Office of the Revisor of Statutes
Minnesota Session Laws - 1991, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1991
CHAPTER 336-S.F.No. 506
An act relating to lawful gambling; lotteries;
providing for teleracing and its operation and
regulation; expanding requirements relating to
compulsive gambling; exempting lawful gambling profits
from the tax on unrelated business income; regulating
manufacturers and distributors of gambling devices;
changing certain requirements relating to record
keeping, reports, audits, and expenditures of gambling
profits by licensed gambling organizations; modifying
certain licensing, training, and operating
requirements for licensed gambling organizations;
changing requirements relating to posting of pull-tab
winners; authorizing the director of the lottery to
enter into joint lotteries outside the United States;
expanding certain provisions relating to lottery
retailers; designating certain data on lottery prize
winners as private; changing requirements relating to
lottery advertising; clarifying the prohibitions on
video games of chance and lotteries; authorizing
dissemination of information about lotteries conducted
by adjoining states; establishing a task force on
compulsive gambling assessments; appropriating money;
amending Minnesota Statutes 1990, sections 3.9221, by
adding a subdivision; 240.01, subdivisions 1, 10, and
by adding subdivisions; 240.02, subdivision 3; 240.03;
240.05, subdivision 1; 240.06, subdivision 1; 240.09,
subdivision 2; 240.10; 240.11; 240.13, subdivisions 1,
2, 3, 4, 5, 6, and 8; 240.15, subdivision 6; 240.16,
subdivision 1a; 240.18; 240.19; 240.23; 240.24,
subdivision 2; 240.25, subdivision 2; 240.27; 240.28,
subdivision 1; 240.29; 245.98, by adding a
subdivision; 299L.01, subdivision 1; 349.12,
subdivision 25, and by adding subdivisions; 349.15;
349.151, subdivision 4, and by adding a subdivision;
349.154, subdivision 2; 349.16, subdivision 3;
349.163, by adding a subdivision; 349.165,
subdivisions 1 and 3; 349.167, subdivisions 1, 2, and
4; 349.17, subdivision 5; 349.172; 349.18,
subdivisions 1 and 1a; 349.19, subdivisions 2, 5, 9,
and by adding subdivisions; 349.211, by adding a
subdivision; 349.213, subdivision 1; 349A.02,
subdivision 3; 349A.06, subdivisions 3, 5, and 11;
349A.08, by adding a subdivision; 349A.09, subdivision
2; 349A.10, subdivision 3; 609.115, by adding a
subdivision; 609.75, subdivisions 1, 4, and by adding
subdivisions; 609.755; 609.76, subdivision 1;
proposing coding for new law in Minnesota Statutes,
chapters 240; and 299L; repealing Minnesota Statutes
1990, sections 240.01, subdivision 13; 240.13,
subdivision 6a; 240.14; subdivision 1a; and 349.154,
subdivision 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
TELERACING
Section 1. Minnesota Statutes 1990, section 240.01,
subdivision 1, is amended to read:
Subdivision 1. [TERMS.] For the purposes of Laws 1983,
this chapter 214, the terms defined in this section have the
meanings given them.
Sec. 2. Minnesota Statutes 1990, section 240.01,
subdivision 10, is amended to read:
Subd. 10. [RACING DAY.] "Racing day" is a day assigned by
the commission on which live racing is conducted. Racing day
includes televised racing day.
Sec. 3. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 16. [HORSEPERSON.] "Horseperson" means a person who
is currently licensed by the commission as an owner or lessee,
or a trainer.
Sec. 4. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 17. [TELERACING FACILITY.] "Teleracing facility"
means a facility at which telerace simulcasting is conducted
under authority of a class E license issued by the commission.
Sec. 5. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 18. [ON-TRACK PARI-MUTUEL BETTING.] "On-track
pari-mutuel betting" means wagering conducted at a licensed
racetrack, or at a class E licensed facility whose wagering
system is electronically linked to a licensed racetrack.
Sec. 6. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 19. [SIMULCASTING.] "Simulcasting" means the
televised display, for pari-mutuel wagering purposes, of one or
more horse races conducted at another location wherein the
televised display occurs simultaneously with the race being
televised.
Sec. 7. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 20. [TELERACE SIMULCASTING.] "Telerace simulcasting"
means simulcasting at a teleracing facility.
Sec. 8. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 21. [TELERACING PROGRAM.] "Teleracing program" means
a telerace simulcasting event consisting of simulcasting that
includes not more than two full racing cards, plus not more than
two other races.
Sec. 9. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 22. [RACING SEASON.] "Racing season" means that
portion of the calendar year starting at the beginning of the
day of the first live horse race conducted by the licensee and
concluding at the end of the day of the last live horse race
conducted by the licensee in any year.
For purposes of this chapter, the racing season begins
before the first Saturday in May and continues for not less than
25 consecutive weeks.
Sec. 10. Minnesota Statutes 1990, section 240.01, is
amended by adding a subdivision to read:
Subd. 23. [FULL RACING CARD.] "Full racing card" means
three or more races that are: (1) part of a horse racing
program being conducted at a racetrack; and (2) being simulcast
or telerace simulcast at a licensed racetrack or teleracing
facility.
Sec. 11. Minnesota Statutes 1990, section 240.03, is
amended to read:
240.03 [COMMISSION POWERS AND DUTIES.]
The commission has the following powers and duties:
(1) to regulate horse racing in Minnesota to ensure that it
is conducted in the public interest;
(2) to issue licenses as provided in Laws 1983, this
chapter 214;
(3) to enforce all laws and rules governing horse racing;
(4) to collect and distribute all taxes provided for in
Laws 1983, this chapter 214;
(5) to conduct necessary investigations and inquiries and
compel the submission of information, documents, and records it
deems necessary to carry out its duties;
(6) to supervise the conduct of pari-mutuel betting on
horse racing;
(7) to employ and supervise personnel under Laws 1983, this
chapter 214;
(8) to determine the number of racing days to be held in
the state and at each licensed racetrack; and
(9) to take all necessary steps to ensure the integrity of
racing in Minnesota.
Sec. 12. Minnesota Statutes 1990, section 240.05,
subdivision 1, is amended to read:
Subdivision 1. [CLASSES.] The commission may issue
four five classes of licenses:
(a) class A licenses, for the ownership and operation of a
racetrack with horse racing on which pari-mutuel betting is
conducted;
(b) class B licenses, for the sponsorship and management of
horse racing on which pari-mutuel betting is conducted;
(c) class C licenses, for the privilege of engaging in
certain occupations related to horse racing; and
(d) class D licenses, for the conduct of pari-mutuel horse
racing by county agricultural societies or associations; and
(e) class E licenses, for the management of a teleracing
facility.
No person may engage in any of the above activities without
first having obtained the appropriate license from the
commission.
Sec. 13. Minnesota Statutes 1990, section 240.06,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] The commission may issue one
or more class A licenses, but not more than one to any one
person. An application for a class A license must be on a form
the commission prescribes and must be accompanied by detailed
plans and specifications of the track, buildings, fences, and
other improvements. The application must contain:
(a) the name and address of the applicant and, if it is a
corporation, the names of all officers, directors, and
shareholders of the corporation and any of its holding
corporations;
(b) if required by the commission, the names of any person
or persons holding directly, indirectly, or beneficially an
interest of any kind in the applicant or any of its holding
corporations, whether the interest is financial, administrative,
policy making, or supervisory;
(c) a statement of the assets and liabilities of the
applicant;
(d) an affidavit executed by the applicant setting forth
that no officer, director, or other person with a present or
future direct or indirect financial or management interest in
the racetrack, to the best of the applicant's knowledge:
(1) is in default in the payment of an obligation or debt
to the state under Laws 1983, this chapter 214;
(2) has ever been convicted of a felony in a state or
federal court or has a state or federal felony charge pending;
(3) is or has been connected with or engaged in any illegal
business;
(4) has ever been found guilty of fraud or
misrepresentation in connection with racing or breeding;
(5) has ever been found guilty of a violation of a law or
rule relating to horse racing, pari-mutuel betting or any other
form of gambling which is a serious violation as defined by the
commission's rules; or
(6) has ever knowingly violated a rule or order of the
commission or a law of Minnesota relating to racing;
(e) an irrevocable consent statement, to be signed by the
applicant, which states that suits and actions relating to the
subject matter of the application or acts or omissions arising
from it may be commenced against the applicant in any court of
competent jurisdiction in this state by the service on the
secretary of state of any summons, process, or pleadings
authorized by the laws of this state. If any summons, process,
or pleadings is served upon the secretary of state, it must be
by duplicate copies. One copy must be retained in the office of
the secretary of state and the other copy must be forwarded
immediately by certified mail to the address of the applicant,
as shown by the records of the commission; and
(f) an affirmative action plan establishing goals and
timetables consistent with the Minnesota human rights act,
chapter 363.
Sec. 14. [240.091] [TELERACING FACILITY LICENSE.]
Subdivision 1. [APPLICATION.] The commission may issue one
or more class E licenses to a holder of a class B license who
conducts live racing at a class A facility. The commission may
issue a total of not more than four class E licenses, of which
not more than two may be issued before January 1, 1992. If two
licenses are issued before January 1, 1991, only one may be for
a facility located within the seven-county metropolitan area.
An application for a class E license must be on a form the
commission prescribes and must be accompanied by detailed plans
and specifications of the facility to be used, the location of
the facility, and any other information relevant to the
specifications of the facility and its operation, as designated
by the commission. The application must also contain:
(1) the name and address of the applicant and, if it is a
corporation or association, the names of all officers,
directors, and shareholders of the corporation and any of its
holding companies;
(2) if required by the commission, the names of any person
or persons holding directly, indirectly, or beneficially, an
interest of any kind in the applicant or any of its holding
companies, whether the interest is financial, administrative,
policy making, or supervisory;
(3) a statement of the assets and liabilities of the
applicant;
(4) an affidavit of the type described in section 240.06,
subdivision 1, paragraph (d);
(5) an irrevocable consent statement, to be signed by the
applicant, that states that the applicant agrees to be bound by
and subject to the authority of the commission, the rules
adopted by the commission, and the laws of this state relating
to the activity to be conducted; and
(6) an irrevocable consent statement, to be signed by the
applicant, that states that suits and actions relating to the
subject matter of the application or acts or omissions arising
from it may be commenced against the applicant in any court of
competent jurisdiction in this state by the service on the
secretary of state of any summons, process, or pleadings
authorized by the laws of this state. If any summons, process,
or pleading is served upon the secretary of state, it must be by
duplicate copies. One copy must be retained in the office of
the secretary of state and the other copy must be forwarded
immediately by certified mail to the address of the applicant,
as shown by the records of the commission.
Subd. 2. [HEARINGS; INVESTIGATIONS.] Before granting a
class E license, the commission shall conduct at least one
public hearing on the license application in the area where the
teleracing facility is proposed to be located. The commission
shall request comments on the application from: (1) the city
council or town board of the city or town where the facility is
proposed to be located, (2) the county board if the facility is
proposed to be located outside a city, and (3) the appropriate
regional development commission if one exists for the area or,
if the facility is proposed to be located within the
metropolitan area as defined in section 473.121, subdivision 2,
the metropolitan council. The commission may conduct, or
request the division of gambling enforcement to conduct,
comprehensive background and financial investigations of the
applicant, sources of financing, and other information appearing
in the application. The costs of the investigations must be
paid in the manner prescribed by section 240.06, subdivision 3.
The commission has access to all criminal history data compiled
by the division of gambling enforcement on class E licensees and
applicants.
Subd. 3. [LICENSE ISSUANCE.] (a) If after considering the
information received from the hearing and investigations, the
commission determines that the applicant will manage the
facility in accordance with all applicable laws and rules and
will not adversely affect the public health, welfare, and
safety; that the license will not create a competitive situation
that will adversely affect racing and the public interest; and
that the applicant is financially able to manage the licensed
simulcast facility, the commission may issue a class E license
to the applicant. The license is effective until revoked or
suspended by the commission or relinquished by the licensee.
(b) As a condition of a class E license, the commission
shall require that a person employed in the erection,
construction, remodeling, or repairing of a teleracing facility
may not be paid a lesser rate of wages than the prevailing wage
rate, as defined in section 177.42, subdivision 6, in the same
or most similar trade or occupation in the area.
Subd. 4. [FACILITIES.] The commission may not issue a
class E license unless the design of the facility will
accommodate and provide adequate seating. The operators of the
facility must provide adequate parking, and make food and
beverages available. The telerace simulcasts must be displayed
so that spectators in attendance are afforded a clear
presentation of the races.
Subd. 5. [CHANGES IN OWNERSHIP OR MANAGEMENT.] If a change
in the officers, directors, or other persons with a direct or
indirect financial or management interest in the class B
licensee, or a change of ownership of more than five percent of
the class B licensee's shares, is made after the application for
or issuance of a class E license, the applicant or licensee must
notify the commission of the changes within five days of their
occurrence and provide the affidavit required in section 240.06,
subdivision 1, paragraph (d).
Subd. 6. [LICENSE SUSPENSION AND REVOCATION.] A class E
license may be suspended or revoked as provided in section
240.06, subdivision 7. A license suspension or revocation is a
contested case under sections 14.57 to 14.69 of the
administrative procedure act, and is in addition to criminal
penalties imposed for a violation of law or rule.
Subd. 7. [WORK AREAS.] A class E licensee shall provide at
no cost to the commission suitable work areas for commission
members, officers, employees, and agents, including agents of
the division of gambling enforcement, who are directed or
requested by the commission to supervise and control wagering at
the licensed simulcast facility.
Sec. 15. Minnesota Statutes 1990, section 240.10, is
amended to read:
240.10 [LICENSE FEES.]
The fee for a class A license is $10,000 per year. The fee
for a class B license is $100 for each assigned racing day on
which racing is actually conducted, and $50 for each assigned
televised racing day on which televised racing simulcasting is
authorized and actually conducted takes place. The fee for a
class D license is $50 for each assigned racing day on which
racing is actually conducted. The fee for a class E license is
$1,000 per year. Fees imposed on class B and class D licenses
must be paid to the commission at a time and in a manner as
provided by rule of the commission.
The commission shall by rule establish an annual license
fee for each occupation it licenses under section 240.08 but no
annual fee for a class C license may exceed $100.
License fee payments received must be paid by the
commission to the state treasurer for deposit in the general
fund.
Sec. 16. Minnesota Statutes 1990, section 240.11, is
amended to read:
240.11 [LICENSES NONTRANSFERABLE.]
A license issued under Laws 1983, this chapter 214 may not
be transferred.
Sec. 17. Minnesota Statutes 1990, section 240.13,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZED.] Class B and class D licenses
give the licensees authority to conduct pari-mutuel betting on
the results of races run at the licensed racetrack, and on other
races as authorized by the commission under subdivision 6 or
6a this section.
A class B or class E license gives the licensee the
authority to transmit and receive telecasts and conduct
pari-mutuel betting on the results of horse races run at its
class A facility, and of other horse races run at locations
outside of the state, as authorized by the commission. A class
E licensee must present, for pari-mutuel wagering purposes, all
live horse races conducted at its class A facility. The class B
or class E licensee may present racing programs separately or
concurrently.
Subject to the approval of the commission, for simulcasts
and telerace simulcasts the types of betting, takeout, and
distribution of winnings on pari-mutuel pools of a class B or
class E facility are those in effect at the sending racetrack.
Pari-mutuel pools accumulated at a class E facility must be
commingled with the pools at the class A facility for comparable
pools on those races that are being simultaneously presented at
both facilities. Pari-mutuel pools may be commingled with pools
at the sending racetrack, for the purposes of determining odds
and payout prices, via the totalizator computer at the class A
facility.
The commission may not authorize a class B or class E
licensee to conduct simulcasting or telerace simulcasting unless
125 days of live racing, consisting of not less than eight live
races on each racing day, have been conducted at the class A
facility within the preceding 12 months. The number of live
racing days required may be adjusted by agreement between the
licensee and the horsepersons' organization representing the
majority of horsepersons racing the breed racing the majority of
races at the licensee's class A facility during the preceding 12
months. The number of live racing days required must be reduced
by one day for each assigned racing day that the licensee is
unable to conduct live racing due to natural occurrences or
catastrophes beyond its control.
Sec. 18. Minnesota Statutes 1990, section 240.13,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS.] A licensee conducting pari-mutuel
betting must provide at the licensed track or at the teleracing
facility:
(a) the necessary equipment for issuing pari-mutuel
tickets; and
(b) mechanical or electronic equipment for displaying
information the commission requires. All mechanical or
electronic devices must be approved by the commission before
being used.
Sec. 19. Minnesota Statutes 1990, section 240.13,
subdivision 3, is amended to read:
Subd. 3. [TYPES OF BETTING.] The commission shall by rule
designate those types of pari-mutuel pools which are permitted
at licensed racetracks and teleracing facilities, and no
licensee may conduct any type of pari-mutuel pool which has not
been so designated, except as provided for in subdivision
6a. Pari-mutuel pools permitted at licensed racetracks and
pari-mutuel pools designated by the commission are permitted at
teleracing facilities.
Sec. 20. Minnesota Statutes 1990, section 240.13,
subdivision 4, is amended to read:
Subd. 4. [TAKEOUT; DISTRIBUTION OF WINNINGS.] A licensee
conducting pari-mutuel betting must deduct from a straight
pari-mutuel pool, before payments to holders of winning tickets,
an amount equal to not more than 17 percent of the total money
in that pool. The licensee must deduct from a multiple
pari-mutuel pool, before payments to the holders of winning
tickets, an amount equal to not more than 23 percent of the
total money in that pool. The remaining money in each pool must
be distributed among the holders of winning tickets in a manner
the commission by rule prescribes for each type of pool.
Breakage must be computed on the basis of payoffs rounded down
to the next lowest increment of 20 10 cents, with a minimum
payoff of $2.20 $1.10 on a $2 $1 ticket, except that the
licensee may reduce the minimum payoff to $2.10 $1.05 on a $2 $1
ticket if there is not a sufficient amount in a pool to make a
minimum payoff of $2.20 $1.10.
Sec. 21. Minnesota Statutes 1990, section 240.13,
subdivision 5, is amended to read:
Subd. 5. [PURSES.] (a) From the amounts deducted from all
pari-mutuel pools by a licensee, an amount equal to not less
than the following percentages of all money in all pools must be
set aside by the licensee and used for purses for races
conducted by the licensee, provided that a licensee may agree by
contract with an organization representing a majority of the
horsepersons racing the breed involved to set aside amounts in
addition to the following percentages:
(1) For a licensee conducting a racing meeting with an
average daily handle of $500,000 or less, four percent of the
average daily handle times the number of racing days in that
meeting.
(2) For a licensee conducting a racing meeting with an
average daily handle of more than $500,000 but not more than
$750,000, six percent of the average daily handle times the
number of racing days in that meeting.
(3) For a licensee conducting a racing meeting with an
average daily handle of more than $750,000, 8.4 percent of the
first $1 million in average daily handle times the number of
racing days in that meeting.
(1) for live races conducted at a class A facility, and for
races that are part of full racing card simulcasting or full
racing card telerace simulcasting that takes place within the
time period of the live races, 8.4 percent;
(2) for simulcasts and telerace simulcasts conducted during
the racing season other than as provided for in clause (1), 50
percent of the takeout remaining after deduction for taxes on
pari-mutuel pools, payment to the breeders fund, and payment to
the sending out-of-state racetrack for receipt of the signal;
and
(3) for simulcasts and telerace simulcasts conducted
outside of the racing season, 25 percent of the takeout
remaining after deduction for the state pari-mutuel tax, payment
to the breeders fund, payment to the sending out-of-state
racetrack for receipt of the signal and, before January 1, 2005,
a further deduction of eight percent of all money in all pools;
provided, however, that in the event that wagering on simulcasts
and telerace simulcasts outside of the racing season exceeds
$125 million in any calendar year, the amount set aside for
purses by this formula is increased to 30 percent on amounts
between $125,000,000 and $150,000,000 wagered; 40 percent on
amounts between $150,000,000 and $175,000,000 wagered; and 50
percent on amounts in excess of $175,000,000 wagered. In lieu
of the eight percent deduction, a deduction as agreed to between
the licensee and the horsepersons' organization representing the
majority of horsepersons racing at the licensee's class A
facility during the preceding 12 months, is allowed after
December 31, 2004.
The commission may by rule provide for the administration
and enforcement of this subdivision. The deductions for payment
to the sending out-of-state racetrack must be actual, except
that when there exists any overlap of ownership, control, or
interest between the sending out-of-state racetrack and the
receiving licensee, the deduction must not be greater than three
percent unless agreed to between the licensee and the
horsepersons' organization representing the majority of
horsepersons racing the breed racing the majority of races
during the existing racing meeting or, if outside of the racing
season, during the most recent racing meeting.
In lieu of the amount the licensee must pay to the
commission for deposit in the Minnesota breeders fund under
section 240.15, subdivision 1, the licensee shall pay 5-1/2
percent of the takeout from all pari-mutuel pools generated by
wagering at the licensee's facility on full racing card
simulcasts and full racing card telerace simulcasts of races not
conducted in this state.
(b) From the money set aside for purses, the licensee shall
pay to the horseperson's organization representing the majority
of the horsepersons racing the breed involved and contracting
with the licensee with respect to purses and the conduct of the
racing meetings and providing representation, benevolent
programs, benefits, and services for horsepersons and their
on-track employees, an amount, sufficient to perform these
services, as may be determined by agreement by the licensee and
the horseperson's organization. The amount paid may be deducted
only from the money set aside for purses to be paid in races for
the breed represented by the horseperson's organization. With
respect to racing meetings where more than one breed is racing,
the licensee may contract independently with the horseperson's
organization representing each breed racing.
(c) Notwithstanding sections 325D.49 to 325D.66, a
horseperson's organization representing the majority of the
horsepersons racing a breed at a meeting, and the members
thereof, may agree to withhold horses during a meeting.
(d) Money set aside for purses from wagering, during the
racing season, on simulcasts and telerace simulcasts must be
used for purses for live races conducted at the licensee's class
A facility during the same racing season, over and above the 8.4
percent purse requirement or any higher requirement to which the
parties agree, for races conducted in this state. Money set
aside for purses from wagering, outside of the racing season, on
simulcasts and telerace simulcasts must be for purses for live
races conducted at the licensee's class A facility during the
next racing season, over and above the 8.4 percent purse
requirement or any higher requirement to which the parties
agree, for races conducted in this state.
(e) Money set aside for purses from wagering on simulcasts
and telerace simulcasts must be used for purses for live races
involving the same breed involved in the simulcast or telerace
simulcast except that money set aside for purses and payments to
the breeders fund from wagering on full racing card simulcasts
and full racing card telerace simulcasts of races not conducted
in this state, occurring during a live mixed meet, must be
allotted to the purses and breeders fund for each breed
participating in the mixed meet in the same proportion that the
number of live races run by each breed bears to the total number
of live races conducted during the period of the mixed meet.
(f) The allocation of money set aside for purses to
particular racing meets may be adjusted, relative to
overpayments and underpayments, by contract between the licensee
and the horsepersons' organization representing the majority of
horsepersons racing the breed involved at the licensee's
facility.
(g) Subject to the provisions of this chapter, money set
aside from pari-mutuel pools for purses must be for the breed
involved in the race that generated the pool, except that if the
breed involved in the race generating the pari-mutuel pool is
not racing in the current racing meeting, or has not raced
within the preceding 12 months at the licensee's class A
facility, money set aside for purses must be distributed
proportionately to those breeds that have run during the
preceding 12 months.
Sec. 22. Minnesota Statutes 1990, section 240.13,
subdivision 6, is amended to read:
Subd. 6. [TELEVISED RACES SIMULCASTING.] (a) The
commission may by rule permit a class B or class D licensee to
conduct on the premises of the licensed racetrack pari-mutuel
betting on horse races run in other states and broadcast by
television on the premises. All provisions of law governing
pari-mutuel betting apply to pari-mutuel betting on televised
races except as otherwise provided in this subdivision or in the
commission's rules. Pari-mutuel pools conducted on such
televised races may consist only of money bet on the premises
and may not be commingled with any other pool off the premises,
except that:
(1) the licensee may pay a fee to the person or entity
conducting the race for the privileges of conducting pari-mutuel
betting on the race; and
(2) the licensee may pay the costs of transmitting the
broadcast of the race.
(b) Pari-mutuel betting on a televised race may be
conducted only on a racing day assigned by the commission. The
takeout and taxes on pari-mutuel pools on televised races are as
provided for other pari-mutuel pools. All televised races under
this subdivision must comply with the Interstate Horse Racing
Act of 1978 as found in United States Code, title 15, section
3001 and the following relevant sections. In lieu of the purse
requirement established by subdivision 5, the licensee shall set
aside for purses one-half of the take-out from the amount bet on
televised races after the payment of fees and taxes. For the
purposes of purse distribution under subdivision 5, the average
daily handle shall not include amounts bet in pari-mutuel pools
on televised races.
(c) A licensee may, with the approval of the commission,
transmit telecasts of races the licensee conducts, for wagering
purposes, to a location outside the state. The commission may
allow the licensee to commingle its wagering pools with the
wagering pools at a facility located outside of this state that
is regulated by a state racing commission, when it transmits
telecasts under this paragraph. The commission may permit an
authorized licensee to conduct simulcasting or telerace
simulcasting at the licensee's facility on any day authorized by
the commission. All simulcasts and telerace simulcasts must
comply with the Interstate Horse Racing Act of 1978, United
States Code, title 15, sections 3001 to 3007. In addition to
teleracing programs featuring live racing conducted at the
licensee's class A facility, the class E licensee may conduct
not more than seven teleracing programs per week during the
racing season, unless additional telerace simulcasting is
authorized by the director and approved by the horsepersons'
organization representing the majority of horsepersons racing
the breed racing the majority of races at the licensee's class A
facility during the preceding 12 months. The commission may not
authorize any day for simulcasting at a class A facility during
the racing season, and a licensee may not be allowed to transmit
out-of-state telecasts of races the licensee conducts, unless
the licensee has obtained the approval of the horsepersons'
organization representing the majority of the horsepersons
racing the breed involved at the licensed racetrack during the
preceding 12 months. The licensee may pay fees and costs to an
entity transmitting a telecast of a race to the licensee for
purposes of conducting pari-mutuel wagering on the race. The
licensee may deduct fees and costs related to the receipt of
televised transmissions from a pari-mutuel pool on the televised
race, provided that one-half of any amount recouped in this
manner must be added to the amounts required to be set aside for
purses.
With the approval of the commission and subject to the
provisions of this subdivision, a licensee may transmit
telecasts of races it conducts, for wagering purposes, to
locations outside the state, and the commission may allow this
to be done on a commingled pool basis.
Except as otherwise provided in this section, simulcasting
and telerace simulcasting may be conducted on a separate pool
basis or, with the approval of the commission, on a commingled
pool basis. All provisions of law governing pari-mutuel betting
apply to simulcasting and telerace simulcasting except as
otherwise provided in this subdivision or in the commission's
rules. If pools are commingled, wagering at the licensed
facility must be on equipment electronically linked with the
equipment at the licensee's class A facility or with the sending
racetrack via the totalizator computer at the licensee's class A
facility. Subject to the approval of the commission, the types
of betting, takeout, and distribution of winnings on commingled
pari-mutuel pools are those in effect at the sending racetrack.
Breakage for pari-mutuel pools on a televised race must be
calculated in accordance with the law or rules governing the
sending racetrack for these pools, and must be distributed in a
manner agreed to between the licensee and the sending
racetrack. Notwithstanding sections 240.13, subdivision 7, and
240.15, subdivision 5, the commission may approve procedures
governing the definition and disposition of unclaimed tickets
that are consistent with the law and rules governing unclaimed
tickets at the sending racetrack. For the purposes of this
section, "sending racetrack" is either the racetrack outside of
this state where the horse race is conducted or, with the
consent of the racetrack, an alternative facility that serves as
the racetrack for the purpose of commingling pools.
If there is more than one class B licensee conducting
racing within the seven-county metropolitan area, simulcasting
and telerace simulcasting may be conducted only on races run by
a breed that ran at the licensee's class A facility within the
12 months preceding the event. That portion of the takeout
allocated for purses from pari-mutuel pools generated by
wagering on standardbreds must be set aside and must be paid to
the racing commission and used for purses as otherwise provided
by this section or to promote standardbred racing or both, in a
manner prescribed by the commission. In the event that a
licensee conducts live standardbred racing, pools generated by
live, simulcast, or telerace simulcasting at the licensee's
facilities on standardbred racing are subject to the purse set
aside requirements otherwise provided by law.
