Minnesota Session Laws - 1999, Regular Session

                            CHAPTER 206-H.F.No. 1825 
                  An act relating to gambling; allowing a class B 
                  licensee of a class A racetrack to conduct card club 
                  activities; expanding the use of pull-tab dispensing 
                  machines; making technical changes; setting forth 
                  conduct of raffles; modifying progressive bingo 
                  prizes; specifying maximum tipboard prizes; amending 
                  Minnesota Statutes 1998, sections 240.01, by adding 
                  subdivisions; 240.07, subdivision 3; 240.10; 240.25, 
                  subdivision 8; 349.151, subdivision 4b; 349.1711, by 
                  adding a subdivision; and 349.211, subdivision 2, and 
                  by adding a subdivision; proposing coding for new law 
                  in Minnesota Statutes, chapters 240; and 349. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 240.01, is 
        amended by adding a subdivision to read: 
           Subd. 24.  [CARD CLUB.] "Card club" means a facility or 
        portion of a facility where the commission has authorized a 
        licensee to conduct card playing. 
           Sec. 2.  Minnesota Statutes 1998, section 240.01, is 
        amended by adding a subdivision to read: 
           Subd. 25.  [CARD PLAYING.] "Card playing" means an activity 
        wherein individuals compete and wager with each other utilizing 
        a 52-unit system comprised of a series of numbers, numbered two 
        through ten, and the letters J, Q, K, and A, combined with four 
        symbols commonly known as hearts, diamonds, spades, and clubs, 
        wherein each individual unit constitutes the display of one of 
        the 52 possible combinations.  The symbol commonly known as a 
        joker may be incorporated into the system. 
           Sec. 3.  Minnesota Statutes 1998, section 240.01, is 
        amended by adding a subdivision to read: 
           Subd. 26.  [UNBANKED.] "Unbanked" means a wagering system 
        or game where the individual participants compete against each 
        other and not against the sponsor or house.  In an unbanked 
        system or game, the sponsor or house may deduct a percentage 
        from the accumulated wagers and impose other charges for hosting 
        the activity, but does not have an interest in the outcome of a 
        game.  The sponsor or house may add additional prizes, awards, 
        or money to any game for promotional purposes.  
           Sec. 4.  Minnesota Statutes 1998, section 240.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LICENSE ISSUANCE.] (a) If after considering the 
        information received from the hearing and investigations, the 
        commission determines that the applicant will conduct horse 
        racing in accordance with all applicable laws and rules, will 
        not adversely affect the public health, welfare, and safety, 
        that the license will not create a competitive situation that 
        will adversely affect racing and the public interest and that 
        the applicant is fit to sponsor and manage racing, the 
        commission may issue a class B license.  
           (b) If the commission determines that the licensee will 
        operate a card club in accordance with all applicable law and 
        rules and the applicant's approved plan of operation under 
        section 240.30, subdivision 6, that the operation of a card club 
        by the licensee will not adversely affect the public health, 
        welfare, and safety, and that the licensee is fit to operate a 
        card club, the commission may include with the class B license 
        an authorization to conduct a card club at the licensee's class 
        A racetrack as provided in section 240.30.  The commission may 
        give an interim authorization for the operation of a card club 
        that is effective until the expiration of the licensee's class B 
        license, and may charge for the interim authorization a 
        proportionate amount of the additional class B license fee under 
        section 240.10. 
           (c) The license is for a period of one year. 
           Sec. 5.  Minnesota Statutes 1998, section 240.10, is 
        amended to read: 
           240.10 [LICENSE FEES.] 
           The fee for a class A license is $10,000 per year.  The fee 
        for a class B license is $100 for each assigned racing day on 
        which racing is actually conducted, and $50 for each day on 
        which simulcasting is authorized and actually takes place, plus 
        $10,000 per year if the class B license includes authorization 
        to operate a card club.  The fee for a class D license is $50 
        for each assigned racing day on which racing is actually 
        conducted.  Fees imposed on class B and class D licenses must be 
        paid to the commission at a time and in a manner as provided by 
        rule of the commission.  
           The commission shall by rule establish an annual license 
        fee for each occupation it licenses under section 240.08 but no 
        annual fee for a class C license may exceed $100.  
           License fee payments received must be paid by the 
        commission to the state treasurer for deposit in the general 
        fund. 
           Sec. 6.  [240.135] [CARD CLUB REVENUE.] 
           (a) From the amounts received from charges authorized under 
        section 240.30, subdivision 4, the licensee shall set aside the 
        amounts specified in this section to be used for purse payments. 
        These amounts are in addition to the breeders fund and purse 
        requirements set forth elsewhere in this chapter. 
           (1) For amounts between zero and $6,000,000, the licensee 
        shall set aside ten percent to be used as purses. 
           (2) For amounts in excess of $6,000,000, the licensee shall 
        set aside 14 percent to be used as purses. 
           (b) From all amounts set aside under paragraph (a), the 
        licensee shall set aside ten percent to be deposited in the 
        breeders fund.  The licensee and the horseperson's organization 
        representing the majority of horsepersons who have raced at the 
        racetrack during the preceding 12 months may negotiate 
        percentages different from those stated in this section if the 
        agreement is in writing and filed with the racing commission. 
           (c) It is the intent of the legislature that the proceeds 
        of the card playing activities authorized by this chapter be 
        used to improve the horse racing industry by improving purses.  
        The commission shall annually review the financial details of 
        card playing activities and determine if the present use of card 
        playing proceeds is consistent with the policy established by 
        this paragraph.  If the commission determines that the use of 
        the proceeds does not comply with the policy set forth herein, 
        then the commission shall direct the parties to make the changes 
        necessary to ensure compliance.  If these changes require 
        legislation, the commission shall make the appropriate 
        recommendations to the legislature. 
           Sec. 7.  [240.136] [COMPULSIVE GAMBLING NOTICE.] 
           A class B licensee who has been authorized to operate a 
        card club must prominently post in the card club premises the 
        toll-free telephone number established by the commissioner of 
        human services in connection with the compulsive gambling 
        program established under section 245.98.  
           Sec. 8.  Minnesota Statutes 1998, section 240.25, 
        subdivision 8, is amended to read: 
           Subd. 8.  [AGE UNDER 18.] A person under the age of 18 may 
        not place a bet or present a pari-mutuel ticket for payment with 
        an approved pari-mutuel system or participate in card playing at 
        a card club at a licensed racetrack. 
           Sec. 9.  [240.30] [CARD CLUBS.] 
           Subdivision 1.  [CARD CLUB OPERATION.] A class B licensee 
        conducting pari-mutuel betting on horse racing at a class A 
        racetrack may operate a card club at the racetrack and offer 
        card playing services to patrons only if the commission has 
        authorized the licensee to operate a card club operation under 
        section 240.07, subdivision 3, paragraph (b), and the commission 
        has approved the licensee's plan of operation under subdivision 
        6.  The commission may withdraw its authorization for operation 
        of a card club at any time for a violation of a law or rule 
        governing card club operation. 
           Subd. 2.  [SUPERVISION.] The authorized licensee is 
        responsible for conducting and supervising the card games, 
        providing all necessary equipment, services, and personnel, and 
        reimbursing the commission for costs related to card club 
        regulation and enforcement. 
           Subd. 3.  [TYPE OF WAGERING.] All card club wagering 
        activities must be conducted in an unbanked system. 
           Subd. 4.  [CHARGES.] The authorized licensee may charge 
        patrons for card playing services by deducting and retaining 
        money from wagers, by charging a fee based on playing time, or 
        by any other means authorized by the commission. 
           Subd. 5.  [LIMITATION.] The commission shall not authorize 
        a licensee to operate a card club unless the licensee has 
        conducted at least 50 days of live racing at a class A facility 
        within the past 12 months or during the preceding calendar year. 
           Subd. 6.  [PLAN OF OPERATION.] (a) The commission shall not 
        authorize a class B licensee to operate a card club unless the 
        licensee has submitted, and the commission approved, a plan of 
        operation for card playing activities.  The plan must set forth 
        all necessary details for conducting card playing activities, 
        including, among other things: 
           (1) specifying and defining all card games to be played, 
        including all governing aspects of each game; 
           (2) time and location of card playing activities; 
           (3) amount and method by which participants will be charged 
        for card playing services; 
           (4) arrangements to ensure the security of card playing 
        activities; 
           (5) designation of all licensed employees of the licensee 
        who undertake supervisory positions related to card playing 
        activities; 
           (6) internal control systems for card playing activities; 
        and 
           (7) a plan for the training of card club personnel in 
        identification of problem gamblers and appropriate action to 
        prevent or control problem gambling. 
           (b) The licensee must prepare and make available to all 
        customers a written manual that covers all portions of the 
        current plan of operation.  The licensee must also publish, in 
        pamphlet form, a condensed and comprehensive version of the 
        manual and make it available to all customers. 
           Subd. 7.  [AMENDMENTS TO PLAN; VIOLATIONS; RELATION TO 
        OTHER LAWS.] (a) The licensee may amend the plan of operation 
        only with the commission's approval.  The commission may 
        withdraw its approval of a plan of operation. 
           (b) Card club activities are deemed to be relevant to the 
        integrity of horse racing activities in Minnesota for purposes 
        of sections 240.03; 240.06, subdivision 7; 240.08; and 240.27, 
        subdivision 1. 
           (c) A violation of a law or rule relating to card club 
        operation or a violation of an approved plan of operation is 
        deemed to be a violation of law or rule for purposes of section 
        240.22. 
           (d) A violation of an approved plan of operation is deemed 
        to be a violation of a rule of the commission for purposes of 
        section 240.26, subdivision 3. 
           (e) Card playing at a card club is deemed to be a bet at a 
        licensed racetrack for purposes of section 240.28, subdivision 2.
           Subd. 8.  [LIMITATIONS.] The commission may not approve any 
        plan of operation under subdivision 6 that exceeds any of the 
        following limitations: 
           (1) the maximum number of tables used for card playing at 
        the card club at any one time may not exceed 50; 
           (2) the opening wager by any player in any card game may 
        not exceed $15; and 
           (3) no single wager that increases the total amount staked 
        in any card game may exceed $30. 
           Subd. 9.  [REIMBURSEMENT TO COMMISSION.] The commission 
        shall require that the licensee reimburse it for the 
        commission's actual costs, including personnel costs, of 
        regulating the card club.  Amounts received under this 
        subdivision must be deposited as provided in section 240.155, 
        subdivision 1. 
           Sec. 10.  Minnesota Statutes 1998, 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; 
           (2) must limit the use of pull-tab dispensing devices to a 
        permitted premises which is (i) a licensed premises for on-sales 
        of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
        licensed bingo hall that allows gambling only by persons 18 
        years or older; and 
           (3) must prohibit the use of pull-tab dispensing devices at 
        any licensed premises where pull-tabs are sold other than 
        through a pull-tab dispensing device by an employee of the 
        organization who is also the lessor or an employee of the lessor.
           (c) Notwithstanding rules adopted under paragraph (b), 
        pull-tab dispensing devices may be used in establishments 
        licensed for the off-sale of intoxicating liquor, other than 
        drugstores and general food stores licensed under section 
        340A.405, subdivision 1. 
           (d) The director may charge a manufacturer a fee of up to 
        $5,000 per pull-tab dispensing device to cover the costs of 
        services provided by an independent testing laboratory to 
        perform testing and analysis of pull-tab dispensing devices.  
        The director shall deposit in a separate account in the state 
        treasury all money the director receives as reimbursement for 
        the costs of services provided by independent testing 
        laboratories that have entered into contracts with the state to 
        perform testing and analysis of pull-tab dispensing devices.  
        Money in the account is appropriated to the director to pay the 
        costs of services under those contracts. 
           Sec. 11.  Minnesota Statutes 1998, section 349.1711, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [TIPBOARD RULES.] The board may by rule permit 
        tipboard games with multiple seals.  The board may also adopt 
        rules for cumulative or carryover tipboard prizes. 
           Sec. 12.  [349.173] [CONDUCT OF RAFFLES.] 
           Raffle tickets 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."  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 sold. 
           Sec. 13.  Minnesota Statutes 1998, section 349.211, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROGRESSIVE BINGO GAMES.] A prize of up to 
        $2,000 may be awarded for a progressive bingo game, including a 
        cover-all game.  The prize for a progressive bingo game may 
        start at $300 and be increased by up to $100 for each occasion 
        during which the progressive bingo game is played.  A 
        consolation prize of up to $100 $200 for a progressive bingo 
        game may be awarded in each occasion during which the 
        progressive bingo game is played and the accumulated prize is 
        not won.  The total amount awarded in progressive bingo game 
        prizes in any calendar year may not exceed $36,000. 
           Sec. 14.  Minnesota Statutes 1998, section 349.211, is 
        amended by adding a subdivision to read: 
           Subd. 2c.  [TIPBOARD PRIZES.] The maximum prize which may 
        be awarded for a tipboard ticket is $500, not including any 
        cumulative or carryover prizes.  Cumulative or carryover prizes 
        in tipboard games shall not exceed $2,500.  
           Sec. 15.  [EFFECTIVE DATE.] 
           Sections 1 to 13 are effective the day following final 
        enactment.  Section 14 is effective the day following final 
        approval of the rules established in section 11. 
           Presented to the governor May 21, 1999 
           Signed by the governor May 24, 1999, 9:51 a.m.