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Minnesota Legislature

Office of the Revisor of Statutes

SF 3098

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

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

Current Version - 1st Engrossment

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A bill for an act
relating to lawful gambling; providing for certain penalties; modifying licensing
and other regulatory provisions; making changes to expenditure restrictions;
modifying games and prizes; making clarifying, conforming, and technical
changes to lawful gambling; requiring a report; amending Minnesota Statutes
2006, sections 349.12, subdivisions 18, 31; 349.15, by adding a subdivision;
349.161, subdivisions 1, 5; 349.1641; 349.167, subdivisions 2, 4, 7; 349.17,
subdivision 7; 349.18, subdivision 1; 349.19, subdivision 10; 349.191,
subdivisions 1a, 1b; 349.2113; Minnesota Statutes 2007 Supplement, sections
349.15, subdivision 1; 349.17, subdivision 8; 349.211, subdivisions 2, 2a, 2c,
3, 4, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2006, section 349.12, subdivision 18, is amended to read:


Subd. 18.

Gambling equipment.

"Gambling equipment" means: bingo hard cards
or paper sheets, linked bingo paper sheets, devices for selecting bingo numbers, electronic
bingo devices, pull-tabs, jar tickets, paddlewheels, paddlewheel tables, paddletickets,
paddleticket cards, tipboards, tipboard tickets,new text begin promotional tickets that mimic a pull-tab or
tipboard,
new text end and pull-tab dispensing devices.

Sec. 2.

Minnesota Statutes 2006, section 349.12, subdivision 31, is amended to read:


Subd. 31.

Promotional ticket.

A pull-tab or tipboard ticketnew text begin created and printed by a
licensed manufacturer
new text end with the words "no purchase necessary" and "for promotional use
only" and for which no consideration is given is a promotional ticket.

Sec. 3.

Minnesota Statutes 2007 Supplement, section 349.15, subdivision 1, is
amended to read:


Subdivision 1.

Expenditure restrictions.

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. Provided that no more than 70 percent of the gross profit from bingo, and
no more than 60 percent of the gross profit from other forms of lawful gambling, may
be expended biennially during the term of the license for allowable expenses related to
lawful gamblingnew text begin, except that for the period of July 1, 2008, to June 30, 2009, no more
than 75 percent of the gross profit from bingo, and no more than 65 percent of the gross
profit from other forms of lawful gambling, may be expended for allowable expenses
related to lawful gambling
new text end. For licenses issued after June 30, 2006, compliance with this
subdivision will be measured on a biennial basis that is concurrent with the term of the
license. Compliance with this subdivision is a condition for the renewal of any license
beginning on July 1, 2008. For licenses renewed with an effective date between July 1,
2006, and June 30, 2008, an organization shall carry forward an amount equal to 15
percent of any positive allowable expense carryover amount. This balance must be used to
offset any future negative expense balance at the time of license renewal.

Sec. 4.

Minnesota Statutes 2006, section 349.15, is amended by adding a subdivision
to read:


new text begin Subd. 5. new text end

new text begin Civil penalty. new text end

new text begin (a) If an organization exceeds the expense limitation
contained in subdivision 1, the board may suspend the organization's license or impose a
civil penalty as follows:
new text end

new text begin (1) up to five percent of the reimbursement amount for the first violation;
new text end

new text begin (2) up to ten percent of the reimbursement amount for a second consecutive
violation; and
new text end

new text begin (3) up to 25 percent of the reimbursement amount for subsequent consecutive
violations.
new text end

new text begin (b) In determining any suspension or penalty for a violation of subdivision 1, the
board must consider any unique factors or extraordinary circumstances that directly
caused the organization to exceed the expense limitation. Unique factors or extraordinary
circumstances include, but are not limited to: the purchase of capital assets necessary to
conduct lawful gambling; road or other construction causing impaired access to the lawful
gambling premise; and flood, tornado, or other catastrophe that had a direct impact on
the continuing lawful gambling operation.
new text end

new text begin (c) Notwithstanding section 349.151, subdivision 4, paragraph (a), clause (10), the
board may impose a civil penalty under this subdivision that exceeds $500.
new text end

Sec. 5.

Minnesota Statutes 2006, section 349.161, subdivision 1, is amended to read:


Subdivision 1.

Prohibited acts; licenses required.

(a) No person may:

(1) sell, offer for sale, or furnish gambling equipment for use within the state other
than for lawful gambling exempt or excluded from licensing, except to an organization
licensed for lawful gambling;

(2) sell, offer for sale, or furnish gambling equipment for use within the state
without having obtained a distributor license or a distributor salesperson license under
this sectionnew text begin except that an organization authorized to conduct bingo by the board may
loan bingo hard cards and devices for selecting bingo numbers to another organization
authorized to conduct bingo
new text end;

(3) sell, offer for sale, or furnish gambling equipment for use within the state that is
not purchased or obtained from a manufacturer or distributor licensed under this chapter; or

(4) sell, offer for sale, or furnish gambling equipment for use within the state that
has the same serial number as another item of gambling equipment of the same type sold
or offered for sale or furnished for use in the state by that distributor.

(b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling
equipment for use within the state without being employed by a licensed distributor or
owning a distributor license.

Sec. 6.

Minnesota Statutes 2006, section 349.161, subdivision 5, is amended to read:


Subd. 5.

Prohibition.

(a) No distributor, distributor salesperson, or other employee
of a distributor, may also be a wholesale distributor of alcoholic beverages or an employee
of a wholesale distributor of alcoholic beverages.

(b) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor, may: (1) be involved in the conduct of lawful gambling
by an organization; (2) keep or assist in the keeping of an organization's financial records,
accounts, and inventories; or (3) prepare or assist in the preparation of tax forms and other
reporting forms required to be submitted to the state by an organization.

(c) No distributor, distributor salesperson, or any representative, agent, affiliate,
or other employee of a distributor may provide a lessor of gambling premises any
compensation, gift, gratuity, premium, or other thing of value.

(d) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may provide an employee or agent of the organization
any compensation, gift, gratuity, premium, or other thing of value greater than $25 per
organization in a calendar year.

(e) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may participate in any gambling activity at any gambling
site or premises where gambling equipment purchased from that distributor or distributor
salesperson is being used in the conduct of lawful gambling.

(f) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may alter or modify any gambling equipment, except to
add a "last ticket sold" prize sticker.

(g) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may: (1) recruit a person to become a gambling manager
of an organization or identify to an organization a person as a candidate to become
gambling manager for the organization; or (2) identify for an organization a potential
gambling location.

(h) No distributor or distributor salesperson may purchase gambling equipment for
resale to a person for use within the state from any person not licensed as a manufacturer
under section 349.163, except for gambling equipment returned from an organization
licensed under section 349.16, or exempt or excluded from licensing under section
349.166.

(i) No distributor or distributor salesperson may sell gambling equipmentnew text begin, except
gambling equipment identified as a promotional ticket,
new text end to any person for use in Minnesota
other than (i) a licensed organization or organization excluded or exempt from licensing,
or (ii) the governing body of an Indian tribe.

(j) No distributor or distributor salesperson may sell or otherwise provide a pull-tab
or tipboard deal with the symbol required by section 349.163, subdivision 5, paragraph
(d), visible on the flare to any person other than in Minnesota to a licensed organization or
organization exempt from licensing.

Sec. 7.

Minnesota Statutes 2006, section 349.1641, is amended to read:


349.1641 LICENSES; SUMMARY SUSPENSION.

The board may (1) summarily suspend the license of an organization that is more
than three months late in filing a tax return or in paying a tax required under chapter 297E
and may keep the suspension in effect until all required returns are filed and required taxes
are paid; deleted text beginanddeleted text end (2) summarily suspend for not more than 90 days any license issued by the
board or director for what the board determines are actions detrimental to the integrity
of lawful gambling in Minnesotanew text begin; and (3) summarily suspend the license of a gambling
manager who has failed to receive the training required under section 349.167, subdivision
4, clause (2), and may keep the suspension in effect until the gambling manager passes an
examination prepared and administered by the board. The examination does not qualify
as continuing education credit for the next calendar year
new text end. The board must notify the
licensee at least 14 days before suspending the license under this section. If a license is
summarily suspended under this section, a contested case hearing on the merits must be
held within 20 days of the issuance of the order of suspension, unless the parties agree
to a later hearing date. The administrative law judge's report must be issued within 20
days after the close of the hearing record. In all cases involving summary suspension,
the board must issue its final decision within 30 days after receipt of the report of the
administrative law judge and subsequent exceptions and argument under section 14.61.
When an organization's license is suspended under this section, the board shall within
three days notify all municipalities in which the organization's gambling premises are
located and all licensed distributors in the state.