Contractual agreements between licensees and horsepersons'
organizations entered into before the effective date of this
subdivision, regarding money to be set aside for purses from
pools generated by simulcasts at a class A facility, are
controlling regarding purse requirements through the end of the
1992 racing season.
Sec. 23. Minnesota Statutes 1990, section 240.13,
subdivision 8, is amended to read:
Subd. 8. [PROHIBITED ACTS.] A licensee may not accept a
bet from any person under the age of 18 years; and a licensee
may not accept a bet of less than $2 $1.
Sec. 24. Minnesota Statutes 1990, section 240.15,
subdivision 6, is amended to read:
Subd. 6. [DISPOSITION OF PROCEEDS.] The commission shall
distribute all money received under this section, and all money
received from license fees and fines it collects, as follows:
all money designated for deposit in the Minnesota breeders fund
must be paid into that fund for distribution under section
240.18 except that all money generated by full racing card
simulcasts, or full racing card telerace simulcasts of races not
conducted in this state, must be distributed as provided in
section 240.18, clause (2), paragraphs (a), (b), and (c).
Revenue from an admissions tax imposed under subdivision 1 must
be paid to the local unit of government at whose request it was
imposed, at times and in a manner the commission determines.
All other revenues received under this section by the
commission, and all license fees, fines, and other revenue it
receives, must be paid to the state treasurer for deposit in the
general fund.
Sec. 25. Minnesota Statutes 1990, section 240.16,
subdivision 1a, is amended to read:
Subd. 1a. [TELEVISED RACING DAY SIMULCAST.] All races on
which pari-mutuel betting is conducted on televised racing days
must be presided over by an official of the commission. The
official of the commission presiding over races conducted on
televised racing days has the powers and duties as provided by
rule. All simulcasts and telerace simulcasts are subject to the
regulation of the commission. The commission may assign an
official to preside over these activities and, if so assigned,
the official has the powers and duties provided by rule.
Sec. 26. Minnesota Statutes 1990, section 240.19, is
amended to read:
240.19 [CONTRACTS.]
The commission shall by rule require that all contracts
entered into by a class A, class B, or class D, or class E
licensee for the provision of goods or services, including
concessions contracts, be subject to commission approval. The
rules must require that the contract include an affirmative
action plan establishing goals and timetables consistent with
the Minnesota Human Rights Act, chapter 363. The commission may
require a contract holder to submit to it documents and records
the commission deems necessary to evaluate the contract.
Sec. 27. Minnesota Statutes 1990, section 240.23, is
amended to read:
240.23 [RULEMAKING AUTHORITY.]
The commission has the authority, in addition to all other
rulemaking authority granted elsewhere in Laws 1983, this
chapter 214, to promulgate rules governing:
(a) the conduct of horse races held at licensed racetracks
in Minnesota, including but not limited to the rules of racing,
standards of entry, operation of claiming races, filing and
handling of objections, carrying of weights, and declaration of
official results;
(b) wire communications between the premises of a licensed
racetrack and any place outside the premises;
(c) information on horse races which is sold on the
premises of a licensed racetrack;
(d) liability insurance which it may require of all class
A, class B, and class D, and class E licensees;
(e) the auditing of the books and records of a licensee by
an auditor employed or appointed by the commission;
(f) emergency action plans maintained by licensed
racetracks and their periodic review;
(g) safety, security, and sanitation of stabling facilities
at licensed racetracks;
(h) entry fees and other funds received by a licensee in
the course of conducting racing which the commission determines
must be placed in escrow accounts; and
(i) the operation of teleracing facilities; and
(j) any other aspect of horse racing or pari-mutuel betting
which in its opinion affects the integrity of racing or the
public health, welfare, or safety.
Rules of the commission are subject to chapter 14, the
Administrative Procedure Act.
Sec. 28. Minnesota Statutes 1990, section 240.25,
subdivision 2, is amended to read:
Subd. 2. [OFF-TRACK BETS.] (a) No person shall:
(1) for a fee, directly or indirectly, accept anything of
value from another to be transmitted or delivered for wager in
any licensed pari-mutuel system of wagering on horse races, or
for a fee deliver anything of value which has been received
outside of the enclosure of a licensed racetrack holding a race
meet licensed under this chapter or a teleracing facility, to be
placed as wagers in the pari-mutuel system of wagering on horse
racing within the enclosure or facility; or
(2) give anything of value to be transmitted or delivered
for wager in any licensed pari-mutuel system of wagering on
horse races to another who charges a fee, directly or
indirectly, for the transmission or delivery.
(b) Nothing in this subdivision prohibits the conducting of
pari-mutuel wagering at a licensed teleracing facility.
Sec. 29. Minnesota Statutes 1990, section 240.27, is
amended to read:
240.27 [EXCLUSION OF CERTAIN PERSONS.]
Subdivision 1. [PERSONS EXCLUDED.] The commission may
exclude from any and all licensed racetracks or licensed
teleracing facilities in the state a person who:
(a) has been convicted of a felony under the laws of any
state or the United States;
(b) has had a license suspended, revoked, or denied by the
commission or by the racing authority of any other jurisdiction;
or
(c) is determined by the commission, on the basis of
evidence presented to it, to be a threat to the integrity of
racing in Minnesota.
Subd. 2. [HEARING; APPEAL.] An order to exclude a person
from any or all licensed racetracks or licensed teleracing
facilities in the state must be made by the commission at a
public hearing of which the person to be excluded must have at
least five days' notice. If present at the hearing, the person
must be permitted to show cause why the exclusion should not be
ordered. An appeal of the order may be made in the same manner
as other appeals under section 240.20.
Subd. 3. [NOTICE TO RACETRACKS.] Upon issuing an order
excluding a person from any or all licensed racetracks or
licensed teleracing facilities, the commission shall send a copy
of the order to the excluded person and to all racetracks or
teleracing facilities named in it, along with other information
as it deems necessary to permit compliance with the order.
Subd. 4. [PROHIBITIONS.] It is a gross misdemeanor for a
person named in an exclusion order to enter, attempt to enter,
or be on the premises of a racetrack or a teleracing facility
named in the order while it is in effect, and for a person
licensed to conduct racing or operate a racetrack or a
teleracing facility knowingly to permit an excluded person to
enter or be on the premises.
Subd. 5. [EXCLUSIONS BY RACETRACK.] The holder of a
license to conduct racing or operate a teleracing facility may
eject and exclude from its premises any licensee or any other
person who is in violation of any state law or commission rule
or order or who is a threat to racing integrity or the public
safety. A person so excluded from racetrack premises or
teleracing facility may appeal the exclusion to the commission
and must be given a public hearing on the appeal upon request.
At the hearing the person must be given the opportunity to show
cause why the exclusion should not have been ordered. If the
commission after the hearing finds that the integrity of racing
and the public safety do not justify the exclusion, it shall
order the racetrack or teleracing facility making the exclusion
to reinstate or readmit the person. An appeal of a commission
order upholding the exclusion is governed by section 240.20.
Sec. 30. Minnesota Statutes 1990, section 240.28,
subdivision 1, is amended to read:
Subdivision 1. [FINANCIAL INTEREST.] No person may serve
on the commission or be employed by the division who has an
interest in any corporation, association, or partnership which
holds a license from the commission or which holds a contract to
supply goods or services to a licensee or at a licensed
racetrack or a licensed teleracing facility, including
concessions contracts. No member of the commission or employee
of the division may own, wholly or in part, or have an interest
in a horse which races at a licensed racetrack in Minnesota. No
member of the commission or employee of the division may have a
financial interest in or be employed in a profession or business
which conflicts with the performance of duties as a member or
employee.
Sec. 31. Minnesota Statutes 1990, section 240.29, is
amended to read:
240.29 [REQUIRED RACES.]
Each holder of a class B or D license must declare and
schedule, on each racing day it conducts, except for televised
racing days, at least one race which:
(a) before January 1, 1988, is limited to horses which are
Minnesota-bred, Minnesota-foaled, or Minnesota-owned, and
(b) on and after January 1, 1988, is limited to horses
which are Minnesota-bred or Minnesota-foaled.
If there is not a sufficient number of such horses entered
in the declared race to make up an adequate slate of entries,
another similarly restricted race may be substituted.
The commission shall by rule define "Minnesota-bred,"
"Minnesota-foaled," and "Minnesota-owned."
Sec. 32. [APPROPRIATION.]
$234,000 is appropriated from the general fund to the
racing commission to license teleracing facilities. $88,000 is
for fiscal year 1992 and $146,000 is for fiscal year 1993. The
approved complement of the racing commission is increased by two
positions in fiscal year 1992 and one additional position in
fiscal year 1993.
Sec. 33. [REPEALER.]
Minnesota Statutes 1990, sections 240.01, subdivision 13;
240.13, subdivision 6a; and 240.14, subdivision 1a, are repealed.
Sec. 34. [SEVERABILITY.]
If article 1 is found unconstitutional, that finding does
not affect the constitutionality of article 2.
Sec. 35. [EFFECTIVE DATE.]
Sections 1 to 31, 33, and 34 are effective the day
following the final enactment.
ARTICLE 2
MISCELLANEOUS
Section 1. Minnesota Statutes 1990, section 3.9221, is
amended by adding a subdivision to read:
Subd. 5. [REPORT.] The governor, the attorney general, and
the governor's designated representatives shall report to the
house and senate committees having jurisdiction over gambling
regulation semiannually. This report shall contain information
on compacts negotiated, and an outline of prospective
negotiations.
Sec. 2. Minnesota Statutes 1990, section 240.02,
subdivision 3, is amended to read:
Subd. 3. [COMPENSATION.] The compensation of commission
members is $35 per day for time spent on commission activities,
when authorized by the commission, is the same as the
compensation provided for members of other boards and
commissions under section 15.0575, subdivision 3, plus expenses
in the same manner and amount as provided in the commissioner's
plan adopted according to section 43A.18, subdivision 2.
Sec. 3. Minnesota Statutes 1990, section 240.09,
subdivision 2, is amended to read:
Subd. 2. [OCCUPATIONAL LICENSES.] A person who
participates in the management or conduct of horse racing or
pari-mutuel betting for a county fair holding a class D license
who is in an occupation listed in section 240.08, subdivision 1,
or the rules of the commission must have a class C license from
the commission except for active members, as defined in section
349.12, of nonprofit organizations who act without compensation
as concession workers or pari-mutuel clerks.
Sec. 4. Minnesota Statutes 1990, section 240.13,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS.] (a) A licensee conducting
pari-mutuel betting must provide at the licensed track:
(a) (1) the necessary equipment for issuing pari-mutuel
tickets; and
(b) (2) mechanical or electronic equipment for displaying
information the commission requires. All mechanical or
electronic devices must be approved by the commission before
being used.
(b) A licensee conducting pari-mutuel betting must post
prominently at each point of sale of pari-mutuel tickets, in a
manner approved by the commissioner of human services, the
toll-free telephone number established by the commissioner of
human services in connection with the compulsive gambling
program established under section 245.98.
Sec. 5. Minnesota Statutes 1990, section 240.18, is
amended to read:
240.18 [BREEDERS' FUND.]
Subdivision 1. [ESTABLISHMENT; APPORTIONMENT.] The
commission shall establish a Minnesota breeders' fund with the
money paid to it under section 240.15, subdivision 1. The
commission, after paying the current costs of administering the
fund, shall apportion the remaining net proceeds into categories
corresponding with the various breeds of horses which are racing
at licensed Minnesota racetracks in proportion to each
category's contribution to the fund and distribute the available
net proceeds in each category as follows: provided in this
section.
(1) Subd. 2. [THOROUGHBRED AND QUARTERHORSE
CATEGORIES.] (a) With respect to available money apportioned in
the thoroughbred and quarterhorse categories, 20 percent must be
expended as grants for equine research and related education at
public institutions of post-secondary learning within the state.
follows:
(1) at least one-half in the form of grants, contracts, or
expenditures for equine research and related education at the
University of Minnesota school of veterinary medicine; and
(2) the balance in the form of grants, contracts, or
expenditures for one or more of the following:
(i) additional equine research and related education;
(ii) substance abuse programs for licensed personnel at
racetracks in this state; and
(iii) promotion and public information regarding industry
and commission activities; racehorse breeding, ownership, and
management; and development and expansion of economic benefits
from racing.
(b) As a condition of a grant, contract, or expenditure
under paragraph (a), the commission shall require an annual
report from the recipient on the use of the funds to the
commission, the chair of the house of representatives committee
on general legislation, veterans affairs, and gaming, and the
chair of the senate committee on gaming regulation.
(c) The commission shall include in its annual report a
summary of each grant, contract, or expenditure under paragraph
(a), clause (2), and a description of how the commission has
coordinated activities among recipients to ensure the most
efficient and effective use of funds.
(2) (d) After deducting the amount for paragraph (1) (a),
the balance of the available proceeds in each category may be
expended by the commission to:
(a) (1) supplement purses for races held exclusively for
Minnesota-bred or Minnesota-foaled horses, and supplement purses
for Minnesota-bred or Minnesota-foaled horses racing in
nonrestricted races in that category;
(b) (2) pay breeders' or owners' awards to the breeders or
owners of Minnesota-bred horses in that category which win money
at licensed racetracks in the state; and
(c) (3) provide other financial incentives to encourage the
horse breeding industry in Minnesota.
(3) Subd. 3. [STANDARDBRED CATEGORY.] (a) With respect to
the available money apportioned in the standardbred category, 20
percent must be expended as follows:
(a) (1) one-half of that amount to supplement purses for
standardbreds at non-pari-mutuel racetracks in the state;
(b) (2) one-fourth of that amount for the development of
non-pari-mutuel standardbred tracks in the state; and
(c) (3) one-fourth of that amount as grants for equine
research and related education at public institutions of
post-secondary learning in the state.
(4) (b) After deducting the amount for paragraph (3) (a),
the balance of the available proceeds in the standardbred
category must be expended by the commission to:
(a) (1) supplement purses for races held exclusively for
Minnesota-bred and Minnesota-foaled standardbreds;
(b) (2) pay breeders or owners awards to the breeders or
owners of Minnesota-bred standardbreds which win money at
licensed racetracks in the state; and
(c) (3) provide other financial incentives to encourage the
horse breeding industry in Minnesota.
Subd. 4. [RULES; ADVISORY COMMITTEES.] The commission
shall adopt rules governing the distribution of the fund. The
commission may establish advisory committees to advise it on the
distribution of money under this section, provided that the
members of an advisory committee shall serve without
compensation.
Sec. 6. Minnesota Statutes 1990, section 240.24,
subdivision 2, is amended to read:
Subd. 2. [EXCEPTION.] Notwithstanding subdivision 1, the
commission by rule shall allow the use of: (1) topical external
applications that do not contain anesthetics or steroids; (2)
food additives; (3) Furosemide or other pulmonary hemostatic
agents if the agents are administered under the visual
supervision of the veterinarian or assistant a designee of the
veterinarian employed by the commission; and (4) nonsteroidal
anti-inflammatory drugs, provided that the test sample does not
contain more than three micrograms of the substance or
metabolites thereof per milliliter of blood plasma. For
purposes of this clause, "test sample" means any bodily
substance including blood, urine, saliva, or other substance as
directed by the commission, taken from a horse under the
supervision of the commission veterinarian and in such manner as
prescribed by the commission for the purpose of analysis.
The commission shall adopt emergency rules to implement the
provisions of this subdivision.
Sec. 7. Minnesota Statutes 1990, section 245.98, is
amended by adding a subdivision to read:
Subd. 2a. [ASSESSMENT OF CERTAIN OFFENDERS.] The
commissioner shall adopt by rule criteria to be used in
conducting compulsive gambling assessments of offenders under
section 42. The commissioner shall also adopt by rule standards
to qualify a person to: (1) assess offenders for compulsive
gambling treatment; and (2) provide treatment indicated in a
compulsive gambling assessment. The rules must specify the
circumstances in which, in the absence of an independent
assessor, the assessment may be performed by a person with a
direct or shared financial interest or referral relationship
resulting in shared financial gain with a treatment provider.
Sec. 8. Minnesota Statutes 1990, section 299L.01,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For the purposes of this
chapter, the terms defined in this subdivision have the meanings
given them.
(b) "Division" means the division of gambling enforcement.
(c) "Commissioner" means the commissioner of public safety.
(d) "Director" means the director of gambling enforcement.
(e) "Manufacturer" means a person who assembles from raw
materials or subparts a gambling device for sale or use in
Minnesota.
(f) "Distributor" means a person who sells, offers to sell,
or otherwise provides a gambling device to a person in Minnesota.
Sec. 9. [299L.07] [GAMBLING DEVICES.]
Subdivision 1. [RESTRICTION.] A person may not
manufacture, sell, offer to sell, or otherwise provide, in whole
or in part, a gambling device as defined in sections 349.30,
subdivision 2, and 609.75, subdivision 4, except that a gambling
device may be:
(1) manufactured as provided in section 349.40;
(2) sold, offered for sale, or otherwise provided to a
distributor licensed under subdivision 3;
(3) sold, offered for sale, or otherwise provided to the
governing body of a federally recognized Indian tribe that is
authorized to operate the gambling device under a tribal-state
compact under the Indian Gaming Regulatory Act, United States
Code, title 25, sections 2701 to 2721;
(4) sold, offered for sale, or otherwise provided to a
person for use in the person's dwelling for display or amusement
purposes in a manner that does not afford players an opportunity
to obtain anything of value; or
(5) sold by a person who is not licensed under this section
and who is not engaged in the trade or business of selling
gambling devices, if the person does not sell more than one
gambling device in any calendar year.
Subd. 2. [LICENSE REQUIRED.] A person may not manufacture
or distribute gambling devices without having obtained a license
under this section.
Subd. 3. [LICENSE ISSUANCE.] The commissioner may issue a
license under this section if the commissioner determines that
the applicant will conduct the business in a manner that will
not adversely affect the public health, welfare, and safety or
be detrimental to the effective regulation and control of
gambling. A license may not be issued under this section to a
person, or a corporation, firm, or partnership that has an
officer, director, or other person with a direct or indirect
financial or management interest of five percent or more, who
has ever:
(1) been convicted of a felony;
(2) been convicted of a crime involving gambling;
(3) been connected with or engaged in an illegal business;
or
(4) had a license revoked or denied by another jurisdiction
for a violation of law or rule related to gambling.
Subd. 4. [APPLICATION.] An application for a
manufacturer's or distributor's license must be on a form
prescribed by the commissioner and must, at a minimum, contain:
(1) the name and address of the applicant and, if it is a
corporation, the names of all officers, directors, and
shareholders with a financial interest of five percent or more;
(2) the names and addresses of any holding corporation,
subsidiary, or affiliate of the applicant, without regard to
whether the holding corporation, subsidiary, or affiliate does
business in Minnesota; and
(3) if the applicant does not maintain a Minnesota office,
an irrevocable consent statement signed by the applicant,
stating that suits and actions relating to the subject matter of
the application or acts of omissions arising from it may be
commenced against the applicant in a court of competent
jurisdiction in this state by service on the secretary of state
of any summons, process, or pleadings authorized by the laws of
this state. If any summons, process, or pleading is served upon
the secretary of state, it must be by duplicate copies. One
copy must be retained in the office of the secretary of state
and the other copy must be forwarded immediately by certified
mail to the address of the applicant, as shown on the
application.
Subd. 5. [INVESTIGATION.] Before a manufacturer's or
distributor's license is granted, the director may conduct a
background and financial investigation of the applicant,
including the applicant's sources of financing. The director
may, or shall when required by law, require that fingerprints be
taken and the director may forward the fingerprints to the
Federal Bureau of Investigation for a national criminal history
check. The director may charge an investigation fee to cover
the cost of the investigation.
Subd. 6. [LICENSE FEES.] (a) A license issued under this
section is valid for one year.
(b) For a person who distributes 100 or fewer used gambling
devices per year, the fee is $1,500. For a person who
distributes more than 100 used gambling devices per year, the
fee is $2,000. For purposes of this subdivision, a used
gambling device is a gambling device five or more years old.
(c) For a person who manufactures or distributes 100 or
fewer new, or new and used gambling devices in a year, the fee
is $5,000. For a person who manufactures or distributes more
than 100 new, or new and used gambling devices in a year, the
fee is $7,500.
Subd. 7. [RENEWAL.] Upon making the same determination as
in subdivision 3, the commissioner may renew a license issued
under this section.
Subd. 8. [LICENSE SUSPENSION AND REVOCATION.] (a) The
commissioner may suspend a license under this section for a
violation of law or rule. The commissioner may revoke a license:
(1) for a violation of law or rule which, in the
commissioner's opinion, adversely affects the integrity of
gambling in Minnesota;
(2) for an intentional false statement in a license
application; or
(3) if the licensee is the subject of a disciplinary
proceeding in another jurisdiction which results in the
revocation of a license.
A revocation or suspension is a contested case under
sections 14.57 to 14.69.
(b) The commissioner may summarily suspend a license prior
to a contested case hearing if the commissioner determines that
a summary suspension is necessary to ensure the integrity of
gambling. A contested case hearing must be held within 20 days
of the summary suspension and the administrative law judge must
issue a report within 20 days of the close of the hearing
record. The commissioner shall issue a final decision within 30
days from receipt of the report of the administrative law judge
and subsequent exceptions and argument under section 14.61.
Subd. 9. [REQUIRED INFORMATION.] A person to whom a
license is issued under this section shall provide, in a manner
prescribed by the commissioner, information required by the
commissioner relating to the shipment and sale of gambling
devices.
Subd. 10. [TRANSPORTATION OF GAMBLING DEVICES.] In
addition to the requirements of this section, the transportation
of gambling devices into Minnesota must be in compliance with
United States Code, title 15, sections 1171 to 1177, as amended.
Sec. 10. Minnesota Statutes 1990, section 349.12, is
amended by adding a subdivision to read:
Subd. 3a. [ALLOWABLE EXPENSE.] "Allowable expense" means
an expense directly related to the conduct of lawful gambling.
Sec. 11. Minnesota Statutes 1990, section 349.12,
subdivision 25, is amended to read:
Subd. 25. (a) "Lawful purpose" means one or more of the
following:
(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 349.154;
(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, and 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:
(i) the amount which an organization may expend under board
rule on rent for premises used for lawful gambling bingo; or
(ii) $15,000 per year for premises used for other forms of
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; or
(12) payment of one-half of the reasonable costs of an
audit required in section 349.19, subdivision 9.
(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. 12. Minnesota Statutes 1990, section 349.12, is
amended by adding a subdivision to read:
Subd. 30a. [PROFIT CARRYOVER.] "Profit carryover" means
cumulative net profit less cumulative lawful purpose
expenditures.
Sec. 13. Minnesota Statutes 1990, 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 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 tax imposed by
section 349.212, 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. 14. Minnesota Statutes 1990, 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 licenses to organizations, distributors, bingo
halls, manufacturers, and gambling managers;
(3) to collect and deposit license, permit, and
registration fees due under this chapter;
(4) to receive reports required by this chapter and inspect
all premises, records, books, and other documents of
organizations, distributors, manufacturers, and bingo halls to
insure compliance with all applicable laws and rules;
(5) to make rules authorized by this chapter;
(6) to register gambling equipment and issue registration
stamps;
(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;
(8) to report annually to the governor and legislature on
its activities and on recommended changes in the laws governing
gambling;
(9) to impose civil penalties of not more than $500 per
violation on organizations, distributors, manufacturers, bingo
halls, and gambling managers for failure to comply with any
provision of this chapter or any rule of the board;
(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) (14) to require fingerprints from persons determined
by board rule to be subject to fingerprinting; and
(16) (15) 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. 15. Minnesota Statutes 1990, section 349.151, is
amended by adding a subdivision to read:
Subd. 4a. [PADDLEWHEEL RULES.] The board shall promulgate
rules governing paddlewheels before July 1, 1992. The rules
must provide for operation procedures, internal control
standards, posted information, records, and reports.
Sec. 16. Minnesota Statutes 1990, section 349.154,
subdivision 2, is amended to read:
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 25, 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.
Sec. 17. Minnesota Statutes 1990, section 349.16,
subdivision 3, is amended to read:
Subd. 3. [TERM OF LICENSE: SUSPENSION AND REVOCATION.]
Licenses issued under this section are valid for one year two
years 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
willful 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. 18. Minnesota Statutes 1990, section 349.163, is
amended by adding a subdivision to read:
Subd. 6a. [PADDLEWHEEL MORATORIUM.] The board must not
approve new types of paddlewheel equipment for sale in this
state until July 1, 1993. This subdivision applies to new types
of paddlewheel equipment, samples of which are submitted to the
board after March 15, 1991.
Sec. 19. Minnesota Statutes 1990, section 349.165,
subdivision 1, is amended to read:
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. A premises permit issued by the
board is valid for two years. The board may by rule limit the
number of premises permits that may be issued to an organization.
Sec. 20. Minnesota Statutes 1990, section 349.165,
subdivision 3, is amended to read:
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 $400 for a class A permit;
(2) $125 $250 for a class B permit;
(3) $100 $200 for a class C permit; and
(4) $75 $150 for a class D permit.
Sec. 21. Minnesota Statutes 1990, section 349.167,
subdivision 1, is amended to read:
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 A person designated
as a gambling manager to shall maintain, a fidelity bond in the
sum of $25,000 $10,000 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.
Sec. 22. Minnesota Statutes 1990, section 349.167,
subdivision 2, is amended to read:
Subd. 2. [GAMBLING MANAGERS; LICENSES.] A person may not
serve as a gambling manager for an organization unless the
person possesses a valid gambling manager's license issued by
the board. The board may issue a gambling manager's license to
a person applying for the license who:
(1) has received training as required in complied with
subdivision 4, clause (1);
(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.
Sec. 23. Minnesota Statutes 1990, section 349.167,
subdivision 4, is amended to read:
Subd. 4. [TRAINING OF GAMBLING MANAGERS.] 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 receive
training before being issued a new license, except that in the
case of the death, disability, or termination of a gambling
manager, a replacement gambling manager must receive the
training within 90 days of being issued a license;
(2) each gambling manager 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.
Sec. 24. Minnesota Statutes 1990, section 349.17,
subdivision 5, is amended to read:
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. 25. Minnesota Statutes 1990, section 349.172, is
amended to read:
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. Subdivision 1. [BOARD
MAY REQUIRE CERTAIN POSTING.] The board may issue an order
requiring an organization selling pull-tabs to post major
pull-tab prizes and the names of major prize winners if the
board has reasonable grounds to believe that the organization,
or a person receiving compensation from the organization for
participating in the sale of pull-tabs, has been or is providing
information to a player or players that provides an unfair
advantage related to the potential winnings from pull-tabs. The
board must notify the organization at least 14 days before the
order becomes effective. The notice to the organization must
describe the organization's right to a hearing under subdivision
3.
Subd. 2. [POSTING; REQUIREMENTS.] The information required
to be posted under subdivision 1 must be posted prominently at
the point of sale of the pull-tabs. An easily legible pull-tab
flare that lists prizes in the deal for that flare, and on which
prizes are marked off as they are awarded, satisfies the
requirements 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 and post the name of the prize winner immediately on
awarding the prize.
Subd. 3. [APPEAL.] An organization to which the board
issues an order under subdivision 1 may request a contested case
hearing on the order. The hearing must be held within 20 days
of the effective date of the order, and the report by the
administrative law judge must be issued within 20 days after the
close of the hearing record. The board must issue its final
decision within 30 days after receipt of the report of the
administrative law judge and subsequent exceptions and arguments
under section 14.61.
Subd. 4. [MAJOR PRIZES.] For purposes of this section, a
"major prize" in a deal of pull-tabs is a prize of at least 50
times the face value of any pull-tab in the deal.
Subd. 5. [COMPULSIVE GAMBLING HOTLINE NUMBER.] An
organization conducting lawful gambling must post at each point
of sale a sign containing the toll-free telephone number
established by the commissioner of human services in connection
with the compulsive gambling program established under section
245.98. The sign must be kept in easily legible form and repair
by the owner, lessee, or person having control thereof, and must
either:
(1) be approved by the commissioner; or
(2) have lettering at least three-quarters of an inch in
height, of block letter design.
Subd. 6. [VOLUNTARY POSTING.] Nothing in this section
limits the right of an organization voluntarily to post the
names of winners of lawful gambling prizes.
Sec. 26. Minnesota Statutes 1990, section 349.18,
subdivision 1, is amended to read:
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 at least one
year and must be 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 provided that no rule of the board may prescribe a
limit of less than $1,000 per month on rent paid for premises
used for lawful gambling other than bingo. Any rule adopted by
the board limiting the amount of rent to be paid may only be
effective for leases entered into, or renewed, after the
effective date of the rule.
No person, distributor, manufacturer, lessor, or
organization other than the licensed organization leasing the
space may conduct any activity on the leased premises during
times when lawful gambling is being conducted on the premises.
Sec. 27. Minnesota Statutes 1990, section 349.18,
subdivision 1a, is amended to read:
Subd. 1a. [STORAGE OF GAMBLING EQUIPMENT.] (a) Gambling
equipment owned by or in the possession of 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 an organization must be secured and kept
separate from gambling equipment owned by other persons,
organizations, distributors, or manufacturers.
(c) Paddlewheels must be covered or disabled when not in
use by the organization in the conduct of lawful gambling.
(d) Gambling equipment kept in violation of this
subdivision is contraband under section 349.2125.
(d) (e) An organization may transport gambling equipment it
owns or possesses between approved gambling equipment storage
sites and to and from licensed distributors.
Sec. 28. Minnesota Statutes 1990, section 349.19,
subdivision 2, is amended to read:
Subd. 2. [ACCOUNTS.] Gross receipts from lawful gambling
by each organization at each 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 the 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 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 at each permitted premises. The
person who accounts for gambling gross receipts and profits may
not be the same person who accounts for other revenues of the
organization.
Sec. 29. Minnesota Statutes 1990, section 349.19,
subdivision 5, is amended to read:
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. The report must
include a reconciliation of the organization's profit carryover
with its cash balance on hand. 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 349.154 satisfies the requirement for
reporting monthly to the board on expenditure of net profits.
Sec. 30. Minnesota Statutes 1990, section 349.19,
subdivision 9, is amended to read:
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 accountant licensed by the
state of Minnesota or performed by an independent accountant who
has had prior approval of the board. The board commissioner of
revenue 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 349.154. A complete,
true, and correct copy of the audit report must be filed with as
prescribed by the board upon completion of the audit
commissioner of revenue.
Sec. 31. Minnesota Statutes 1990, section 349.19, is
amended by adding a subdivision to read:
Subd. 9a. [RECORDS.] An organization licensed under this
chapter must maintain records that account for the assets,
liabilities, and fund balance of the organization. The records
must also account for the revenues, taxes, prize payouts,
expenses, and lawful purpose expenditures of the organization.
The records must include a perpetual inventory of games
purchased but not yet played and games in play.
Sec. 32. Minnesota Statutes 1990, section 349.19, is
amended by adding a subdivision to read:
Subd. 9b. [ACCOUNTING MANUAL.] The board must prepare and
distribute to each organization licensed under this chapter a
manual designed to facilitate compliance with section 31. The
manual must include a clear description of the processes needed
to maintain the records required in section 31. The board may
contract for preparation of the manual.
Sec. 33. Minnesota Statutes 1990, section 349.211, is
amended by adding a subdivision to read:
Subd. 2b. [PADDLEWHEEL PRIZES.] The maximum cash prize
which may be awarded for a paddleticket is $70. An organization
may not sell any paddleticket for more than $2.
Sec. 34. Minnesota Statutes 1990, section 349.213,
subdivision 1, is amended to read:
Subdivision 1. [LOCAL REGULATION.] (a) A statutory or home
rule city or county has the authority to adopt more stringent
regulation of lawful gambling within its jurisdiction, including
the prohibition 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, except a
political subdivision may prohibit the use of paddlewheels.
Sec. 35. Minnesota Statutes 1990, section 349A.02,
subdivision 3, is amended to read:
Subd. 3. [POWERS AND DUTIES.] In operating the lottery the
director shall exercise the following powers and duties:
(1) adopt rules and game procedures;
(2) issue lottery retailer contracts and rule on appeals of
decisions relating to those contracts;
(3) enter into lottery procurement contracts for the
provision of goods and services to the lottery;
(4) employ personnel as are required to operate the
lottery;
(5) enter into written agreements with one or more states
government-authorized lotteries, or with an organization created
and controlled by those lotteries, for the operation, marketing,
and promotion of a joint lottery;
(6) adopt and publish advertising and promotional materials
consistent with section 349A.09; and
(7) take all necessary steps to ensure the integrity of,
and public confidence in, the state lottery.
Sec. 36. Minnesota Statutes 1990, section 349A.06,
subdivision 3, is amended to read:
Subd. 3. [BOND.] The director shall require that each
lottery retailer post a bond, securities, or an irrevocable
letter of credit, in an amount as the director deems necessary,
to protect the financial interests of the state. If securities
are deposited or an irrevocable letter of credit filed, the
securities or letter of credit must be of a type or in the form
provided under section 349A.07, subdivision 5, paragraphs (b)
and (c).
Sec. 37. Minnesota Statutes 1990, section 349A.06,
subdivision 5, is amended to read:
Subd. 5. [RESTRICTIONS ON LOTTERY RETAILERS.] (a) A
lottery retailer may sell lottery tickets only on the premises
described in the contract.
(b) A lottery retailer must prominently display a
certificate issued by the director on the premises where lottery
tickets will be sold.
(c) A lottery retailer must keep a complete set of books of
account, correspondence, and all other records necessary to show
fully the retailer's lottery transactions, and make them
available for inspection by employees of the division at all
times during business hours. The director may require a lottery
retailer to furnish information as the director deems necessary
to carry out the purposes of this chapter, and may require an
audit to be made of the books of account and records. The
director may select an auditor to perform the audit and may
require the retailer to pay the cost of the audit. The auditor
has the same right of access to the books of account,
correspondence, and other records as is given to employees of
the division.
(d) A contract issued under this section may not be
transferred or assigned.
(e) The director shall require that lottery tickets may be
sold by retailers only for cash.
(f) A lottery retailer must prominently post at the point
of sale of lottery tickets, in a manner approved by the
commissioner of human services, the toll-free telephone number
established by the commissioner of human services in connection
with the compulsive gambling program established under section
245.98.
Sec. 38. Minnesota Statutes 1990, section 349A.06,
subdivision 11, is amended to read:
Subd. 11. [REVOCATION CANCELLATION, SUSPENSION, AND
REFUSAL TO RENEW LICENSES CONTRACTS.] (a) The director shall
cancel the contract of any lottery retailer who:
(1) has been convicted of a felony or gross misdemeanor;
(2) has committed fraud, misrepresentation, or deceit;
(3) has provided false or misleading information to the
division; or
(4) has acted in a manner prejudicial to public confidence
in the integrity of the lottery.
(b) The director may cancel, suspend, or refuse to renew
the contract of any lottery retailer who:
(1) changes business location;
(2) fails to account for lottery tickets received or the
proceeds from tickets sold;
(3) fails to remit funds to the director in accordance with
the director's rules;
(4) violates a law or a rule or order of the director;
(5) fails to comply with any of the terms in the lottery
retailer's contract;
(6) fails to comply with file a bond requirements,
securities, or a letter of credit as required under this section
subdivision 3;
(7) in the opinion of the director fails to maintain a
sufficient sales volume to justify continuation as a lottery
retailer; or
(8) has violated section 340A.503, subdivision 2, clause
(1), two or more times within a two-year period.
(c) The director may also cancel, suspend, or refuse to
renew a lottery retailer's contract if there is a material
change in any of the factors considered by the director under
subdivision 2.
(d) A contract cancellation, suspension, or refusal to
renew under this subdivision is a contested case under sections
14.57 to 14.69 and is in addition to any criminal penalties
provided for a violation of law or rule.
(e) The director may temporarily suspend a contract without
notice for any of the reasons specified in this subdivision
provided that a hearing is conducted within seven days after a
request for a hearing is made by a lottery retailer. Within 20
days after receiving the administrative law judge's report, the
director shall issue an order vacating the temporary suspension
or making any other appropriate order. If no hearing is
requested within 30 days of the temporary suspension taking
effect, the director may issue an order making the suspension
permanent suspension becomes permanent unless the director
vacates or modifies the order.
Sec. 39. Minnesota Statutes 1990, section 349A.08, is
amended by adding a subdivision to read:
Subd. 9. [PRIVACY.] The phone number and street address of
a winner of a lottery prize is private data on individuals under
chapter 13.
Sec. 40. Minnesota Statutes 1990, section 349A.09,
subdivision 2, is amended to read:
Subd. 2. [CONTENT OF ADVERTISING.] (a) Advertising and
promotional materials for the lottery adopted or published by
the director must be consistent with the dignity of the state
and may only:
(1) present information on how lottery games are played,
prizes offered, where and how tickets may be purchased, when
drawings are held, and odds on the games advertised;
(2) identify state programs supported by lottery net
revenues;
(3) present the lottery as a form of entertainment; or
(4) state the winning numbers or identity of winners of
lottery prizes.
(b) The director may not adopt or publish any advertising
for the lottery which:
(1) presents directly or indirectly any lottery game as a
potential means of relieving any person's financial
difficulties;
(2) is specifically targeted with the intent to exploit a
person, a specific group or an economic class of people, or a
religious holiday by use of a religious theme or symbol;
(3) presents the purchase of a lottery ticket as a
financial investment or a way to achieve financial security;
(4) uses the name or picture of a current elected state
official to promote a lottery game;
(5) exhorts the public to bet by directly or indirectly
misrepresenting a person's chance of winning a prize; or
(6) denigrates a person who does not buy a lottery ticket
or unduly praises a person who does buy a ticket.
Sec. 41. Minnesota Statutes 1990, section 349A.10,
subdivision 3, is amended to read:
Subd. 3. [LOTTERY OPERATIONS.] (a) The director shall
establish a lottery operations account in the lottery fund. The
director shall pay all costs of operating the lottery, including
payroll costs or amounts transferred to the state treasury for
payroll costs, but not including lottery prizes, from the
lottery operating account. The director shall credit to the
lottery operations account amounts sufficient to pay the
operating costs of the lottery.
(b) The director may not credit in any fiscal year amounts
to the lottery operations account which when totaled exceed 15
percent of gross revenue to the lottery fund in that fiscal
year. In computing total amounts credited to the lottery
operations account under this paragraph the director shall
disregard amounts transferred to or retained by lottery
retailers as sales commissions or other compensation.
(c) The director of the lottery may not expend after July
1, 1992 1991, more than 2-3/4 percent of gross revenues in a
fiscal year for contracts for the preparation, publication, and
placement of advertising.
(d) Except as the director determines, the division is not
subject to chapter 16A relating to budgeting, payroll, and the
purchase of goods and services.
Sec. 42. Minnesota Statutes 1990, section 609.115, is
amended by adding a subdivision to read:
Subd. 9. [COMPULSIVE GAMBLING ASSESSMENT REQUIRED.] (a)
If a person is convicted of a felony for theft under section
609.52, embezzlement of public funds under section 609.54, or
forgery under section 609.625, 609.63, or 609.631, the probation
officer shall determine in the report prepared under subdivision
1 whether or not compulsive gambling contributed to the
commission of the offense. If so, the report shall contain the
results of a compulsive gambling assessment conducted in
accordance with this subdivision. The probation officer shall
make an appointment for the defendant to undergo the assessment
if so indicated.
(b) The compulsive gambling assessment report must include
a recommended level of care for the defendant if the assessor
concludes that the defendant is in need of compulsive gambling
treatment. The assessment must be conducted by an assessor
qualified under section 7 to perform these assessments or to
provide compulsive gambling treatment. An assessor providing a
compulsive gambling assessment may not have any direct or shared
financial interest or referral relationship resulting in shared
financial gain with a treatment provider. If an independent
assessor is not available, the probation officer may use the
services of an assessor with a financial interest or referral
relationship as authorized under rules adopted by the
commissioner of human services under section 7.
(c) The commissioner of human services shall reimburse the
county for the costs associated with a compulsive gambling
assessment at a rate established by the commissioner up to a
maximum of $100 for each assessment.
Sec. 43. Minnesota Statutes 1990, section 609.75,
subdivision 1, is amended to read:
Subdivision 1. [LOTTERY.] (a) A lottery is a plan which
provides for the distribution of money, property or other reward
or benefit to persons selected by chance from among participants
some or all of whom have given a consideration for the chance of
being selected. A participant's payment for use of a 900
telephone number or another means of communication that results
in payment to the sponsor of the plan constitutes consideration
under this paragraph.
(b) An in-package chance promotion is not a lottery if all
of the following are met:
(1) participation is available, free and without purchase
of the package, from the retailer or by mail or toll-free
telephone request to the sponsor for entry or for a game piece;
(2) the label of the promotional package and any related
advertising clearly states any method of participation and the
scheduled termination date of the promotion;
(3) the sponsor on request provides a retailer with a
supply of entry forms or game pieces adequate to permit free
participation in the promotion by the retailer's customers;
(4) the sponsor does not misrepresent a participant's
chances of winning any prize;
(5) the sponsor randomly distributes all game pieces and
maintains records of random distribution for at least one year
after the termination date of the promotion;
(6) all prizes are randomly awarded if game pieces are not
used in the promotion; and
(7) the sponsor provides on request of a state agency a
record of the names and addresses of all winners of prizes
valued at $100 or more, if the request is made within one year
after the termination date of the promotion.
(c) Except as provided by section 349.40, acts in this
state in furtherance of a lottery conducted outside of this
state are included notwithstanding its validity where conducted.
(d) The distribution of property, or other reward or
benefit by an employer to persons selected by chance from among
participants who have made a contribution through a payroll or
pension deduction campaign to a registered combined charitable
organization, within the meaning of section 309.501, as a
precondition to the chance of being selected, is not a lottery
if:
(1) all of the persons eligible to be selected are employed
by or retirees of the employer;
(2) the cost of the property or other reward or benefit
distributed and all costs associated with the distribution are
borne by the employer; and
(3) the total amount actually expended by the employer to
obtain the property or other rewards or benefits distributed by
the employer during the calendar year does not exceed $500.
Sec. 44. Minnesota Statutes 1990, section 609.75,
subdivision 4, is amended to read:
Subd. 4. [GAMBLING DEVICE.] A gambling device is a
contrivance which for a consideration affords the player an
opportunity to obtain something of value, other than free plays,
automatically from the machine or otherwise, the award of which
is determined principally by chance. "Gambling device" also
includes any a 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. 45. Minnesota Statutes 1990, section 609.75, is
amended by adding a subdivision to read:
Subd. 8. [VIDEO GAME OF CHANCE.] A video game of chance is
a game or device that simulates one or more 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 that records unplayed credits or replays.
Sec. 46. Minnesota Statutes 1990, section 609.75, is
amended by adding a subdivision to read:
Subd. 9. [900 TELEPHONE NUMBER.] A 900 telephone number is
a ten-digit number, the first three numbers of which are from
900 to 999.
Sec. 47. Minnesota Statutes 1990, section 609.755, is
amended to read:
609.755 [ACTS OF OR RELATING TO GAMBLING.]
Whoever does any of the following is guilty of a
misdemeanor:
(1) makes a bet; or
(2) sells or transfers a chance to participate in a
lottery; or
(3) disseminates information about a lottery, except a
lottery conducted by an adjoining state, with intent to
encourage participation therein; or
(4) permits a structure or location owned or occupied by
the actor or under the actor's control to be used as a gambling
place; or
(5) operates a gambling device.
Clause (5) does not prohibit operation of a gambling device
in a person's dwelling for amusement purposes in a manner that
does not afford players an opportunity to obtain anything of
value.
Sec. 48. Minnesota Statutes 1990, 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 except as provided
in section 9, manufactures, sells or, offers for sale, or
otherwise provides, 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) with intent that it be so used, manufactures, sells, or
offers for sale any facility for conducting a lottery, except as
provided by section 349.40; or
(7) 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 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. 49. [TRIBAL-STATE COMPACTS.]
Sections 8, 9, 44, 45, 47, and 48 do not affect the
validity of, and must not be construed as prohibiting the state
from entering into or participating in, a tribal-state compact
with the governing body of an Indian tribe governing the conduct
of video games of chance under the Indian Gaming Regulatory Act,
United States Code, title 25, sections 2701 to 2721.
Sec. 50. [REPORT.]
The director of the gambling control board, the
commissioner of public safety, and the attorney general or their
designees shall jointly study the issue of requiring that all
gambling equipment as defined in Minnesota Statutes, section
34.12, subdivision 24, be purchased from one or more suppliers
who contract with the state for that purpose. The study shall
include a recommendation as to the adoption of the requirement
and a plan for implementing such a requirement. The study must
include, among other things, the following options:
(1) requiring organizations to purchase gambling equipment
directly from the state; and
(2) requiring organizations to purchase gambling equipment
directly from suppliers who contract with the state.
The director, the commissioner, and the attorney general or
their designees shall report to the legislature on the results
of the study not later than February 1, 1992. The report must
contain draft legislation that implements any legislative
recommendation contained in the study.
Sec. 51. [REPORT ON COMPULSIVE GAMBLING ASSESSMENTS.]
By February 1, 1992, the commissioner of human services
shall report to the chairs of the senate committees on
judiciary, health and human services, and gaming regulation and
the chairs of the house of representatives committees on
judiciary, health and human services, and general legislation,
veterans, and gaming, on a method to implement sections 245.98,
subdivision 2a, and 609.115, subdivision 9.
Sec. 52. [APPROPRIATION.]
$600,000 in fiscal year 1992 and $600,000 in fiscal year
1993 is appropriated from the general fund to the commissioner
of human services to implement the compulsive gambling treatment
program established under Minnesota Statutes, section 245.98.
Of the amounts appropriated in this section, not more than
$91,500 in each fiscal year may be spent for administrative
expenses.
The director of the state lottery shall transfer $200,000
in fiscal year 1992 and $200,000 in fiscal year 1993 from the
lottery operations account to the general fund for the costs
incurred for the compulsive gambling treatment program under
Minnesota Statutes, section 245.98. This transfer is in
addition to any amount the director is required to transfer in
those years by any other law.
Sec. 53. [REPEALER.]
Minnesota Statutes 1990, section 349.154, subdivision 3, is
repealed.
Sec. 54. [EFFECTIVE DATE.]
(a) Sections 1, 2, 3, 5, 6, 10, 11, 13 to 16, 21 to 24, 26,
28, 30, 35, 36, 38 to 40, 50, 51, the provisions of section 47
that amend Minnesota Statutes 1990, section 609.755, clause (3),
50, 51, and 53 are effective are effective the day following
final enactment.
(b) Sections 4, 25, 37, and 41 are effective July 1, 1991.
(c) Sections 18 to 20 are effective August 1, 1991, and
apply to licenses and permits issued on and after that date.
(d) Section 32 is effective September 1, 1991, and the
manual required by that section must be distributed by that date.
(e) Sections 8, 9, 44, 45, 47 except as provided in
paragraph (a), 48, and 49 are effective January 1, 1992.
(f) Sections 12, 29, and 31 are effective March 1, 1992.
(g) Sections 7 and 42 are effective July 1, 1993.
Presented to the governor May 31, 1991
Signed by the governor June 4, 1991, 8:38 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes