Office of the Revisor of Statutes
Minnesota Session Laws - 1990, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1990
CHAPTER 590-S.F.No. 2018
An act relating to lawful gambling; defining lawful
purposes for expenditures of gambling profits;
establishing licensing qualifications for
organizations, distributors, and manufacturers;
requiring organizations to report monthly on
expenditures and contributions of gambling profits;
authorizing the gambling control board to require
recipients of contributions of gambling profits to
register with the board; authorizing summary
suspension of gambling licenses; requiring pull-tabs
to be manufactured in Minnesota; requiring inspection
and testing of gambling equipment; requiring permits
for gambling premises; requiring gambling managers to
be licensed; requiring that employees of organizations
conducting lawful gambling be registered with the
board; prescribing specifications for video games of
chance and terminating all licenses for video games of
chance on January 1, 1992; regulating incentive
payments to lottery employees; prescribing
qualifications for lottery retailers; increasing
penalties for violations of lawful gambling statutes;
providing for the disposal of seized gambling
equipment; amending Minnesota Statutes 1988, sections
349.12, by adding subdivisions; 349.16; 349.17;
349.18; 349.19; 349.2123; 349.2125, subdivision 4;
349.2127, subdivisions 1, 3, and by adding
subdivisions; 349.22, by adding a subdivision; 349.30,
subdivision 2; 349.31; 349.32; 349.34; 349.35,
subdivision 1; 349.36; 349.38; 349.39; 349.50,
subdivision 8; 349.52, by adding a subdivision;
349.55; 349.59, subdivision 1; 609.75, subdivision 4;
349.59, subdivision 1; Minnesota Statutes 1989
Supplement, sections 299L.03, by adding subdivisions;
349.12, subdivisions 11 and 12; 349.15; 349.151,
subdivision 4, and by adding a subdivision; 349.152,
subdivision 2, and by adding subdivisions; 349.161;
349.162; 349.163; 349.164; 349.212, subdivision 2;
349.2122; 349.2125, subdivisions 1 and 3; 349.2127,
subdivisions 2, 4, and 5; 349.213; 349.22, subdivision
1; 349.501, subdivision 1; 349.502, subdivision 1;
349A.02, subdivision 5; 349A.06, subdivisions 2 and 4;
609.76, subdivision 1; proposing coding for new law in
Minnesota Statutes, chapters 299L; 349; repealing
Minnesota Statutes 1988, sections 349.14; 349.214,
subdivision 1, 1a, 3, and 4; Minnesota Statutes 1989
Supplement, sections 349.151, subdivision 4a; 349.20;
349.21; 349.22, subdivision 3; 349.502, subdivision 2;
Minnesota Statutes Second 1989 Supplement, section
349.214, subdivision 2; Laws 1989 First Special
Session, chapter 1, article 13, section 27.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
REGULATORY PROVISIONS
Section 1. Minnesota Statutes 1989 Supplement, section
299L.03, is amended by adding a subdivision to read:
Subd. 9. [VIDEO GAMES OF CHANCE.] The commissioner shall
exercise all powers and duties assigned to the commissioner
relating to video games of chance under sections 349.50 to
349.60 through the division and director.
Sec. 2. Minnesota Statutes 1989 Supplement, section
299L.03, is amended by adding a subdivision to read:
Subd. 10. [FINGERPRINTING.] The director may require that
any: (1) licensee under sections 349.11 to 349.23, (2) employee
of such a licensee, or (3) shareholder or officer of such a
licensee be fingerprinted by the director, or otherwise submit
to fingerprinting in a form and manner acceptable to the
director.
Sec. 3. [299L.06] [JURISDICTION.]
In any investigation or other enforcement activity where
there is probable cause to believe that a criminal violation
relating to gambling has occurred, except a violation relating
only to taxation, the division rather than any other state
department, agency, or office shall be the primary investigation
entity where enforcement rests.
Sec. 4. Minnesota Statutes Second 1989 Supplement, section
349.12, subdivision 11, is amended to read:
Subd. 11. (a) "Lawful purpose" means one or more of the
following:
(1) benefiting persons by enhancing their opportunity for
religious or educational advancement, by relieving or protecting
them from disease, suffering or distress, by contributing to
their physical well-being, by assisting them in establishing
themselves in life as worthy and useful citizens, or by
increasing their comprehension of and devotion to the principles
upon which this nation was founded;
(2) initiating, performing, or fostering worthy public
works or enabling or furthering the erection or maintenance of
public structures;
(3) lessening the burdens borne by government or
voluntarily supporting, augmenting or supplementing services
which government would normally render to the people;
(4) payment of local taxes authorized under this chapter,
and taxes imposed by the United States on receipts from lawful
gambling;
(5) any expenditure by, or any contribution to, a hospital
or nursing home exempt from taxation under section 501(c)(3) of
the Internal Revenue Code;
(6) payment of reasonable costs incurred in complying with
the performing of annual audits required under section 349.19,
subdivision 9;
(7) payment of real estate taxes and assessments on
licensed gambling premises wholly owned by the licensed
organization; or
(8) if approved by the board, construction, improvement,
expansion, maintenance, and repair of athletic fields and
outdoor ice rinks and their appurtenances, owned by the
organization or a public agency.
(b) "Lawful purpose" does not include the erection,
acquisition, improvement, expansion, repair, or maintenance of
any real property or capital assets owned or leased by an
organization, other than a hospital or nursing home exempt from
taxation under section 501(c)(3) of the Internal Revenue Code,
unless the board has first specifically authorized the
expenditures after finding: (1) that the property or capital
assets will be used exclusively for one or more of the purposes
specified in paragraph (a), clauses (1) to (3); or (2) with
respect to expenditures for repair or maintenance only, that the
property is or will be used extensively as a meeting place or
event location by other nonprofit organizations or community or
service groups and that no rental fee is charged for the use; or
(3) with respect to expenditures for erection or acquisition
only, that the erection or acquisition is necessary to replace
with a comparable building a building owned by the organization
and destroyed or made uninhabitable by fire or natural disaster,
provided that the expenditure may be only for that part of the
replacement cost not reimbursed by insurance. The board shall
by rule adopt procedures and standards to administer this
subdivision.
(1) any expenditure by or contribution to a 501(c)(3)
organization, provided that the organization and expenditure or
contribution are in conformity with standards prescribed by the
board under section 16;
(2) a contribution to an individual or family suffering
from poverty, homelessness, or physical or mental disability,
which is used to relieve the effects of that poverty,
homelessness, or disability;
(3) a contribution to an individual for treatment for
delayed posttraumatic stress syndrome, or a contribution to a
recognized program for the treatment of compulsive gambling on
behalf of an individual who is a compulsive gambler;
(4) a contribution to or expenditure on a public or private
nonprofit educational institution registered with or accredited
by this state or any other state;
(5) a contribution to a scholarship fund for defraying the
cost of education to individuals, where the funds are awarded
through an open and fair selection process;
(6) activities by an organization or a government entity
which recognize humanitarian or military service to the United
States, the state of Minnesota, or a community, subject to rules
of the board;
(7) recreational, community, and athletic facilities and
activities intended primarily for persons under age 21, provided
that such facilities and activities do not discriminate on the
basis of gender, as evidenced by (i) provision of equipment and
supplies, (ii) scheduling of activities, including games and
practice times, (iii) supply and assignment of coaches or other
adult supervisors, (iv) provision and availability of support
facilities, and (v) whether the opportunity to participate
reflects each gender's demonstrated interest in the activity,
provided that nothing in this clause prohibits a contribution to
or expenditure on an educational institution or other entity
that is excepted from the prohibition against discrimination
based on sex contained in the Higher Education Act Amendments of
1976, United States Code, title 20, section 1681;
(8) payment of local taxes authorized under this chapter,
taxes imposed by the United States on receipts from lawful
gambling, the tax imposed by section 349.212, subdivisions 1 and
4, and the tax imposed on unrelated business income by section
290.05, subdivision 3;
(9) payment of real estate taxes and assessments on
licensed gambling premises wholly owned by the licensed
organization paying the taxes, not to exceed the amount which an
organization may expend under board rule on rent for premises
used for lawful gambling;
(10) a contribution to the United States, this state or any
of its political subdivisions, or any agency or instrumentality
thereof other than a direct contribution to a law enforcement or
prosecutorial agency; or
(11) a contribution to or expenditure by a nonprofit
organization, church, or body of communicants, gathered in
common membership for mutual support and edification in piety,
worship, or religious observances.
(b) Notwithstanding paragraph (a), "lawful purpose" does
not include:
(1) any expenditure made or incurred for the purpose of
influencing the nomination or election of a candidate for public
office or for the purpose of promoting or defeating a ballot
question;
(2) any activity intended to influence an election or a
governmental decision-making process;
(3) the erection, acquisition, improvement, expansion,
repair, or maintenance of real property or capital assets owned
or leased by an organization, except as provided in clause (6),
unless the board has first specifically authorized the
expenditures after finding that (i) the real property or capital
assets will be used exclusively for one or more of the purposes
in paragraph (a); (ii) with respect to expenditures for repair
or maintenance only, that the property is or will be used
extensively as a meeting place or event location by other
nonprofit organizations or community or service groups and that
no rental fee is charged for the use; (iii) with respect to
expenditures, including a mortgage payment or other debt service
payment, for erection or acquisition only, that the erection or
acquisition is necessary to replace with a comparable building,
a building owned by the organization and destroyed or made
uninhabitable by fire or natural disaster, provided that the
expenditure may be only for that part of the replacement cost
not reimbursed by insurance; or (iv) with respect to
expenditures, including a mortgage payment or other debt service
payment, for erection or acquisition only, that the erection or
acquisition is necessary to replace with a comparable building a
building owned by the organization that was acquired from the
organization by eminent domain or sold by the organization to a
purchaser that the organization reasonably believed would
otherwise have acquired the building by eminent domain, provided
that the expenditure may be only for that part of the
replacement cost that exceeds the compensation received by the
organization for the building being replaced;
(4) an expenditure by an organization which is a
contribution to a parent organization, foundation, or affiliate
of the contributing organization, if the parent organization,
foundation, or affiliate has provided to the contributing
organization within one year of the contribution any money,
grants, property, or other thing of value;
(5) a contribution by a licensed organization to another
licensed organization unless the board has specifically
authorized the contribution. The board must authorize such a
contribution when requested to do so by the contributing
organization unless it makes an affirmative finding that the
contribution will not be used by the recipient organization for
one or more of the purposes in paragraph (a); or
(6) the erection, acquisition, improvement, or expansion of
real property or capital assets which will be used for one or
more of the purposes in paragraph (a), clause (7), unless the
organization making the expenditures notifies the board at least
15 days before making the expenditure.
Sec. 5. Minnesota Statutes 1989 Supplement, section
349.12, subdivision 12, is amended to read:
Subd. 12. [ORGANIZATION.] "Organization" means any
fraternal, religious, veterans, or other nonprofit organization
which has at least 15 active members, and either has been duly
incorporated as a nonprofit organization for at least three
years, or has been recognized by the Internal Revenue Service as
exempt from income taxation for the most recent three years.
Sec. 6. Minnesota Statutes 1988, section 349.12, is
amended by adding a subdivision to read:
Subd. 30. [501(c)(3) ORGANIZATION.] "501(c)(3)
organization" is an organization exempt from the payment of
federal income taxes under section 501(c)(3) of the Internal
Revenue Code.
Sec. 7. Minnesota Statutes 1988, section 349.12, is
amended by adding a subdivision to read:
Subd. 31. [AFFILIATE.] "Affiliate" is any person or entity
directly or indirectly controlling, controlled by, or under
common control or ownership with a licensee of the board or any
officer or director of a licensee of the board.
Sec. 8. Minnesota Statutes 1988, section 349.12, is
amended by adding a subdivision to read:
Subd. 32. [PERSON.] "Person" is an individual, firm,
association, partnership, corporation, trustee, or legal
representative.
Sec. 9. Minnesota Statutes 1988, section 349.12, is
amended by adding a subdivision to read:
Subd. 34. [FLARE.] "Flare" is the posted display, with
registration stamp affixed, that sets forth the rules of a
particular game of pull-tabs or tipboards, and that is
associated with a specific deal of pull-tabs or grouping of
tipboards.
Sec. 10. Minnesota Statutes Second 1989 Supplement,
section 349.15, is amended to read:
349.15 [USE OF GROSS PROFITS.]
(a) Gross profits from lawful gambling may be expended only
for lawful purposes or allowable expenses as authorized at a
regular meeting of the conducting organization. Provided that
no more than 55 60 percent of the gross profit less the tax
imposed under section 349.212, subdivision 1, from bingo, and no
more than 50 percent of the gross profit less the taxes tax
imposed by section 349.212, subdivisions 1, 4, and subdivision
6, from other forms of lawful gambling, may be expended for
allowable expenses related to lawful gambling.
(b) The board shall provide by rule for the administration
of this section, including specifying allowable expenses. The
rules must specify that no more than one-third of the annual
premium on a policy of liability insurance procured by the
organization may be taken as an allowable expense. This expense
shall be allowed by the board only to the extent that it relates
directly to the conduct of lawful gambling and is verified in
the manner the board prescribes by rule. The rules may provide
a maximum percentage of gross profits which may be expended for
certain expenses.
(c) Allowable expenses also include reasonable costs of
bank account service charges, and the reasonable costs of an
audit required by the board, except an audit required under
section 349.19, subdivision 9.
(d) Allowable expenses include reasonable legal fees and
damages that relate to the conducting of lawful gambling, except
for legal fees or damages incurred in defending the organization
against the board, attorney general, United States attorney,
commissioner of revenue, or a county or city attorney.
Sec. 11. Minnesota Statutes 1989 Supplement, section
349.151, is amended by adding a subdivision to read:
Subd. 3a. [COMPENSATION.] The compensation of board
members is as provided in section 15.0575, subdivision 3.
Sec. 12. Minnesota Statutes 1989 Supplement, section
349.151, subdivision 4, is amended to read:
Subd. 4. [POWERS AND DUTIES.] (a) The board has the
following powers and duties:
(1) to regulate lawful gambling to ensure it is conducted
in the public interest;
(2) to issue, revoke, and suspend licenses to
organizations, distributors, bingo halls, and manufacturers
under sections 349.16, 349.161, 349.163, and 349.164, and
gambling managers;
(2) (3) to collect and deposit license, permit, and
registration fees due under this chapter;
(3) (4) to receive reports required by this chapter and
inspect the all premises, records, books, and other documents of
organizations and suppliers, distributors, manufacturers, and
bingo halls to insure compliance with all applicable laws and
rules;
(4) (5) to make rules required authorized by this chapter;
(5) (6) to register gambling equipment and issue
registration stamps under section 349.162;
(6) (7) to provide by rule for the mandatory posting by
organizations conducting lawful gambling of rules of play and
the odds and/or house percentage on each form of lawful
gambling;
(7) (8) to report annually to the governor and legislature
on its activities and on recommended changes in the laws
governing gambling;
(8) (9) to impose civil penalties of not more than $500 per
violation on organizations, distributors, and manufacturers,
bingo halls, and gambling managers for failure to comply with
any provision of sections 349.12 to 349.23 this chapter or any
rule of the board;
(9) to notify city councils, county boards, and town boards
before issuing or renewing licenses to organizations and bingo
halls as specified under section 349.213; and
(10) to issue premises permits to organizations licensed to
conduct lawful gambling;
(11) to delegate to the director the authority to issue
licenses and premises permits under criteria established by the
board.;
(12) to suspend or revoke licenses and premises permits of
organizations, distributors, manufacturers, bingo halls, or
gambling managers as provided in this chapter;
(13) to register recipients of net profits from lawful
gambling and to revoke or suspend the registrations;
(14) to register employees of organizations licensed to
conduct lawful gambling;
(15) to require fingerprints from persons determined by
board rule to be subject to fingerprinting; and
(16) to take all necessary steps to ensure the integrity of
and public confidence in lawful gambling.
(b) Any organization, distributor, bingo hall operator, or
manufacturer assessed a civil penalty may request a hearing
before the board. Hearings conducted on appeals of imposition
of penalties are not subject to the provisions of the
administrative procedure act.
(c) All fees and penalties received by the board must be
deposited in the general fund.
Sec. 13. Minnesota Statutes 1989 Supplement, section
349.152, subdivision 2, is amended to read:
Subd. 2. [DUTIES OF THE DIRECTOR.] The director has the
following duties:
(1) to carry out gambling policy established by the board;
(2) to employ and supervise personnel of the board;
(3) to advise and make recommendations to the board on
rules;
(4) to issue licenses and premises permits as authorized by
the board;
(5) to issue cease and desist orders;
(6) to make recommendations to the board on license
issuance, denial, suspension and revocation, and civil penalties
the board imposes; and
(7) to ensure that board rules, policy, and decisions are
adequately and accurately conveyed to the board's licensees.
Sec. 14. Minnesota Statutes 1989 Supplement, section
349.152, is amended by adding a subdivision to read:
Subd. 3. [CEASE AND DESIST ORDERS.] Whenever it appears to
the director that any person has engaged or is about to engage
in any act or practice constituting a violation of this chapter
or any rule:
(a) The director has the power to issue and cause to be
served upon the person an order requiring the person to cease
and desist from violations of this chapter. The order must give
reasonable notice of the rights of the person to request a
hearing and must state the reason for the entry of the order. A
hearing shall be held not later than seven days after the
request for the hearing is received by the board after which and
within 20 days of the date of the hearing the board shall issue
an order vacating the cease and desist order or making it
permanent as the facts require. All hearings shall be conducted
in accordance with the provisions of chapter 14. If the person
to whom a cease and desist order is issued fails to appear at
the hearing after being duly notified, the person shall be
deemed in default, and the proceeding may be determined against
the person upon consideration of the cease and desist order, the
allegations of which may be deemed to be true.
(b) The board may bring an action in the district court in
the appropriate county to enjoin the acts or practices and to
enforce compliance with this chapter or any rule and may refer
the matter to the attorney general. Upon a proper showing, a
permanent or temporary injunction, restraining order, or writ of
mandamus shall be granted. The court may not require the board
to post a bond.
Sec. 15. Minnesota Statutes 1989 Supplement, section
349.152, is amended by adding a subdivision to read:
Subd. 4. [EXECUTIVE ASSISTANT.] The director may appoint
an executive assistant to the director, who is in the
unclassified service.
Sec. 16. [349.154] [EXPENDITURE OF NET PROFITS FROM LAWFUL
GAMBLING.]
Subdivision 1. [STANDARDS FOR CERTAIN ORGANIZATIONS.] The
board shall by rule prescribe standards that must be met by any
licensed organization that is a 501(c)(3) organization. The
standards must provide:
(1) operating standards for the organization, including a
maximum percentage or percentages of the organization's total
expenditures that may be expended for the organization's
administration and operation; and
(2) standards for any expenditure by the organization of
net profits from lawful gambling, including a requirement that
the expenditure be related to the primary purpose of the
organization.
Subd. 2. [NET PROFIT REPORTS.] (a) Each licensed
organization must report monthly to the board on a form
prescribed by the board each expenditure and contribution of net
profits from lawful gambling. The reports must provide for each
expenditure or contribution:
(1) the name, address, and telephone number of the
recipient of the expenditure or contribution;
(2) the date the contribution was approved by the
organization;
(3) the date, amount, and check number of the expenditure
or contribution; and
(4) a brief description of how the expenditure or
contribution meets one or more of the purposes in section
349.12, subdivision 11, paragraph (a).
(b) Each report required under paragraph (a) must be
accompanied by an acknowledgment, on a form the board
prescribes, of each contribution of net profits from lawful
gambling included in the report. The acknowledgment must be
signed by the recipient of the contribution, or, if the
recipient is not an individual, or other authorized
representative of the recipient, by an officer. The
acknowledgment must include the name and address of the
contributing organization and each item in paragraph (a),
clauses (1) to (3).
(c) The board shall provide the commissioners of revenue
and public safety copies of each report received under this
subdivision.
Subd. 3. [REGISTRATION OF LAWFUL GAMBLING NET PROFIT
RECIPIENTS.] The board may by rule require that any individual,
organization, or other entity must be registered with the board
to receive a contribution of net profits from lawful gambling.
The rules may designate and define specific categories of
recipients that are subject to registration. The board may
suspend or revoke the registration of any recipient the board
determines has made an unlawful expenditure of net profits from
lawful gambling.
Sec. 17. Minnesota Statutes 1988, section 349.16, as
amended by Laws 1989, chapter 334, article 2, sections 20 and
21, and Laws 1989, First Special Session chapter 1, article 13,
section 8, is amended to read:
349.16 [ORGANIZATION LICENSES.]
Subdivision 1. [LICENSE REQUIRED.] An organization may
conduct lawful gambling if it has a license to conduct lawful
gambling and complies with this chapter.
Subd. 2. [ISSUANCE OF GAMBLING LICENSES.] (a) Licenses
authorizing organizations to conduct lawful gambling may be
issued by the board to organizations meeting the
qualifications of section 349.14, in paragraphs (b) to (h) if
the board determines that the license is consistent with the
purpose of sections 349.11 to 349.22.
(b) The organization must have been in existence for the
most recent three years preceding the license application as a
registered Minnesota nonprofit corporation or as an organization
designated as exempt from the payment of income taxes by the
Internal Revenue Code.
(c) The organization at the time of licensing must have at
least 15 active members.
(d) The organization must not be in existence solely for
the purpose of conducting gambling.
(e) The organization must not have as an officer or member
of the governing body any person who, within the five years
before the issuance of the license, has been convicted in a
federal or state court of a felony or gross misdemeanor or who
has ever been convicted of a crime involving gambling or who has
had a license issued by the board or director revoked for a
violation of law or board rule.
(f) The organization has identified in its license
application the lawful purposes on which it proposes to expend
net profits from lawful gambling.
(g) The organization has identified on its license
application a gambling manager and certifies that the manager is
qualified under this chapter.
(h) The organization must not, in the opinion of the board
after consultation with the commissioner of revenue, be seeking
licensing primarily for the purpose of evading or reducing the
tax imposed by section 349.212, subdivision 6.
Subd. 3. [TERM OF LICENSE: SUSPENSION AND REVOCATION.]
Licenses issued under this section are valid for one year and
may be suspended by the board for a violation of law or board
rule or revoked for what the board determines to be a pattern of
willful violations violation of law or board rule. A revocation
or suspension is a contested case under sections 14.57 to 14.69
of the administrative procedure act.
Subd. 1a. [RESTRICTIONS ON LICENSE ISSUANCE.] On and after
October 1, 1989, the board shall not issue an initial license to
any organization if the board, in consultation with the
department of revenue, determines that the organization is
seeking licensing for the primary purpose of evading or reducing
the tax imposed by section 349.212, subdivision 6.
Subd. 2 4. [APPLICATION.] All applications for a license
under this section must be on a form prescribed by the board.
The board may require the applying organization to submit a copy
of its articles of incorporation and other documents it deems
necessary.
Subd. 5. [RENEWALS.] The board shall not renew a license
issued under this section unless it determines that the
organization is in compliance with all laws and rules governing
lawful gambling and is not delinquent in filing tax returns or
paying taxes required under this chapter. The board may
delegate to the director the authority to make determinations
required under this subdivision.
Subd. 3 6. [FEES.] The board may issue four classes of
organization licenses: a class A license authorizing all forms
of lawful gambling; a class B license authorizing all forms of
lawful gambling except bingo; a class C license authorizing
bingo only; and a class D license authorizing raffles only. The
annual license fee for each class of license is:
(1) $200 for a class A license;
(2) $125 for a class B license;
(3) $100 for a class C license; and
(4) $75 for a class D license board shall not charge a fee
for an organization license.
Subd. 7. [PURCHASE OF GAMBLING EQUIPMENT.] An organization
may purchase gambling equipment only from a person licensed as a
distributor.
Subd. 4 8. [LOCAL INVESTIGATION FEE.] A statutory or home
rule charter city or county notified under section 349.213,
subdivision 2, may assess an investigation fee on organizations
or bingo halls applying for or renewing a license to conduct
lawful gambling or operate a bingo hall. An investigation fee
may not exceed the following limits:
(1) for cities of the first class, $500;
(2) for cities of the second class, $250;
(3) for all other cities, $100; and
(4) for counties, $375.
Sec. 18. Minnesota Statutes 1989 Supplement, section
349.161, as amended by Laws 1989, First Special Session chapter
1, article 13, section 9, is amended to read:
349.161 [DISTRIBUTOR LICENSES.]
Subdivision 1. [PROHIBITED ACTS; LICENSES REQUIRED.] No
person may:
(1) sell, offer for sale, or furnish gambling equipment for
use within the state for gambling purposes, other than for
lawful gambling exempt or excluded from licensing under section
349.214, except to an organization licensed for lawful gambling;
(2) sell, offer for sale, or furnish gambling equipment to
an organization licensed for lawful gambling without having
obtained a distributor license under this section;
(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.
No licensed organization may purchase gambling equipment
from any person not licensed as a distributor under this section.
Subd. 2. [LICENSE APPLICATION.] The board may issue
licenses for the sale of gambling equipment to persons who meet
the qualifications of this section if the board determines that
a license is consistent with the purpose of sections 349.11 to
349.22. Applications must be on a form the board prescribes.
Subd. 3. [QUALIFICATIONS.] A license may not be issued
under this section to a person, or to a corporation, firm, or
partnership which has as an officer, director, other person in a
supervisory or management position, or employee eligible to make
sales on behalf of the distributor a person, who:
(1) has ever been convicted of a felony within the past
five years;
(2) has ever been convicted of a felony involving fraud or
misrepresentation or a crime involving gambling;
(3) has ever been convicted of (i) assault, (ii) a criminal
violation involving the use of a firearm, or (iii) making
terroristic threats;
(4) is or has ever been engaged in an illegal business;
(4) (5) owes $500 or more in delinquent taxes as defined in
section 270.72;
(5) (6) has had a sales and use tax permit revoked by the
commissioner of revenue within the last two years; or
(6) (7) after demand, has not filed tax returns required by
the commissioner of revenue.
Subd. 4. [FEES.] The annual fee for a distributor's
license is $2,500.
Subd. 5. [PROHIBITION.] (a) No distributor, or 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's or any representative,
agent, affiliate, or employee of a distributor, may be (1)
involved directly in the operation conduct of lawful gambling
conducted 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 manufacturer or distributor or person acting as a
any representative, agent, affiliate, or employee of
a manufacturer or distributor may provide a lessor of gambling
premises any compensation, gift, gratuity, premium, or other
thing of value.
(d) No distributor, distributor's or any representative,
agent, affiliate, or employee of a distributor may participate
in any gambling activity at any gambling site or premises where
gambling equipment purchased from that distributor is being used
in the conduct of lawful gambling.
(e) No distributor, distributor's or any representative,
agent, affiliate, or employee of a distributor may alter or
modify any gambling equipment, except to add a "last ticket
sold" prize sticker.
(f) No distributor or any representative, agent, affiliate,
or 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.
(g) No distributor may purchase gambling equipment from any
person not licensed as a manufacturer under section 349.163.
(h) No distributor may sell gambling equipment to any
person in Minnesota other than (i) a licensed organization or
organization exempt from licensing, or (ii) the governing body
of an Indian tribe.
Subd. 6. [REVOCATION AND SUSPENSION.] A license under this
section may be suspended by the board for a violation of law or
board rule or. A license under this section may be revoked for
failure to meet the qualifications in subdivision 3 at any time
or revoked for what the board determines to be a pattern of a
willful violations violation of law or board rule. A revocation
or suspension is a contested case under sections 14.57 to 14.69
of the administrative procedure act.
Subd. 7. [CRIMINAL HISTORY.] The board may request the
assistance of the division of gambling enforcement in
investigating the background of an applicant for a distributor's
license and may reimburse the division of gambling enforcement
for the costs thereof. The board has access to all criminal
history data compiled by the division of gambling enforcement on
licensees and applicants.
Subd. 8. [EMPLOYEES OF DISTRIBUTORS.] Licensed
distributors shall provide the board upon request with the names
and home addresses of all employees. Each distributor, and
employee of a distributor, or a person making sales of gambling
equipment on behalf of a distributor must have in their
possession a picture identification card approved by the board.
No person other than an employee of a licensed distributor shall
make any sales on behalf of a licensed distributor.
Sec. 19. Minnesota Statutes 1989 Supplement, section
349.162, is amended to read:
349.162 [EQUIPMENT REGISTERED.]
Subdivision 1. [STAMP REQUIRED.] (a) A distributor may not
sell, transfer, furnish, or otherwise provide to a person,
organization, or distributor, and no person, organization, or
distributor may purchase, borrow, accept, or acquire from a
distributor gambling equipment unless the equipment has been
registered with the board and has a registration stamp affixed.
The board shall charge a fee of five cents for each stamp. Each
stamp must bear a registration number assigned by the board. A
distributor is entitled to a refund for unused stamps and
replacement for stamps which are defective or canceled by the
distributor.
(b) From January 1, 1991, to June 30, 1992, no distributor,
organization, or other person may sell a pull-tab which is not
clearly marked "For Sale in Minnesota Only."
(c) On and after July 1, 1992, no distributor,
organization, or other person may sell a pull-tab which is not
clearly marked "Manufactured in Minnesota For Sale in Minnesota
Only."
(d) Paragraphs (b) and (c) do not apply to pull-tabs sold
by a distributor to the governing body of an Indian tribe.
Subd. 2. [RECORDS REQUIRED.] A distributor must maintain a
record of all gambling equipment which it sells to
organizations. The record must include:
(1) the identity of the person or firm from whom the
equipment was distributor purchased the equipment;
(2) the registration number of the equipment;
(3) the name and, address, and license or exempt permit
number of the organization to which the sale was made;
(4) the date of the sale;
(5) the name of the person who ordered the equipment; and
(6) the name of the person who received the equipment.;
(7) the type of equipment;
(8) the serial number of the equipment;
(9) the name, form number, or other identifying information
for each game; and
(10) in the case of bingo cards sold on and after January
1, 1991, the individual number of each card.
The invoice for each sale must be retained for at least two
3-1/2 years after the sale is completed and a copy of each
invoice is to be delivered to the board in the manner and time
prescribed by the board. For purposes of this section, a sale
is completed when the gambling equipment is physically delivered
to the purchaser.
Each distributor must report monthly to the board, in a
form the board prescribes, its sales of each type of gambling
equipment. Employees of the division and the division of
gambling enforcement may inspect the business premises, books,
records, and other documents of a distributor at any reasonable
time without notice and without a search warrant.
The board may require that a distributor submit the monthly
report and invoices required in this subdivision via magnetic
media or electronic data transfer.
Subd. 3. [EXEMPTION.] For purposes of this section, bingo
cards or sheets need not be stamped.
Subd. 4. [PROHIBITION.] (a) No person other than a
licensed distributor may possess unaffixed registration stamps
issued by the board.
(b) Unless otherwise provided in this chapter, no person
may possess gambling equipment that has not been stamped and
registered with the board.
(c) On and after January 1, 1991, no distributor may:
(1) sell a bingo card that does not bear an individual
number; or
(2) sell a package of bingo cards that does not contain
bingo cards in numerical order.
Subd. 5. [SALES FROM FACILITIES.] (a) All gambling
equipment purchased or possessed by a licensed distributor for
resale in Minnesota must, prior to the equipment's resale, be
unloaded into a sales or storage facility located in Minnesota
which the distributor owns or leases; and which has been
registered, in advance and in writing, with the division of
gambling enforcement as a sales or storage facility of the
distributor's. All unregistered gambling equipment and all
unaffixed registration stamps owned by, or in the possession of,
a licensed distributor in the state of Minnesota shall be stored
at a sales or storage facility which has been registered with
the division of gambling enforcement. No gambling equipment may
be moved from the facility unless the gambling equipment has
been first registered with the board.
(b) All sales and storage facilities owned, leased, used,
or operated by a licensed distributor may be entered upon and
inspected by the employees of the division of gambling
enforcement or the director's authorized representatives during
reasonable and regular business hours. Obstruction of, or
failure to permit, entry and inspection is cause for revocation
or suspension of a distributor's licenses and permits issued
under this chapter.
(c) Unregistered gambling equipment and unaffixed
registration stamps found at any location in Minnesota other
than a registered sales or storage facility are contraband under
section 349.2125. This paragraph does not apply to unregistered
gambling equipment being transported in interstate commerce
between locations outside this state, if the interstate shipment
is verified by a bill of lading or other valid shipping document.
Subd. 6. [REMOVAL OF EQUIPMENT FROM INVENTORY.] Authorized
employees of the board, the division of gambling enforcement of
the department of public safety, and the commissioner of revenue
may remove gambling equipment from the inventories of
distributors and organizations and test that equipment to
determine its compliance with all applicable laws and rules. A
distributor or organization may return to the manufacturer
thereof any gambling equipment which is determined to be in
violation of law or rule. The cost to an organization of
gambling equipment removed from inventory under this paragraph
and found to be in compliance with all applicable law and rules
is an allowable expense under section 349.15.
Sec. 20. Minnesota Statutes 1989 Supplement, section
349.163, as amended by Laws 1989, First Special Session chapter
1, article 13, section 10, is amended to read:
349.163 [LICENSING OF MANUFACTURERS.]
Subdivision 1. [LICENSE REQUIRED.] No manufacturer of
gambling equipment may sell any gambling equipment to any person
unless the manufacturer has been issued a current and valid
license by the board under objective this section and other
criteria prescribed by the board by rule.
A manufacturer licensed under this section may not also be
directly or indirectly licensed as a distributor under section
349.161, unless the manufacturer (1) does not manufacture any
gambling equipment other than paddlewheels, and (2) was licensed
as both a manufacturer and distributor on May 1, 1990.
Subd. 1a. [QUALIFICATIONS.] A license may not be issued
under this section to a person, or to a corporation, firm, or
partnership that has as an officer, director, other person in a
supervisory or management position, or employee eligible to make
sales on behalf of the distributor, a person, who:
(1) has ever been convicted of a felony;
(2) has ever been convicted of a crime involving gambling;
(3) has ever been convicted of (i) assault, (ii) a criminal
violation involving the use of a firearm, or (iii) making
terroristic threats;
(4) is or has ever been engaged in an illegal business;
(5) owes $500 or more in delinquent taxes as defined in
section 270.72;
(6) has had a sales and use tax permit revoked by the
commissioner of revenue within the last two years; or
(7) after demand, has not filed tax returns required by the
commissioner of revenue.
Subd. 1b. [APPLICATIONS; INFORMATION.] An applicant for a
manufacturer's license must list on the license application the
names and addresses of all subsidiaries, affiliates, and
branches in which the applicant has any form of ownership or
control, in whole or in part, without regard to whether the
subsidiary, affiliate, or branch does business in Minnesota.
Subd. 2. [LICENSE; FEE.] A license under this section is
valid for one year. The annual fee for the license is $2,500.
Subd. 2a. [LICENSES; SUSPENSION, REVOCATION.] The board
may suspend a license under this section for a violation of law
or board rule. The board may revoke a license under this
section for (1) a willful violation of law or board rule, or (2)
a conviction in another jurisdiction for a criminal violation
that is related to gambling, or that would be a felony or gross
misdemeanor if committed in Minnesota.
Subd. 3. [PROHIBITED SALES.] (a) A manufacturer may not:
(1) sell gambling equipment to any person not licensed as a
distributor unless the manufacturer is also a licensed
distributor; or
(2) sell gambling equipment to a distributor in this state
that has the same serial number as another item of gambling
equipment of the same type that is sold by that manufacturer for
use in this state.;
(3) from January 1, 1991, to June 30, 1992, sell to any
person in Minnesota, other than the governing body of an Indian
tribe, a pull-tab on which the manufacturer has not clearly
printed the words "For Sale in Minnesota Only";
(4) on and after July 1, 1992, sell to any person in
Minnesota, other than the governing body of an Indian tribe, a
pull-tab on which the manufacturer has not clearly printed the
words "Manufactured in Minnesota For Sale In Minnesota Only"; or
(5) sell a pull-tab marked as required in paragraphs (3)
and (4) to any person inside or outside the state, including the
governing body of an Indian tribe, who is not a licensed
distributor.
(b) On and after July 1, 1992, all pull-tabs sold by a
licensed manufacturer to a person in Minnesota must be
manufactured in Minnesota.
(c) A manufacturer, affiliate of a manufacturer, or person
acting as a representative or agent of a manufacturer, may not
provide a lessor of gambling premises or an appointed official
any compensation, gift, gratuity, premium, contribution, or
other thing of value.
Subd. 4. [INSPECTION OF MANUFACTURERS.] Employees of the
division and the division of gambling enforcement may inspect
the books, records, inventory, and manufacturing operations
business premises of a licensed manufacturer without notice
during the normal business hours of the manufacturer.
Subd. 5. [PULL-TAB AND TIPBOARD FLARES.] (a) A
manufacturer may not ship or cause to be shipped into this state
any deal of pull-tabs or tipboards that does not have its own
individual flare as required for that deal by rule of the
board. A person other than a manufacturer may not manufacture,
alter, modify, or otherwise change a flare for a deal of
pull-tabs or tipboards except as allowed by this chapter or
board rules.
(b) The flare of each deal of pull-tabs and tipboards sold
by a manufacturer in Minnesota must have the Minnesota gambling
stamp affixed. The flare, with the stamp affixed, must be
placed inside the wrapping of the deal which the flare describes.
(c) Each pull-tab and tipboard flare must bear the
following statement printed in letters large enough to be
clearly legible:
"Pull-tab (or tipboard) purchasers -- This pull-tab (or
tipboard) game is not legal in Minnesota unless:
-- a Minnesota gambling stamp is affixed to this sheet, and
-- the serial number handwritten on the gambling stamp is
the same as the serial number printed on this sheet and on the
pull-tab (or tipboard) ticket you have purchased."
(d) The flare of each pull-tab and tipboard game must bear
the serial number of the game, printed in numbers at least
one-half inch high.
(e) The flare of each pull-tab and tipboard game must be
imprinted at the bottom with a bar code that provides:
(1) the name of the game;
(2) the serial number of the game;
(3) the name of the manufacturer;
(4) the number of tickets in the deal;
(5) the odds of winning each prize in the deal; and
(6) other information the board by rule requires.
The serial number included in the bar code must be the same as
the serial number of the tickets included in the deal. A
manufacturer who manufactures a deal of pull-tabs must affix to
the outside of the box containing that game the same bar code
that is imprinted at the bottom of a flare for that deal.
(f) No person may alter the bar code that appears on the
outside of a box containing a deal of pull-tabs and tipboards.
Possession of a box containing a deal of pull-tabs and tipboards
that has a bar code different from the bar code of the deal
inside the box is prima facie evidence that the possessor has
altered the bar code on the box.
Subd. 6. [SAMPLES OF GAMBLING EQUIPMENT.] The board shall
require each licensed manufacturer to submit to the board one or
more samples of each item of gambling equipment the manufacturer
manufactures for sale in this state. The board shall inspect
and test all the equipment it deems necessary to determine the
equipment's compliance with law and board rules. Samples
required under this subdivision must be approved by the board
before the equipment being sampled is sold in this state. The
board may request the assistance of the commissioner of public
safety and the director of the state lottery division in
performing the tests.
Subd. 7. [RECYCLED PAPER.] The board may, after January 1,
1991, by rule require that all pull-tabs sold in Minnesota be
manufactured using recycled paper.
Sec. 21. Minnesota Statutes 1989 Supplement, section
349.164, is amended to read:
349.164 [BINGO HALL LICENSES.]
Subdivision 1. [LICENSE REQUIRED.] No person may lease a
facility to more than one individual, corporation, partnership,
or organization to conduct bingo without having obtained a
current and valid bingo hall license under this section, unless
the lessor is a licensed organization.
Subd. 2. [LICENSE APPLICATION.] The board may issue a
bingo hall license to persons who meet the qualifications of
this section if the board determines that a license is
consistent with the purpose of sections 349.11 to 349.22.
Applications must be on a form the board prescribes. The board
may not issue or renew a bingo hall license unless the
conditions of section 349.213, subdivision 2, have been
satisfied.
Subd. 3. [QUALIFICATIONS.] A license may not be issued
under this section to a person, or to a organization,
corporation, firm, or partnership that is not the legal owner of
the facility, or to a person, organization, corporation, firm,
or partnership which has as an officer, director, or other
person in a supervisory or management position a person, who:
(1) has ever been convicted of a felony within the past
five years;
(2) has ever been convicted of a felony involving fraud or
misrepresentation or a crime involving gambling; or
(3) has ever been convicted of (i) assault, (ii) a criminal
violation involving the use of a firearm, or (iii) making
terroristic threats;
(4) owes delinquent taxes in excess of $500 as defined in
section 270.72; or
(5) after demand, has not filed tax returns required by the
commissioner of revenue.
Subd. 4. [FEES.] The annual fee for a bingo hall license
is $2,500.
Subd. 5. [CRIMINAL HISTORY.] The board may request the
assistance of the division of gambling enforcement in
investigating the background of an applicant for a bingo hall
license and may reimburse the division of gambling enforcement
for the costs. The board has access to all criminal history
data compiled by the bureau of criminal apprehension and the
division of gambling enforcement on licensees and applicants.
Subd. 6. [PROHIBITION PROHIBITED ACTS.] No bingo hall
licensee, person holding a financial or managerial interest in a
bingo hall, or affiliate thereof may also:
(1) be a licensed distributor or licensed manufacturer or
affiliate of the distributor or manufacturer under section
349.161 or 349.163 or a wholesale distributor of alcoholic
beverages.;
Subd. 7. [RESTRICTIONS.] A bingo hall licensee or
affiliate of the licensee may not:
(1) (2) provide any staff to conduct or assist in the
conduct of bingo or any other form of lawful gambling during the
bingo occasion on the premises;
(2) (3) acquire, provide storage or inventory control, or
report the use of any gambling equipment used by an organization
that conducts bingo lawful gambling on the premises;
(3) (4) provide accounting services to an organization
conducting bingo lawful gambling on the premises;
(4) (5) solicit, suggest, encourage, or make any
expenditures of gross receipts of an organization from lawful
gambling; or
(5) (6) charge any fee to a person at a bingo occasion,
without which the person could not play a bingo game or
participate in another form of lawful gambling on the premises;
(7) provide assistance or participate in the conduct of
lawful gambling on the premises; or
(8) permit more than 21 bingo occasions to be conducted on
the premises in any week.
Subd. 8 7. [LEASES.] All of the remuneration to be
received from the organization for the conduct of lawful
gambling must be stated in the lease. No amount may be paid by
the organization or received by the operator of the bingo hall
licensee based on the number of participants attending the bingo
occasion or participating in lawful gambling on the premises, or
based on the gross receipts or profit received by the
organization. All provisions of section 349.18 apply to lawful
gambling conducted in bingo halls.
Subd. 9 8. [REVOCATION AND SUSPENSION.] A license under
this section may be suspended by the board for a violation of
law or board rule or revoked for (1) failure to meet the
qualifications in subdivision 3 at any time; or revoked for what
the board determines to be (2) a pattern of willful violations
violation of law or board rule. A revocation or suspension is a
contested case under sections 14.57 to 14.69 of the
administrative procedure act.
Sec. 22. [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 required under this chapter, and may keep the suspension
in effect until all required returns are filed; and (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
Minnesota. The board must notify the licensee at least 14 days
before suspending the license under this paragraph. 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 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 or revoked under this subdivision, 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. 23. [349.165] [PREMISES PERMITS.]
Subdivision 1. [PREMISES PERMIT REQUIRED; APPLICATION.] A
licensed organization may not conduct lawful gambling at any
site unless it has first obtained from the board a premises
permit for the site. The board shall prescribe a form for
permit applications, and each application for a permit must be
submitted on a separate form. The board may by rule limit the
number of premises permits that may be issued to an organization.
Subd. 2. [CONTENTS OF APPLICATION.] An application for a
premises permit must contain:
(1) the name and address of the applying organization and
of the organization's gambling manager;
(2) a description of the site for which the permit is
sought, including its address and, where applicable, its
placement within another premises or establishment;
(3) if the site is leased, the name and address of the
lessor and information about the lease the board requires,
including all rents and other charges for the use of the site;
and
(4) other information the board deems necessary to carry
out its purposes.
An organization holding a premises permit must notify the
board in writing within ten days whenever any material change is
made in the above information.
Subd. 3. [FEES.] The board may issue four classes of
premises permits, corresponding to the classes of licenses
authorized under section 349.16, subdivision 6. The annual fee
for each class of permit is:
(1) $200 for a class A permit;
(2) $125 for a class B permit;
(3) $100 for a class C permit; and
(4) $75 for a class D permit.
Subd. 4. [IDENTIFICATION OF PREMISES.] No organization may
seek or accept assistance from a manufacturer or distributor, or
a representative, agent, affiliate, or employee of a
manufacturer or distributor, in identifying potential locations
for gambling conducted by the organization.
Sec. 24. [349.166] [EXCLUSIONS; EXEMPTIONS.]
Subdivision 1. [EXCLUSIONS.] (a) Bingo may be conducted
without a license and without complying with sections 349.17,
subdivision 1, and 349.18, if it is conducted:
(1) in connection with a county fair, the state fair, or a
civic celebration if it is not conducted for more than 12
consecutive days in a calendar year; or
(2) by an organization that conducts four or fewer bingo
occasions in a calendar year.
An organization that holds a license to conduct lawful
gambling under this chapter may not conduct bingo under this
subdivision.
(b) Bingo may be conducted within a nursing home or a
senior citizen housing project or by a senior citizen
organization without compliance with sections 349.11 to 349.213
if the prizes for a single bingo game do not exceed $10, total
prizes awarded at a single bingo occasion do not exceed $200, no
more than two bingo occasions are held by the organization or at
the facility each week, only members of the organization or
residents of the nursing home or housing project are allowed to
play in a bingo game, no compensation is paid for any persons
who conduct the bingo, a manager is appointed to supervise the
bingo, and the manager registers with the board. The gross
receipts from bingo conducted under the limitations of this
subdivision are exempt from taxation under chapter 297A.
(c) Raffles may be conducted by an organization without
complying with sections 349.11 to 349.14 and 349.151 to 349.213
if the value of all raffle prizes awarded by the organization in
a calendar year does not exceed $750.
Subd. 2. [EXEMPTIONS.] (a) Lawful gambling may be
conducted by an organization as defined in section 349.12,
subdivision 12, without complying with sections 349.151 to
349.16; 349.167; 349.168; 349.18; 349.19; and 349.212 if:
(1) the organization conducts lawful gambling on five or
fewer days in a calendar year;
(2) the organization does not award more than $50,000 in
prizes for lawful gambling in a calendar year;
(3) the organization pays a fee of $25 to the board,
notifies the board in writing not less than 30 days before each
lawful gambling occasion of the date and location of the
occasion, or 60 days for an occasion held in the case of a city
of the first class, the types of lawful gambling to be
conducted, the prizes to be awarded, and receives an exemption
identification number;
(4) the organization notifies the local government unit 30
days before the lawful gambling occasion, or 60 days for an
occasion held in a city of the first class;
(5) the organization purchases all gambling equipment and
supplies from a licensed distributor; and
(6) the organization reports to the board, on a single-page
form prescribed by the board, within 30 days of each gambling
occasion, the gross receipts, prizes, expenses, expenditures of
net profits from the occasion, and the identification of the
licensed distributor from whom all gambling equipment was
purchased.
(b) If the organization fails to file a timely report as
required by paragraph (a), clause (3) or (6), a $250 penalty is
imposed on the organization. Failure to file a timely report
does not disqualify the organization as exempt under this
paragraph if a report is later filed and the penalty paid.
(c) Merchandise prizes must be valued at their fair market
value.
(d) Unused pull-tab and tipboard deals must be returned to
the distributor within seven working days after the end of the
lawful gambling occasion. The distributor must accept and pay a
refund for all returns of unopened and undamaged deals returned
under this paragraph.
(e) An organization that is exempt from taxation on
purchases of pull-tabs and tipboards under section 349.212,
subdivision 4, paragraph (c), must return to the distributor any
tipboard or pull-tab deal no part of which is used at the lawful
gambling occasion for which it was purchased by the organization.
Subd. 3. [RAFFLES; CERTAIN ORGANIZATIONS.] Sections 349.21
and 349.211, subdivision 3, and the membership requirements of
sections 349.14 and 349.20 do not apply to raffles conducted by
an organization that directly or under contract to the state or
a political subdivision delivers health or social services and
that is a 501(c)(3) organization if the prizes awarded in the
raffles are real or personal property donated by an individual,
firm, or other organization. The person who accounts for the
gross receipts, expenses, and profits of the raffles may be the
same person who accounts for other funds of the organization.
Subd. 4. [TAXATION.] An organization's receipts from
lawful gambling that is exempt from licensing under this section
are not subject to the tax imposed by section 297A.02 or 349.212.
Sec. 25. [349.167] [GAMBLING MANAGERS.]
Subdivision 1. [GAMBLING MANAGER REQUIRED.] (a) All lawful
gambling conducted by a licensed organization must be under the
supervision of a gambling manager. A gambling manager
designated by an organization to supervise lawful gambling is
responsible for the gross receipts of the organization and for
its conduct in compliance with all laws and rules. The
organization must maintain, or require the person designated as
a gambling manager to maintain, a fidelity bond in the sum or
$25,000 in favor of the organization and the state, conditioned
on (1) the faithful performance of the manager's duties; and (2)
the payment of all taxes due under this chapter on lawful
expenditures of gross profits from lawful gambling. The terms
of the bond must provide that notice be given to the board in
writing not less than 30 days before its cancellation. In the
case of conflicting claims against a bond a claim by the state
has preference over a claim by the organization.
(b) A person may not act as a gambling manager for more
than one organization.
(c) An organization may not conduct lawful gambling without
having a gambling manager. The board must be notified in
writing of a change in gambling managers. Notification must be
made within ten days of the date the gambling manager assumes
the manager's duties.
(d) An organization may not have more than one gambling
manager at any time.
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. The board may issue a gambling manager's license to
a person applying for the license who:
(1) has received training as required in subdivision 5;
(2) has never been convicted of a felony;
(3) within the five years before the date of the license
application, has not committed a violation of law or board rule
that resulted in the revocation of a license issued by the
board;
(4) has never been convicted of a criminal violation
involving fraud, theft, tax evasion, misrepresentation, or
gambling;
(5) has never been convicted of (i) assault, (ii) a
criminal violation involving the use of a firearm, or (iii)
making terroristic threats; and
(6) has not 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 is valid for one year unless
suspended or revoked. The annual fee for a gambling manager's
license is $100.
Subd. 4. [SUSPENSION; REVOCATION.] The board may suspend
or revoke, as provided in board rules, a gambling manager's
license for a violation of law or board rule. A suspension or
revocation is a contested case under sections 14.57 to 14.69 of
the administrative procedure act.
Subd. 5. [TRAINING OF GAMBLING MANAGERS.] (a) The board
shall by rule require all persons licensed as gambling managers
to receive periodic training in laws and rules governing lawful
gambling. The rules must contain the following requirements:
(1) each gambling manager must have received such training
before being issued a new license;
(2) each gambling manager applying for a renewal of a
license must have received training within the three years prior
to the date of application for the renewal; and
(3) the training required by this subdivision may be
provided by a person, firm, association, or organization
authorized by the board to provide the training. Before
authorizing a person, firm, association, or organization 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 rules may provide for differing training requirements
for gambling managers based on the class of license held by the
gambling manager's organization.
The board or the director may provide the training required
by this subdivision using employees of the division.
Subd. 6. [CRIMINAL HISTORY.] The board may request the
assistance of the division of gambling enforcement in
investigating the background of an applicant for a gambling
manager's license and may reimburse the division of gambling
enforcement for the costs thereof. The board has access to all
criminal history data compiled by the division of gambling
enforcement on licensees and applicants.
Subd. 7. [RECRUITMENT OF GAMBLING MANAGERS.] No
organization may seek or accept assistance from a manufacturer
or distributor, or a representative, agent, affiliate, or
employee of a manufacturer or distributor, in identifying or
recruiting candidates to become a gambling manager for the
organization.
Sec. 26. [349.168] [GAMBLING EMPLOYEES.]
Subdivision 1. [REGISTRATION OF EMPLOYEES.] A person may
not receive compensation for participating in the conduct of
lawful gambling as an employee of a licensed organization unless
the person has first registered with the board on a form the
board prescribes. The form must require each registrant to
provide: (1) the person's name, address, and social security
number; (2) a current photograph; (3) the name, address, and
license number of the employing organization; and (4) a listing
of all employment in the conduct of lawful gambling within the
previous three years, including the name and address of each
employing organization and the circumstances under which the
employment was terminated.
Subd. 2. [IDENTIFICATION OF EMPLOYEES.] The board shall
issue to each person registering under subdivision 1 a
registration number and identification card, which must include
the employee's photograph. Each person receiving compensation
for the conduct of lawful gambling must wear the identification
card provided by the board at all times while conducting the
lawful gambling.
Subd. 3. [COMPENSATION.] Compensation to persons who
participate in the conduct of lawful gambling may be paid only
to active members of the conducting organization or its
auxiliary, or the spouse or surviving spouse of an active
member, except that the following persons may receive
compensation without being active members: (1) sellers of
pull-tabs, tipboards, raffle tickets, paddlewheel tickets, and
bingo paper; (2) accountants performing auditing or bookkeeping
services for the organization; and (3) attorneys providing legal
services to the organization. The board may by rule allow other
persons not active members of the organization to receive
compensation.
Subd. 4. [AMOUNTS PAID.] The amounts of compensation that
may be paid under this section may be provided for in a schedule
of compensation adopted by the board by rule. In adopting a
schedule, the board must consider the nature of the
participation and the types of lawful gambling participated in.
Subd. 5. [COMPENSATION RECORDS.] An organization paying
compensation to persons who participate in the conduct of lawful
gambling must maintain a compensation record. The record must
be retained for at least two years after the month in which the
compensation is paid. The record must itemize each payment made
to each recipient of compensation and must include the amount
and the full name, address, and membership status of each
recipient.
Subd. 6. [COMPENSATION PAID BY CHECK.] Compensation paid
by an organization in connection with lawful gambling must be in
the form of a check drawn on the organization's gambling
account, as specified in section 349.19, and paid directly to
the employee.
Subd. 7. [PENALTY.] (a) An organization that makes payment
of compensation, or causes compensation to be made, that
violates subdivision 4 must be assessed a civil penalty not to
exceed $1,000 for each violation of subdivision 4. A second
violation within 12 months of notification by the board to the
organization of the first violation must result in suspension of
the organization's gambling license for a period of three
months, in addition to any civil penalty assessed. A third
violation within 12 months of the board's notification to the
organization of the second violation must result in revocation
of the organization's gambling license in addition to any civil
penalty assessed.
(b) Upon each violation, the director shall notify the
organization in writing of its violation and of the penalties
under this subdivision for future violations. Notification is
effective upon mailing.
(c) For purposes of this subdivision, a violation consists
of a payroll period or compensation date that includes payments
made in violation of subdivision 4.
Subd. 8. [PERCENTAGE OF GROSS PROFIT PAID.] A licensed
organization may pay a percentage of the gross profit from
raffle ticket sales to a nonprofit organization that sells
raffle tickets for the licensed organization.
Sec. 27. [349.169] [FILING OF PRICES.]
Subdivision 1. [FILING REQUIRED.] All manufacturers and
distributors must file with the director, not later than the
first day of each month, the prices at which the manufacturer or
distributor will sell all gambling equipment in that month. The
filing must be on a form the director prescribes. Prices filed
must include all charges the manufacturer or distributor makes
for each item of gambling equipment sold, including all volume
discounts, exclusive of transportation costs. All filings are
effective on the first day of the month for which they are
filed, except that a manufacturer or distributor may amend a
filed price within five days of filing it.
Subd. 2. [COPIES.] The director shall provide copies of
price filings to any person requesting them and may charge a
reasonable fee for the copies. Any person may examine price
filings in the division office at no cost, and the director
shall make the filings available for that purpose.
Subd. 3. [SALES AT FILED PRICES.] No manufacturer may sell
to a distributor, and no distributor may sell to an
organization, any gambling equipment for any price other than a
price the manufacturer or distributor has filed with the
director under subdivision 1, exclusive of transportation costs.
Sec. 28. Minnesota Statutes 1988, section 349.17, as
amended by Laws 1989, chapter 334, article 2, section 26, is
amended to read:
349.17 [CONDUCT OF BINGO.]
Subdivision 1. [BINGO OCCASIONS.] Not more than six seven
bingo occasions each week may be conducted by an organization.
At least 15 bingo games must be held at each occasion and a
bingo occasion must continue for at least 1-1/2 hours but not
more than four consecutive hours.
Subd. 2. [BINGO ON LEASED PREMISES.] (a) A person or
corporation, other than an organization, which leases any
premises that it owns to two or more organizations for purposes
including the conduct of bingo occasions, may not allow more
than 18 bingo occasions to be conducted on the premises in any
week.
(b) If an organization conducts bingo on premises it does
not own, the organization must provide the board with the name
of the owner and lessor of the premises, copies of all
agreements between the organization and the owner or lessor, and
the names of employees of the owner or lessor who will be
responsible for the premises during the bingo occasion held by
the organization.
(c) During any bingo occasion held conducted by an
organization on premises it does not own, the organization shall
be is directly responsible for the:
(1) staffing of the bingo occasion;
(2) conducting of lawful gambling during the bingo
occasion;
(3) acquiring, storage, inventory control, and reporting of
all gambling equipment used by the organization; and
(4) receipt, accounting, and all expenditures of gross
receipts from lawful gambling; and
(5) preparation of the bingo packets.
Subd. 2a. [DISTRIBUTOR LICENSE EXEMPTION FOR LESSOR.] As
part of a lease agreement on a leased bingo premises, the lessor
may furnish bingo equipment without being a licensed
distributor. For purposes of this section, "furnish" does not
include the right to sell or offer for sale.
Subd. 3. Each bingo winner must be determined and every
prize shall be awarded and delivered the same day on which the
bingo occasion is conducted.
Subd. 4. [CHECKERS.] One or more checkers must be engaged
for each bingo occasion. The checker or checkers must record,
on a form the board provides, the number of cards played in each
game and the prizes awarded to recorded cards. The form must
provide for the inclusion of the registration number of each
card and must include a checker's certification that the figures
recorded are correct to the best of the checker's knowledge.
Subd. 5. [BINGO CARD NUMBERING.] (a) The board shall by
rule require that all licensed organizations: (1) conduct bingo
only using liquid daubers on cards that bear an individual
number recorded by the distributor; (2) sell all bingo cards
only in the order of the numbers appearing on the cards; and (3)
use each bingo card for no more than one bingo occasion. In
lieu of the requirements of clauses (2) and (3), a licensed
organization may electronically record the sale of each bingo
card at each bingo occasion using an electronic recording system
approved by the board.
(b) The requirements of paragraph (a) do not apply to a
licensed organization that (1) has never received gross receipts
from bingo in excess of $150,000 in any year, and (2) does not
pay compensation to any person for participating in the conduct
of lawful gambling.
Sec. 29. [349.172] [PULL-TABS; INFORMATION REQUIRED TO BE
POSTED.]
An organization selling pull-tabs must post for each deal
of pull-tabs all major prizes that have been awarded for
pull-tabs purchased from that deal. The information must be
posted prominently at the point of sale of the deal. An easily
legible pull-tab flare that lists prizes in that deal, and on
which prizes are marked or crossed off as they are awarded,
satisfies the requirement of this section that major prizes be
posted, provided that a separate flare is posted for each deal
of pull-tabs. An organization must post or mark off each major
prize immediately upon awarding the prize. A "major prize" in a
deal of pull-tabs is any prize that is at least 50 times the
face value of any pull-tab in the deal.
Sec. 30. [349.174] [PULL-TABS; DEADLINE FOR USE.]
A deal of pull-tabs and tipboards received by an
organization before September 1, 1989, must be put into play by
that organization before September 1, 1990, unless the deal
bears a serial number that allows it to be traced back to its
manufacturer and to the distributor who sold it to the
organization. An organization in possession on and after
September 1, 1990, of a deal of pull-tabs and tipboards the
organization received before September 1, 1989, may not put such
a deal in play but must remove it from the organization's
inventory and return it to the manufacturer.
Sec. 31. Minnesota Statutes 1988, section 349.18, as
amended by Laws 1989, chapter 334, article 2, sections 27 and
28, is amended to read:
349.18 [PREMISES USED FOR GAMBLING.]
Subdivision 1. [LEASE OR OWNERSHIP REQUIRED.] An
organization may conduct lawful gambling only on premises it
owns or leases. Leases must be for a period of one year and
must be in writing on a form prescribed by the board. Copies of
all leases must be made available to employees of the division
and the division of gambling enforcement on request. A lease
may not provide for payments determined directly or indirectly
by the receipts or profits from lawful gambling. The board may
prescribe by rule limits on the amount of rent which an
organization may pay to a lessor for premises leased for lawful
gambling. 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.
No person, distributor, manufacturer, lessor, or
organization other than the licensed organization leasing the
space may conduct any activity in a on the leased space premises
during times when lawful gambling is being conducted in the
space on the premises.
Subd. 1a. [STORAGE OF GAMBLING EQUIPMENT.] (a) Gambling
equipment owned by or in the possession of a licensed an
organization must be kept at a licensed gambling premises owned
or operated by the organization, or at other storage sites
within the state that the organization has notified the board
are being used as gambling equipment storage sites. At each
storage site or licensed premises, the organization must have
the invoices or true and correct copies of the invoices for the
purchase of all gambling equipment at the site or premises.
Gambling equipment owned by an organization may not be kept at a
distributor's office, warehouse, storage unit, or other place of
the distributor's business.
(b) Gambling equipment, other than devices for selecting
bingo numbers, owned by a licensed an organization must be
secured and kept separate from gambling equipment owned by other
persons, organizations, distributors, or
manufacturers consistent with the organization's internal
controls filed with the board.
(c) Gambling equipment kept in violation of this
subdivision is contraband under section 349.2125.
(d) A licensed An organization may transport gambling
equipment it owns or possesses between approved gambling
equipment storage sites and to and from licensed distributors.
Subd. 2. [EXCEPTIONS.] (a) A licensed An organization may
conduct raffles on a premise it does not own or lease.
(b) A licensed An organization may with the permission of
the board, conduct bingo on premises it does not own or lease
for up to six 12 consecutive days in a calendar year, in
connection with a county fair, the state fair, or civil a civic
celebration.
(c) A licensed organization may, after compliance with
section 349.213, conduct lawful gambling on premises other than
the organization's licensed premise for one day per year for not
more than 12 hours that day. A lease for that time period for
the exempted premises must accompany the request to the board.
Subd. 3. [PROCEEDS FROM RENTAL.] Rental proceeds from
premises owned by a licensed an organization and leased or
subleased to one or more other licensed organizations for the
purposes of conducting lawful gambling shall not be reported as
gambling proceeds under this chapter.
Subd. 4. [PROHIBITION.] (a) An organization may not pay
rent to itself or to any of its affiliates for use of space for
conducting lawful gambling.
(b) An organization may not pay rent for space for
conducting lawful gambling from any account or fund other than
the organization's separate gambling account.
Subd. 5. [CERTAIN AGREEMENTS PROHIBITED.] An organization
may not enter into or be a party to a lending agreement under
which any of the organization's receipts from lawful gambling
are pledged as collateral for a loan.
Sec. 32. Minnesota Statutes 1988, section 349.19, as
amended by Laws 1989, chapter 334, article 2, sections 29, 30,
32, and 33, and Laws 1989, First Special Session chapter 1,
article 13, section 11, is amended to read:
349.19 [RECORDS AND REPORTS.]
Subdivision 1. [REQUIRED RECORD OF RECEIPTS.] A licensed
organization must keep a record of each occasion on which it
conducts gambling, including each bingo occasion and each day on
which other forms of lawful gambling are conducted. The record
must include gross receipts, quantities of free plays if any,
expenses, prizes, and profits gross profit. The board may by
rule provide for the methods by which expenses are documented.
Gross receipts for bingo include any amount received by the
organization which has been paid by a person at the bingo
occasion to play the game, without which the player could not
play the game. In the case of bingo, gross receipts must be
compared to the checkers' records for the occasion by a person
who did not sell cards for the occasion. Separate records must
be kept for bingo and all other forms of lawful gambling.
Subd. 2. [ACCOUNTS.] Gross receipts from lawful gambling
by each organization at each licensed permitted premises must be
segregated from all other revenues of the conducting
organization and placed in a separate account. All expenditures
for expenses, taxes, and lawful purposes must be made from the
separate account except in the case of expenditures previously
approved by the organization's membership for emergencies as
defined by board rule. The name and address of the bank and the
account number for that separate account for that licensed
premises, and the names of organization members authorized as
signatories on the separate account must be provided to the
board when the application is submitted. Changes in the
information must be submitted to the board at least ten days
before the change is made. Gambling receipts must be deposited
into the gambling bank account within one business day three
days of completion of the bingo occasion, deal, or game from
which they are received, and deposit records must be sufficient
to allow determination of deposits made from each bingo
occasion, deal, or game. The person who accounts for gambling
gross receipts and profits may not be the same person who
accounts for other revenues of the organization.
Subd. 3. [EXPENDITURES.] All expenditures of gross profits
from lawful gambling must be itemized as to payee, purpose,
amount, and date of payment, and must be in compliance with
section 349.154. Authorization of the expenditures must be
recorded in the regular monthly meeting minutes of the licensed
organization. Checks for expenditures of gross profits must be
signed by at least two persons authorized by board rules to sign
the checks.
Subd. 4. [DISCREPANCIES.] If at a bingo occasion a
discrepancy of more than $20 is found between the gross receipts
as reported by the checkers and the gross receipts determined by
adding the cash receipts, the discrepancy must be reported to
the board within five days of the bingo occasion.
Subd. 5. [REPORTS.] A licensed organization must report to
the board and to its membership monthly, or quarterly in the
case of a licensed organization which does not report more than
$1,000 in gross receipts from lawful gambling in any calendar
quarter, on its gross receipts, expenses, profits, and
expenditure of profits from lawful gambling. If the
organization conducts both bingo and other forms of lawful
gambling, the figures for both must be reported separately. In
addition, a licensed organization must report to the board
monthly on its purchases of gambling equipment and must include
the type, quantity, and dollar amount from each supplier
separately. The reports must be on a form the board prescribes.
Submission of the report required by section 16 satisfies the
requirement for reporting monthly to the board on expenditure of
net profits.
Subd. 6. [PRESERVATION OF RECORDS.] Records required to be
kept by this section must be preserved by a licensed
organization for at least 3-1/2 years and may be inspected by
the commissioner of revenue, the commissioner of gaming, or the
commissioner of public safety at any reasonable time without
notice or a search warrant.
Subd. 7. [TAX RECORDS.] The board may by rule require each
licensed organization to provide copies of forms it files with
the United States department of the treasury which are required
for organizations exempt from income tax.
Subd. 8. [TERMINATION PLAN.] Upon termination of a license
for any reason, a licensed organization must notify the board in
writing within 15 calendar days of the license termination date
of its plan for disposal of registered gambling equipment and
distribution of remaining gambling proceeds. Before
implementation, a plan must be approved by the board. The board
may accept or reject a plan and order submission of a new plan
or amend a proposed plan. The board may specify a time for
submission of new or amended plans or for completion of an
accepted plan.
Subd. 9. [ANNUAL AUDIT; FILING REQUIREMENT.] An
organization licensed under this chapter must have an annual
financial audit of its lawful gambling activities and funds
performed by an independent auditor licensed by the state of
Minnesota or performed by an independent accountant who has had
prior approval of the board. The board shall by rule prescribe
standards for the audit, which must provide for the
reconciliation of the organization's gambling account or
accounts with the organization's reports filed under subdivision
5 and section 16. A complete, true, and correct copy of the
audit report must be filed with the board upon completion of the
audit.
Subd. 10. [PULL-TAB RECORDS.] 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 drivers 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.
Subd. 11. [INFORMATION MADE PART OF ORGANIZATION MINUTES.]
A licensed organization which receives a copy of a written audit
under subdivision 9, or an audit or compliance report prepared
by an agency of the state, must place the audit report or
compliance report in the minutes of the next meeting of the
organization following receipt of the report. Copies of such
minutes must be made available to all members of the
organization upon request.
Sec. 33. [349.191] [SALES ON CREDIT.]
Subdivision 1. [CREDIT RESTRICTION.] A manufacturer may
not offer or extend to a distributor, and a distributor may not
extend to an organization, credit for a period of more than 30
days for the sale of any gambling equipment. No right of action
exists for the collection of any claim based on credit
prohibited by this subdivision. The 30-day period allowed by
this subdivision begins with the day immediately following the
day of invoice and includes all successive days, including
Sundays and holidays, to and including the 30th successive day.
Subd. 2. [INVOICES.] All invoices prepared by a
manufacturer or distributor and presented as part of a credit
transaction for the purchase of gambling equipment must clearly
bear the words "Notice: State Law Prohibits the Extension of
Credit For This Sale For More Than 30 Days."
Subd. 3. [RULES.] Any rule of the board which requires a
manufacturer to report to the board any distributor who is
delinquent in payment for gambling equipment must provide that a
distributor is subject to the rule if the distributor is more
than 30 days delinquent in payment to a manufacturer.
Subd. 4. [CREDIT; POSTDATED CHECKS.] For purposes of this
subdivision, "credit" includes acceptance by a manufacturer or
distributor of a postdated check in payment for gambling
equipment.
Sec. 34. Minnesota Statutes Second 1989 Supplement,
section 349.212, subdivision 2, is amended to read:
Subd. 2. [COLLECTION; DISPOSITION.] The taxes imposed by
this section are due and payable to the commissioner of revenue
at the time when the gambling tax return is required to be
filed. Returns covering the taxes imposed under this section
must be filed with the commissioner of revenue on or before the
20th day of the month following the close of the previous
calendar month. The commissioner may require that the returns
be filed via magnetic media or electronic data transfer. The
proceeds, along with the revenue received from all license fees
and other fees under sections 349.11 to 349.21 and 349.211,
349.212, and 349.213, must be paid to the state treasurer for
deposit in the general fund.
Sec. 35. Minnesota Statutes 1989 Supplement, section
349.2122, is amended to read:
349.2122 [MANUFACTURERS; REPORTS TO THE COMMISSIONER OF
REVENUE; PENALTY.]
A manufacturer licensed with by the board who sells
pull-tabs and tipboards to a licensed distributor licensed by
the board must file with the commissioner of revenue, on a form
prescribed by the commissioner, a report of pull-tabs and
tipboards sold to licensed distributors any person in the state,
including the established governing body of Indian tribes
recognized by the United States Department of the Interior. The
report must be filed monthly on or before the 25th day of the
month succeeding the month in which the sale was made. The
commissioner may require that the report be submitted via
magnetic media or electronic data transfer. The commissioner of
revenue may inspect the books, records, and inventory of a
licensed manufacturer without notice during the normal business
hours of the manufacturer. Any person violating this section
shall be guilty of a misdemeanor.
Sec. 36. Minnesota Statutes 1988, section 349.2123, is
amended to read:
349.2123 [CERTIFIED PHYSICAL INVENTORY.]
The board or commissioner of revenue may, upon request,
require a licensed distributor to furnish a certified physical
inventory of the pull-tabs and tipboards all gambling equipment
in stock. The inventory must contain the information required
by the board or the commissioner.
Sec. 37. Minnesota Statutes 1989 Supplement, section
349.213, is amended to read:
349.213 [LOCAL AUTHORITY.]
Subdivision 1. [LOCAL REGULATION.] (a) A statutory or home
rule city or county has the authority to adopt more stringent
regulation of any form of lawful gambling within its
jurisdiction, including the prohibition of any form of lawful
gambling, and may require a permit for the conduct of gambling
exempt from licensing under section 349.214. The fee for a
permit issued under this subdivision may not exceed $100. The
authority granted by this subdivision does not include the
authority to require a license or permit to conduct gambling by
organizations or sales by distributors licensed by the board.
The authority granted by this subdivision does not include the
authority to require an organization to make specific
expenditures of more than ten percent from its net profits
derived from lawful gambling. For the purposes of this
subdivision, net profits are profits less amounts expended for
allowable expenses. A statutory or home rule charter city or a
county may not require an organization conducting lawful
gambling within its jurisdiction to make an expenditure to the
city or county as a condition to operate within that city or
county, except as authorized under section 349.16, subdivision
4, or 349.212; provided, however, that an ordinance requirement
that such organizations must contribute ten percent of their net
profits derived from lawful gambling to a fund administered and
regulated by the responsible local unit of government without
cost to such fund, for disbursement by the responsible local
unit of government of the receipts for lawful purposes, is not
considered an expenditure to the city or county nor a tax under
section 349.212, and is valid and lawful.
(b) A statutory or home rule city or county may by
ordinance require that a licensed organization conducting lawful
gambling within its jurisdiction expend all or a portion of its
expenditures for lawful purposes on lawful purposes conducted or
located within the city's or county's trade area. Such an
ordinance must define the city's or county's trade area and must
specify the percentage of lawful purpose expenditures which must
be expended within the trade area. A trade area defined by a
city under this subdivision must include each city contiguous to
the defining city.
(c) A more stringent regulation or prohibition of lawful
gambling adopted by a political subdivision under this
subdivision must apply equally to all forms of lawful gambling
within the jurisdiction of the political subdivision.
Subd. 2. [LOCAL APPROVAL.] Before issuing or renewing an
organization license a premises permit or bingo hall license,
the board must notify the city council of the statutory or home
rule city in which the organization's premises or the bingo hall
is located or, if the premises or hall is located outside a
city, the county board of the county and the town board of the
town where the premises or hall is located. The board may
require organizations or bingo halls to notify the appropriate
local government at the time of application. This required
notification is sufficient to constitute the notice required by
this subdivision. If the city council or county board adopts a
resolution disapproving the license and so informs the board
within 60 days of receiving notice of the application, the
license may not be issued or renewed. The board may not issue
or renew a premises permit or bingo hall license unless the
organization submits a resolution from the city council or
county board approving the premises permit or bingo hall
license. The resolution must have been adopted within 60 days
of the date of application for the new or renewed permit or
license.
Sec. 38. Minnesota Statutes 1988, section 349.30,
subdivision 2, is amended to read:
Subd. 2. "Gambling devices" means slot machines, roulette
wheels, punchboards, and pin ball machines which return coins or
slugs, chips, or tokens of any kind, which are redeemable in
merchandise or cash device" has the meaning given it in section
609.75, subdivision 4.
Sec. 39. Minnesota Statutes 1988, section 349.31, is
amended to read:
349.31 [GAMBLING DEVICE; POSSESSION OF.]
Subdivision 1. [INTENTIONAL POSSESSION; WILLFUL KEEPING.]
The intentional possession or willful keeping of a gambling
device on a licensed premises is cause for the suspension or
revocation of any license under which the licensed business is
carried on upon the premises where the gambling device is found,
provided that possession of gambling equipment as defined in
section 349.12, subdivision 17, which is used for lawful
gambling authorized by this chapter, and the manufacture of
gambling devices for use in jurisdictions where use of the
gambling device is legal as provided for by section 349.40 shall
not be cause for revocation of a license.
Subd. 2. [SUSPENSION AND REVOCATION OF LICENSES.] All
licenses under which any licensed business is permitted to be
carried on upon the licensed premises shall be suspended or
revoked if the intentional possession or willful keeping of any
such gambling devices upon the licensed premises is established,
notwithstanding that it may not be made to appear that such
devices have actually been used or operated for the purpose of
gambling.
Sec. 40. Minnesota Statutes 1988, section 349.32, is
amended to read:
349.32 [ISSUING AUTHORITY TO SUSPEND OR REVOKE.]
The proceedings for suspension or revocation shall be had
are held before the issuing authority, which shall have has the
power to suspend or revoke the license or licenses involved, as
hereinafter provided.
Sec. 41. Minnesota Statutes 1988, section 349.34, is
amended to read:
349.34 [PROCEEDINGS BEFORE ISSUING AUTHORITY; ORDER TO SHOW
CAUSE.]
Upon the receipt of such information from any of the peace
officers referred to in section 349.33, if any If an issuing
authority, on receipt of information from a peace officer
described in section 349.33, is of the opinion that cause exists
for the suspension or revocation of any such a license, then
that the authority shall issue an order to show cause directed
to the licensee of the premises, stating the ground upon which
the proceeding is based and requiring the licensee to appear and
show cause at a time and place, within the county in which the
licensed premises are located, not less than ten days after the
date of the order, why the license should not be suspended or
revoked. That order to show cause shall be served upon the
licensee in the manner prescribed by law for the service of
summons in a civil action, or by certified mail, not less than
eight days before the date fixed for the hearing thereof. A
copy of the order shall forthwith be mailed to the owner of the
premises, as shown by the records in the office of the county
recorder, at the owner's last known post office address. A copy
of the order shall at the same time be mailed to any other
issuing authority, of which the authority issuing the order to
show cause has knowledge, by which other license to that
licensee may have been issued, and any such other authority may
participate in the suspension or revocation proceedings after
notifying the licensee and the officer or authority holding the
hearing of its intention so to do on or before the date of
hearing, and after the hearing take such action as it could have
taken had it instituted the suspension or revocation proceedings
in the first instance.
Sec. 42. Minnesota Statutes 1988, section 349.35,
subdivision 1, is amended to read:
Subdivision 1. [SUSPENSION; REVOCATION; STAY; APPEAL.] If,
upon the hearing of the order to show cause, it appears that the
licensee intentionally possessed or willfully kept upon the
licensed premises any gambling device, then the license or
licenses under which the licensed business is operated on the
licensed premises, shall be suspended or revoked. The order of
suspension or revocation shall not be enforced during the period
allowed by section 349.39 for taking an appeal.
Sec. 43. Minnesota Statutes 1988, section 349.36, is
amended to read:
349.36 [DUTIES OF COUNTY ATTORNEY.]
The county attorney of the county in which the hearing is
held, or the city attorney if the issuing authority is the city,
shall attend the hearing, interrogate the witnesses, and advise
the issuing authority. The county attorney shall also, and
appear for the issuing authority on any appeal taken pursuant to
the provisions of section 349.39.
Sec. 44. Minnesota Statutes 1988, section 349.38, is
amended to read:
349.38 [PROPERTY OWNERS LIABILITY.]
When a license is suspended or revoked under the provisions
of sections 349.30 to 349.39, the owner of the premises upon
which any licensed business has been operated shall not be
penalized by reason thereof unless it is established that the
owner had knowledge of the existence of the gambling devices
resulting in license suspension or revocation.
Sec. 45. Minnesota Statutes 1988, section 349.39, is
amended to read:
349.39 [APPEAL TO DISTRICT COURT; STAY; CONTINUANCE UNDER
BOND; HEARING UPON ONE YEAR LIMITATION ON PREMISES.]
Any licensee, or any owner of licensed premises, aggrieved
by an order of an issuing authority suspending or revoking any
license may appeal from that order to the district court of the
county in which the licensee resides by serving a notice of the
appeal upon the issuing authority or the clerk thereof. The
notice of appeal shall state that the person appealing takes an
appeal to that district court from the order suspending or
revoking the license or licenses, describing them and
identifying the order appealed from. This notice shall be
served within 15 days from the date of service of the order
appealed from, and the same, with proof of service thereof,
shall be filed with the court administrator of the district
court of the proper county. The appeal shall stand for trial at
the next term of the district court following the filing of the
notice of appeal, without the service of any notice of trial,
and shall be tried in the district court de novo. The trial
shall be by jury if the appellant shall so demand. The licensee
may continue to operate the licensed business or businesses
until the final disposition of such appeal. If the district
court upon the appeal shall determine that any license involved
in the appeal should be suspended or revoked, it may,
nevertheless, in its discretion permit the continuance of the
licensed business under a bond in the amount and in the form and
containing the conditions prescribed by the court. The district
court on the appeal, or in a separate proceeding, may permit the
issuance of a new license to a different licensee before the
expiration of the period of one year specified in section
349.35, subdivision 2, upon such terms and conditions imposed by
the court as will insure that no gambling device shall
thereafter be maintained upon the licensed premises.
Sec. 46. Minnesota Statutes 1988, section 349.50,
subdivision 8, is amended to read:
Subd. 8. [VIDEO GAME OF CHANCE.] "Video game of chance"
means games or devices that simulate games commonly referred to
as poker, blackjack, craps, hi-lo, roulette or other common
gambling forms, though not offering any type of pecuniary award
or gain to players. The term also includes any video game
having one or more of the following characteristics:
(1) it is primarily a game of chance, and has no
substantial elements of skill involved;
(2) it awards game credits or replays and contains a meter
or device which records unplayed credits or replays and contains
a device that permits them to be canceled.
Sec. 47. Minnesota Statutes 1988, section 349.55, is
amended to read:
349.55 [GAME SPECIFICATIONS.]
No payment may be made directly from any game or in
connection with the operation of any device. Each game must
contain a random character generator, and any internal meter
must be nonresettable. Any game canceling replays or credits
must cancel them no more than one at a time. A video game of
chance may not contain or have attached to it any switch, lever,
button, or other device capable of canceling replays or credits
in any way other than by playing the game offered by the
machine. A video game of chance must be programmed and must
operate in such a way that all credits accumulated on a game
must automatically cancel within 60 seconds of the completion of
a play. No person may cancel replays or credits on a video game
of chance in any way other than by playing the game offered by
the machine. A video game of chance may not be restarted after
cancellation of all accumulated credits except on insertion of a
coin.
Sec. 48. [349.61] [REPEAL; TERMINATION OF LICENSES.]
Subdivision 1. [REPEAL.] Section 1 and sections 349.50;
349.501; 349.502; 349.51; 349.52; 349.53; 349.54; 349.55;
349.56; 349.57; 349.58; 349.59; and 349.60 are repealed January
1, 1992. All licenses issued under sections 349.51 and 349.52
in effect on that date expire on that date. The commissioner of
finance shall on that date transfer all money in the video
gaming license account to the general fund.
Subd. 2. [NOT TO AFFECT CERTAIN COMPACTS.] Nothing in
subdivision 1 is intended to affect the validity of any compact
entered into before or after the effective date of this section
between the state and the governing body of an Indian tribe that
governs the conduct of any form of gambling on Indian lands.
Sec. 49. Minnesota Statutes 1989 Supplement, section
349A.02, subdivision 5, is amended to read:
Subd. 5. [COMPENSATION INCENTIVE PLAN.] The compensation
of employees in the division is as provided in chapter
43A. Subject to the provisions of section 43A.18, subdivision
1, the commissioner of employee relations director may, at the
request of the director, develop and implement a plan for making
incentive payments to employees of the division whose primary
responsibilities are in marketing.
Sec. 50. Minnesota Statutes 1989 Supplement, section
349A.06, subdivision 2, is amended to read:
Subd. 2. [QUALIFICATIONS.] (a) The director may not
contract with a retailer who:
(1) is under the age of 18;
(2) is in business solely as a seller of lottery tickets;
(3) owes $500 or more in delinquent taxes as defined in
section 270.72;
(4) has been convicted within the previous five years of a
felony or gross misdemeanor, any crime involving fraud or
misrepresentation, or a gambling-related offense;
(5) is a member of the immediate family, residing in the
same household, as the director, board member, or any employee
of the division; or
(6) in the director's judgment does not have the financial
stability or responsibility to act as a lottery retailer, or
whose contracting as a lottery retailer would adversely affect
the public health, welfare, and safety, or endanger the security
and integrity of the lottery; or
(7) is a currency exchange, as defined in section 53A.01.
A contract entered into before August 1, 1990, which
violates clause (7) may continue in effect until its expiration
but may not be renewed.
(b) An organization, firm, partnership, or corporation that
has a stockholder who owns more than five percent of the
business or the stock of the corporation, an officer, or
director, that does not meet the requirements of paragraph (a),
clause (4), is not eligible to be a lottery retailer under this
section.
(c) The restrictions under paragraph (a), clause (4), do
not apply to an organization, partnership, or corporation if the
director determines that the organization, partnership, or firm
has terminated its relationship with the individual whose
actions directly contributed to the disqualification under this
subdivision.
Sec. 51. Minnesota Statutes 1989 Supplement, section
349A.06, subdivision 4, is amended to read:
Subd. 4. [CRIMINAL HISTORY.] The director may request the
director of gambling enforcement to investigate all applicants
for lottery retailer contracts to determine their compliance
with the requirements of subdivision 2. The director may issue
a temporary contract, valid for not more than 90 days, to an
applicant pending the completion of the investigation or a final
determination of qualifications under this section. The
director has access to all criminal history data compiled by the
director of gambling enforcement on any person (1) holding or
applying for a retailer contract, (2) any person holding a
lottery vendor contract or who has submitted a bid on such a
contract, and (3) any person applying for employment with the
lottery.
Sec. 52. Minnesota Statutes 1988, section 609.75,
subdivision 4, is amended to read:
Subd. 4. [GAMBLING DEVICE.] A gambling device is a
contrivance which for a consideration affords the player an
opportunity to obtain something of value, other than free plays,
automatically from the machine or otherwise, the award of which
is determined principally by chance. "Gambling device" includes
any video game of chance, as defined in section 349.50,
subdivision 8, that is not in compliance with sections 349.50 to
349.60.
Sec. 53. [TRANSPORTATION OF UNSTAMPED DEALS;
APPLICABILITY.]
Until January 1, 1991, Minnesota Statutes, section
349.2127, subdivision 4, does not prevent the otherwise lawful
transfer of gambling equipment to a licensed facility in
Minnesota from a facility in an adjoining state which is owned
and operated by the licensed Minnesota distributor who makes the
transfer.
Sec. 54. [LEGISLATIVE FINDING.]
The legislature finds and determines that, because of (1)
the difficulty of ensuring the security and integrity of
pull-tabs when they are manufactured in another state, and (2)
the enhanced inspection and regulation of the manufacture of
pull-tabs, and the consequent enhancement of their security and
integrity that would result from their manufacture in Minnesota,
it is necessary and desirable that all pull-tabs sold in the
state after June 30, 1992, be required to be manufactured in
Minnesota.
Sec. 55. [REPEALER.]
(a) Minnesota Statutes 1988, sections 349.14; and 349.214,
subdivisions 1, 1a, 3, and 4; Minnesota Statutes 1989
Supplement, section 349.151, subdivision 4a; and Minnesota
Statutes Second 1989 Supplement, section 349.214, subdivision 2,
are repealed.
(b) Minnesota Statutes 1989 Supplement, sections 349.20 and
349.21, are repealed.
(c) Laws 1989, First Special Session chapter 1, article 13,
section 27, is repealed.
Sec. 56. [EFFECTIVE DATE.]
Section 55, paragraph (c), is effective the day following
final enactment. Sections 23; 25; 26; 28, subdivision 5; 47;
and 55, paragraph (b), are effective January 1, 1991.
ARTICLE 2
PENALTY PROVISIONS
Section 1. Minnesota Statutes 1989 Supplement, section
349.2125, subdivision 1, is amended to read:
Subdivision 1. [CONTRABAND DEFINED.] The following are
contraband:
(1) all pull-tab or tipboard deals that do not have stamps
affixed to them as provided in section 349.162;
(2) all pull-tab or tipboard deals in the possession of any
unlicensed person, firm, or organization, whether stamped or
unstamped;
(3) any container used for the storage and display of any
contraband pull-tab or tipboard deals as defined in clauses (1)
and (2);
(4) all currency, checks, and other things of value used
for pull-tab or tipboard transactions not expressly permitted
under this chapter, and any cash drawer, cash register, or any
other container used for illegal pull-tab or tipboard
transactions including its contents;
(5) any device including, but not limited to, motor
vehicles, trailers, snowmobiles, airplanes, and boats used, with
the knowledge of the owner or of a person operating with the
consent of the owner, for the storage or transportation of more
than five pull-tab or tipboard deals that are contraband under
this subdivision. When pull-tabs and tipboards are being
transported in the course of interstate commerce, or from one
distributor to another, the pull-tab and tipboard deals are not
contraband, notwithstanding the provisions of clause (1);
(6) any unaffixed registration stamps except as provided in
section 349.162, subdivision 4;
(7) any prize used or offered in a game utilizing
contraband as defined in this subdivision;
(8) any altered, modified, or counterfeit pull-tab or
tipboard ticket;
(9) any unregistered gambling equipment except as permitted
by this chapter; and
(10) any gambling equipment kept in violation of section
349.18; and
(11) any gambling equipment not in conformity with law or
board rule.
Sec. 2. Minnesota Statutes 1989 Supplement, section
349.2125, subdivision 3, is amended to read:
Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] Within two ten days after the
seizure of any alleged contraband, the person making the seizure
shall deliver make available an inventory of the property seized
to the person from whom the property was seized, if known, and
file a copy with the commissioner of revenue or the director of
gambling enforcement. Within ten days after the date of service
of the inventory, the person from whom the property was seized
or any person claiming an interest in the property may file with
the seizing authority a demand for judicial determination of
whether the property was lawfully subject to seizure and
forfeiture. Within 30 60 days after the date of filing of the
demand, the seizing authority must bring an action in the
district court of the county where seizure was made to determine
the issue of forfeiture. The action must be brought in the name
of the state and be prosecuted by the county attorney or by the
attorney general. The court shall hear the action without a
jury and determine the issues of fact and laws involved. When a
judgment of forfeiture is entered, the seizing authority may,
unless the judgment is stayed pending an appeal, either (1)
cause the forfeited property to be destroyed; or (2) cause it to
be sold at a public auction as provided by law.
If demand for judicial determination is made and no action
is commenced by the seizing authority as provided in this
subdivision, the property must be released by the seizing
authority and delivered to the person entitled to it. If no
demand is made, the property seized is considered forfeited to
the state seizing authority by operation of law and may be
disposed of by the seizing authority as provided where there has
been a judgment of forfeiture. When the seizing authority is
satisfied that a person from whom property is seized was acting
in good faith and without intent to evade the tax imposed by
section 349.2121, subdivision 4, the seizing authority shall
release the property seized without further legal proceedings.
Sec. 3. Minnesota Statutes 1988, section 349.2125,
subdivision 4, is amended to read:
Subd. 4. [DISPOSAL.] (a) The property described in
subdivision 1, clauses (4) and (5), must be confiscated after
conviction of the person from whom it was seized, upon
compliance with the following procedure: the seizing authority
shall file with the court a separate complaint against the
property, describing it and charging its use in the specific
violation, and specifying substantially the time and place of
the unlawful use. A copy of the complaint must be served upon
the defendant or person in charge of the property at the time of
seizure, if any. If the person arrested is acquitted, the court
shall dismiss the complaint against the property and order it
returned to the persons legally entitled to it. Upon conviction
of the person arrested, the court shall issue an order directed
to any person known or believed to have any right, title or
interest in, or lien upon, any of the property, and to persons
unknown claiming any right, title, interest, or lien in it,
describing the property and (1) stating that it was seized and
that a complaint against it, charging the specified violation,
has been filed with the court, (2) requiring the persons to file
with the court administrator their answer to the complaint,
setting forth any claim they may have to any right or title to,
interest in, or lien upon the property, within 30 days after the
service of the order, and (3) notifying them in substance that
if they fail to file their answer within the time, the property
will be ordered sold by the seizing authority. The court shall
cause the order to be served upon any person known or believed
to have any right, title, interest, or lien as in the case of a
summons in a civil action, and upon unknown persons by
publication, as provided for service of summons in a civil
action. If no answer is filed within the time prescribed, the
court shall, upon affidavit by the court administrator, setting
forth the fact, order the property sold by the seizing
authority. Seventy percent of the proceeds of the sale, after
deducting the expense of keeping the property and fees and costs
of sale, must be paid into the state treasury and credited to
the general fund of forfeited property, after payment of
seizure, storage, forfeiture and sale expenses, must be
forwarded to the seizing authority for deposit as a supplement
to its operating fund or similar fund for official use, and 20
percent must be forwarded to the county attorney or other
prosecuting agency that handled the forfeiture for deposit as a
supplement to its operating fund or similar fund for
prosecutorial purposes. The remaining ten percent of the
proceeds must be forwarded within 60 days after resolution of
the forfeiture to the department of human services to fund
programs for the treatment of compulsive gamblers. If answer is
filed within the time provided, the court shall fix a time for a
hearing, which shall be not less than ten nor more than 30 days
after the time for filing answer expires. At the time fixed for
hearing, unless continued for cause, the matter shall be heard
and determined by the court, without a jury, as in other civil
actions.
(b) If the court finds that the property, or any part of
it, was used in the violation specified in the complaint, it
shall order the property unlawfully used, sold as provided by
law, unless the owner shows to the satisfaction of the court
that the owner had no notice or knowledge or reason to believe
that the property was used or intended to be used in the
violation. The officer making a sale, after deducting the
expense of keeping the property, the fee for seizure, and the
costs of the sale, shall pay all liens according to their
priority, which are established at the hearing as being bona
fide and as existing without the lienor having any notice or
knowledge that the property was being used or was intended to be
used for or in connection with the violation specified in the
order of the court, and shall pay the balance of the
proceeds into the state treasury to be credited to the general
fund to the seizing authority for official use and sharing in
the manner provided in paragraph (a). A sale under this section
shall free the property sold from any and all liens on it.
Appeal from the order of the district court will lie as in other
civil cases. At any time after seizure of the articles
specified in this subdivision, and before the hearing provided
for, the property must be returned to the owner or person having
a legal right to its possession, upon execution of a good and
valid bond to the state, with corporate surety, in the sum of
not less than $100 and not more than double the value of the
property seized, to be approved by the court in which the case
is triable, or a judge of it, conditioned to abide any order and
the judgment of the court, and to pay the full value of the
property at the time of the seizure. The seizing authority may
dismiss the proceedings outlined in this subdivision when the
seizing authority considers it to be in the best interests of
the state public interest to do so.
Sec. 4. Minnesota Statutes 1988, section 349.2127,
subdivision 1, is amended to read:
Subdivision 1. [COUNTERFEITING.] No A person shall is
guilty of a felony who, with intent to defraud the state, make
makes, alter alters, forge forges, or counterfeit
counterfeits any license or stamp provided for in this chapter,
or have has in possession any forged, spurious, or altered
stamps, with the intent, or with the result of, depriving the
state of the tax imposed by this chapter.
Sec. 5. Minnesota Statutes 1988, section 349.2127, is
amended by adding a subdivision to read:
Subd. 6. [UNLAWFUL EXPENDITURES.] (a) A person who
knowingly or with reason to know makes an unlawful expenditure
of gross profits from lawful gambling is guilty of a crime and
may be sentenced as provided in this subdivision.
(b) If the unlawful expenditure is of $200 or less, the
penalty in section 349.22, subdivision 1, applies.
(c) If the unlawful expenditure is of more than $200 but
not more than $2,500, the person is guilty of a gross
misdemeanor.
(d) If the unlawful expenditure is of more than $2,500, the
person is guilty of a felony.
(e) For purposes of this subdivision, expenditures made
within a six-month period may be aggregated and the defendant
charged accordingly.
Sec. 6. Minnesota Statutes 1989 Supplement, section
349.2127, subdivision 2, is amended to read:
Subd. 2. [PROHIBITION AGAINST POSSESSION.] (a) No A
person, other than a licensed distributor, shall sell, offer is
guilty of a crime who sells, offers for sale, or have in
possession with intent to sell or offer for sale, possesses a
pull-tab or tipboard deal not stamped in accordance with the
provisions of this chapter. A violation of this paragraph is a
gross misdemeanor if it involves ten or fewer pull-tab or
tipboard deals. A violation of this paragraph is a felony if it
involves more than ten pull-tab or tipboard deals, or a
combination of more than ten deals of pull-tabs and tipboards.
(b) No A person, other than a licensed distributor or
licensed or exempt an organization under section 349.214 may
possess with the intent to sell or offer licensed or exempt or
excluded from licensing under this chapter, is guilty of a crime
who sells, offers to sell, or possesses gambling equipment,
except (1) equipment exempt from taxation, or (2) equipment put
into play by a licensed or exempt organization. A violation of
this paragraph is a gross misdemeanor if it involves ten or
fewer pull-tab or tipboard deals. A violation of this paragraph
is a felony if it involves more than ten pull-tab or tipboard
deals, or a combination of more than ten deals of pull-tabs and
tipboards.
(c) No A person, firm, or organization may possess is
guilty of a crime who alters, modifies, or counterfeits
pull-tabs, tipboards, or tipboard tickets, or possesses altered,
modified, or counterfeit pull-tabs or, tipboards, or tipboard
tickets with intent to sell, redeem, or exchange them. A
violation of this paragraph is a gross misdemeanor if the total
face value for all such pull-tabs, tipboards, or tipboard
tickets does not exceed $200. A violation of this paragraph is
a felony if the total face value exceeds $200. For purposes of
this paragraph, the face value of all pull-tabs, tipboards, and
tipboard tickets altered, modified, or counterfeited within a
six-month period may be aggregated and the defendant charged
accordingly.
Sec. 7. Minnesota Statutes 1988, section 349.2127,
subdivision 3, is amended to read:
Subd. 3. [FALSIFICATION OF RECORDS FALSE INFORMATION.] No
(a) A person is guilty of a felony if the person is required by
section 349.2121, subdivision 2, to keep records or to make
returns shall falsify or fail and falsifies or fails to keep the
records or falsify or fail falsifies or fails to make the
returns.
(b) A person is guilty of a felony who:
(1) knowingly submits materially false information in any
license application or other document or communication submitted
to the board; or
(2) knowingly submits materially false information in any
report, document, or other communication submitted to the
commissioner of revenue in connection with lawful gambling or
with any provision of this chapter.
Sec. 8. Minnesota Statutes Second 1989 Supplement, section
349.2127, subdivision 4, is amended to read:
Subd. 4. [TRANSPORTING UNSTAMPED DEALS.] No A person shall
transport is guilty of a gross misdemeanor who transports into,
or receive receives, carry carries, or move moves from place
to place in this state, any deals of pull-tabs or tipboards not
stamped in accordance with this chapter except in the course of
interstate commerce. A person is guilty of a felony who
violates this subdivision with respect to more than ten pull-tab
or tipboard deals, or a combination of more than ten deals of
pull-tabs and tipboards.
Sec. 9. Minnesota Statutes Second 1989 Supplement, section
349.2127, subdivision 5, is amended to read:
Subd. 5. [PROVIDING INFORMATION.] No (a) An employee of an
organization shall may not provide any information to a player
that would provide an unfair advantage to the player related to
the potential winnings of any lawful gambling activity. For
purposes of this subdivision, "employee" includes a volunteer.
(b) An employee may not provide, and a person may not
receive, with expectation of pecuniary gain to either, any
information that would provide an unfair advantage to the
recipient of the information related to the potential winnings
of any lawful gambling activity. A person who violates this
paragraph is guilty of a gross misdemeanor. A person who
violates this paragraph within five years after a previous
conviction under this paragraph is guilty of a felony.
(c) For purposes of this subdivision, "employee" includes a
volunteer.
Sec. 10. Minnesota Statutes 1988, section 349.2127, is
amended by adding a subdivision to read:
Subd. 7. [CHECKS FOR GAMBLING PURCHASES.] An organization
may not accept checks in payment for the purchase of any
gambling equipment or for the chance to participate in any form
of lawful gambling.
Sec. 11. Minnesota Statutes 1989 Supplement, section
349.22, subdivision 1, is amended to read:
Subdivision 1. [GROSS MISDEMEANOR PENALTY.] (a) A person
who violates any provision of sections 349.11 to 349.23 for
which another penalty is not provided is guilty of a misdemeanor.
(b) A person who violates any provision of sections 349.11
to 349.23 for which another penalty is not provided is guilty of
a gross misdemeanor if the violation occurs within five years
after a previous conviction under any provision of sections
349.11 to 349.23.
(c) A person who in any manner violates sections 349.11 to
349.23 to evade a tax imposed by a provision of this chapter, or
who aids and abets the evasion of a tax, or hinders or
interferes with a seizing authority when a seizure is made as
provided by section 349.2125, is guilty of a gross misdemeanor.
Sec. 12. Minnesota Statutes 1988, section 349.22, is
amended by adding a subdivision to read:
Subd. 3a. [AGGREGATION.] When the value of prizes or
pull-tabs received within a six-month period is aggregated under
this section and two or more offenses were committed by the same
person in two or more counties, the accused may be prosecuted in
any county in which one of the offenses was committed for all of
the offenses aggregated under this section.
Sec. 13. Minnesota Statutes 1989 Supplement, section
349.501, subdivision 1, is amended to read:
Subdivision 1. [TO THE PUBLIC.] An operator must
prominently post in the owner's business premises a brief
description of the legal consequences of awarding or receiving
cash instead of game credits or replays on video games of chance
in violation of section sections 349.502 and 609.76, subdivision
1.
The information is prominently posted if it can be readily
seen by a player immediately before the player participates in
the video game of chance.
Sec. 14. Minnesota Statutes 1989 Supplement, section
349.502, subdivision 1, is amended to read:
Subdivision 1. [MISDEMEANOR.] A person who awards or
receives cash instead of game credits or anything of value other
than replays on a video game of chance is guilty of a
misdemeanor. An owner who directs an employee to violate this
section is also considered to have violated this section. For
purposes of this subdivision "cash" includes checks.
Sec. 15. Minnesota Statutes 1988, section 349.52, is
amended by adding a subdivision to read:
Subd. 5. [LOCAL REGULATION.] A statutory or home rule
charter city or county has the authority to adopt more stringent
regulations concerning video games of chance, including
regulations prohibiting video games of chance within its
jurisdiction.
Sec. 16. Minnesota Statutes 1988, section 349.59,
subdivision 1, is amended to read:
Subdivision 1. [PACKAGES DECLARED TO BE CONTRABAND.] The
following are declared to be contraband:
(1) all video games of chance which do not have a licensing
stamp affixed to them and all containers that contain contraband
video games of chance;
(2) all video games of chance to which the commissioner or
designated representatives have been denied access for the
inspection of contents. In lieu of seizure, the commissioner or
designated representatives may seal the game to prevent its use
until inspection of contents is permitted;
(3) all video games of chance at a location at which there
is no location agreement in force; and
(4) all video games of chance illegally brought into the
state; and
(5) all video games of chance that do not conform to the
game specifications contained in section 349.55.
Sec. 17. Minnesota Statutes 1989 Supplement, section
609.76, subdivision 1, is amended to read:
Subdivision 1. [GROSS MISDEMEANORS.] (a) Whoever does any
of the following may be sentenced to imprisonment for not more
than one year or to payment of a fine of not more than $3,000,
or both:
(1) maintains or operates a gambling place or operates a
bucket shop;
(2) intentionally participates in the income of a gambling
place or bucket shop;
(3) conducts a lottery, or, with intent to conduct a
lottery, possesses facilities for doing so;
(4) sets up for use for the purpose of gambling, or
collects the proceeds of, any gambling device or bucket shop;
(5) with intent that it shall be so used, manufactures,
sells or offers for sale, in whole or any part thereof, any
gambling device including those defined in section 349.30,
subdivision 2, and any facility for conducting a lottery, except
as provided by section 349.40;
(6) receives, records, or forwards bets or offers to bet
or, with intent to receive, record, or forward bets or offers to
bet, possesses facilities to do so; or
(7) pays any compensation for game credits earned on or
otherwise rewards, with anything of value other than free plays,
players of video games of chance as defined under in section
349.50, subdivision 8, or who directs an employee to pay any
such compensation or reward.
(b) On conviction of a person for the crime established in
paragraph (a), clause (7), the court shall impose a fine of not
less than $700.
Sec. 18. [REPEALER.]
Minnesota Statutes 1989 Supplement, sections 349.22,
subdivision 3; and 349.502, subdivision 2, are repealed.
Sec. 19. [EFFECTIVE DATE; APPLICATION.]
Sections 1 to 18 are effective August 1, 1990. Sections 4
to 12, 14, 17, and 18 apply to violations committed on or after
that date.
Presented to the governor April 28, 1990
Signed by the governor May 4, 1990, 11:02 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes