Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

SF 2591

as introduced - 87th Legislature (2011 - 2012) Posted on 04/03/2012 08:39am

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

Current Version - as introduced

Line numbers 1.1 1.2 1.3 1.4 1.5 1.6
1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
1.21 1.22 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 2.36 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11
3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16

A bill for an act
relating to State Lottery; authorizing director of the State Lottery to adopt rules
for electronic scratch ticket devices;amending Minnesota Statutes 2010, section
297A.65; Minnesota Statutes 2011 Supplement, section 349.15, subdivision 1;
proposing coding for new law in Minnesota Statutes, chapter 349A.

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

Section 1.

Minnesota Statutes 2010, section 297A.65, is amended to read:


297A.65 LOTTERY TICKETS; IN LIEU TAX.

Sales of state lottery tickets are exempt from the tax imposed under section
297A.62. The State Lottery must on or before the 20th day of each month transmit to
the commissioner of revenue an amount equal to the gross receipts from the sale of
lottery tickets for the previous month multiplied by the tax rate under section 297A.62,
subdivision 1
new text begin, and for lottery tickets sold through electronic scratch ticket devices under
section 349A.065, an amount equal to the gross receipts from the sale of the tickets for the
previous month multiplied by two percent
new text end. The resulting payment is in lieu of the sales
tax that otherwise would be imposed by this chapter. The commissioner shall deposit the
money transmitted as provided by section 297A.94 and the money must be treated as other
proceeds of the sales tax. For purposes of this section, "gross receipts" means the proceeds
of the sale of tickets before deduction of a commission or other compensation paid to
the vendor or retailer for selling tickets.

Sec. 2.

Minnesota Statutes 2011 Supplement, section 349.15, subdivision 1, is
amended to read:


Subdivision 1.

Expenditure restrictions, requirements, and civil penalties.

(a) 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.

(b) 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
gambling, 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. This provision expires June 30, 2009.

(c) For each 12-month period beginning July 1, 2009, a licensed organization will
be evaluated by the board to determine a rating based on the percentage of annual lawful
purpose expenditures when compared to available gross profits for the same period. The
rating will be used to determine the organization's profitability percent and is not a rating
of the organization's lawful gambling operation. An organization will be evaluated
according to the following criteria:

(1) an organization that expends 50 percent or more of gross profits on lawful
purposes will receive a five-star rating;

(2) an organization that expends 40 percent or more but less than 50 percent of gross
profits on lawful purposes will receive a four-star rating;

(3) an organization that expends 30 percent or more but less than 40 percent of gross
profits on lawful purposes will receive a three-star rating;

(4) an organization that expends 20 percent or more but less than 30 percent of gross
profits on lawful purposes will receive a two-star rating; and

(5) an organization that expends less than 20 percent of gross profits on lawful
purposes will receive a one-star rating.

(d) An organization that fails to expend a minimum of 30 percent annually of gross
profits on lawful purposes, or 20 percent annually for organizations that conduct lawful
gambling in a location where the primary business is bingo, is automatically on probation
effective July 1 for a period of one year. The organization must increase its rating to the
required minimum or be subject to sanctions by the board. If an organization fails to
meet the minimum after a one-year probation, the board may suspend the organization's
license or impose a civil penalty as follows:

(1) in determining any suspension or penalty for a violation of this paragraph, the
board must consider any unique factors or extraordinary circumstances that caused the
organization to not meet the minimum rate of profitability. 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 premises; and flood, tornado, or other catastrophe that had a direct impact on the
continuing lawful gambling operation; and

(2) notwithstanding section 349.151, subdivision 4, paragraph (a), clause (10), the
board may impose a civil penalty under this subdivision up to $10,000.

new text begin (e) Money received by an organization from electronic scratch ticket devices under
section 349A.065 may be expended only for lawful purposes or allowable expenses
as authorized by the membership of the organization at a monthly meeting of the
organization's membership.
new text end

Sec. 3.

new text begin [349A.065] ELECTRONIC SCRATCH TICKET DEVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Rules. new text end

new text begin The director of the State Lottery shall adopt rules under
chapter 14 governing the sale of lottery tickets through electronic scratch ticket devices.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin For purposes of this section, an "electronic scratch ticket
device" means a device authorized by the director that displays an electronic facsimile of
a lottery scratch ticket and that may read the ticket, display the result of the ticket on a
video monitor in an entertaining manner, and accumulate winning prize amounts to the
player's account balance. The electronic scratch ticket device may be operated by cash or
currency and must:
new text end

new text begin (1) have a finite number of tickets for sale; and
new text end

new text begin (2) have a predetermined number of winning and losing tickets.
new text end

new text begin Subd. 3. new text end

new text begin Retailers. new text end

new text begin (a) The director may only enter into a lottery retailer contract for
electronic scratch ticket devices with a retailer that:
new text end

new text begin (1) has an on-sale intoxicating liquor license under chapter 340A. This does not
include a retailer that has only a temporary on-sale license; and
new text end

new text begin (2) has an organization licensed under chapter 349 to conduct lawful gambling on
the premises.
new text end

new text begin (b) A lottery retailer authorized to operate electronic scratch ticket devices may not
cancel or refuse to renew a lease with an organization on its premises for three years
following the effective date of this act, unless the organization has failed to comply with
the terms of its lease with the retailer.
new text end

new text begin (c) A lottery retailer may have up to five electronic scratch ticket devices on the
retailer's premises. A lottery retailer that is authorized to operate electronic scratch ticket
devices may not make reference to the establishment being a "casino" or use the word
"casino" in its name or in any of its advertisements or promotions.
new text end

new text begin (d) The director, or an employee of the director, may inspect an electronic scratch
ticket device at any time during the hours when alcoholic beverages may be sold at
on-sale, without notice, to ensure compliance with this chapter and any rules adopted
by the director.
new text end

new text begin Subd. 4. new text end

new text begin Commission. new text end

new text begin The rules adopted by the director under this section must set
the amount that a lottery retailer will receive as a commission for selling lottery tickets
through an electronic scratch ticket device. A lottery retailer shall transmit 29 percent of
the retailer's commission from the sale of lottery tickets through the electronic scratch
ticket device, to an organization conducting lawful gambling on the premises of the
retailer. If more than one organization conducts lawful gambling on the premises, the
payment must be reasonably allocated between the organizations, pro rata based on their
respective gross receipts.
new text end

new text begin Subd. 5. new text end

new text begin Gambling device. new text end

new text begin For purposes of this chapter and chapters 299L, 340A,
349, and 609, an electronic scratch ticket device is not a "gambling device."
new text end