Office of the Revisor of Statutes
Minnesota Session Laws - 2003, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 110-H.F.No. 1244
An act relating to lawful gambling; making various
clarifying and technical changes; providing and
modifying definitions; providing for conduct of linked
bingo games; permitting resale of certain gambling
equipment; providing for fees, prices, and prize
limits; clarifying requirements for gambling managers
and employees, premises, records and reports;
clarifying conduct of high school raffles; amending
Minnesota Statutes 2002, sections 349.12, subdivisions
4, 18, 19, 25, by adding subdivisions; 349.151,
subdivisions 4, 4b; 349.153; 349.155, subdivision 3;
349.161, subdivision 5; 349.163, subdivision 3;
349.166, subdivisions 1, 2; 349.167, subdivisions 4,
6, 7; 349.168, subdivisions 1, 2, 6, by adding a
subdivision; 349.169, subdivisions 1, 3; 349.17,
subdivisions 3, 6, 7, by adding a subdivision; 349.18,
subdivision 1; 349.19, subdivision 3, by adding a
subdivision; 349.191, subdivisions 1, 1a; 349.211,
subdivision 1, by adding a subdivision; 609.761,
subdivision 5; proposing coding for new law in
Minnesota Statutes, chapter 349; repealing Minnesota
Statutes 2002, section 349.168, subdivision 9.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 3b. [BAR OPERATION.] "Bar operation" means a method
of selling and redeeming gambling equipment within a leased
premises which is licensed for the on-sale of alcoholic
beverages where such sales and redemptions are made by an
employee of the lessor from a common area where food and
beverages are also sold.
Sec. 2. Minnesota Statutes 2002, section 349.12,
subdivision 4, is amended to read:
Subd. 4. [BINGO.] "Bingo" means a game where each player
has a bingo hard card or bingo paper sheet, for which a
consideration has been paid, and played in accordance with this
chapter and with rules of the board for the conduct of
bingo. "Bingo" also includes a linked bingo game.
Sec. 3. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 6a. [BOOTH OPERATION.] "Booth operation" means a
method of selling and redeeming gambling equipment by an
employee of a licensed organization in a premises the
organization leases or owns where such sales and redemptions are
made within a separate enclosure that is distinct from areas
where food and beverages are sold.
Sec. 4. Minnesota Statutes 2002, section 349.12,
subdivision 18, is amended to read:
Subd. 18. [GAMBLING EQUIPMENT.] "Gambling equipment"
means: bingo hard cards or paper sheets, linked bingo paper
sheets, devices for selecting bingo numbers, pull-tabs, jar
tickets, paddlewheels, paddlewheel tables, paddletickets,
paddleticket cards, tipboards, tipboard tickets, and pull-tab
dispensing devices.
Sec. 5. Minnesota Statutes 2002, section 349.12,
subdivision 19, is amended to read:
Subd. 19. [GAMBLING MANAGER.] "Gambling manager" means a
person who has been designated by the organization to supervise
the lawful gambling conducted by it and who:
(1) has been an active member of the organization for at
least two years at the time of the organization's initial
application for a license; or
(2) has been an active member of the organization for at
least the most recent six months prior to the effective date of
the organization's renewal license; or
(3) meets other qualifications as prescribed by the board
by rule.
Sec. 6. Minnesota Statutes 2002, section 349.12,
subdivision 25, is amended to read:
Subd. 25. [LAWFUL PURPOSE.] (a) "Lawful purpose" means one
or more of the following:
(1) any expenditure by or contribution to a 501(c)(3) or
festival organization, as defined in subdivision 15a, provided
that the organization and expenditure or contribution are in
conformity with standards prescribed by the board under section
349.154, which standards must apply to both types of
organizations in the same manner and to the same extent;
(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
program recognized by the Minnesota department of human services
for the education, prevention, or treatment of compulsive
gambling;
(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, provided that the rules must not include mileage
reimbursements in the computation of the per occasion diem
reimbursement limit and must impose no aggregate annual limit on
the amount of reasonable and necessary expenditures made to
support:
(i) members of a military marching or color guard unit for
activities conducted within the state;
(ii) members of an organization solely for services
performed by the members at funeral services; or
(iii) members of military marching, color guard, or honor
guard units may be reimbursed for participating in color guard,
honor guard, or marching unit events within the state or states
contiguous to Minnesota at a per participant rate of up to $35
per occasion diem;
(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 and the organization complies with section
349.154;
(8) payment of local taxes authorized under this chapter,
taxes imposed by the United States on receipts from lawful
gambling, the taxes imposed by section 297E.02, subdivisions 1,
4, 5, and 6, and the tax imposed on unrelated business income by
section 290.05, subdivision 3;
(9) payment of real estate taxes and assessments on
permitted gambling premises wholly owned by the licensed
organization paying the taxes, or wholly leased by a licensed
veterans organization under a national charter recognized under
section 501(c)(19) of the Internal Revenue Code, not to exceed:
(i) for premises used for bingo, the amount that an
organization may expend under board rules on rent for bingo; and
(ii) $35,000 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;
(11) a contribution to or expenditure by a nonprofit
organization which is a church or body of communicants gathered
in common membership for mutual support and edification in
piety, worship, or religious observances;
(12) payment of the reasonable costs of an audit required
in section 297E.06, subdivision 4, provided the annual audit is
filed in a timely manner with the department of revenue;
(13) a contribution to or expenditure on a wildlife
management project that benefits the public at-large, provided
that the state agency with authority over that wildlife
management project approves the project before the contribution
or expenditure is made;
(14) expenditures, approved by the commissioner of natural
resources, by an organization for grooming and maintaining
snowmobile trails and all-terrain vehicle trails that are (1)
grant-in-aid trails established under section 85.019, or (2)
other trails open to public use, including purchase or lease of
equipment for this purpose; or
(15) conducting nutritional programs, food shelves, and
congregate dining programs primarily for persons who are age 62
or older or disabled;
(16) a contribution to a community arts organization, or an
expenditure to sponsor arts programs in the community, including
but not limited to visual, literary, performing, or musical
arts;
(17) an expenditure by a licensed veterans organization for
payment of heat, water, sanitation, telephone, and other utility
bills fuel for heating, electricity, and sewer costs for a
building wholly owned or wholly leased by, and used as the
primary headquarters of, a the licensed veterans organization;
or
(18) expenditure by a licensed veterans organization of up
to $5,000 in a calendar year in net costs to the organization
for meals and other membership events, limited to members and
spouses, held in recognition of military service. No more than
$5,000 can be expended in total per calendar year under this
clause by all licensed veterans organizations sharing the same
veterans post home.
(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, 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; (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; or (v) with
respect to an expenditure to bring an existing building into
compliance with the Americans with Disabilities Act under item
(ii), an organization has the option to apply the amount of the
board-approved expenditure to the erection or acquisition of a
replacement building that is in compliance with the Americans
with Disabilities Act;
(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) a contribution to a statutory or home rule charter
city, county, or town by a licensed organization with the
knowledge that the governmental unit intends to use the
contribution for a pension or retirement fund.
Sec. 7. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 25a. [LINKED BINGO GAME.] "Linked bingo game" means
a bingo game played at two or more locations where licensed
organizations are authorized to conduct bingo, where there is a
common prize pool and a common selection of numbers or symbols
conducted at one location, and where the results of the
selection are transmitted to all participating locations by
satellite, telephone, or other means by a linked bingo game
provider.
Sec. 8. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 25b. [LINKED BINGO GAME PROVIDER.] "Linked bingo
game provider" means any person who provides the means to link
bingo prizes in a linked bingo game, who provides linked bingo
paper sheets to the participating organizations, who provides
linked bingo prize management, and who provides the linked bingo
game system.
Sec. 9. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 25c. [LINKED BINGO GAME SYSTEM.] "Linked bingo game
system" means the equipment used by the linked bingo provider to
conduct, transmit, and track a linked bingo game. The system
must be approved by the board before its use in this state and
it must have dial-up or other capability to permit the board to
monitor its operation remotely.
Sec. 10. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 25d. [LINKED BINGO PRIZE POOL.] "Linked bingo prize
pool" means the total of all prize money that each participating
organization has contributed to the linked bingo game prize. No
participating organization may contribute more than $300 per
bingo occasion to a linked bingo prize pool.
Sec. 11. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 36. [VETERANS POST HOME.] "Veterans post home" means
a building, or portion of a building, that is leased or owned by
one or more licensed veterans organizations, and that is
considered the post home for all licensed veterans organizations
at that site.
Sec. 12. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 37. [WHOLLY LEASED BUILDING.] "Wholly leased
building" means a building that is leased in its entirety by a
licensed organization, and no part or portion of the building is
subleased to any other entity or licensed organization.
Sec. 13. Minnesota Statutes 2002, section 349.12, is
amended by adding a subdivision to read:
Subd. 38. [WHOLLY OWNED BUILDING.] "Wholly owned building"
means a building that is owned in its entirety by a licensed
organization, and no part or portion of the building is
subleased to any other entity or licensed organization.
Sec. 14. Minnesota Statutes 2002, 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, linked bingo game providers, 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, linked bingo game
providers, 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, employees eligible to
make sales on behalf of a distributor, manufacturers, bingo
halls, linked bingo game providers, and gambling managers for
failure to comply with any provision of this chapter or any rule
or order 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 or
deny license and premises permit applications and renewals under
criteria established by the board;
(12) to suspend or revoke licenses and premises permits of
organizations, distributors, manufacturers, bingo halls, linked
bingo game providers, or gambling managers as provided in this
chapter;
(13) to register employees of organizations licensed to
conduct lawful gambling;
(14) to require fingerprints from persons determined by
board rule to be subject to fingerprinting;
(15) to delegate to a compliance review group of the board
the authority to investigate alleged violations, issue consent
orders, and initiate contested cases on behalf of the board;
(16) to order organizations, distributors, manufacturers,
bingo halls, linked bingo game providers, and gambling managers
to take corrective actions; and
(17) to take all necessary steps to ensure the integrity of
and public confidence in lawful gambling.
(b) The board, or director if authorized to act on behalf
of the board, may by citation assess any organization,
distributor, employee eligible to make sales on behalf of a
distributor, manufacturer, bingo hall licensee, linked bingo
game provider, or gambling manager a civil penalty of not more
than $500 per violation for a failure to comply with any
provision of this chapter or any rule adopted or order issued by
the board. Any organization, distributor, bingo hall licensee,
gambling manager, linked bingo game provider, or manufacturer
assessed a civil penalty under this paragraph may request a
hearing before the board. Appeals of citations imposing a civil
penalty 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 2002, section 349.151,
subdivision 4b, is amended to read:
Subd. 4b. [PULL-TAB SALES FROM DISPENSING DEVICES.] (a)
The board may by rule authorize but not require the use of
pull-tab dispensing devices.
(b) Rules adopted under paragraph (a):
(1) must limit the number of pull-tab dispensing devices on
any permitted premises to three; and
(2) must limit the use of pull-tab dispensing devices to a
permitted premises which is (i) a licensed premises for on-sales
of intoxicating liquor or 3.2 percent malt beverages; or (ii) a
licensed bingo hall that allows gambling only by persons 18
years or older.
(c) Notwithstanding rules adopted under paragraph (b),
pull-tab dispensing devices may be used in establishments
licensed for the off-sale of intoxicating liquor, other than
drugstores and general food stores licensed under section
340A.405, subdivision 1.
(d) The director may charge a manufacturer a fee of up to
$5,000 per pull-tab dispensing device to cover the costs of
services provided by an independent testing laboratory to
perform testing and analysis of pull-tab dispensing devices.
The director shall deposit in a separate account in the state
treasury all money the director receives as reimbursement for
the costs of services provided by independent testing
laboratories that have entered into contracts with the state to
perform testing and analysis of pull-tab dispensing devices.
Money in the account is appropriated to the director to pay the
costs of services under those contracts.
Sec. 16. Minnesota Statutes 2002, section 349.153, is
amended to read:
349.153 [CONFLICT OF INTEREST.]
(a) A person may not serve on the board, be the director,
or be an employee of the board who has an interest in any
corporation, association, limited liability company, or
partnership that is licensed by the board as a distributor,
manufacturer, linked bingo game provider, or a bingo hall under
section 349.164.
(b) A member of the board, the director, or an employee of
the board may not accept employment with, receive compensation
directly or indirectly from, or enter into a contractual
relationship with an organization that conducts lawful gambling,
a distributor, a linked bingo game provider, a bingo hall, or a
manufacturer while employed with or a member of the board or
within one year after terminating employment with or leaving the
board.
(c) A distributor, bingo hall, manufacturer, linked bingo
game provider, or organization licensed to conduct lawful
gambling may not hire a former employee, director, or member of
the gambling control board for one year after the employee,
director, or member has terminated employment with or left the
gambling control board.
Sec. 17. Minnesota Statutes 2002, section 349.155,
subdivision 3, is amended to read:
Subd. 3. [MANDATORY DISQUALIFICATIONS.] (a) In the case of
licenses for manufacturers, distributors, bingo halls, linked
bingo game providers, and gambling managers, the board may not
issue or renew a license under this chapter, and shall revoke a
license under this chapter, if the applicant or licensee, or a
director, officer, partner, governor, person in a supervisory or
management position of the applicant or licensee, or an employee
eligible to make sales on behalf of the applicant or licensee:
(1) has ever been convicted of a felony or a crime
involving gambling;
(2) has ever been convicted of (i) assault, (ii) a criminal
violation involving the use of a firearm, or (iii) making
terroristic threats;
(3) is or has ever been connected with or engaged in an
illegal business;
(4) owes $500 or more in delinquent taxes as defined in
section 270.72;
(5) had a sales and use tax permit revoked by the
commissioner of revenue within the past two years; or
(6) after demand, has not filed tax returns required by the
commissioner of revenue. The board may deny or refuse to renew
a license under this chapter, and may revoke a license under
this chapter, if any of the conditions in this paragraph are
applicable to an affiliate or direct or indirect holder of more
than a five percent financial interest in the applicant or
licensee.
(b) In the case of licenses for organizations, the board
may not issue or renew a license under this chapter, and shall
revoke a license under this chapter, if the organization, or an
officer or member of the governing body of the organization:
(1) has been convicted of a felony or gross misdemeanor
within the five years before the issuance or renewal of the
license;
(2) has ever been convicted of a crime involving gambling;
or
(3) has had a license issued by the board or director
permanently revoked for violation of law or board rule.
Sec. 18. Minnesota Statutes 2002, section 349.161,
subdivision 5, is amended to read:
Subd. 5. [PROHIBITION.] (a) No distributor, or employee of
a distributor, may also be a wholesale distributor of alcoholic
beverages or an employee of a wholesale distributor of alcoholic
beverages.
(b) No distributor, or any representative, agent,
affiliate, or employee of a distributor, may: (1) be involved in
the conduct of lawful gambling by an organization; (2) keep or
assist in the keeping of an organization's financial records,
accounts, and inventories; or (3) prepare or assist in the
preparation of tax forms and other reporting forms required to
be submitted to the state by an organization.
(c) No distributor or any representative, agent, affiliate,
or employee of a distributor may provide a lessor of gambling
premises any compensation, gift, gratuity, premium, or other
thing of value.
(d) No distributor or any representative, agent, affiliate,
or employee of a distributor may participate in any gambling
activity at any gambling site or premises where gambling
equipment purchased from that distributor is being used in the
conduct of lawful gambling.
(e) No distributor or any representative, agent, affiliate,
or employee of a distributor may alter or modify any gambling
equipment, except to add a "last ticket sold" prize sticker.
(f) No distributor or any representative, agent, affiliate,
or employee of a distributor may: (1) recruit a person to
become a gambling manager of an organization or identify to an
organization a person as a candidate to become gambling manager
for the organization; or (2) identify for an organization a
potential gambling location.
(g) No distributor may purchase gambling equipment for
resale to a person for use within the state from any person not
licensed as a manufacturer under section 349.163, except for
gambling equipment returned from an organization licensed under
section 349.16, or exempt or excluded from licensing under
section 349.166.
(h) No distributor may sell gambling equipment to any
person for use in Minnesota other than (i) a licensed
organization or organization excluded or exempt from licensing,
or (ii) the governing body of an Indian tribe.
(i) No distributor may sell or otherwise provide a pull-tab
or tipboard deal with the symbol required by section 349.163,
subdivision 5, paragraph (h), visible on the flare to any person
other than in Minnesota to a licensed organization or
organization exempt from licensing.
Sec. 19. Minnesota Statutes 2002, section 349.163,
subdivision 3, is amended to read:
Subd. 3. [PROHIBITED SALES.] (a) A manufacturer may not:
(1) sell gambling equipment for use or resale within the
state to any person not licensed as a distributor, except that
gambling equipment used exclusively in a linked bingo game may
be sold to a licensed linked bingo provider; or
(2) sell gambling equipment to a distributor in this state
that has the same serial number as another item of gambling
equipment of the same type that is sold by that manufacturer for
use or resale in this state.
(b) A manufacturer, affiliate of a manufacturer, or person
acting as a representative or agent of a manufacturer may not
provide a lessor of gambling premises or an appointed official
any compensation, gift, gratuity, premium, contribution, or
other thing of value.
(c) A manufacturer may not sell or otherwise provide a
pull-tab or tipboard deal with the symbol required by
subdivision 5, paragraph (h), imprinted on the flare to any
person other than a licensed distributor unless the manufacturer
first renders the symbol permanently invisible.
Sec. 20. [349.1635] [LINKED BINGO GAME PROVIDER LICENSE.]
Subdivision 1. [LICENSE REQUIRED.] No person may do any of
the following without having first obtained a license from the
board:
(1) provide the means to link prizes in a linked bingo
game;
(2) provide linked bingo game prize management;
(3) provide the linked bingo system; or
(4) provide linked bingo paper sheets to an organization.
Subd. 2. [LICENSE APPLICATION.] The board may issue a
license to a linked bingo game provider who meets the
qualifications of this chapter and the rules promulgated by the
board. The application shall be on a form prescribed by the
board. The license is valid for two years and the fee for a
linked bingo game provider license is $5,000 per year.
Subd. 3. [ATTACHMENTS TO APPLICATION.] An applicant for a
linked bingo game provider license must attach to its
application:
(1) evidence of a bond in the principal amount of $250,000
payable to the state of Minnesota conditioned on the payment of
all linked bingo prizes and any other money due and payable
under this chapter;
(2) detailed plans and specifications for the operation of
the linked bingo game and the linked bingo system; and
(3) any other information required by the board by rule.
Subd. 4. [PROHIBITION.] (a) Except for services associated
exclusively with a linked bingo game, a linked bingo game
provider may not participate or assist in the conduct of lawful
gambling by an organization. No linked bingo game provider may:
(1) also be licensed as a bingo hall or hold any financial
or managerial interest in a bingo hall;
(2) also be licensed as a distributor or hold any financial
or managerial interest in a distributor;
(3) sell or lease linked bingo game equipment to any person
not licensed as an organization;
(4) purchase gambling equipment to be used exclusively in a
linked bingo game from any person not licensed as a manufacturer
under section 349.163; and
(5) provide an organization, a lessor of gambling premises,
or an appointed official any compensation, gift, gratuity,
premium, or contribution.
(b) Employees of the board and the division of alcohol and
gambling enforcement may inspect the books, records, inventory,
and business premises of a licensed linked bingo game provider
without notice during the normal business hours of the linked
bingo game provider. The board may charge a linked bingo game
provider for the actual cost of conducting scheduled or
unscheduled inspections of the licensee's facilities.
Sec. 21. Minnesota Statutes 2002, section 349.166,
subdivision 1, is amended to read:
Subdivision 1. [EXCLUSIONS.] (a) Bingo, with the exception
of linked bingo games, may be conducted without a license and
without complying with sections 349.168, subdivisions 1 and 2;
349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and
349.19, if it is conducted:
(1) by an organization in connection with a county fair,
the state fair, or a civic celebration and is not conducted for
more than 12 consecutive days and is limited to no more than
four separate applications for activities applied for and
approved in a calendar year; or
(2) by an organization that conducts four or fewer bingo
occasions in a calendar year.
An organization that holds a license to conduct lawful
gambling under this chapter may not conduct bingo under this
subdivision.
(b) Bingo may be conducted within a nursing home or a
senior citizen housing project or by a senior citizen
organization if the prizes for a single bingo game do not exceed
$10, total prizes awarded at a single bingo occasion do not
exceed $200, no more than two bingo occasions are held by the
organization or at the facility each week, only members of the
organization or residents of the nursing home or housing project
are allowed to play in a bingo game, no compensation is paid for
any persons who conduct the bingo, and a manager is appointed to
supervise the bingo. Bingo conducted under this paragraph is
exempt from sections 349.11 to 349.23, and the board may not
require an organization that conducts bingo under this
paragraph, or the manager who supervises the bingo, to register
or file a report with the board. The gross receipts from bingo
conducted under the limitations of this subdivision are exempt
from taxation under chapter 297A.
(c) Raffles may be conducted by an organization without a
license and without complying with sections 349.154 to 349.165
and 349.167 to 349.213 if the value of all raffle prizes awarded
by the organization in a calendar year does not
exceed $750 $1,500.
(d) Except as provided in paragraph (b), the organization
must maintain all required records of excluded gambling activity
for 3-1/2 years.
Sec. 22. Minnesota Statutes 2002, section 349.166,
subdivision 2, is amended to read:
Subd. 2. [EXEMPTIONS.] (a) Lawful gambling, with the
exception of linked bingo games, may be conducted by an
organization without a license and without complying with
sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4
and 5; 349.18, subdivision 1; and 349.19 if:
(1) the organization conducts lawful gambling on five or
fewer days in a calendar year;
(2) the organization does not award more than $50,000 in
prizes for lawful gambling in a calendar year;
(3) the organization pays a fee of $25 to the board,
notifies the board in writing not less than 30 days before each
lawful gambling occasion of the date and location of the
occasion, or 60 days for an occasion held in the case of a city
of the first class, the types of lawful gambling to be
conducted, the prizes to be awarded, and receives an exemption
identification number;
(4) the organization notifies the local government unit 30
days before the lawful gambling occasion, or 60 days for an
occasion held in a city of the first class;
(5) the organization purchases all gambling equipment and
supplies from a licensed distributor; and
(6) the organization reports to the board, on a single-page
form prescribed by the board, within 30 days of each gambling
occasion, the gross receipts, prizes, expenses, expenditures of
net profits from the occasion, and the identification of the
licensed distributor from whom all gambling equipment was
purchased.
(b) If the organization fails to file a timely report as
required by paragraph (a), clause (3) or (6), the board shall
not issue any authorization, license, or permit to the
organization to conduct lawful gambling on an exempt, excluded,
or licensed basis until the report has been filed.
(c) Merchandise prizes must be valued at their fair market
value.
(d) Unused pull-tab and tipboard deals must be returned to
the distributor within seven working days after the end of the
lawful gambling occasion. The distributor must accept and pay a
refund for all returns of unopened and undamaged deals returned
under this paragraph.
(e) An organization that is exempt from taxation on
purchases of pull-tabs and tipboards under section 297E.02,
subdivision 4, paragraph (b), clause (4), must return to the
distributor any tipboard or pull-tab deal no part of which is
used at the lawful gambling occasion for which it was purchased
by the organization.
(f) The organization must maintain all required records of
exempt gambling activity for 3-1/2 years.
Sec. 23. Minnesota Statutes 2002, 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 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 continuing education training, as
required by board rule, each year of the two-year license
period, or pass a gambling manager examination as required in
subdivision 7; and
(3) the training required by this subdivision may be
provided by a person authorized by the board to provide the
training. Before authorizing a person to provide training, the
board must determine that:
(i) the provider and all of the provider's personnel
conducting the training are qualified to do so;
(ii) the curriculum to be used fully and accurately covers
all elements of lawful gambling law and rules that the board
determines are necessary for a gambling manager to know and
understand;
(iii) the fee to be charged for participants in the
training sessions is fair and reasonable; and
(iv) the training provider has an adequate system for
documenting completion of training.
The 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 board.
Sec. 24. Minnesota Statutes 2002, section 349.167,
subdivision 6, is amended to read:
Subd. 6. [RECRUITMENT OF GAMBLING MANAGERS.] No
organization may seek or accept assistance from a manufacturer
or, distributor, or linked bingo game provider, or a
representative, agent, affiliate, or employee of a manufacturer
or, distributor, or linked bingo game provider, in identifying
or recruiting candidates to become a gambling manager for the
organization.
Sec. 25. Minnesota Statutes 2002, section 349.167,
subdivision 7, is amended to read:
Subd. 7. [GAMBLING MANAGER EXAMINATION.] Each applicant
for a new gambling manager's license, and each renewing
applicant that has failed to receive training as required in
subdivision 4, must pass an examination prepared and
administered by the board that tests the applicant's knowledge
of the responsibilities of gambling managers, and of gambling
procedures, laws, and rules before being issued the license. In
the case of the death, disability, or termination of a gambling
manager, a replacement gambling manager must pass the
examination within 90 days of being issued a gambling manager's
license. The board shall revoke the replacement gambling
manager's license if the replacement gambling manager fails to
pass the examination as required in this subdivision.
Sec. 26. Minnesota Statutes 2002, section 349.168,
subdivision 1, is amended to read:
Subdivision 1. [REGISTRATION OF EMPLOYEES.] A person may
not receive compensation for participating in the conduct of
lawful gambling as an employee of a licensed organization unless
the person has first registered with the board on a form the
board prescribes. The form must require each registrant to
provide: (1) the person's name, address, and date of birth, and
social security number; (2) a current photograph; and (3) the
name, address, and license number of the employing organization.
Sec. 27. Minnesota Statutes 2002, section 349.168,
subdivision 2, is amended to read:
Subd. 2. [IDENTIFICATION OF EMPLOYEES.] The board shall
issue to each person registering under subdivision 1 a
registration number and identification card which must include
the employee's photograph. Each person receiving compensation
for the conduct of lawful gambling must wear the identification
card provided by the board publicly display the person's name at
all times while conducting the lawful gambling.
Sec. 28. Minnesota Statutes 2002, section 349.168,
subdivision 6, is amended to read:
Subd. 6. [COMPENSATION PAID BY CHECK OR ELECTRONIC
TRANSFER.] Compensation paid by an organization in connection
with lawful gambling must either be: (1) in the form of a check
drawn on the organization's gambling account, as specified in
section 349.19, and paid directly to the person being
compensated; (2) transferred electronically from the
organization's gambling account, as specified in section 349.19,
subdivision 3, directly to the employee's bank account; or (3)
transferred electronically from the organization's gambling
account to the account of a payroll processing firm from which
payment in the form of a check is paid directly to the person
being compensated; or (4) transferred electronically to and from
the account of a payroll processing firm for payment to the
employee's account and for the payment of local, state, and
federal withholding taxes, provided that the payroll processing
firm is (i) currently registered with and meets the criteria of
the department of revenue as a third-party bulk filer under
section 290.92, subdivision 30, (ii) is able to provide proof of
a third-party audit and an annual report and statement of
financial condition, (iii) is able to provide evidence of a
fidelity bond, and (iv) can provide proof of having been in
business as a third-party bulk filer for the most recent three
years.
Sec. 29. Minnesota Statutes 2002, section 349.168, is
amended by adding a subdivision to read:
Subd. 10. [EMPLOYMENT OF CERTAIN PERSONS.] An organization
that sells pull-tabs and tip boards on leased premises within a
booth operation may not employ, other than as a seller of
pull-tabs and tip boards, the lessor of those premises or a
person who is employed by the lessor of those premises.
Sec. 30. Minnesota Statutes 2002, section 349.169,
subdivision 1, is amended to read:
Subdivision 1. [FILING REQUIRED.] All When required by the
board, manufacturers and distributors must file with the
director, not later than the first day of each month, the prices
at which the manufacturer or distributor will sell all gambling
equipment in that month currently offered for sale by that
manufacturer or distributor. The filing must be on a form in a
format the director prescribes. Prices filed must include all
charges the manufacturer or distributor makes for each item of
gambling equipment sold, including all volume discounts,
exclusive of transportation costs. All filings are effective on
the first day of the month for which they are filed, except that
a manufacturer or distributor may amend a filed price within
five days of filing it and may file a price any time during a
month for gambling equipment not previously included on that
month's filed pricing report, but may not later amend the price
during the month.
Sec. 31. Minnesota Statutes 2002, section 349.169,
subdivision 3, is amended to read:
Subd. 3. [SALES AT FILED PRICES.] When required to report
under subdivision 1, no manufacturer may sell to a distributor,
and no distributor may sell to an organization, any gambling
equipment for any price other than a price the manufacturer or
distributor has filed with the director under subdivision
1, including volume discounts, and exclusive of transportation
costs.
Sec. 32. Minnesota Statutes 2002, section 349.17,
subdivision 3, is amended to read:
Subd. 3. [WINNERS.] Each bingo winner must be determined
and every prize shall be awarded and delivered the same day on
which the bingo occasion is conducted, except that prizes won in
a linked bingo game must be delivered within three business days
of the day on which the occasion was conducted.
Sec. 33. Minnesota Statutes 2002, section 349.17,
subdivision 6, is amended to read:
Subd. 6. [CONDUCT OF BINGO.] (a) Each bingo hard card and
paper sheets must have five horizontal rows of spaces with each
row except one having five numbers. The center row must have
four numbers and the center space marked "free." Each column
must have one of the letters B-I-N-G-O in order at the top.
Bingo paper sheets may also have numbers that are not preprinted
but are filled in by players.
(b) A game of bingo begins with the first letter and number
called. Each player must cover or mark with a liquid dauber the
numbers when bingo balls, similarly numbered, are randomly
drawn, announced, and displayed to the players, either manually
or with a flashboard and monitor. The game is won when a player
has covered or marked a previously designated arrangement of
numbers on the card or sheet and declared bingo. The game is
completed when a winning card or sheet is verified and a prize
awarded, except that prizes won in linked bingo games may be
awarded pursuant to subdivision 3.
Sec. 34. Minnesota Statutes 2002, section 349.17,
subdivision 7, is amended to read:
Subd. 7. [NOON HOUR BINGO.] Notwithstanding subdivisions 1
and 3, an organization may conduct bingo subject to the
following restrictions:
(1) the bingo is conducted only between the hours of 11:00
a.m. and 2:00 p.m.;
(2) the bingo is conducted at a site the organization owns
or leases and which has a license for the sale of intoxicating
beverages on the premises under chapter 340A;
(3) the bingo is limited to one progressive bingo game per
site as defined by section 349.211, subdivision 2;
(4) the bingo is conducted using only bingo paper sheets;
and
(5) if the premises are leased, the rent may not exceed $25
per day for each day bingo is conducted; and
(6) linked bingo games may not be conducted at a noon hour
bingo occasion.
Sec. 35. Minnesota Statutes 2002, section 349.17, is
amended by adding a subdivision to read:
Subd. 8. [LINKED BINGO GAMES.] (a) A licensed organization
may conduct or participate in a linked bingo game in association
with one or more other licensed organizations.
(b) Each participating licensed organization shall
contribute to each prize awarded in a linked bingo game in an
amount not to exceed $300 per occasion.
(c) The board may adopt rules to:
(1) specify the manner in which a linked bingo game must be
played and how the linked bingo prizes must be awarded;
(2) specify the records to be maintained by a linked bingo
game provider;
(3) require the submission of periodic reports by the
linked bingo game provider and specify the content of the
reports;
(4) establish the qualifications required to be licensed as
a linked bingo game provider; and
(5) any other matter involving the operation of a linked
bingo game.
Sec. 36. Minnesota Statutes 2002, section 349.18,
subdivision 1, is amended to read:
Subdivision 1. [LEASE OR OWNERSHIP REQUIRED; RENT
LIMITATIONS.] (a) An organization may conduct lawful gambling
only on premises it owns or leases. Leases must be on a form
prescribed by the board. Except for leases entered into before
August 1, 1994, the term of the lease may not begin before the
effective date of the premises permit and must expire on the
same day that the premises permit expires. Copies of all leases
must be made available to employees of the board and the
division of alcohol and 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.
(b) Rent paid by an organization for leased premises is
subject to the following limits:
(1) for booth operations, including booth operations where
a pull-tab dispensing device is located, booth operations where
a bar operation is also conducted, and booth operations where
both a pull-tab dispensing device is located and a bar operation
is also conducted, the maximum rent is:
(i) in any month where the organization's gross profit at
those premises does not exceed $4,000, up to $400; and
(ii) in any month where the organization's gross profit at
those premises exceeds $4,000, up to $400 plus not more than ten
percent of the gross profit for that month in excess of $4,000;
(2) for bar operations, including bar operations where a
pull-tab dispensing device is located but not including bar
operations subject to clause (1), and for locations where only a
pull-tab dispensing device is located:
(i) in any month where the organization's gross profit at
those premises does not exceed $1,000, up to $200; and
(ii) in any month where the organization's gross profit at
those premises exceeds $1,000, up to $200 plus not more than 20
percent of the gross profit for that month in excess of $1,000;
(3) a lease not governed by clauses (1) and (2) must be
approved by the board before becoming effective;
(4) total rent paid to a lessor from all organizations from
leases governed by clause (1) may not exceed $1,750 per month.
Total rent paid to a lessor from all organizations from leases
governed by clause (2) may not exceed $2,000 per month.
(c) Amounts paid as rent under leases are all-inclusive.
No other services provided or contracted by the lessor may be
paid by the organization, including, but not limited to, trash
removal, janitorial and cleaning services, snow removal, lawn
services, electricity, heat, security, security monitoring,
storage, other utilities or services, and, in the case of bar
operations, compensation for cash shortages. Any other
expenditure made by an organization that is related to a leased
premises must be approved by the director. An organization may
not provide any compensation or thing of value to a lessor or
the lessor's employees from any fund source other than its
gambling account. Rent payments may not be made to an
individual.
(d) Notwithstanding paragraph (b), an organization may pay
a lessor for food or beverages or meeting room rental if the
charge made is comparable to similar charges made to other
individuals or groups.
(e) No person, distributor, manufacturer, lessor, linked
bingo game provider, or organization other than the licensed
organization leasing the space may conduct any activity other
than the sale or serving of food and beverages on the leased
premises during times when lawful gambling is being conducted on
the premises.
(c) (f) At a site where the leased premises consists of an
area on or behind a bar at which alcoholic beverages are sold
and employees of the lessor are employed by the organization as
pull-tab sellers at the site, pull-tabs and tipboard tickets may
be sold and redeemed by those employees at any place on or
behind the bar, but the tipboards and receptacles for pull-tabs
and cash drawers for lawful gambling receipts must be maintained
only within the leased premises.
(d) (g) Employees of a lessor may participate in lawful
gambling on the premises provided (1) if pull-tabs or tipboards
are sold, the organization voluntarily posts, or is required to
post, the major prizes as specified in section 349.172; and (2)
any employee of the lessor participating in lawful gambling is
not a gambling employee for the organization conducting lawful
gambling on the premises.
(e) (h) A gambling employee may purchase pull-tabs at the
site of the employee's place of employment provided:
(1) the organization voluntarily posts, or is required to
post, the major prizes for pull-tab or tipboard games as
specified in section 349.172; and
(2) the employee is not involved in the sale of pull-tabs
at that site.
(f) (i) At a leased site where an organization uses a
paddlewheel consisting of 30 numbers or less or a tipboard
consisting of 30 tickets or less, tickets may be sold throughout
the permitted premises, but winning tickets must be redeemed,
the paddlewheel must be located, and the tipboard seal must be
opened within the leased premises.
[EFFECTIVE DATE.] This section is effective May 31, 2003,
and applies to leases entered into or amended on and after that
date.
Sec. 37. Minnesota Statutes 2002, section 349.19, is
amended by adding a subdivision to read:
Subd. 2b. [LINKED BINGO PRIZE POOL ACCOUNT.] A licensed
organization participating in a linked bingo game must maintain
a separate account in a bank for the deposit of the
organization's portion of the linked bingo game prize pool. The
name of the bank, the account number, and authorization for
electronic funds transfer must be provided by the organization
to the linked bingo game provider. Deposits must be made into
the account by the organization as designated by the linked
bingo game provider. Money in the account must be available to
the linked bingo game provider at all times by electronic funds
transfer, unless the linked bingo provider agrees to the
transfer of the funds by other means.
Sec. 38. Minnesota Statutes 2002, section 349.19,
subdivision 3, is amended to read:
Subd. 3. [EXPENDITURES.] (a) All expenditures of gross
profits from lawful gambling must be itemized as to payee,
purpose, amount, and date of payment, and must be in compliance
with section 349.154. Authorization of the expenditures must be
recorded in the monthly meeting minutes of the licensed
organization. Checks or authorizations for electronic fund
transfers for expenditures of gross profits must be signed by at
least two persons authorized by board rules to sign the checks.
Expenditures of gross profits from lawful gambling for local,
state, and federal taxes as identified in section 349.12,
subdivision 25, paragraph (a), clause (8), may be: (1)
transferred electronically from the organization's gambling
account directly to bank accounts identified by local, state, or
federal agencies if the organization's gambling account monthly
bank statement specifically identifies the payee by name, the
amount transferred, the account number of the account into which
the funds were transferred, and the date of the transaction; or
(2) transferred electronically to and from the account of a
payroll processing firm that meets the criteria for such a firm
established under section 349.168, subdivision 6. Expenditures
of gross profits from lawful gambling as identified in section
349.12, subdivision 3a, and as authorized by section 349.15,
subdivision 1, for utility payments for utilities, insurance,
and payroll processing charges may be transferred electronically
from the organization's gambling account directly to bank
accounts identified by the utility vendor if the organization's
gambling account monthly bank statement specifically identifies
the payee by name, the amount transferred, the account number of
the account into which the funds were transferred, and the date
of the transaction. Electronic payments of local, state, and
federal taxes and utility, payroll processing, or insurance
payments are permitted only if they have been authorized by the
membership, the organization maintains supporting documentation,
and the expenditures can be verified.
(b) Expenditures authorized by the board according to
section 349.12, subdivision 25, paragraph (b), clause (3), must
be 51 percent completed within two years of the date of board
approval. "Fifty-one percent completed" means that the work
completed must represent at least 51 percent of the value of the
project as documented by the contractor or vendor. An
organization that fails to comply with this paragraph shall
reapply to the board for approval of the project.
Sec. 39. Minnesota Statutes 2002, section 349.191,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT RESTRICTION.] A manufacturer may
not offer or extend to a distributor, a linked bingo game
provider may not offer or extend to an organization, and a
distributor may not offer or extend to an organization, credit
for a period of more than 30 days for the sale or lease of any
gambling equipment. No right of action exists for the
collection of any claim based on credit prohibited by this
subdivision. The 30-day period allowed by this subdivision
begins with the day immediately following the day of invoice and
includes all successive days, including Sundays and holidays, to
and including the 30th successive day.
Sec. 40. Minnesota Statutes 2002, section 349.191,
subdivision 1a, is amended to read:
Subd. 1a. [CREDIT AND SALES TO DELINQUENT ORGANIZATIONS.]
(a) If a distributor or linked bingo game provider does not
receive payment in full from an organization within 35 days of
the day immediately following the date of the invoice, the
distributor or linked bingo game provider must notify the board
in writing of the delinquency on the next business day.
(b) If a distributor or linked bingo game provider who has
notified the board under paragraph (a) has not received payment
in full from the organization within 60 days of the notification
under paragraph (a), the distributor or linked bingo game
provider must notify the board of the continuing delinquency.
(c) On receipt of a notice under paragraph (a), the board
shall order all distributors and linked bingo game providers
that until further notice from the board, they may sell gambling
equipment to the delinquent organizations only on a cash basis
with no credit extended. On receipt of a notice under paragraph
(b), the board shall order all distributors and linked bingo
game providers not to sell any gambling equipment to the
delinquent organization.
(d) No distributor or linked bingo game provider may extend
credit or sell gambling equipment to an organization in
violation of an order under paragraph (c) until the board has
authorized such credit or sale.
Sec. 41. Minnesota Statutes 2002, section 349.211,
subdivision 1, is amended to read:
Subdivision 1. [BINGO.] Except as provided in
subdivision subdivisions 1a and 2, prizes for a single bingo
game may not exceed $200 except prizes for a cover-all game,
which may exceed $200 if the aggregate value of all cover-all
prizes in a bingo occasion does not exceed $1,000. Total prizes
awarded at a bingo occasion may not exceed $2,500, unless a
cover-all game is played in which case the limit is $3,500. A
prize may be determined based on the value of the bingo packet
sold to the player. For purposes of this subdivision, a
cover-all game is one in which a player must cover all spaces
except a single free space to win.
Sec. 42. Minnesota Statutes 2002, section 349.211, is
amended by adding a subdivision to read:
Subd. 1a. [LINKED BINGO PRIZES.] Prizes for a linked bingo
game shall be limited as follows:
(1) no organization may contribute more than $300 per
occasion to a linked bingo game prize pool; and
(2) if an organization contributes to a linked bingo game
prize pool, the organization's aggregate value of cover-all
prizes available during the bingo occasion must be reduced by
the amount contributed to the linked bingo game prize pool.
Sec. 43. Minnesota Statutes 2002, section 609.761,
subdivision 5, is amended to read:
Subd. 5. [HIGH SCHOOL RAFFLES.] Sections 609.755 and
609.76 do not prohibit a raffle, as defined in section 349.12,
subdivision 33, conducted by a school district or a nonprofit
organization organized primarily to support programs of a school
district, if the following conditions are complied with:
(1) tickets for the raffle may only be sold and the drawing
conducted at a high school event sponsored by a school
district. All tickets must be sold for the same price;
(2) tickets may only be sold to persons 18 years of age or
older attending the event;
(3) the drawing must be held during or immediately after
the conclusion of the event; and
(4) one-half of the gross receipts from the sale of tickets
must be awarded as prizes for the raffle, and the remaining
one-half may only be expended to defray the school district's
costs of sending event participants to high school activities
held at other locations; and
(5) if a school district's or nonprofit organization's
gross receipts from the conduct of raffles exceeds $12,000 in a
calendar year or $5,000 in a single raffle, the school district
or organization must report the following information to the
gambling control board annually: the total amount of gross
receipts received, the total expenses for the raffles, the total
prizes awarded, and an accounting of the expenditures from the
gross receipts of the raffles.
Sec. 44. [REPEALER.]
Minnesota Statutes 2002, section 349.168, subdivision 9, is
repealed.
Presented to the governor May 23, 2003
Signed by the governor May 27, 2003, 4:08 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes