Minnesota Session Laws - 2004, Regular Session

                            CHAPTER 172-H.F.No. 2521 
                  An act relating to lawful gambling; making various 
                  changes to lawful gambling provisions; amending 
                  Minnesota Statutes 2002, sections 349.15, subdivision 
                  2; 349.163, subdivision 9; 349.1711, by adding a 
                  subdivision; 349.18, subdivision 2; 349.19, 
                  subdivision 5; 349.2127, subdivision 8; Minnesota 
                  Statutes 2003 Supplement, sections 349.167, 
                  subdivisions 2, 4; 349.18, subdivision 1; 349.211, 
                  subdivision 1; repealing Minnesota Statutes 2002, 
                  section 349.1711, subdivision 4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 349.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CASH SHORTAGES.] In computing gross profit to 
        determine maximum amounts which may be expended for allowable 
        expenses under subdivision 1, an organization may not reduce its 
        gross receipts by any cash shortages.  An organization may 
        report cash shortages to the board only as an allowable 
        expense.  An organization may not report cash shortages in any 
        reporting period fiscal year beginning on July 1, 2004, that in 
        total exceed the following percentages of the organization's 
        gross receipts from lawful gambling for that period:  until 
        August 1, 1995, four-tenths of one percent; and on and after 
        August 1, 1995, three-tenths of one percent of the 
        organization's gross receipts from lawful gambling at each 
        permitted premises where the organization conducts lawful 
        gambling. 
           Sec. 2.  Minnesota Statutes 2002, section 349.163, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SALES REQUIRED.] No licensed manufacturer may 
        refuse to sell pull-tab games gambling equipment to a licensed 
        distributor unless: 
           (1) a specific game type of gambling equipment sold on an 
        exclusive basis is at issue; 
           (2) the manufacturer does not sell pull-tab games gambling 
        equipment to any distributor in Minnesota; 
           (3) a Minnesota statute or rule prohibits the sale; or 
           (4) the distributor is delinquent on any payment owed to 
        the manufacturer. 
           Sec. 3.  Minnesota Statutes 2003 Supplement, section 
        349.167, subdivision 2, is amended to read: 
           Subd. 2.  [GAMBLING MANAGERS; LICENSES.] A person may not 
        serve as a gambling manager for an organization unless the 
        person possesses a valid gambling manager's license issued by 
        the board.  In addition to the disqualifications in section 
        349.155, subdivision 3, the board may not issue a gambling 
        manager's license to a person applying for the license who: 
           (1) has not complied with subdivision 4, clause (1); 
           (2) within the five years before the date of the license 
        application, has committed a violation of law or board rule that 
        resulted in the revocation of a license issued by the board; 
           (3) has ever been convicted of a criminal violation 
        involving fraud, theft, tax evasion, misrepresentation, or 
        gambling; or 
           (4) has engaged in conduct the board determines is contrary 
        to the public health, welfare, or safety or the integrity of 
        lawful gambling. 
           A gambling manager's license runs concurrent with the 
        organization's license unless the gambling manager's license is 
        suspended or revoked.  The annual fee for a gambling manager's 
        license is $100.  
           Sec. 4.  Minnesota Statutes 2003 Supplement, 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. 5.  Minnesota Statutes 2002, section 349.1711, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [TIPBOARD RULES.] The board shall adopt rules for 
        tipboard games with multiple seals.  The board shall also adopt 
        rules for cumulative or carryover tipboard prizes. 
           Sec. 6.  Minnesota Statutes 2003 Supplement, 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.  The 
        board may prescribe by rule limits on the amount of rent which 
        an organization may pay to a lessor for premises leased for 
        bingo.  Any rule adopted by the board limiting the amount of 
        rent to be paid may only be effective for leases entered into, 
        or renewed, after the effective date of the rule. 
           (b) Rent paid by an organization for leased premises 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 $2,500 per month. 
           (c) Amounts paid as rent under leases are all-inclusive.  
        No other services or expenses provided or contracted by the 
        lessor may be paid by the organization, including, but not 
        limited to, trash removal, janitorial and cleaning services, 
        snow removal, lawn services, electricity, heat, security, 
        security monitoring, storage, other utilities or services, and, 
        in the case of bar operations, 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. 
           (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. 
           (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. 
           (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. 
           (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. 
           (j) A member of the lessor's immediate family may not be a 
        compensated employee of an organization leasing space at the 
        premises.  For purposes of this paragraph, a "member of the 
        immediate family" is a spouse, parent, child, or sibling. 
           Sec. 7.  Minnesota Statutes 2002, section 349.18, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXCEPTIONS.] (a) An organization may conduct 
        raffles on a premise it does not own or lease.  
           (b) An organization may, with the permission of the board, 
        conduct bingo on premises it does not own or lease for up to 12 
        consecutive days in a calendar year, in connection with a county 
        fair, the state fair, or a civic celebration.  
           (c) A licensed organization may, after compliance with 
        section 349.213, conduct lawful gambling on premises other than 
        the organization's permitted premises for one day four days per 
        calendar year or and one event up to 12 consecutive days in a 
        calendar year in connection with a county fair, the state fair, 
        a church festival, or a civic celebration.  A lease for that 
        time period for the exempted premises must accompany the request 
        to the board. 
           Sec. 8.  Minnesota Statutes 2002, section 349.19, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPORTS.] A licensed organization must report to 
        the Department of Revenue and to its membership monthly, or 
        quarterly in the case of a class C licensee or 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.  
           Sec. 9.  Minnesota Statutes 2003 Supplement, section 
        349.211, subdivision 1, is amended to read: 
           Subdivision 1.  [BINGO.] Except as provided in 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 $2,800, unless a cover-all game is played in 
        which case the limit is $3,500 $3,800.  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. 10.  Minnesota Statutes 2002, section 349.2127, 
        subdivision 8, is amended to read: 
           Subd. 8.  [MINIMUM AGE.] (a) A person under the age of 18 
        years may not buy a pull-tab, tipboard ticket, paddlewheel 
        ticket, or raffle ticket, or a chance to participate in a bingo 
        game other than (1) a bingo game exempt or excluded from 
        licensing, or (2) one bingo occasion conducted by a licensed 
        organization as part of an annual community event if the person 
        under age 18 is accompanied by a parent or guardian.  Violation 
        of this paragraph is a misdemeanor. 
           (b) A licensed organization or employee may not allow a 
        person under age 18 to participate in lawful gambling in 
        violation of paragraph (a).  Violation of this paragraph is a 
        misdemeanor. 
           (c) In a prosecution under paragraph (b), it is a defense 
        for the defendant to prove by a preponderance of the evidence 
        that the defendant reasonably and in good faith relied upon 
        representations of proof of age authorized in section 340A.503, 
        subdivision 6, paragraph (a). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  [LAWFUL PURPOSE.] 
           Notwithstanding the definition of "lawful purpose" in 
        Minnesota Statutes, section 349.12, subdivision 25, it is a 
        lawful purpose of lawful gambling conducted by a licensed 
        veterans organization to pay up to $1,500 per person to send up 
        to two World War II veterans per local veterans organization to 
        Washington D.C., for the dedication events of the National World 
        War II Memorial on May 27 to May 30, 2004.  No licensed veterans 
        organization may spend more than $6,000 under authority of this 
        section. 
           Sec. 12.  [REPEALER.] 
           Minnesota Statutes 2002, section 349.1711, subdivision 4, 
        is repealed. 
           Sec. 13.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 2004.  Sections 2 to 9, 11, 
        and 12 are effective the day following final enactment. 
           Presented to the governor April 28, 2004 
           Signed by the governor April 30, 2004, 1:10 p.m.