text begin (9) based on past activities or criminal record, poses a threat to the public interest or
to the effective regulation and control of gambling, or creates or enhances the dangers of
unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling
or the management of the business and financial arrangements incidental to the conduct of
gambling.
new text end

new text begin (b) Any conduct in violation of this section, or failure by the licensee to take
reasonable action to cure a violation of this section, may be considered by the
commissioner in determining whether to order revocation or suspension of the gaming
facility license. Any proposed revocation or suspension is subject to the notice and process
requirements of subdivision 6, paragraph (b).
new text end

new text begin (c) Administrative action, including, but not limited to, imposition of a civil penalty,
corrective order, or other administrative action under this paragraph, is a contested case
under sections 14.57 to 14.69 of the Administrative Procedure Act and is in addition to
any other civil, administrative, or criminal penalties provided for a violation of law or rule.
new text end

new text begin Subd. 8. new text end

new text begin Required notification. new text end

new text begin (a) The licensee has the obligation to immediately
report to the commissioner any substantial change in its management or ownership. Any
individual who later becomes an officer, director, or other individual with a direct financial
or management interest in the licensee must undergo a comprehensive background and
financial investigation as set forth in subdivision 5. Prior to assuming any duties or
responsibilities for the licensee the individual must file the appropriate license application
information with the commissioner.
new text end

new text begin (b) Following issuance of a gaming facility license, the licensee must annually
certify to the commissioner its compliance with this section.
new text end

new text begin Subd. 9. new text end

new text begin License review. new text end

new text begin The gaming facility license must be reviewed by the
commissioner every five years. An application for review must be on a form prescribed
by the commissioner. The commissioner shall review the application and conduct the
comprehensive background investigation pursuant to subdivision 5.
new text end

new text begin Subd. 10. new text end

new text begin Audit; investigation. new text end

new text begin (a) The licensee shall have an annual certified audit
conducted of the licensee's operation of the gaming facility in accordance with generally
accepted accounting principles. The licensee shall file a copy of each audit report with
the commissioner.
new text end

new text begin (b) The commissioner has the right to conduct additional reasonable audits or
investigations relating to the operation of the gaming facility. The commissioner shall
have access to all information, records, and accounts pertaining to the operation of the
gaming facility. The commissioner may recover the reasonable costs of additional audits
and investigations from the licensee.
new text end

new text begin Subd. 11. new text end

new text begin Sale of intoxicating liquor. new text end

new text begin Notwithstanding any other law, local
ordinance, or charter provision, the host community shall issue to the licensee an on-sale
license for the sale of intoxicating liquor at the gaming facility pursuant to chapter 340A.
The annual fee for the license issued pursuant to this subdivision shall be set by the
host community at an amount comparable to the fee charged by municipalities in the
surrounding area for a similar license. Chapter 340A applies to the sale of intoxicating
liquor at the gaming facility, except that the licensed premises need not be compact and
contiguous if the licensed premises are limited to the interior and grounds of the gaming
facility.
new text end

new text begin Subd. 12. new text end

new text begin Detention of suspects. new text end

new text begin (a) The commissioner may designate specific
employees of the department, the lottery, or the gaming facility as persons authorized to
detain a person if they have probable cause to believe that the person detained has violated
section 609.651 or 609.76 while at the gaming facility.
new text end

new text begin (b) A person authorized to detain an individual under paragraph (a) is not criminally
or civilly liable for any detention authorized by this subdivision if the person has a
good faith belief that probable cause exists for the detention, and the detention was not
conducted with unreasonable force or in bad faith.
new text end

new text begin (c) A peace officer or person authorized by the commissioner under paragraph (a)
may exclude a person from the gaming facility or remove that person from the gaming
facility if the person is suspected to have violated section 609.651 or 609.76 or possesses
contraband as provided in section 609.762, subdivision 1.
new text end

new text begin (d) The licensee may establish a self-exclusion program by which persons, at their
request, may be excluded from the gaming facility.
new text end

new text begin Subd. 13. new text end

new text begin Reimbursement of costs. new text end

new text begin The commissioner shall impose a fee on
the licensee sufficient to recover the operating costs of the commissioner to license
and regulate the gaming facility under this section and sections 299L.091 to 299L.094
with the approval of the legislature according to section 16A.1283. Notwithstanding
section 16A.1283, when the legislature is not in session, the commissioner of finance
may grant interim approval for any new fee or adjustment to existing fees that are not
statutorily specified, until such time as the legislature reconvenes, and acts upon the
new fees or adjustments. Money received by the commissioner under this subdivision
must be deposited in the state treasury and credited to the commissioner reimbursement
account and is annually appropriated to the commissioner to pay the costs of regulating
activities at the gaming facility.
new text end

Sec. 2.

new text begin [299L.092] GAMING MANAGEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin License required. new text end

new text begin The tribal entity or any entity formed by or
engaged by the tribal entity to manage the operations of the gaming facility under section
349A.17, must obtain a gaming management license from the commissioner.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin An application for a license under this section must be
on a form prescribed by the commissioner. The commissioner may issue a gaming
management license to the management entity that will manage or operate the gaming
facility or gaming operations for the tribal entity. The term of this license shall be adjusted
to be consistent with the date of the tribal-state agreement.
new text end

new text begin Subd. 3. new text end

new text begin License issuance. new text end

new text begin (a) The commissioner shall issue a license under
this section unless information obtained from the comprehensive background check
establishes that issuance of the license would be adverse to the public interest or to the
effective regulation of gaming.
new text end

new text begin (b) The commissioner may only issue a gaming management license to an entity
that is subject to the jurisdiction of the Minnesota state courts and the administrative
jurisdiction and regulation of the state.
new text end

new text begin (c) Any license issued under this section is nontransferable.
new text end

new text begin Subd. 4. new text end

new text begin Background investigation. new text end

new text begin (a) Before issuing a gaming management
license, the commissioner must conduct a comprehensive background and financial
investigation of the applicant including its officers, directors, managers, supervisory
personnel, and persons with a direct financial interest in the management entity, provided
that if the management entity applying for the gaming management license and the gaming
facility licensee are the same, the commissioner shall utilize the background investigation
conducted as part of the application for a gaming facility license. The commissioner may
require that fingerprints be taken and the commissioner may forward the fingerprints to
the Federal Bureau of Investigation for a national criminal history check on the officers,
directors, managers, supervisory personnel, and persons with a direct financial interest in
the management entity, not including the tribal governments that have an interest in the
management entity. The provisions of this paragraph do not apply or include the tribal
government having an interest in the management entity.
new text end

new text begin (b) The commissioner may charge an applicant for a gaming management
license a reasonable fee to cover the costs of the investigation. Money received by
the commissioner under this subdivision must be deposited in the state treasury and
credited to the commissioner reimbursement account and is annually appropriated to the
commissioner to pay for costs incurred under this subdivision.
new text end

new text begin Subd. 5. new text end

new text begin License actions. new text end

new text begin (a) The commissioner may not issue a license under this
section, or may by administrative action revoke, suspend, or refuse to renew the gaming
management license, impose a civil penalty upon the licensee, or issue correction orders,
if the commissioner determines that the management entity, or officer, director, manager,
supervisory personnel, or other person with a direct financial interest in the management
entity, not including the tribal government that have an interest in the management entity
financial or management interest in the licensee:
new text end

new text begin (1) has been convicted of a felony or of a crime in another jurisdiction, which would
be a felony in Minnesota;
new text end

new text begin (2) has been convicted of any crime related to gaming;
new text end

new text begin (3) has been found by a court, the lottery director, the commissioner, or other state or
governmental body to have engaged in fraud, misrepresentation, or deceit;
new text end

new text begin (4) has provided false or misleading information to the commissioner;
new text end

new text begin (5) has violated or failed to comply with this chapter or chapter 349A;
new text end

new text begin (6) is permanently or temporarily enjoined by any gambling regulatory agency from
engaging in or continuing any conduct or practice involving any aspect of gambling;
new text end

new text begin (7) has had a gambling related license revoked or suspended, or has paid or been
required to pay a monetary penalty of $10,000 or more, by a gambling regulator in another
state or jurisdiction;
new text end

new text begin (8) has been the subject of any of the following actions by the commissioner:
new text end

new text begin (i) has had a license under this chapter denied, suspended, or revoked;
new text end

new text begin (ii) has been censured or reprimanded or has paid or been required to pay a monetary
penalty or fine; or
new text end

new text begin (iii) has been the subject of any other discipline by the commissioner;
new text end

new text begin (9) has engaged in conduct that is contrary to the public health, safety, or welfare,
or to the integrity of gambling;
new text end

new text begin (10) based on past activities or criminal record, poses a threat to the public interest or
to the effective regulation and control of gambling, or creates or enhances the dangers of
unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling
or the management of the business and financial arrangements incidental to the conduct of
gambling;
new text end

new text begin (11) has engaged in a material violation of law, order, or rule relating to gambling
within any jurisdiction;
new text end

new text begin (12) has operated gaming in violation of approved game procedures or an approved
security plan, which in the commissioner's opinion adversely and materially affects the
public interest of the state in the effective regulation and control of gaming;
new text end

new text begin (13) has made an intentional false statement in a license application;
new text end

new text begin (14) has failed to perform material covenants or representations made in a license
application; or
new text end

new text begin (15) has failed to notify the commissioner of a material change in the information
provided in a license application.
new text end

new text begin (b) A license revocation, suspension, or imposition of a civil penalty under this
paragraph is a contested case under sections 14.57 to 14.69 of the Administrative
Procedure Act and is in addition to any criminal penalties provided for a violation of
law or rule.
new text end

new text begin (c) The commissioner shall provide notice of any license revocation, suspension, or
imposition of a civil penalty to the tribal entity.
new text end

new text begin Subd. 6. new text end

new text begin Required notification. new text end

new text begin (a) The gaming management licensee has the
obligation to immediately report to the commissioner any change in its management or
ownership. Any individual who later becomes an officer, director, or other individual with
a direct financial or management interest in the licensee must undergo a comprehensive
background and financial investigation as set forth in subdivision 4. Prior to assuming any
duties or responsibilities for the licensee, the individual must file the appropriate license
application information with the commissioner.
new text end

new text begin (b) Following issuance of a gaming management license, the licensee must annually
certify to the commissioner its compliance with this section.
new text end

new text begin Subd. 7. new text end

new text begin License renewal. new text end

new text begin The gaming management license must be renewed
every five years. The commissioner must review an application for renewal of a gaming
management license in the same manner as set forth in this section for issuance of a
license, including the assessment of costs related to the background investigation.
new text end

Sec. 3.

new text begin [299L.093] EMPLOYEES LICENSES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The commissioner may issue employee licenses for
persons employed at a gaming facility. All persons employed at a gaming facility must
have the appropriate license issued by the commissioner. The gaming facility licensee
must ensure that an employee has a valid employee license before the employee begins
work at the gaming facility.
new text end

new text begin Subd. 2. new text end

new text begin Application information. new text end

new text begin An application for an employee license must
be on a form prescribed by the commissioner and include an affidavit of qualification
that the applicant:
new text end

new text begin (1) does not have a felony conviction of record in a state or federal court and does
not have a state or federal felony charge pending;
new text end

new text begin (2) is not and never has been connected with or engaged in an illegal business;
new text end

new text begin (3) has never been found guilty of fraud or misrepresentation in connection with
gambling; and
new text end

new text begin (4) has never been found guilty of a violation of law or rule relating to gambling
within any jurisdiction.
new text end

new text begin Subd. 3. new text end

new text begin Background investigations. new text end

new text begin The commissioner shall investigate each
applicant for an employee license to the extent the commissioner deems necessary.
The commissioner must require the applicant to be fingerprinted or to furnish the
applicant's fingerprints. The commissioner may require the tribal entity to pay the
costs of processing employee licenses, renewing employee licenses, and conducting
background investigations on the employee. Money received by the commissioner under
this subdivision must be deposited in the state treasury and credited to the commissioner
reimbursement account and are annually appropriated to the commissioner to pay for costs
incurred under this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin License issuance and renewal. new text end

new text begin If the commissioner determines that
the applicant is qualified for the occupation for which licensing is sought and will
not adversely affect the public health, safety, and welfare or the integrity of gambling
in Minnesota, the commissioner may issue an employee license to the applicant. If
the commissioner makes a similar finding for a renewal of an employee license, the
commissioner may renew the license. Employee licenses are effective for one year.
new text end

new text begin Subd. 5. new text end

new text begin Revocation and suspension. new text end

new text begin (a) The commissioner may revoke an
employee license for a violation of law or rule which in the commissioner's opinion
adversely affects the integrity of gambling in Minnesota, or for an intentional false
statement made in a license application. The commissioner may suspend an employee
license for up to one year or refuse to renew the license or impose a civil penalty for a
violation of law, order, or rule. A license revocation or suspension 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.
new text end

new text begin (b) The commissioner may summarily suspend an employee license prior to a
contested case hearing where it is necessary to ensure the integrity of gambling. 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 commissioner must issue a
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

Sec. 4.

new text begin [299L.094] VENDOR LICENSES.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance. new text end

new text begin The commissioner may issue a vendor license for any
person or entity that sells or distributes products or provides services at a gaming facility.
No person may sell or distribute products or provide a service at a gaming facility unless
the person has obtained a license from the commissioner. All employees of the vendor
whose work requires attendance at a gaming facility must obtain license under section
299L.093.
new text end

new text begin Subd. 2. new text end

new text begin Application information. new text end

new text begin An application for a vendor license must be on
a form prescribed by the commissioner and include an affidavit of qualification that the
applicant, and any officer, director, or person with direct financial interest in the applicant:
new text end

new text begin (1) does not have a felony conviction of record in a state or federal court and does
not have a state or federal felony charge pending;
new text end

new text begin (2) is not and never has been connected with or engaged in an illegal business;
new text end

new text begin (3) has never been found guilty of fraud or misrepresentation in connection with
gambling; and
new text end

new text begin (4) has never been found guilty of a violation of law or rule relating to gambling
within any jurisdiction.
new text end

new text begin Subd. 3. new text end

new text begin Background investigation. new text end

new text begin The commissioner shall investigate each
applicant for a vendor license to the extent the commissioner deems necessary. The
commissioner must require the applicant be fingerprinted or furnish the applicant's
fingerprints. The commissioner may require the vendor to pay the costs of processing
employee licenses, renewing vendor licenses, and conducting background investigations
on the vendor. Money received by the commissioner under this subdivision must be
deposited in the state treasury and credited to the commissioner reimbursement account,
and are annually appropriated to the commissioner to pay for costs incurred under this
subdivision.
new text end

new text begin Subd. 4. new text end

new text begin License issuance and renewal. new text end

new text begin If the commissioner determines that the
applicant is qualified and the issuance of the license will not adversely affect the public
health, safety, and welfare or the integrity of gambling in Minnesota, the commissioner
may issue a vendor license to the applicant. If the commissioner makes a similar finding
for a renewal of a vendor license, the commissioner may renew the license. Vendor
licenses are effective for one year.
new text end

new text begin Subd. 5. new text end

new text begin Revocation and suspension. new text end

new text begin (a) The commissioner may revoke a vendor
license for a violation of law or rule that, in the commissioner's opinion, adversely affects
the integrity of gambling in Minnesota, or for an intentional false statement made in a
license application. The commissioner may suspend a vendor license for up to one year or
refuse to renew the license or impose a civil penalty for a violation of law, order, or rule.
A license revocation or suspension 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.
new text end

new text begin (b) The commissioner may summarily suspend a vendor license for not more than
90 days prior to a contested case hearing where it is necessary to ensure the integrity
of gambling. 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
commissioner must issue a 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

Sec. 5.

new text begin [299L.095] NONLOTTERY CASINO GAMES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms
have the meanings given them.
new text end

new text begin (b) "Nonlottery casino games" means any game authorized by the commissioner
to be conducted by a gaming facility licensee at the gaming facility that is not a gaming
machine or other lottery game as defined by section 349A.01.
new text end

new text begin (c) "Nonlottery casino games' adjusted gross revenue" means the sum of all money
received from the operation of nonlottery casino games, less the amounts paid out to
players in prizes or winnings and promotional allowances approved by the lottery director
under section 349A.17 in the nonlottery casino games.
new text end

new text begin Subd. 2. new text end

new text begin Operation. new text end

new text begin Nonlottery casino games may be operated by the gaming
facility licensee in conformance with a plan of operation approved by the commissioner.
The plan of operation must include, at a minimum:
new text end

new text begin (1) specifying and defining all nonlottery games to be played, including all governing
aspects of each nonlottery casino game;
new text end

new text begin (2) arrangements to ensure the security of nonlottery casino gaming;
new text end

new text begin (3) internal control systems for play of nonlottery casino games; and
new text end

new text begin (4) a plan for the training of nonlottery casino games personnel in identification of
problem gamblers and appropriate action to prevent or control problem gambling.
new text end

new text begin Subd. 3. new text end

new text begin Plan amendment. new text end

new text begin The plan of operation may be amended only with
the approval of the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Actions. new text end

new text begin The commissioner may revoke, suspend, refuse to renew, or
impose a civil penalty upon the gaming facility or the gaming management licensee for
violation of the plan of operation. An action under this subdivision shall be conducted as a
contested case under sections 14.57 to 14.69 of the Administrative Procedure Act and is in
addition to criminal penalties imposed for violation of the plan of operation.
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 nonlottery casino game at a 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 plan of operation, claim
procedures established by the plan of operation for that game, and any confidential or
public validation tests established by the plan of operation for that game. A person under
18 years of age may not claim a prize from a nonlottery casino game at a gaming facility.
new text end

Sec. 6.

new text begin [299L.096] EMPLOYMENT RESTRICTIONS; CIVIL PENALTY.
new text end

new text begin (a) The lottery director, the commissioner, or any manager, director, or supervisor
employed by the lottery or the Department of Public Safety whose job responsibilities
include the oversight, audit, investigation, or regulation of gaming at a gaming facility
licensed by the commissioner must not, while employed with or within one year after
leaving employment, receive compensation directly or indirectly from, or enter into a
contractual relationship with the tribal entity, or any management entity licensed by the
commissioner pursuant to section 299L.091 or 299L.092.
new text end

new text begin (b) The tribal entity, or management entity licensed by the commissioner must not
negotiate with or offer to employ or compensate the lottery director, commissioner, or
any manager, director, or supervisor employed by the lottery or the Department of Public
Safety whose job responsibilities include the oversight, audit, investigation, or regulation
of gaming at a gaming facility licensed by the commissioner pursuant to section 299L.091
or 299L.092 while the person is employed by the lottery or the Department of Public
Safety or within one year after the person's employment has ended.
new text end

new text begin (c) A state employee who violates this section is subject to a civil penalty not to
exceed $10,000 for each violation. The attorney general may bring an action in district
court to pursue a violation of this section.
new text end

new text begin (d) The commissioner may take administrative action in relation to the gaming
facility license or management license for a violation of this section by a tribal entity, or
management entity.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

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

ARTICLE 3

CARD CLUBS

Section 1.

Minnesota Statutes 2010, section 240.135, is amended to read:

240.135 CARD CLUB REVENUE.

(a) From the amounts received from charges authorized under section 240.30,
subdivision 4, new text begin or from revenue received from the conduct of nonlottery casino games
under section 299L.04, new text end the licensee shall set aside the amounts specified in this section to
be used for purse payments. These amounts are in addition to the breeders fund and purse
requirements set forth elsewhere in this chapter.

(1) For amounts between zero and $6,000,000, the licensee shall set aside ten
percent to be used as purses.

(2) For amounts in excess of $6,000,000, the licensee shall set aside 14 percent to
be used as purses.

(b) From all amounts set aside under paragraph (a), the licensee shall set aside
ten percent to be deposited in the breeders fund. The licensee and the horseperson's
organization representing the majority of horsepersons who have raced at the racetrack
during the preceding 12 months may negotiate percentages different from those stated in
this section if the agreement is in writing and filed with the Racing Commission.

(c) It is the intent of the legislature that the proceeds of the card playing activities
authorized by this chapter be used to improve the horse racing industry by improving
purses. The commission shall annually review the financial details of card playing
activities and determine if the present use of card playing proceeds is consistent with the
policy established by this paragraph. If the commission determines that the use of the
proceeds does not comply with the policy set forth herein, then the commission shall direct
the parties to make the changes necessary to ensure compliance. If these changes require
legislation, the commission shall make the appropriate recommendations to the legislature.

Sec. 2. new text begin EFFECTIVE DATE.
new text end

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

ARTICLE 4

GAMING TRANSACTION FEE

Section 1. new text begin REVENUES.
new text end

new text begin Subdivision 1. new text end

new text begin Tribal entity. new text end

new text begin A tribal entity authorized to conduct nonlottery casino
games at a gaming facility under section 299L.094, shall pay a gaming transaction fee at
the rate of ten percent of nonlottery casino games' adjusted gross revenue, as defined in
section 299L.095. The tribal entity authorized to conduct nonlottery casino games at the
gaming facility must make the payments due under this subdivision to the commissioner
on or before the 20th day of each month for the adjusted gross revenue received for the
previous month. Provided that beginning on January 1 following the first full year that the
tribal entity's permanent gaming facility has been in operation, there shall be an adjustment
in the fee due under this subdivision if (1) the adjusted gross revenue from the conduct
of gaming machines at the gaming facility is less than $50,000,000 for that quarter, the
gaming transaction fee shall be at the rate of ... percent of nonlottery casino games'
adjusted gross revenue, as defined in section 299L.095, and (2) the adjusted gross revenue
from the conduct of gaming machines at the gaming facility is less than $25,000,0000 for
that quarter, the gaming transaction fee shall be at the rate of six percent of nonlottery
casino games' adjusted gross revenue, as defined in section 299L.095.
new text end

new text begin Subd. 2. new text end

new text begin Deposit of receipts. new text end

new text begin The commissioner shall deposit the money transmitted
under this section in the state treasury to be credited to the general fund.
new text end

Sec. 2. new text begin EFFECTIVE DATE.
new text end

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

ARTICLE 5

MISCELLANEOUS PROVISIONS

Section 1.

Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:

Subd. 2.

Exclusions.

Notwithstanding subdivision 1, a gambling device:

(1) may be sold by a person who is not licensed under this section, if the person (i) is
not engaged in the trade or business of selling gambling devices, and (ii) does not sell
more than one gambling device in any calendar year;

(2) may be sold by the governing body of a federally recognized Indian tribe
described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
a distributor licensed under this section, and (iii) the licensed distributor notifies the
commissioner of the purchase, in the same manner as is required when the licensed
distributor ships a gambling device into Minnesota;

(3) may be possessed by a person not licensed under this section if the person holds
a permit issued under section 299L.08; deleted text begin and
deleted text end

(4) may be possessed by a state agency, with the written authorization of the director,
for display or evaluation purposes only and not for the conduct of gambling new text begin ; and
new text end

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

Sec. 2.

Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:

Subd. 2a.

Restrictions.

(a) A manufacturer licensed under this section may sell,
offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
licensed under this section new text begin or to the State Lottery as authorized under chapter 349A new text end .

(b) A distributor licensed under this section may sell, offer to sell, market, rent,
lease, or otherwise provide, in whole or in part, a gambling device only to:

(1) the governing body of a federally recognized Indian tribe that is authorized
to operate the gambling device under a tribal state compact under the Indian Gaming
Regulatory Act, Public Law 100-497, and future amendments to it;

(2) a person for use in the person's dwelling for display or amusement purposes in a
manner that does not afford players an opportunity to obtain anything of value;

(3) another distributor licensed under this section; deleted text begin or
deleted text end

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

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

Sec. 3.

Minnesota Statutes 2010, 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 gaming facility
as authorized by chapters 299L and 349A.
new text end

Sec. 4.

Minnesota Statutes 2010, section 541.20, is amended to read:

541.20 RECOVERY OF MONEY LOST.

Every person who, by playing at cards, dice, or other game, or by betting on the hands
or sides of such as are gambling, shall lose to any person so playing or betting any sum of
money or any goods, and pays or delivers the same, or any part thereof, to the winner,
may sue for and recover such money by a civil action, before any court of competent
jurisdiction. For purposes of this section, gambling shall not include pari-mutuel wagering
conducted under a license issued pursuant to chapter 240, purchase or sale of tickets in
the state lottery, new text begin purchase of gaming machine plays as authorized under chapter 349A,
conduct of any lottery or nonlottery casino games at a gaming facility as authorized under
chapters 299L and 349A, new text end or gambling authorized under chapters 349 and 349A.

Sec. 5.

Minnesota Statutes 2010, section 541.21, is amended to read:

541.21 COMMITMENTS FOR GAMBLING DEBT VOID.

Every note, bill, bond, mortgage, or other security or conveyance in which the whole
or any part of the consideration shall be for any money or goods won by gambling or
playing at cards, dice, or any other game whatever, or by betting on the sides or hands
of any person gambling, or for reimbursing or repaying any money knowingly lent or
advanced at the time and place of such gambling or betting, or lent and advanced for any
gambling or betting to any persons so gambling or betting, shall be void and of no effect
as between the parties to the same, and as to all persons except such as hold or claim
under them in good faith, without notice of the illegality of the consideration of such
contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
in the state lottery new text begin or other wagering authorized new text end under chapter new text begin 299L or new text end 349A; (3) gaming
activities conducted pursuant to the Indian Gaming Regulatory Act, United States Code,
title 25, section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.

Sec. 6.

Minnesota Statutes 2010, 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; deleted text begin and
deleted text end

(8) the purchase and sale of state lottery tickets under chapter 349A new text begin ; and
new text end

new text begin (9) plays on a gaming machine, or purchase or participating in any lottery or
nonlottery casino game at a gaming facility authorized under chapter 299L or 349A new text end .

Sec. 7.

Minnesota Statutes 2010, section 609.761, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Gaming facility. 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 at a gaming facility
under chapter 349A, or the conduct of any other lottery or nonlottery casino game at a
gaming facility under chapters 299L and 349A.
new text end

Sec. 8. new text begin SEVERABILITY; 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. 9. new text begin EFFECTIVE DATE.
new text end

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