Sec. 8.

Minnesota Statutes 2006, section 349.167, subdivision 2, is amended to read:


Subd. 2.

Gambling managers; licenses.

A person may not serve as a gambling
manager for an organization unless the person possesses a valid gambling manager's
license issued by the board. In addition to the disqualifications in section 349.155,
subdivision 3
, the board may not issue a gambling manager's license to a person applying
for the license who:

(1) has not complied with subdivision 4, deleted text beginclausedeleted text endnew text begin clausesnew text end (1)new text begin and (2)new text end;

(2) within the five years before the date of the license application, has committed
a violation of law or board rule that resulted in the revocation of a license issued by the
board;

(3) has ever been convicted of a criminal violation involving fraud, theft, tax
evasion, misrepresentation, or gambling; or

(4) has engaged in conduct the board determines is contrary to the public health,
welfare, or safety or the integrity of lawful gambling.

A gambling manager's license runs concurrent with the organization's license unless
the gambling manager's license is suspended or revoked. The annual fee for a gambling
manager's license is $100.

Sec. 9.

Minnesota Statutes 2006, section 349.167, subdivision 4, is amended to read:


Subd. 4.

Training of gambling managers.

deleted text beginThe board shall by rule requiredeleted text end All
persons licensed as gambling managers deleted text begintodeleted text endnew text begin mustnew text end receive deleted text beginperiodicdeleted text end training in laws and
rules governing lawful gamblingdeleted text begin. The rules must containdeleted text endnew text begin to comply withnew text end the following
requirements:

(1) each gambling manager must receive trainingnew text begin within the last six monthsnew text end before
being issued a new license, except that in the case of the death, disability,new text begin resignation,new text end or
termination of a gambling manager, a replacement gambling manager must receive the
training within 90 days of being issued a license;

(2) each gambling manager deleted text beginapplying for a renewal of a licensedeleted text end must deleted text beginhave receiveddeleted text endnew text begin
receive
new text end continuing education training, deleted text beginas required by board rule,deleted text endnew text begin at least once duringnew text end eachnew text begin
calendar
new text end year deleted text beginof the two-year license period, or pass a gambling manager examination
as required in subdivision 7
deleted text end; and

(3) the training required by this subdivision may be provided by a person authorized
by the board to provide the training. Before authorizing a person to provide training,
the board must determine that:

(i) the provider and all of the provider's personnel conducting the training are
qualified to do so;

(ii) the curriculum to be used fully and accurately covers all elements of lawful
gambling law and rules that the board determines are necessary for a gambling manager
to know and understand;

(iii) the fee to be charged for participants in the training sessions is fair and
reasonable; and

(iv) the training provider has an adequate system for documenting completion of
training.

The board or the director may provide the training required by this subdivision using
employees of the board.

Sec. 10.

Minnesota Statutes 2006, section 349.167, subdivision 7, is amended to read:


Subd. 7.

Gambling manager examination.

Each applicant for a new gambling
manager's licensedeleted text begin, and each renewing applicant that has failed to receive training as
required in subdivision 4,
deleted text end must pass an examination prepared and administered by the
board that tests the applicant's knowledge of the responsibilities of gambling managers,
and of gambling procedures, laws, and rules before being issued the license. In the case of
the death, disability,new text begin resignation,new text end or termination of a gambling manager, a replacement
gambling manager must pass the examination within 90 days of being issued a gambling
manager's license. The board shall revoke the replacement gambling manager's license
if the replacement gambling manager fails to pass the examination as required in this
subdivision.

Sec. 11.

Minnesota Statutes 2006, section 349.17, subdivision 7, is amended to read:


Subd. 7.

Bar bingo.

An organization may conduct bar bingo subject to the
following restrictions:

(1) the bingo is conducted at a site the organization owns or leases and which has a
license for the sale of intoxicating beverages on the premises under chapter 340A;

(2) the bingo is conducted using only bingo paper sheets purchased from a licensed
distributor; deleted text beginand
deleted text end

(3) no rent may be paid for a bar bingo occasionnew text begin; and
new text end

new text begin (4) the lessor's immediate family and employees may participate if they are not
involved with the sale or operation of bar bingo
new text end.

Sec. 12.

Minnesota Statutes 2007 Supplement, section 349.17, subdivision 8, is
amended to read:


Subd. 8.

Linked bingo games.

(a) A licensed organization may conduct or
participate in not more than two linked bingo games per occasion, one of which may be
a progressive game in which a portion of the prize is carried over from one occasion to
another until won by a player achieving a bingo within a predetermined amount of bingo
numbers called.

(b) Each participating licensed organization shall contribute to each prize awarded
in a linked bingo game in an amount not to exceed $300.

(c) new text beginAn electronic bingo device as defined in section 349.12, subdivision 12a, may
be used for a linked bingo game.
new text end

new text begin (d) new text endThe board may adopt rules to:

(1) specify the manner in which a linked bingo game must be played and how the
linked bingo prizes must be awarded;

(2) specify the records to be maintained by a linked bingo game provider;

(3) require the submission of periodic reports by the linked bingo game provider and
specify the content of the reports;

(4) establish the qualifications required to be licensed as a linked bingo game
provider; and

(5) any other matter involving the operation of a linked bingo game.

Sec. 13.

Minnesota Statutes 2006, section 349.18, subdivision 1, is amended to read:


Subdivision 1.

Lease or ownership required; rent limitations.

(a) An organization
may conduct lawful gambling only on premises it owns or leases. Leases must be on a
form prescribed by the board. The term of the lease may not begin before the effective date
of the premises permit and must expire on the same day that the premises permit expires.
Leases approved by the board must specify that the board may authorize an organization
to withhold rent from a lessor for a period of up to 90 days if the board determines that
illegal gambling occurred on the premises and that the lessor or its employees participated
in the illegal gambling or knew of the gambling and did not take prompt action to stop the
gambling. The lease must authorize the continued tenancy of the organization without
the payment of rent during the time period determined by the board under this paragraph.
Copies of all leases must be made available to employees of the board and the Division of
Alcohol and Gambling Enforcement on request. The board may prescribe by rule limits
on the amount of rent which an organization may pay to a lessor for premises leased for
bingo. Any rule adopted by the board limiting the amount of rent to be paid may only be
effective for leases entered into, or renewed, after the effective date of the rule.

(b) Rent paid by an organization for leased premises for the conduct of pull-tabs,
tipboards, and paddlewheels is subject to the following limits:

(1) for booth operations, including booth operations where a pull-tab dispensing
device is located, booth operations where a bar operation is also conducted, and booth
operations where both a pull-tab dispensing device is located and a bar operation is also
conducted, the maximum rent is:

(i) in any month where the organization's gross profit at those premises does not
exceed $4,000, up to $400; and

(ii) in any month where the organization's gross profit at those premises exceeds
$4,000, up to $400 plus not more than ten percent of the gross profit for that month in
excess of $4,000;

(2) for bar operations, including bar operations where a pull-tab dispensing device
is located but not including bar operations subject to clause (1), and for locations where
only a pull-tab dispensing device is located:

(i) in any month where the organization's gross profit at those premises does not
exceed $1,000, up to $200; and

(ii) in any month where the organization's gross profit at those premises exceeds
$1,000, up to $200 plus not more than 20 percent of the gross profit for that month
in excess of $1,000;

(3) a lease not governed by clauses (1) and (2) must be approved by the board
before becoming effective;

(4) total rent paid to a lessor from all organizations from leases governed by clause
(1) may not exceed $1,750 per month. Total rent paid to a lessor from all organizations
from leases governed by clause (2) may not exceed $2,500 per month.

(c) Rent paid by an organization for leased premises for the conduct of bingo is
subject to either of the following limits at the option of the parties to the lease:

(1) not more than ten percent of the monthly gross profit from all lawful gambling
activities held during bingo occasions excluding bar bingo or at a rate based on a cost per
square foot not to exceed 110 percent of a comparable cost per square foot for leased space
as approved by the director; and

(2) no rent may be paid for bar bingo.

(d) Amounts paid as rent under leases are all-inclusive. No other services or
expenses provided or contracted by the lessor may be paid by the organization, including,
but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn
services, electricity, heat, security, security monitoring, storage, other utilities or services,
and, in the case of bar operations, cash shortages, unless approved by the director. Any
other expenditure made by an organization that is related to a leased premises must be
approved by the director. An organization may not provide any compensation or thing of
value to a lessor or the lessor's employees from any fund source other than its gambling
account. Rent payments may not be made to an individual.

(e) Notwithstanding paragraph (b), an organization may pay a lessor for food or
beverages or meeting room rental if the charge made is comparable to similar charges
made to other individuals or groups.

(f) No entity other than the licensed organization may conduct any activity within
a booth operation on a leased premises.

(g) Employees of a lessor not involved in the conduct of lawful gambling on the
premises or nongambling employees of an organization conducting lawful gambling on
the premises may participate in lawful gambling on the premises provided if pull-tabs or
tipboards are sold, the organization posts the major prizes awarded.

(h) A gambling employee may purchase pull-tabs or tipboards at the site of the
employee's place of employment provided:

(1) the organization posts the major prizes for pull-tab or tipboard games; and

(2) the employee is not involved in the sale of pull-tabs or tipboards at that site.

(i) At a leased site where an organization uses a paddlewheel consisting of deleted text begin30deleted text endnew text begin 32new text end
numbers or less or a tipboard consisting of deleted text begin30deleted text endnew text begin 32new text end tickets or less, tickets may be sold
throughout the permitted premises, but winning tickets must be redeemed, the paddlewheel
must be located, and the tipboard seal must be opened within the leased premises.

Sec. 14.

Minnesota Statutes 2006, section 349.19, subdivision 10, is amended to read:


Subd. 10.

Pull-tab records.

(a) The board shall by rule require a licensed
organization to require each winner of a pull-tab prize of $50 or more to present
identification in the form of a driver's license, Minnesota identification card, or other
identification the board deems sufficient to allow the identification and tracing of the
winner. The rule must require the organization to retain winning pull-tabs of $50 or more,
and the identification of the winner of the pull-tab, for 3-1/2 years.

(b) An organization must maintain separate cash banks for each deal of pull-tabs
unless (1) deleted text begintwo or more deals are commingled indeleted text endnew text begin the licensed organization usesnew text end a pull-tab
dispensing device, or (2) the organization uses a cash register, of a type approved by the
board, which records all sales of pull-tabs by separate deals.

(c) The board shall:

(1) by rule adopt minimum technical standards for cash registers that may be used
by organizations, and shall approve for use by organizations any cash register that meets
the standards; and

(2) before allowing an organization to use a cash register that commingles receipts
from several different pull-tab games in play, adopt rules that define how cash registers
may be used and that establish a procedure for organizations to reconcile all pull-tab
games in play at the end of each month.

Sec. 15.

Minnesota Statutes 2006, section 349.191, subdivision 1a, is amended to read:


Subd. 1a.

Credit and sales to delinquent organizations.

(a) If a distributor or
linked bingo game provider does not receive payment in full from an organization within
deleted text begin 35deleted text endnew text begin 30new text end days of the day immediately following the date of the invoice, the distributor or
linked bingo game provider must notify the board in writing of the delinquency on the
next business day.

(b) If a distributor or linked bingo game provider who has notified the board under
paragraph (a) has not received payment in full from the organization within 60 days of the
notification under paragraph (a), the distributor or linked bingo game provider must notify
the board of the continuing delinquency.

(c) On receipt of a notice under paragraph (a), the board shall order all distributors
and linked bingo game providers that until further notice from the board, they may sell
gambling equipment to the delinquent organizations only on a cash basis with no credit
extended. On receipt of a notice under paragraph (b), the board shall order all distributors
and linked bingo game providers not to sell any gambling equipment to the delinquent
organization.

(d) No distributor or linked bingo game provider may extend credit or sell gambling
equipment to an organization in violation of an order under paragraph (c) until the board
has authorized such credit or sale.

Sec. 16.

Minnesota Statutes 2006, section 349.191, subdivision 1b, is amended to read:


Subd. 1b.

Credit and sales to delinquent distributors.

(a) If a manufacturer does
not receive payment in full from a distributor within deleted text begin35deleted text endnew text begin 30new text end days of the day immediately
following the date of invoice, the manufacturer must notify the board in writing of the
delinquency on the next business day.

(b) If a manufacturer who has notified the board under paragraph (a) has not received
payment in full from the distributor within 60 days of the notification under paragraph (a),
the manufacturer must notify the board of the continuing delinquency.

(c) On receipt of a notice under paragraph (a), the board shall order all manufacturers
that until further notice from the board, they may sell gambling equipment to the
delinquent distributor only on a cash basis with no credit extended. On receipt of a notice
under paragraph (b), the board shall order all manufacturers not to sell any gambling
equipment to the delinquent distributor.

(d) No manufacturer may extend credit or sell gambling equipment to a distributor in
violation of an order under paragraph (c) until the board has authorized such credit or sale.

Sec. 17.

Minnesota Statutes 2007 Supplement, section 349.211, subdivision 2, is
amended to read:


Subd. 2.

Progressive bingo games.

Except as provided in subdivision 1a, a prize
of up to $2,000 may be awarded for a progressive bingo game, including a cover-all
game. The prize for a progressive bingo game may start at $500 and be increased by
up to $100 for each occasion during which the progressive bingo game is played. A
consolation prize of up to $200 for a progressive bingo game may be awarded in each
occasion during which the progressive bingo game is played and the accumulated prize is
not won. deleted text beginThe total amount awarded in progressive bingo game prizes in any calendar year
may not exceed $48,000.
deleted text end

Sec. 18.

Minnesota Statutes 2007 Supplement, section 349.211, subdivision 2a,
is amended to read:


Subd. 2a.

Pull-tab prizes.

The maximum prize which may be awarded for any
single pull-tab is $599new text begin for $2 and under pull-tabs, $899 for $3 pull-tabs, $1,199 for
$4 pull-tabs, and $1,499 for $5 pull-tabs
new text end, not including any cumulative or carryover
prizes. Cumulative or carryover prizes in a pull-tab game shall not exceed $2,500. An
organization may not sell any pull-tab for more than $5.

Sec. 19.

Minnesota Statutes 2007 Supplement, section 349.211, subdivision 2c,
is amended to read:


Subd. 2c.

Tipboard prizes.

The maximum prize which may be awarded for a
tipboard ticket is $599new text begin for $2 and under tipboard tickets, $899 for $3 tipboard tickets,
$1,199 for $4 tipboard tickets, and $1,499 for $5 tipboard tickets
new text end, not including any
cumulative or carryover prizes. Cumulative or carryover prizes in tipboard games shall
not exceed $2,500. An organization may not sell any tipboard new text beginticket new text endfor more than $5.

Sec. 20.

Minnesota Statutes 2007 Supplement, section 349.211, is amended by adding
a subdivision to read:


new text begin Subd. 2d. new text end

new text begin Raffle prizes. new text end

new text begin The board may not impose an annual limit on the value of
raffle prizes awarded by licensed organizations but the total value of an individual raffle
prize may not exceed $50,000.
new text end

Sec. 21.

Minnesota Statutes 2007 Supplement, section 349.211, subdivision 3, is
amended to read:


Subd. 3.

Other gambling.

The board by rule shall establish a schedule of prize
limits for all other forms of gambling consistent with the purposes set out in section
349.11. The schedule may include daily deleted text beginand annualdeleted text end prize limits and prize limits for each
game, raffle or operation of a gambling device.

Sec. 22.

Minnesota Statutes 2007 Supplement, section 349.211, subdivision 4, is
amended to read:


Subd. 4.

Prize value.

(a) Merchandise prizes must be valued at their fair market
value. For purposes of sections 349.11 to 349.22 "prizes" do not include free plays
awarded.

(b) Merchandise prizes for a paddlewheel consisting of deleted text begin30deleted text endnew text begin 32new text end numbers or less or a
tipboard consisting of deleted text begin30deleted text endnew text begin 32new text end tickets or less may be paid for by the organization up to 30
days after the prize is received by the organization.

Sec. 23.

Minnesota Statutes 2006, section 349.2113, is amended to read:


349.2113 PRIZE PAYOUT LIMIT.

On or after January 1, 2004, a licensed organization may not put into play a pull-tab
or tipboard deleted text begindealdeleted text endnew text begin gamenew text end that provides for a prize payout of greater than 85 percent of the
ideal gross of the deleted text begindealdeleted text endnew text begin gamenew text end.

Sec. 24. new text beginLAWFUL GAMBLING STUDY AND REPORT.
new text end

new text begin The Gambling Control Board shall review operational and regulatory procedures,
accounting functions, tax structure, and recent trends in lawful purpose contributions
and allowable expenses incurred by licensed charitable organizations relating to lawful
gambling activities. The board must seek public input including comment from licensees
and professionals working in the lawful gambling industry. The board must provide
a report with recommendations and proposed legislation, if any, to the chairs of the
legislative standing committees with jurisdiction over lawful gambling by January 15,
2009.
new text end

Sec. 25. new text beginEFFECTIVE DATE.
new text end

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