Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2005, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 166-S.F.No. 1555
An act relating to gambling; amending various
provisions relating to lawful gambling; amending and
providing definitions; making technical, clarifying,
and conforming changes; providing for electronic
bingo; regulating lottery service businesses;
authorizing certain video games of chance and social
skill games; amending Minnesota Statutes 2004,
sections 349.12, subdivisions 5, 25, 33, by adding
subdivisions; 349.15, subdivision 1; 349.151,
subdivisions 4, 4b, by adding a subdivision; 349.152,
subdivision 2; 349.153; 349.155, subdivision 3;
349.16, subdivisions 2, 8; 349.161, subdivision 5;
349.162, subdivisions 1, 4, 5; 349.163, subdivision 3;
349.1635, subdivision 4; 349.166, subdivisions 1, 2;
349.167, subdivision 1; 349.168, subdivision 8;
349.17, subdivisions 5, 7; 349.1711, subdivision 1;
349.173; 349.18, subdivision 1; 349.19, subdivisions
4, 5, 10; 349.211, subdivision 2c; 349.2125,
subdivision 1; 349.213; 609.75, subdivisions 1, 8;
609.761, subdivision 3; proposing coding for new law
in Minnesota Statutes, chapter 299L; repealing
Minnesota Statutes 2004, sections 349.162, subdivision
3; 349.164; 349.17, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
LAWFUL GAMBLING
Section 1. Minnesota Statutes 2004, section 349.12, is
amended by adding a subdivision to read:
Subd. 3c. [BAR BINGO.] "Bar bingo" is a bingo occasion
conducted at a permitted premises in an area where intoxicating
liquor or 3.2 percent malt beverages are sold and where the
licensed organization conducts another form of lawful gambling.
Sec. 2. Minnesota Statutes 2004, section 349.12,
subdivision 5, is amended to read:
Subd. 5. [BINGO OCCASION.] "Bingo occasion" means a single
gathering or session at which a series of one or more successive
bingo games is played. There is no limit on the number of games
conducted during a bingo occasion but a bingo occasion must not
last longer than eight consecutive hours.
Sec. 3. Minnesota Statutes 2004, section 349.12, is
amended by adding a subdivision to read:
Subd. 7a. [CHARITABLE CONTRIBUTION.] "Charitable
contribution" means one or more of the lawful purposes
expenditures under section 349.12, subdivision 25, paragraph
(a), clauses (1) to (7), (10), (11), (13) to (15), and (19).
Sec. 4. Minnesota Statutes 2004, section 349.12, is
amended by adding a subdivision to read:
Subd. 12a. [ELECTRONIC BINGO DEVICE.] "Electronic bingo
device" means an electronic device used by a bingo player to
monitor bingo paper sheets purchased at the time and place of an
organization's bingo occasion and which (1) provides a means for
bingo players to input numbers announced by a bingo caller; (2)
compares the numbers entered by the player to the bingo faces
previously stored in the memory of the device; and (3)
identifies a winning bingo pattern.
Electronic bingo device does not mean any device into which
coin, currency, or tokens are inserted to activate play.
Sec. 5. Minnesota Statutes 2004, 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 or expenditure for goods and services
for 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
suffering;
(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
problem 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 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 diem; or
(iv) active military personnel and their immediate family
members in need of support services;
(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 and paid
prior to June 30, 2006;
(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;
(13) a contribution to or expenditure on projects or
activities approved by the commissioner of natural resources for:
(i) wildlife management projects that benefit the public at
large;
(ii) grant-in-aid trail maintenance and grooming
established under sections 84.83 and 84.927 and other trails
open to public use, including purchase or lease of equipment for
this purpose; and
(iii) supplies and materials for safety training and
educational programs coordinated by the Department of Natural
Resources including the Enforcement Division;
(15) (14) conducting nutritional programs, food shelves,
and congregate dining programs primarily for persons who are age
62 or older or disabled;
(16) (15) 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) (16) an expenditure by a licensed veterans
organization for payment of water, fuel for heating,
electricity, and sewer costs for a building wholly owned or
wholly leased by and used as the primary headquarters of the
licensed veterans organization;
(18) (17) 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; or
(19) (18) payment of fees authorized under this chapter
imposed by the state of Minnesota to conduct lawful gambling in
Minnesota; or
(19) a contribution or expenditure to honor an individual's
humanitarian service as demonstrated through philanthropy or
volunteerism to the United States, this state, or local
community.
(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 catastrophe, 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.
[EFFECTIVE DATE.] The effective date for paragraph (a),
clause (9), is January 1, 2006. All other changes in this
section are effective the day following final enactment.
Sec. 6. Minnesota Statutes 2004, section 349.12,
subdivision 33, is amended to read:
Subd. 33. [RAFFLE.] "Raffle" means a game in which a
participant buys a ticket for a chance at a prize with the
winner determined by a random drawing to take place at a
location and date printed upon the ticket or other certificate
of participation in an event where the prize determination is
based on a method of random selection and all entries have an
equal chance of selection. The ticket or certificate of
participation must include the location, date, and time of the
selection of the winning entries.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2004, section 349.15,
subdivision 1, is amended to read:
Subdivision 1. [EXPENDITURE RESTRICTIONS.] Gross profits
from lawful gambling may be expended only for lawful purposes or
allowable expenses as authorized by the membership of the
conducting organization at a monthly meeting of the
organization's membership. Provided that no more than 70
percent of the gross profit less the tax imposed under section
297E.02, subdivision 1, from bingo, and no more than 55 60
percent of the gross profit from other forms of lawful gambling,
may be expended biennially during the term of the license for
allowable expenses related to lawful gambling. For licenses
issued after June 30, 2006, compliance with this subdivision
will be measured on a biennial basis that is concurrent with the
term of the license. Compliance with this subdivision is a
condition for the renewal of any license beginning on July 1,
2008.
[EFFECTIVE DATE.] This section is effective July 1, 2006.
Sec. 8. Minnesota Statutes 2004, 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,
distributor salespersons, 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, and 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 report annually to the governor and legislature a
financial summary for each licensed organization identifying the
gross receipts, prizes paid, allowable expenses, lawful purpose
expenditures including charitable contributions and all taxes
and fees as per section 349.12, subdivision 25, paragraph (a),
clauses (8) and (18), and the percentage of annual gross profit
used for lawful purposes;
(10) to impose civil penalties of not more than $500 per
violation on organizations, distributors, distributor
salespersons, 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) (11) to issue premises permits to organizations
licensed to conduct lawful gambling;
(11) (12) 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) (13) to delegate to the director the authority to
approve or deny fund loss requests, contribution of gambling
funds to another licensed organization, and property expenditure
requests under criteria established by the board;
(14) to suspend or revoke licenses and premises permits of
organizations, distributors, distributor salespersons,
manufacturers, bingo halls, linked bingo game providers, or
gambling managers as provided in this chapter;
(15) to approve or deny requests from licensees for:
(i) waivers from fee requirements as provided in section
349.16, subdivision 6; and
(ii) variances from Gambling Control Board rules under
section 14.055; and
(13) (16) to register employees of organizations licensed
to conduct lawful gambling;
(14) (17) to require fingerprints from persons determined
by board rule to be subject to fingerprinting;
(15) (18) 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) (19) to order organizations, distributors, distributor
salespersons, manufacturers, bingo halls, linked bingo game
providers, and gambling managers to take corrective actions; and
(17) (20) 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 salesperson, 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 distributor salesperson, 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 penalties received by the board must be deposited
in the general fund.
(d) All fees imposed by the board under sections 349.16 to
349.167 must be deposited in the state treasury and credited to
a lawful gambling regulation account in the special revenue
fund. Receipts in this account are available for the operations
of the board up to the amount authorized in biennial
appropriations from the legislature.
Sec. 9. Minnesota Statutes 2004, 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 premises where
bingo is conducted and admission is restricted to 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.
Sec. 10. Minnesota Statutes 2004, section 349.151, is
amended by adding a subdivision to read:
Subd. 4c. [ELECTRONIC BINGO.] (a) The board may by rule
authorize but not require the use of electronic bingo devices.
(b) Rules adopted under paragraph (a):
(1) must limit the number of bingo faces that can be played
using an electronic bingo device to 36;
(2) must require that an electronic bingo device be used
with corresponding bingo paper sheets;
(3) must require that the electronic bingo device site
system have dial-up capability to permit the board to remotely
monitor the operation of the device and the internal accounting
systems; and
(4) must prohibit the price of a face played on an
electronic bingo device from being less than the price of a face
on a bingo paper sheet sold at the same occasion.
Sec. 11. Minnesota Statutes 2004, section 349.152,
subdivision 2, is amended to read:
Subd. 2. [DUTIES OF DIRECTOR.] The director has the
following duties:
(1) to carry out gambling policy established by the board;
(2) to employ and supervise personnel of the board;
(3) to advise and make recommendations to the board on
rules, policy, and legislative initiatives;
(4) to approve or deny operational requests from licensees
as delegated by the board;
(5) to issue licenses and premises permits as authorized by
the board;
(5) (6) to issue cease and desist orders;
(6) (7) to make recommendations to the board on license
issuance, denial, censure, suspension and revocation, civil
penalties, and corrective action the board imposes;
(7) (8) to ensure that board rules, policy, and decisions
are adequately and accurately conveyed to the board's licensees;
(8) (9) to conduct investigations, inspections, compliance
reviews, and audits under this chapter; and
(9) (10) to issue subpoenas to compel the attendance of
witnesses and the production of documents, books, records, and
other evidence relating to an investigation, compliance review,
or audit the director is authorized to conduct.
Sec. 12. Minnesota Statutes 2004, 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, or linked bingo game provider, or 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. 13. Minnesota Statutes 2004, section 349.155,
subdivision 3, is amended to read:
Subd. 3. [MANDATORY DISQUALIFICATIONS.] (a) In the case of
licenses for manufacturers, distributors, distributor
salespersons, 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, or person in a supervisory or management
position 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 involving theft or fraud;
(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. 14. Minnesota Statutes 2004, section 349.16,
subdivision 2, is amended to read:
Subd. 2. [ISSUANCE OF GAMBLING LICENSES.] (a) Licenses
authorizing organizations to conduct lawful gambling may be
issued by the board to organizations meeting the qualifications
in paragraphs (b) to (h) if the board determines that the
license is consistent with the purpose of sections 349.11 to
349.22.
(b) The organization must have been in existence for the
most recent three years preceding the license application as a
registered Minnesota nonprofit corporation or as an organization
designated as exempt from the payment of income taxes by the
Internal Revenue Code.
(c) The organization at the time of licensing must have at
least 15 active members.
(d) The organization must not be in existence solely for
the purpose of conducting gambling.
(e) The organization has identified in its license
application the lawful purposes on which it proposes to expend
net profits from lawful gambling and has identified an annual
goal for charitable contributions, expressed as a percentage of
gross profits.
(f) The organization has identified on its license
application a gambling manager and certifies that the manager is
qualified under this chapter.
(g) The organization must not, in the opinion of the board
after consultation with the commissioner of revenue, be seeking
licensing primarily for the purpose of evading or reducing the
tax imposed by section 297E.02, subdivision 6.
(h) The organization has not exceeded the expenditure
restrictions imposed under section 349.15, subdivision 1, or if
the organization has exceeded the expenditure restrictions under
section 349.15, subdivision 1, the organization has reimbursed
any excess expenses from nongambling funds.
Sec. 15. Minnesota Statutes 2004, section 349.16,
subdivision 8, is amended to read:
Subd. 8. [LOCAL INVESTIGATION FEE.] A statutory or home
rule charter city or county notified under section 349.213,
subdivision 2, may assess an investigation fee on organizations
or bingo halls applying for or renewing a premises permit or a
bingo hall license. An investigation fee may not exceed the
following limits:
(1) for cities of the first class, $500;
(2) for cities of the second class, $250;
(3) for all other cities, $100; and
(4) for counties, $375.
Sec. 16. Minnesota Statutes 2004, section 349.161,
subdivision 5, is amended to read:
Subd. 5. [PROHIBITION.] (a) No distributor, distributor
salesperson, or other employee of a distributor, may also be a
wholesale distributor of alcoholic beverages or an employee of a
wholesale distributor of alcoholic beverages.
(b) No distributor, distributor salesperson, or any
representative, agent, affiliate, or other 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, distributor salesperson, or any
representative, agent, affiliate, or other employee of a
distributor may provide a lessor of gambling premises any
compensation, gift, gratuity, premium, or other thing of value.
(d) No distributor, distributor salesperson, or any
representative, agent, affiliate, or other employee of a
distributor may provide an employee or agent of the organization
any compensation, gift, gratuity, premium, or other thing of
value greater than $25 per organization in a calendar year.
(e) No distributor, distributor salesperson, or any
representative, agent, affiliate, or other employee of a
distributor may participate in any gambling activity at any
gambling site or premises where gambling equipment purchased
from that distributor or distributor salesperson is being used
in the conduct of lawful gambling.
(e) (f) No distributor, distributor salesperson, or any
representative, agent, affiliate, or other employee of a
distributor may alter or modify any gambling equipment, except
to add a "last ticket sold" prize sticker.
(f) (g) No distributor, distributor salesperson, or any
representative, agent, affiliate, or other 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) (h) No distributor or distributor salesperson 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) (i) No distributor or distributor salesperson 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) (j) No distributor or distributor salesperson may sell
or otherwise provide a pull-tab or tipboard deal with the symbol
required by section 349.163, subdivision 5, paragraph (h) (d),
visible on the flare to any person other than in Minnesota to a
licensed organization or organization exempt from licensing.
Sec. 17. Minnesota Statutes 2004, section 349.162,
subdivision 1, is amended to read:
Subdivision 1. [STAMP REGISTRATION REQUIRED.] (a) A
distributor may not sell, transfer, furnish, or otherwise
provide to a person, and no person may purchase, borrow, accept,
or acquire from a distributor gambling equipment for use within
the state unless the equipment has been registered with the
board and has a registration stamp affixed, except for gambling
equipment not stamped by the manufacturer pursuant to section
349.163, subdivision 5 or 8. Each stamp must bear a
registration number assigned by the board.
(b) A manufacturer must return all unused registration
stamps in its possession to the board by February 1, 1995. No
manufacturer may possess unaffixed registration stamps after
February 1, 1995.
(c) After February 1, 1996, no person may possess any
unplayed pull-tab or tipboard deals with a registration stamp
affixed to the flare or any unplayed paddleticket cards with a
registration stamp affixed to the master flare. This paragraph
does not apply to unplayed pull-tab or tipboard deals with a
registration stamp affixed to the flare, or to unplayed
paddleticket cards with a registration stamp affixed to the
master flare, if the deals or cards are identified on a list of
existing inventory submitted by a licensed organization or a
licensed distributor, in a format prescribed by the commissioner
of revenue, to the commissioner of revenue on or before February
1, 1996 or the Department of Revenue in a manner prescribed by
the board or the Department of Revenue. Gambling equipment kept
in violation of this paragraph subdivision is contraband under
section 349.2125.
Sec. 18. Minnesota Statutes 2004, section 349.162,
subdivision 4, is amended to read:
Subd. 4. [PROHIBITION.] (a) No person other than a
licensed distributor or licensed manufacturer may possess
unaffixed registration stamps issued by the board for the
purpose of registering gambling equipment.
(b) Unless otherwise provided in this chapter, no person
may possess gambling equipment that has not been stamped and
registered.
(c) On and after January 1, 1991, no distributor may:
(1) sell a bingo hard card or paper sheet that does not
bear an individual number; or
(2) sell a package of bingo paper sheets that does not
contain bingo paper sheets in numerical order.
Sec. 19. Minnesota Statutes 2004, section 349.162,
subdivision 5, is amended to read:
Subd. 5. [SALES FROM FACILITIES.] (a) All gambling
equipment purchased or possessed by a licensed distributor for
resale to any person for use in Minnesota must, prior to the
equipment's resale, be unloaded into a storage facility located
in Minnesota which the distributor owns or leases; and which has
been registered, in advance and in writing, with the Division of
Alcohol and Gambling Enforcement as a storage facility of the
distributor. All unregistered gambling equipment and all
unaffixed registration stamps owned by, or in the possession of,
a licensed distributor in the state of Minnesota shall be stored
at a storage facility which has been registered with the
Division of Alcohol and Gambling Enforcement. No gambling
equipment may be moved from the facility unless the gambling
equipment has been first registered with the board, except for
gambling equipment not stamped by the manufacturer pursuant to
section 349.163, subdivision 5 or 8 or the Department of Revenue.
(b) Notwithstanding section 349.163, subdivisions 5, 6, and
8, a licensed manufacturer may ship into Minnesota approved or
unapproved gambling equipment if the licensed manufacturer ships
the gambling equipment to a Minnesota storage facility that is:
(1) owned or leased by the licensed manufacturer; and (2)
registered, in advance and in writing, with the Division of
Alcohol and Gambling Enforcement as a manufacturer's storage
facility. No gambling equipment may be shipped into Minnesota
to the manufacturer's registered storage facility unless the
shipment of the gambling equipment is reported to the Department
of Revenue in a manner prescribed by the department. No
gambling equipment may be moved from the storage facility unless
the gambling equipment is sold to a licensed distributor and is
otherwise in conformity with this chapter, is shipped to an
out-of-state site and the shipment is reported to the Department
of Revenue in a manner prescribed by the department, or is
otherwise sold and shipped as permitted by board rule.
(c) All storage facilities owned, leased, used, or operated
by a licensed distributor or manufacturer may be entered upon
and inspected by the employees of the Division of Alcohol and
Gambling Enforcement, the Division of Alcohol and Gambling
Enforcement director's authorized representatives, employees of
the Gambling Control Board or its authorized representatives,
employees of the Department of Revenue, or authorized
representatives of the director of the Division of Special Taxes
of the Department of Revenue during reasonable and regular
business hours. Obstruction of, or failure to permit, entry and
inspection is cause for revocation or suspension of a
manufacturer's or distributor's licenses and permits issued
under this chapter.
(d) Unregistered gambling equipment and unaffixed
registration stamps found at any location in Minnesota other
than the manufacturing plant of a licensed manufacturer or a
registered storage facility are contraband under section
349.2125. This paragraph does not apply:
(1) to unregistered gambling equipment being transported in
interstate commerce between locations outside this state, if the
interstate shipment is verified by a bill of lading or other
valid shipping document; and
(2) to gambling equipment not stamped by the manufacturer
pursuant to section 349.163, subdivision 5 or 8 registered with
the Department of Revenue for distribution to the tribal casinos.
Sec. 20. Minnesota Statutes 2004, 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) (d), imprinted on the flare to any
person other than a licensed distributor unless the manufacturer
first renders the symbol permanently invisible.
Sec. 21. Minnesota Statutes 2004, section 349.1635,
subdivision 4, is amended to read:
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 premises leased for the conduct of
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. 22. Minnesota Statutes 2004, 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 registering with the board if the value
of all raffle prizes awarded by the organization in a calendar
year does not exceed $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. 23. Minnesota Statutes 2004, 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 $50 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 and the
organization may be subject to penalty as determined by the
board.
(c) Merchandise prizes must be valued at their fair market
value.
(d) Organizations that qualify to conduct exempt raffles
under paragraph (a), are exempt from section 349.173, paragraph
(b), clause (2), if the raffle tickets are sold only in
combination with an organization's membership or a ticket for an
organization's membership dinner and are not included with any
other raffle conducted under the exempt permit.
(e) 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) (f) 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) (g) The organization must maintain all required records
of exempt gambling activity for 3-1/2 years.
Sec. 24. Minnesota Statutes 2004, 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. A person
designated as a gambling manager shall maintain a fidelity
dishonesty bond in the sum of $10,000 in favor of the
organization conditioned on the faithful performance of the
manager's duties. The terms of the bond must provide that
notice be given to the board in writing not less than 30 days
before its cancellation.
(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.
(d) An organization may not have more than one gambling
manager at any time.
Sec. 25. Minnesota Statutes 2004, section 349.168,
subdivision 8, is amended to read:
Subd. 8. [PERCENTAGE OF GROSS PROFIT PAID.] (a) A licensed
organization may pay a percentage of the gross profit from
raffle ticket sales to a nonprofit organization that sells
raffle tickets for the licensed organization.
(b) A licensed organization may compensate an employee of
the organization for the sale of gambling equipment at a bar
operation if the frequency of the activity is one day or less
per week and the games are limited to 32 chances or less per
game. For purposes of this paragraph, an employee must not be a
lessor, employee of the lessor, or an immediate family member of
the lessor.
Sec. 26. Minnesota Statutes 2004, section 349.17,
subdivision 5, is amended to read:
Subd. 5. [BINGO CARDS AND SHEETS.] (a) The board shall by
rule require that all licensed organizations: (1) conduct bingo
only using liquid daubers on bingo paper sheets that bear an
individual number recorded by the distributor or linked bingo
game provider; and (2) use each bingo paper sheet for no more
than one bingo occasion. In lieu of the requirements of clause
(2), a licensed organization may electronically record the sale
of each bingo hard card or paper sheet at each bingo occasion
using an electronic recording system approved by the board.
(b) The requirements of paragraph (a) shall only apply to a
licensed organization that received gross receipts from bingo in
excess of $150,000 in the organization's last fiscal year.
Sec. 27. Minnesota Statutes 2004, section 349.17,
subdivision 7, is amended to read:
Subd. 7. [NOON HOUR BAR BINGO.] Notwithstanding
subdivisions 1 and 3, An organization may conduct bar 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) (2) the bingo is conducted using only bingo paper
sheets purchased from a licensed distributor;
(5) if the premises are leased, the (3) no rent may not
exceed $25 per day for each day bingo is conducted be paid for a
bar bingo occasion; and
(6) (4) linked bingo games may not be conducted at a noon
hour bar bingo occasion.
Sec. 28. Minnesota Statutes 2004, section 349.1711,
subdivision 1, is amended to read:
Subdivision 1. [SALE OF TICKETS.] Tipboard games must be
played using only tipboard tickets that are either (1) attached
to a placard and arranged in columns or rows, or (2) separate
from the placard and contained in a receptacle while the game is
in play. The placard serves as the game flare. The placard
must contain a seal that conceals the winning number or symbol.
When a tipboard ticket is purchased and opened from a game
containing more than 32 tickets, each player having a tipboard
ticket with one or more predesignated numbers or symbols must
sign the placard at the line indicated by the number or symbol
on the tipboard ticket.
Sec. 29. Minnesota Statutes 2004, section 349.173, is
amended to read:
349.173 [CONDUCT OF RAFFLES.]
(a) Raffle tickets or certificates of participation at a
minimum must list the three most expensive prizes to be
awarded. If additional prizes will be awarded that are not
contained on the raffle ticket, the raffle ticket must contain
the statement "A complete list of additional prizes is available
upon request.", a complete list of additional prizes must be
publicly posted at the event and copies of the complete prize
list made available upon request. Notwithstanding section
349.12, subdivision 33, raffles conducted under the exemptions
in section 349.166 may use tickets that contain only the
sequential number of the raffle ticket and no other information
if the organization makes a list of prizes and a statement of
other relevant information required by rule available to persons
purchasing tickets and if tickets are only sold at the event and
on the date when the tickets are drawn.
(b) Raffles must be conducted in a manner that ensures:
(1) all entries in the raffle have an equal chance of
selection;
(2) entry in the raffle is not conditioned upon any other
purchase;
(3) the method of selection is conducted in a public forum;
(4) the method of selection cannot be manipulated or based
on the outcome of an event not under the control of the
organization;
(5) physical presence at the raffle is not a requirement to
win; and
(6) all sold and unsold tickets or certificates of
participation are accounted for.
(c) Methods of selecting winning entries from a raffle
other than prescribed in rule may be used with the prior written
approval of the board.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 30. Minnesota Statutes 2004, 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. Leases approved by
the board must specify that the board may authorize an
organization to withhold rent from a lessor for a period of up
to 90 days if the board determines that illegal gambling
occurred on the premises and that the lessor or its employees
participated in the illegal gambling or knew of the gambling and
did not take prompt action to stop the gambling. The lease must
authorize the continued tenancy of the organization without the
payment of rent during the time period determined by the board
under this paragraph. 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 for
the conduct of pull-tabs, tipboards, and paddlewheels 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 $2,500 per month.
(c) Rent paid by an organization for leased premises for
the conduct of bingo is subject to either of the following
limits at the option of the parties to the lease:
(1) not more than ten percent of the monthly gross profit
from all lawful gambling activities held during bingo occasions
excluding bar bingo or at a rate based on a cost per square foot
not to exceed 110 percent of a comparable cost per square foot
for leased space as approved by the director; and
(2) no rent may be paid for bar bingo.
(d) 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, cash shortages, unless approved
by the director. 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) (e) 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) (f) 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) (g) 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) (h) Employees of a lessor or employees of an
organization 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) (i) A gambling employee may purchase pull-tabs or
tipboards 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
or tipboards at that site.
(i) (j) 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) (k) 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. 31. Minnesota Statutes 2004, section 349.19,
subdivision 4, is amended to read:
Subd. 4. [DISCREPANCIES.] If at a bingo occasion a
discrepancy of more than $20 $50 is found between the gross
receipts as reported by the checkers and the gross receipts
determined by adding the cash receipts, the discrepancy must be
reported to the board within five days of the bingo occasion.
Sec. 32. Minnesota Statutes 2004, 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 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. The
organization must report annually to its membership and annually
file with the board a financial summary report in a format
prescribed by the board that identifies the organization's
receipts and use of lawful gambling proceeds, including:
(1) gross receipts;
(2) prizes paid;
(3) allowable expenses;
(4) lawful purpose expenditures, including annual totals
for types of charitable contributions and all taxes and fees as
per section 349.12, subdivision 25, paragraph (a), clauses (8)
and (18);
(5) the percentage of annual gross profits used for
charitable contributions; and
(6) the percentage of annual gross profits used for all
taxes and fees as per section 349.12, subdivision 25, paragraph
(a), clauses (8) and (18).
Sec. 33. Minnesota Statutes 2004, section 349.19,
subdivision 10, is amended to read:
Subd. 10. [PULL-TAB RECORDS.] (a) The board shall by rule
require a licensed organization to require each winner of a
pull-tab prize of $50 or more to present identification in the
form of a driver's license, Minnesota identification card, or
other identification the board deems sufficient to allow the
identification and tracing of the winner. The rule must require
the organization to retain winning pull-tabs of $50 or more, and
the identification of the winner of the pull-tab, for 3-1/2
years.
(b) An organization must maintain separate cash banks for
each deal of pull-tabs unless (1) two or more deals are
commingled in a single receptacle pull-tab dispensing device, or
(2) the organization uses a cash register, of a type approved by
the board, which records all sales of pull-tabs by separate
deals.
(c) The board shall:
(1) by rule adopt minimum technical standards for cash
registers that may be used by organizations, and shall approve
for use by organizations any cash register that meets the
standards,; and
(2) before allowing an organization to use a cash register
that commingles receipts from several different pull-tab games
in play, adopt rules that define how cash registers may be used
and that establish a procedure for organizations to reconcile
all pull-tab games in play at the end of each month.
Sec. 34. Minnesota Statutes 2004, section 349.211,
subdivision 2c, is amended to read:
Subd. 2c. [TIPBOARD PRIZES.] The maximum prize which may
be awarded for a tipboard ticket is $500 $599, not including any
cumulative or carryover prizes. Cumulative or carryover prizes
in tipboard games shall not exceed $2,500.
Sec. 35. Minnesota Statutes 2004, section 349.2125,
subdivision 1, is amended to read:
Subdivision 1. [CONTRABAND DEFINED.] The following are
contraband:
(1) all pull-tab or tipboard deals or paddleticket cards
not stamped or bar coded in accordance with this chapter or
chapter 297E;
(2) all pull-tab or tipboard deals in the possession of any
unlicensed person, firm, or organization, whether stamped or
unstamped;
(3) any container used for the storage and display of any
contraband pull-tab or tipboard deals as defined in clauses (1)
and (2);
(4) all currency, checks, and other things of value used
for pull-tab or tipboard transactions not expressly permitted
under this chapter, and any cash drawer, cash register, or any
other container used for illegal pull-tab or tipboard
transactions including its contents;
(5) any device including, but not limited to, motor
vehicles, trailers, snowmobiles, airplanes, and boats used, with
the knowledge of the owner or of a person operating with the
consent of the owner, for the storage or transportation of more
than five pull-tab or tipboard deals that are contraband under
this subdivision. When pull-tabs and tipboards are being
transported in the course of interstate commerce between
locations outside this state, the pull-tab and tipboard deals
are not contraband, notwithstanding the provisions of clauses
(1) and (12);
(6) any unaffixed registration stamps except as provided in
section 349.162, subdivision 4;
(7) any prize used or offered in a game utilizing
contraband as defined in this subdivision;
(8) any altered, modified, or counterfeit pull-tab or
tipboard ticket;
(9) any unregistered gambling equipment except as permitted
by this chapter;
(10) any gambling equipment kept in violation of section
349.18;
(11) any gambling equipment not in conformity with law or
board rule;
(12) any pull-tab or tipboard deal in the possession of a
person other than a licensed distributor or licensed
manufacturer for which the person, upon demand of a licensed
peace officer or authorized agent of the commissioner of revenue
or director of alcohol and gambling enforcement, does not
immediately produce for inspection the invoice or a true and
correct copy of the invoice for the acquisition of the deal from
a licensed distributor;
(13) any pull-tab or tipboard deals or portions of deals on
which the tax imposed under chapter 297E has not been paid; and
(14) any device prohibited by section 609.76, subdivisions
4 to 6.
Sec. 36. Minnesota Statutes 2004, section 349.213, is
amended to read:
349.213 [LOCAL AUTHORITY.]
Subdivision 1. [LOCAL REGULATION.] (a) A statutory or home
rule city or county has the authority to adopt more stringent
regulation of 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
349.166. 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 or
linked bingo game providers 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 per year from its net
profits derived from lawful gambling. For the purposes of this
subdivision, net profits are gross profits less amounts expended
for allowable expenses and paid in taxes assessed on lawful
gambling. 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 8, or 297E.02;
provided, however, that an ordinance requirement that such
organizations must contribute ten percent per year of their net
profits derived from lawful gambling conducted at premises
within the city's or county's jurisdiction 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 (i)
lawful purposes, or (ii) police, fire, and other emergency or
public safety-related services, equipment, and training,
excluding pension obligations, is not considered an expenditure
to the city or county nor a tax under section 297E.02, and is
valid and lawful. A city or county making expenditures
authorized under this paragraph must by March 15 of each year
file a report with the board, on a form the board prescribes,
that lists all such revenues collected and expenditures for the
previous calendar year.
(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 be limited to lawful purpose expenditures of
gross profits derived from lawful gambling conducted at premises
within the city's or county's jurisdiction, 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 and township 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.
Subd. 2. [LOCAL APPROVAL.] Before issuing or renewing a
premises permit or bingo hall license, the board must notify the
city council of the statutory or home rule city in which the
organization's premises or the bingo hall is located or, if the
premises or hall is located outside a city, the county board of
the county and the town board of the town where the premises or
hall is located. The board may require organizations or bingo
halls to notify the appropriate local government at the time of
application. This required notification is sufficient to
constitute the notice required by this subdivision. The board
may not issue or renew a premises permit or bingo hall license
unless the organization submits a resolution from the city
council or county board approving the premises permit or bingo
hall license. The resolution must have been adopted within 90
days of the date of application for the new or renewed permit or
license.
Subd. 3. [LOCAL GAMBLING TAX.] A statutory or home rule
charter city that has one or more licensed organizations
operating lawful gambling, and a county that has one or more
licensed organizations outside incorporated areas operating
lawful gambling, may impose a local gambling tax on each
licensed organization within the city's or county's
jurisdiction. The tax may be imposed only if the amount to be
received by the city or county is necessary to cover the costs
incurred by the city or county to regulate lawful gambling. The
tax imposed by this subdivision may not exceed three percent per
year of the gross receipts of a licensed organization from all
lawful gambling less prizes actually paid out by the
organization. A city or county may not use money collected
under this subdivision for any purpose other than to regulate
lawful gambling. All documents pertaining to site inspections,
fines, penalties, or other corrective action involving local
lawful gambling regulation must be shared with the board within
30 days of filing at the city or county of jurisdiction. A tax
imposed under this subdivision is in lieu of all other local
taxes and local investigation fees on lawful gambling. A city
or county that imposes a tax under this subdivision shall
annually, by March 15, file a report with the board in a form
prescribed by the board showing (1) the amount of revenue
produced by the tax during the preceding calendar year, and (2)
the use of the proceeds of the tax.
Sec. 37. Minnesota Statutes 2004, 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, all of whom:
(1) have made a contribution through a payroll or pension
deduction campaign to a registered combined charitable
organization, within the meaning of section 309.501; or
(2) have paid other consideration to the employer entirely
for the benefit of such a registered combined charitable
organization, as a precondition to the chance of being selected,
is not a lottery if:
(1) (i) all of the persons eligible to be selected are
employed by or retirees of the employer; and
(2) (ii) the cost of the property or other reward or
benefit distributed and all costs associated with the
distribution are borne by the employer.
Sec. 38. [REPEALER.]
Minnesota Statutes 2004, sections 349.162, subdivision 3;
349.164; and 349.17, subdivision 1, are repealed.
ARTICLE 2
LOTTERY SERVICE BUSINESS
Section 1. [299L.09] [LOTTERY SERVICE BUSINESS.]
Subdivision 1. [DEFINITION.] For purposes of this section:
(a) A "lottery service business" is a commercial enterprise
that for a fee or commission purchases lottery tickets on behalf
of customers or subscribers.
(b) "Division" means the Division of Alcohol and Gambling
Enforcement in the Department of Public Safety.
(c) "Commissioner" means the commissioner of public safety
acting through the division.
(d) "Disqualifying offense" means any felony, gross
misdemeanor, and any criminal offense involving fraud,
misrepresentation, or deceit.
Subd. 2. [REQUIRED STATEMENTS.] (a) All print advertising
in any medium published by or on behalf of a lottery service
business, and all print communications intended to solicit
members, including Internet solicitations, for each lottery pool
or subscription service offered, must contain a clear and
prominent statement that discloses to the subscriber, either in
print or in electronic format, a statement that describes how
much of each subscriber's fees are used to buy tickets.
(b) All advertising and solicitation described in paragraph
(a) must contain the following statement in clear and readable
type: "This business is not affiliated with and is not an agent
of the Minnesota State Lottery."
Subd. 3. [PROHIBITIONS.] (a) A lottery service business
may not accept as a customer or subscriber any person under age
18, or make a payment of lottery winnings to a person under age
18.
(b) Except as necessary for the lottery service business to
fill a pool, a lottery service business and any officer,
director, or employee of the business may not have any stake or
own any shares in any lottery pool it creates for customers or
subscribers.
Subd. 4. [LOTTERY PRIZE ACCOUNT.] A lottery service
business must deposit all money received as winnings from
lottery tickets bought for or on behalf of customers or
subscribers into a lottery prize account that it maintains
separately from all other accounts of the business. The
business may expend money from the account, including interest
thereon, only to pay winnings to customers or subscribers and to
make payments required under subdivision 5.
Subd. 5. [UNCLAIMED PRIZES.] (a) A lottery service
business must make all good-faith efforts to distribute money in
its lottery prize account to customers and subscribers entitled
thereto.
(b) Any prizewinning money deposited in the lottery prize
account that has not been distributed to customers or
subscribers as winnings within one year after the date of the
drawing becomes an unclaimed prize. On July 1 of each year, a
lottery service business must transmit all unclaimed prizes,
including all interest earned thereon while the prize was in the
lottery prize account, to the commissioner. The commissioner
shall deposit all payments under this subdivision in the general
fund. This subdivision does not apply if the amount of
prizewinning money in the account is less than $25.
Subd. 6. [BOOKS AND RECORDS.] A lottery service business
must keep a complete accounting and all records necessary to
show fully the lottery service business's lottery transactions,
including incoming revenue, tickets purchased, and winnings
distributed.
[EFFECTIVE DATE.] This section is effective August 1, 2005.
ARTICLE 3
VIDEO GAME OF CHANCE
Section 1. Minnesota Statutes 2004, section 609.75,
subdivision 8, is amended 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. A video
game that simulates horse racing that does not involve a prize
payout is not a video game of chance.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 4
SOCIAL SKILL GAME
Section 1. Minnesota Statutes 2004, section 609.761,
subdivision 3, is amended to read:
Subd. 3. [SOCIAL SKILL GAME.] Sections 609.755 and 609.76
do not prohibit tournaments or contests that satisfy all of the
following requirements:
(1) the tournament or contest consists of the card games of
chance commonly known as cribbage, skat, sheephead, bridge,
euchre, pinochle, gin, 500, smear, Texas hold'em, or whist;
(2) the tournament or contest does not provide any direct
financial benefit to the promoter or organizer; and
(3) the sum value of all prizes awarded for each tournament
or contest does not exceed $200; and
(4) for a tournament or contest involving Texas hold'em:
(i) no person under 18 years of age may participate;
(ii) the payment of an entry fee or other consideration for
participating is prohibited;
(iii) the value of all prizes awarded to an individual
winner of a tournament or contest at a single location may not
exceed $200 each day; and
(iv) the organizer or promoter must ensure that reasonable
accommodations are made for players with disabilities.
Accommodations to the table and the cards shall include the
announcement of the cards visible to the entire table and the
use of Braille cards for players who are blind.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to acts committed on or
after that date.
Presented to the governor May 31, 2005
Signed by the governor June 3, 2005, 10:40 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes