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1991 Minnesota Session Laws

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                         Laws of Minnesota 1991 

                        CHAPTER 336-S.F.No. 506 
           An act relating to lawful gambling; lotteries; 
          providing for teleracing and its operation and 
          regulation; expanding requirements relating to 
          compulsive gambling; exempting lawful gambling profits 
          from the tax on unrelated business income; regulating 
          manufacturers and distributors of gambling devices; 
          changing certain requirements relating to record 
          keeping, reports, audits, and expenditures of gambling 
          profits by licensed gambling organizations; modifying 
          certain licensing, training, and operating 
          requirements for licensed gambling organizations; 
          changing requirements relating to posting of pull-tab 
          winners; authorizing the director of the lottery to 
          enter into joint lotteries outside the United States; 
          expanding certain provisions relating to lottery 
          retailers; designating certain data on lottery prize 
          winners as private; changing requirements relating to 
          lottery advertising; clarifying the prohibitions on 
          video games of chance and lotteries; authorizing 
          dissemination of information about lotteries conducted 
          by adjoining states; establishing a task force on 
          compulsive gambling assessments; appropriating money; 
          amending Minnesota Statutes 1990, sections 3.9221, by 
          adding a subdivision; 240.01, subdivisions 1, 10, and 
          by adding subdivisions; 240.02, subdivision 3; 240.03; 
          240.05, subdivision 1; 240.06, subdivision 1; 240.09, 
          subdivision 2; 240.10; 240.11; 240.13, subdivisions 1, 
          2, 3, 4, 5, 6, and 8; 240.15, subdivision 6; 240.16, 
          subdivision 1a; 240.18; 240.19; 240.23; 240.24, 
          subdivision 2; 240.25, subdivision 2; 240.27; 240.28, 
          subdivision 1; 240.29; 245.98, by adding a 
          subdivision; 299L.01, subdivision 1; 349.12, 
          subdivision 25, and by adding subdivisions; 349.15; 
          349.151, subdivision 4, and by adding a subdivision; 
          349.154, subdivision 2; 349.16, subdivision 3; 
          349.163, by adding a subdivision; 349.165, 
          subdivisions 1 and 3; 349.167, subdivisions 1, 2, and 
          4; 349.17, subdivision 5; 349.172; 349.18, 
          subdivisions 1 and 1a; 349.19, subdivisions 2, 5, 9, 
          and by adding subdivisions; 349.211, by adding a 
          subdivision; 349.213, subdivision 1; 349A.02, 
          subdivision 3; 349A.06, subdivisions 3, 5, and 11; 
          349A.08, by adding a subdivision; 349A.09, subdivision 
          2; 349A.10, subdivision 3; 609.115, by adding a 
          subdivision; 609.75, subdivisions 1, 4, and by adding 
          subdivisions; 609.755; 609.76, subdivision 1; 
          proposing coding for new law in Minnesota Statutes, 
          chapters 240; and 299L; repealing Minnesota Statutes 
          1990, sections 240.01, subdivision 13; 240.13, 
          subdivision 6a; 240.14; subdivision 1a; and 349.154, 
          subdivision 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                               TELERACING
    Section 1.  Minnesota Statutes 1990, section 240.01, 
subdivision 1, is amended to read: 
    Subdivision 1.  [TERMS.] For the purposes of Laws 1983, 
this chapter 214, the terms defined in this section have the 
meanings given them.  
    Sec. 2.  Minnesota Statutes 1990, section 240.01, 
subdivision 10, is amended to read: 
    Subd. 10.  [RACING DAY.] "Racing day" is a day assigned by 
the commission on which live racing is conducted.  Racing day 
includes televised racing day. 
    Sec. 3.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 16.  [HORSEPERSON.] "Horseperson" means a person who 
is currently licensed by the commission as an owner or lessee, 
or a trainer. 
    Sec. 4.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 17.  [TELERACING FACILITY.] "Teleracing facility" 
means a facility at which telerace simulcasting is conducted 
under authority of a class E license issued by the commission. 
    Sec. 5.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 18.  [ON-TRACK PARI-MUTUEL BETTING.] "On-track 
pari-mutuel betting" means wagering conducted at a licensed 
racetrack, or at a class E licensed facility whose wagering 
system is electronically linked to a licensed racetrack. 
    Sec. 6.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
     Subd. 19.  [SIMULCASTING.] "Simulcasting" means the 
televised display, for pari-mutuel wagering purposes, of one or 
more horse races conducted at another location wherein the 
televised display occurs simultaneously with the race being 
televised. 
    Sec. 7.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 20.  [TELERACE SIMULCASTING.] "Telerace simulcasting" 
means simulcasting at a teleracing facility. 
    Sec. 8.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 21.  [TELERACING PROGRAM.] "Teleracing program" means 
a telerace simulcasting event consisting of simulcasting that 
includes not more than two full racing cards, plus not more than 
two other races. 
    Sec. 9.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 22.  [RACING SEASON.] "Racing season" means that 
portion of the calendar year starting at the beginning of the 
day of the first live horse race conducted by the licensee and 
concluding at the end of the day of the last live horse race 
conducted by the licensee in any year. 
    For purposes of this chapter, the racing season begins 
before the first Saturday in May and continues for not less than 
25 consecutive weeks. 
    Sec. 10.  Minnesota Statutes 1990, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 23.  [FULL RACING CARD.] "Full racing card" means 
three or more races that are:  (1) part of a horse racing 
program being conducted at a racetrack; and (2) being simulcast 
or telerace simulcast at a licensed racetrack or teleracing 
facility. 
    Sec. 11.  Minnesota Statutes 1990, section 240.03, is 
amended to read: 
    240.03 [COMMISSION POWERS AND DUTIES.] 
    The commission has the following powers and duties:  
    (1) to regulate horse racing in Minnesota to ensure that it 
is conducted in the public interest; 
    (2) to issue licenses as provided in Laws 1983, this 
chapter 214; 
    (3) to enforce all laws and rules governing horse racing; 
    (4) to collect and distribute all taxes provided for in 
Laws 1983, this chapter 214; 
    (5) to conduct necessary investigations and inquiries and 
compel the submission of information, documents, and records it 
deems necessary to carry out its duties; 
    (6) to supervise the conduct of pari-mutuel betting on 
horse racing; 
    (7) to employ and supervise personnel under Laws 1983, this 
chapter 214; 
    (8) to determine the number of racing days to be held in 
the state and at each licensed racetrack; and 
    (9) to take all necessary steps to ensure the integrity of 
racing in Minnesota.  
    Sec. 12.  Minnesota Statutes 1990, section 240.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CLASSES.] The commission may issue 
four five classes of licenses:  
    (a) class A licenses, for the ownership and operation of a 
racetrack with horse racing on which pari-mutuel betting is 
conducted; 
    (b) class B licenses, for the sponsorship and management of 
horse racing on which pari-mutuel betting is conducted; 
    (c) class C licenses, for the privilege of engaging in 
certain occupations related to horse racing; and 
    (d) class D licenses, for the conduct of pari-mutuel horse 
racing by county agricultural societies or associations; and 
    (e) class E licenses, for the management of a teleracing 
facility.  
    No person may engage in any of the above activities without 
first having obtained the appropriate license from the 
commission.  
    Sec. 13.  Minnesota Statutes 1990, section 240.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [APPLICATION.] The commission may issue one 
or more class A licenses, but not more than one to any one 
person.  An application for a class A license must be on a form 
the commission prescribes and must be accompanied by detailed 
plans and specifications of the track, buildings, fences, and 
other improvements.  The application must contain:  
    (a) the name and address of the applicant and, if it is a 
corporation, the names of all officers, directors, and 
shareholders of the corporation and any of its holding 
corporations; 
    (b) if required by the commission, the names of any person 
or persons holding directly, indirectly, or beneficially an 
interest of any kind in the applicant or any of its holding 
corporations, whether the interest is financial, administrative, 
policy making, or supervisory; 
    (c) a statement of the assets and liabilities of the 
applicant; 
    (d) an affidavit executed by the applicant setting forth 
that no officer, director, or other person with a present or 
future direct or indirect financial or management interest in 
the racetrack, to the best of the applicant's knowledge:  
    (1) is in default in the payment of an obligation or debt 
to the state under Laws 1983, this chapter 214; 
    (2) has ever been convicted of a felony in a state or 
federal court or has a state or federal felony charge pending; 
     (3) is or has been connected with or engaged in any illegal 
business; 
     (4) has ever been found guilty of fraud or 
misrepresentation in connection with racing or breeding; 
      (5) has ever been found guilty of a violation of a law or 
rule relating to horse racing, pari-mutuel betting or any other 
form of gambling which is a serious violation as defined by the 
commission's rules; or 
      (6) has ever knowingly violated a rule or order of the 
commission or a law of Minnesota relating to racing; 
     (e) an irrevocable consent statement, to be signed by the 
applicant, which states that suits and actions relating to the 
subject matter of the application or acts or omissions arising 
from it may be commenced against the applicant in any court of 
competent jurisdiction in this state by the service on the 
secretary of state of any summons, process, or pleadings 
authorized by the laws of this state.  If any summons, process, 
or pleadings is served upon the secretary of state, it must be 
by duplicate copies.  One copy must be retained in the office of 
the secretary of state and the other copy must be forwarded 
immediately by certified mail to the address of the applicant, 
as shown by the records of the commission; and 
      (f) an affirmative action plan establishing goals and 
timetables consistent with the Minnesota human rights act, 
chapter 363.  
    Sec. 14.  [240.091] [TELERACING FACILITY LICENSE.] 
    Subdivision 1.  [APPLICATION.] The commission may issue one 
or more class E licenses to a holder of a class B license who 
conducts live racing at a class A facility.  The commission may 
issue a total of not more than four class E licenses, of which 
not more than two may be issued before January 1, 1992.  If two 
licenses are issued before January 1, 1991, only one may be for 
a facility located within the seven-county metropolitan area.  
An application for a class E license must be on a form the 
commission prescribes and must be accompanied by detailed plans 
and specifications of the facility to be used, the location of 
the facility, and any other information relevant to the 
specifications of the facility and its operation, as designated 
by the commission.  The application must also contain:  
     (1) the name and address of the applicant and, if it is a 
corporation or association, the names of all officers, 
directors, and shareholders of the corporation and any of its 
holding companies; 
    (2) if required by the commission, the names of any person 
or persons holding directly, indirectly, or beneficially, an 
interest of any kind in the applicant or any of its holding 
companies, whether the interest is financial, administrative, 
policy making, or supervisory; 
    (3) a statement of the assets and liabilities of the 
applicant; 
     (4) an affidavit of the type described in section 240.06, 
subdivision 1, paragraph (d); 
     (5) an irrevocable consent statement, to be signed by the 
applicant, that states that the applicant agrees to be bound by 
and subject to the authority of the commission, the rules 
adopted by the commission, and the laws of this state relating 
to the activity to be conducted; and 
    (6) an irrevocable consent statement, to be signed by the 
applicant, that states that suits and actions relating to the 
subject matter of the application or acts or omissions arising 
from it may be commenced against the applicant in any court of 
competent jurisdiction in this state by the service on the 
secretary of state of any summons, process, or pleadings 
authorized by the laws of this state.  If any summons, process, 
or pleading is served upon the secretary of state, it must be by 
duplicate copies.  One copy must be retained in the office of 
the secretary of state and the other copy must be forwarded 
immediately by certified mail to the address of the applicant, 
as shown by the records of the commission.  
    Subd. 2.  [HEARINGS; INVESTIGATIONS.] Before granting a 
class E license, the commission shall conduct at least one 
public hearing on the license application in the area where the 
teleracing facility is proposed to be located.  The commission 
shall request comments on the application from:  (1) the city 
council or town board of the city or town where the facility is 
proposed to be located, (2) the county board if the facility is 
proposed to be located outside a city, and (3) the appropriate 
regional development commission if one exists for the area or, 
if the facility is proposed to be located within the 
metropolitan area as defined in section 473.121, subdivision 2, 
the metropolitan council.  The commission may conduct, or 
request the division of gambling enforcement to conduct, 
comprehensive background and financial investigations of the 
applicant, sources of financing, and other information appearing 
in the application.  The costs of the investigations must be 
paid in the manner prescribed by section 240.06, subdivision 3.  
The commission has access to all criminal history data compiled 
by the division of gambling enforcement on class E licensees and 
applicants.  
    Subd. 3.  [LICENSE ISSUANCE.] (a) If after considering the 
information received from the hearing and investigations, the 
commission determines that the applicant will manage the 
facility in accordance with all applicable laws and rules and 
will not adversely affect the public health, welfare, and 
safety; that the license will not create a competitive situation 
that will adversely affect racing and the public interest; and 
that the applicant is financially able to manage the licensed 
simulcast facility, the commission may issue a class E license 
to the applicant.  The license is effective until revoked or 
suspended by the commission or relinquished by the licensee. 
     (b) As a condition of a class E license, the commission 
shall require that a person employed in the erection, 
construction, remodeling, or repairing of a teleracing facility 
may not be paid a lesser rate of wages than the prevailing wage 
rate, as defined in section 177.42, subdivision 6, in the same 
or most similar trade or occupation in the area. 
    Subd. 4.  [FACILITIES.] The commission may not issue a 
class E license unless the design of the facility will 
accommodate and provide adequate seating.  The operators of the 
facility must provide adequate parking, and make food and 
beverages available.  The telerace simulcasts must be displayed 
so that spectators in attendance are afforded a clear 
presentation of the races. 
    Subd. 5.  [CHANGES IN OWNERSHIP OR MANAGEMENT.] If a change 
in the officers, directors, or other persons with a direct or 
indirect financial or management interest in the class B 
licensee, or a change of ownership of more than five percent of 
the class B licensee's shares, is made after the application for 
or issuance of a class E license, the applicant or licensee must 
notify the commission of the changes within five days of their 
occurrence and provide the affidavit required in section 240.06, 
subdivision 1, paragraph (d). 
    Subd. 6.  [LICENSE SUSPENSION AND REVOCATION.] A class E 
license may be suspended or revoked as provided in section 
240.06, subdivision 7.  A license suspension or revocation is a 
contested case under sections 14.57 to 14.69 of the 
administrative procedure act, and is in addition to criminal 
penalties imposed for a violation of law or rule.  
    Subd. 7.  [WORK AREAS.] A class E licensee shall provide at 
no cost to the commission suitable work areas for commission 
members, officers, employees, and agents, including agents of 
the division of gambling enforcement, who are directed or 
requested by the commission to supervise and control wagering at 
the licensed simulcast facility. 
    Sec. 15.  Minnesota Statutes 1990, section 240.10, is 
amended to read: 
    240.10 [LICENSE FEES.] 
    The fee for a class A license is $10,000 per year.  The fee 
for a class B license is $100 for each assigned racing day on 
which racing is actually conducted, and $50 for each assigned 
televised racing day on which televised racing simulcasting is 
authorized and actually conducted takes place.  The fee for a 
class D license is $50 for each assigned racing day on which 
racing is actually conducted.  The fee for a class E license is 
$1,000 per year.  Fees imposed on class B and class D licenses 
must be paid to the commission at a time and in a manner as 
provided by rule of the commission.  
    The commission shall by rule establish an annual license 
fee for each occupation it licenses under section 240.08 but no 
annual fee for a class C license may exceed $100.  
    License fee payments received must be paid by the 
commission to the state treasurer for deposit in the general 
fund. 
    Sec. 16.  Minnesota Statutes 1990, section 240.11, is 
amended to read: 
    240.11 [LICENSES NONTRANSFERABLE.] 
    A license issued under Laws 1983, this chapter 214 may not 
be transferred.  
    Sec. 17.  Minnesota Statutes 1990, section 240.13, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AUTHORIZED.] Class B and class D licenses 
give the licensees authority to conduct pari-mutuel betting on 
the results of races run at the licensed racetrack, and on other 
races as authorized by the commission under subdivision 6 or 
6a this section. 
    A class B or class E license gives the licensee the 
authority to transmit and receive telecasts and conduct 
pari-mutuel betting on the results of horse races run at its 
class A facility, and of other horse races run at locations 
outside of the state, as authorized by the commission.  A class 
E licensee must present, for pari-mutuel wagering purposes, all 
live horse races conducted at its class A facility.  The class B 
or class E licensee may present racing programs separately or 
concurrently. 
    Subject to the approval of the commission, for simulcasts 
and telerace simulcasts the types of betting, takeout, and 
distribution of winnings on pari-mutuel pools of a class B or 
class E facility are those in effect at the sending racetrack. 
Pari-mutuel pools accumulated at a class E facility must be 
commingled with the pools at the class A facility for comparable 
pools on those races that are being simultaneously presented at 
both facilities.  Pari-mutuel pools may be commingled with pools 
at the sending racetrack, for the purposes of determining odds 
and payout prices, via the totalizator computer at the class A 
facility. 
    The commission may not authorize a class B or class E 
licensee to conduct simulcasting or telerace simulcasting unless 
125 days of live racing, consisting of not less than eight live 
races on each racing day, have been conducted at the class A 
facility within the preceding 12 months.  The number of live 
racing days required may be adjusted by agreement between the 
licensee and the horsepersons' organization representing the 
majority of horsepersons racing the breed racing the majority of 
races at the licensee's class A facility during the preceding 12 
months.  The number of live racing days required must be reduced 
by one day for each assigned racing day that the licensee is 
unable to conduct live racing due to natural occurrences or 
catastrophes beyond its control. 
    Sec. 18.  Minnesota Statutes 1990, section 240.13, 
subdivision 2, is amended to read: 
    Subd. 2.  [REQUIREMENTS.] A licensee conducting pari-mutuel 
betting must provide at the licensed track or at the teleracing 
facility:  
    (a) the necessary equipment for issuing pari-mutuel 
tickets; and 
    (b) mechanical or electronic equipment for displaying 
information the commission requires.  All mechanical or 
electronic devices must be approved by the commission before 
being used.  
    Sec. 19.  Minnesota Statutes 1990, section 240.13, 
subdivision 3, is amended to read: 
    Subd. 3.  [TYPES OF BETTING.] The commission shall by rule 
designate those types of pari-mutuel pools which are permitted 
at licensed racetracks and teleracing facilities, and no 
licensee may conduct any type of pari-mutuel pool which has not 
been so designated, except as provided for in subdivision 
6a.  Pari-mutuel pools permitted at licensed racetracks and 
pari-mutuel pools designated by the commission are permitted at 
teleracing facilities. 
    Sec. 20.  Minnesota Statutes 1990, section 240.13, 
subdivision 4, is amended to read: 
    Subd. 4.  [TAKEOUT; DISTRIBUTION OF WINNINGS.] A licensee 
conducting pari-mutuel betting must deduct from a straight 
pari-mutuel pool, before payments to holders of winning tickets, 
an amount equal to not more than 17 percent of the total money 
in that pool.  The licensee must deduct from a multiple 
pari-mutuel pool, before payments to the holders of winning 
tickets, an amount equal to not more than 23 percent of the 
total money in that pool.  The remaining money in each pool must 
be distributed among the holders of winning tickets in a manner 
the commission by rule prescribes for each type of pool.  
Breakage must be computed on the basis of payoffs rounded down 
to the next lowest increment of 20 10 cents, with a minimum 
payoff of $2.20 $1.10 on a $2 $1 ticket, except that the 
licensee may reduce the minimum payoff to $2.10 $1.05 on a $2 $1 
ticket if there is not a sufficient amount in a pool to make a 
minimum payoff of $2.20 $1.10.  
    Sec. 21.  Minnesota Statutes 1990, section 240.13, 
subdivision 5, is amended to read: 
    Subd. 5.  [PURSES.] (a) From the amounts deducted from all 
pari-mutuel pools by a licensee, an amount equal to not less 
than the following percentages of all money in all pools must be 
set aside by the licensee and used for purses for races 
conducted by the licensee, provided that a licensee may agree by 
contract with an organization representing a majority of the 
horsepersons racing the breed involved to set aside amounts in 
addition to the following percentages: 
    (1) For a licensee conducting a racing meeting with an 
average daily handle of $500,000 or less, four percent of the 
average daily handle times the number of racing days in that 
meeting. 
    (2) For a licensee conducting a racing meeting with an 
average daily handle of more than $500,000 but not more than 
$750,000, six percent of the average daily handle times the 
number of racing days in that meeting. 
    (3) For a licensee conducting a racing meeting with an 
average daily handle of more than $750,000, 8.4 percent of the 
first $1 million in average daily handle times the number of 
racing days in that meeting. 
    (1) for live races conducted at a class A facility, and for 
races that are part of full racing card simulcasting or full 
racing card telerace simulcasting that takes place within the 
time period of the live races, 8.4 percent; 
    (2) for simulcasts and telerace simulcasts conducted during 
the racing season other than as provided for in clause (1), 50 
percent of the takeout remaining after deduction for taxes on 
pari-mutuel pools, payment to the breeders fund, and payment to 
the sending out-of-state racetrack for receipt of the signal; 
and 
    (3) for simulcasts and telerace simulcasts conducted 
outside of the racing season, 25 percent of the takeout 
remaining after deduction for the state pari-mutuel tax, payment 
to the breeders fund, payment to the sending out-of-state 
racetrack for receipt of the signal and, before January 1, 2005, 
a further deduction of eight percent of all money in all pools; 
provided, however, that in the event that wagering on simulcasts 
and telerace simulcasts outside of the racing season exceeds 
$125 million in any calendar year, the amount set aside for 
purses by this formula is increased to 30 percent on amounts 
between $125,000,000 and $150,000,000 wagered; 40 percent on 
amounts between $150,000,000 and $175,000,000 wagered; and 50 
percent on amounts in excess of $175,000,000 wagered.  In lieu 
of the eight percent deduction, a deduction as agreed to between 
the licensee and the horsepersons' organization representing the 
majority of horsepersons racing at the licensee's class A 
facility during the preceding 12 months, is allowed after 
December 31, 2004.  
    The commission may by rule provide for the administration 
and enforcement of this subdivision.  The deductions for payment 
to the sending out-of-state racetrack must be actual, except 
that when there exists any overlap of ownership, control, or 
interest between the sending out-of-state racetrack and the 
receiving licensee, the deduction must not be greater than three 
percent unless agreed to between the licensee and the 
horsepersons' organization representing the majority of 
horsepersons racing the breed racing the majority of races 
during the existing racing meeting or, if outside of the racing 
season, during the most recent racing meeting.  
    In lieu of the amount the licensee must pay to the 
commission for deposit in the Minnesota breeders fund under 
section 240.15, subdivision 1, the licensee shall pay 5-1/2 
percent of the takeout from all pari-mutuel pools generated by 
wagering at the licensee's facility on full racing card 
simulcasts and full racing card telerace simulcasts of races not 
conducted in this state. 
    (b) From the money set aside for purses, the licensee shall 
pay to the horseperson's organization representing the majority 
of the horsepersons racing the breed involved and contracting 
with the licensee with respect to purses and the conduct of the 
racing meetings and providing representation, benevolent 
programs, benefits, and services for horsepersons and their 
on-track employees, an amount, sufficient to perform these 
services, as may be determined by agreement by the licensee and 
the horseperson's organization.  The amount paid may be deducted 
only from the money set aside for purses to be paid in races for 
the breed represented by the horseperson's organization.  With 
respect to racing meetings where more than one breed is racing, 
the licensee may contract independently with the horseperson's 
organization representing each breed racing. 
    (c) Notwithstanding sections 325D.49 to 325D.66, a 
horseperson's organization representing the majority of the 
horsepersons racing a breed at a meeting, and the members 
thereof, may agree to withhold horses during a meeting. 
    (d) Money set aside for purses from wagering, during the 
racing season, on simulcasts and telerace simulcasts must be 
used for purses for live races conducted at the licensee's class 
A facility during the same racing season, over and above the 8.4 
percent purse requirement or any higher requirement to which the 
parties agree, for races conducted in this state.  Money set 
aside for purses from wagering, outside of the racing season, on 
simulcasts and telerace simulcasts must be for purses for live 
races conducted at the licensee's class A facility during the 
next racing season, over and above the 8.4 percent purse 
requirement or any higher requirement to which the parties 
agree, for races conducted in this state. 
    (e) Money set aside for purses from wagering on simulcasts 
and telerace simulcasts must be used for purses for live races 
involving the same breed involved in the simulcast or telerace 
simulcast except that money set aside for purses and payments to 
the breeders fund from wagering on full racing card simulcasts 
and full racing card telerace simulcasts of races not conducted 
in this state, occurring during a live mixed meet, must be 
allotted to the purses and breeders fund for each breed 
participating in the mixed meet in the same proportion that the 
number of live races run by each breed bears to the total number 
of live races conducted during the period of the mixed meet. 
    (f) The allocation of money set aside for purses to 
particular racing meets may be adjusted, relative to 
overpayments and underpayments, by contract between the licensee 
and the horsepersons' organization representing the majority of 
horsepersons racing the breed involved at the licensee's 
facility.  
    (g) Subject to the provisions of this chapter, money set 
aside from pari-mutuel pools for purses must be for the breed 
involved in the race that generated the pool, except that if the 
breed involved in the race generating the pari-mutuel pool is 
not racing in the current racing meeting, or has not raced 
within the preceding 12 months at the licensee's class A 
facility, money set aside for purses must be distributed 
proportionately to those breeds that have run during the 
preceding 12 months. 
    Sec. 22.  Minnesota Statutes 1990, section 240.13, 
subdivision 6, is amended to read: 
    Subd. 6.  [TELEVISED RACES SIMULCASTING.] (a) The 
commission may by rule permit a class B or class D licensee to 
conduct on the premises of the licensed racetrack pari-mutuel 
betting on horse races run in other states and broadcast by 
television on the premises.  All provisions of law governing 
pari-mutuel betting apply to pari-mutuel betting on televised 
races except as otherwise provided in this subdivision or in the 
commission's rules. Pari-mutuel pools conducted on such 
televised races may consist only of money bet on the premises 
and may not be commingled with any other pool off the premises, 
except that:  
    (1) the licensee may pay a fee to the person or entity 
conducting the race for the privileges of conducting pari-mutuel 
betting on the race; and 
    (2) the licensee may pay the costs of transmitting the 
broadcast of the race.  
    (b) Pari-mutuel betting on a televised race may be 
conducted only on a racing day assigned by the commission.  The 
takeout and taxes on pari-mutuel pools on televised races are as 
provided for other pari-mutuel pools.  All televised races under 
this subdivision must comply with the Interstate Horse Racing 
Act of 1978 as found in United States Code, title 15, section 
3001 and the following relevant sections.  In lieu of the purse 
requirement established by subdivision 5, the licensee shall set 
aside for purses one-half of the take-out from the amount bet on 
televised races after the payment of fees and taxes.  For the 
purposes of purse distribution under subdivision 5, the average 
daily handle shall not include amounts bet in pari-mutuel pools 
on televised races. 
    (c) A licensee may, with the approval of the commission, 
transmit telecasts of races the licensee conducts, for wagering 
purposes, to a location outside the state.  The commission may 
allow the licensee to commingle its wagering pools with the 
wagering pools at a facility located outside of this state that 
is regulated by a state racing commission, when it transmits 
telecasts under this paragraph.  The commission may permit an 
authorized licensee to conduct simulcasting or telerace 
simulcasting at the licensee's facility on any day authorized by 
the commission.  All simulcasts and telerace simulcasts must 
comply with the Interstate Horse Racing Act of 1978, United 
States Code, title 15, sections 3001 to 3007.  In addition to 
teleracing programs featuring live racing conducted at the 
licensee's class A facility, the class E licensee may conduct 
not more than seven teleracing programs per week during the 
racing season, unless additional telerace simulcasting is 
authorized by the director and approved by the horsepersons' 
organization representing the majority of horsepersons racing 
the breed racing the majority of races at the licensee's class A 
facility during the preceding 12 months.  The commission may not 
authorize any day for simulcasting at a class A facility during 
the racing season, and a licensee may not be allowed to transmit 
out-of-state telecasts of races the licensee conducts, unless 
the licensee has obtained the approval of the horsepersons' 
organization representing the majority of the horsepersons 
racing the breed involved at the licensed racetrack during the 
preceding 12 months.  The licensee may pay fees and costs to an 
entity transmitting a telecast of a race to the licensee for 
purposes of conducting pari-mutuel wagering on the race.  The 
licensee may deduct fees and costs related to the receipt of 
televised transmissions from a pari-mutuel pool on the televised 
race, provided that one-half of any amount recouped in this 
manner must be added to the amounts required to be set aside for 
purses. 
    With the approval of the commission and subject to the 
provisions of this subdivision, a licensee may transmit 
telecasts of races it conducts, for wagering purposes, to 
locations outside the state, and the commission may allow this 
to be done on a commingled pool basis.  
    Except as otherwise provided in this section, simulcasting 
and telerace simulcasting may be conducted on a separate pool 
basis or, with the approval of the commission, on a commingled 
pool basis.  All provisions of law governing pari-mutuel betting 
apply to simulcasting and telerace simulcasting except as 
otherwise provided in this subdivision or in the commission's 
rules.  If pools are commingled, wagering at the licensed 
facility must be on equipment electronically linked with the 
equipment at the licensee's class A facility or with the sending 
racetrack via the totalizator computer at the licensee's class A 
facility.  Subject to the approval of the commission, the types 
of betting, takeout, and distribution of winnings on commingled 
pari-mutuel pools are those in effect at the sending racetrack.  
Breakage for pari-mutuel pools on a televised race must be 
calculated in accordance with the law or rules governing the 
sending racetrack for these pools, and must be distributed in a 
manner agreed to between the licensee and the sending 
racetrack.  Notwithstanding sections 240.13, subdivision 7, and 
240.15, subdivision 5, the commission may approve procedures 
governing the definition and disposition of unclaimed tickets 
that are consistent with the law and rules governing unclaimed 
tickets at the sending racetrack.  For the purposes of this 
section, "sending racetrack" is either the racetrack outside of 
this state where the horse race is conducted or, with the 
consent of the racetrack, an alternative facility that serves as 
the racetrack for the purpose of commingling pools.  
    If there is more than one class B licensee conducting 
racing within the seven-county metropolitan area, simulcasting 
and telerace simulcasting may be conducted only on races run by 
a breed that ran at the licensee's class A facility within the 
12 months preceding the event.  That portion of the takeout 
allocated for purses from pari-mutuel pools generated by 
wagering on standardbreds must be set aside and must be paid to 
the racing commission and used for purses as otherwise provided 
by this section or to promote standardbred racing or both, in a 
manner prescribed by the commission.  In the event that a 
licensee conducts live standardbred racing, pools generated by 
live, simulcast, or telerace simulcasting at the licensee's 
facilities on standardbred racing are subject to the purse set 
aside requirements otherwise provided by law.  
    Contractual agreements between licensees and horsepersons' 
organizations entered into before the effective date of this 
subdivision, regarding money to be set aside for purses from 
pools generated by simulcasts at a class A facility, are 
controlling regarding purse requirements through the end of the 
1992 racing season. 
    Sec. 23.  Minnesota Statutes 1990, section 240.13, 
subdivision 8, is amended to read: 
    Subd. 8.  [PROHIBITED ACTS.] A licensee may not accept a 
bet from any person under the age of 18 years; and a licensee 
may not accept a bet of less than $2 $1.  
    Sec. 24.  Minnesota Statutes 1990, section 240.15, 
subdivision 6, is amended to read: 
    Subd. 6.  [DISPOSITION OF PROCEEDS.] The commission shall 
distribute all money received under this section, and all money 
received from license fees and fines it collects, as follows: 
all money designated for deposit in the Minnesota breeders fund 
must be paid into that fund for distribution under section 
240.18 except that all money generated by full racing card 
simulcasts, or full racing card telerace simulcasts of races not 
conducted in this state, must be distributed as provided in 
section 240.18, clause (2), paragraphs (a), (b), and (c).  
Revenue from an admissions tax imposed under subdivision 1 must 
be paid to the local unit of government at whose request it was 
imposed, at times and in a manner the commission determines.  
All other revenues received under this section by the 
commission, and all license fees, fines, and other revenue it 
receives, must be paid to the state treasurer for deposit in the 
general fund. 
    Sec. 25.  Minnesota Statutes 1990, section 240.16, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [TELEVISED RACING DAY SIMULCAST.] All races on 
which pari-mutuel betting is conducted on televised racing days 
must be presided over by an official of the commission.  The 
official of the commission presiding over races conducted on 
televised racing days has the powers and duties as provided by 
rule.  All simulcasts and telerace simulcasts are subject to the 
regulation of the commission.  The commission may assign an 
official to preside over these activities and, if so assigned, 
the official has the powers and duties provided by rule. 
    Sec. 26.  Minnesota Statutes 1990, section 240.19, is 
amended to read: 
    240.19 [CONTRACTS.] 
    The commission shall by rule require that all contracts 
entered into by a class A, class B, or class D, or class E 
licensee for the provision of goods or services, including 
concessions contracts, be subject to commission approval.  The 
rules must require that the contract include an affirmative 
action plan establishing goals and timetables consistent with 
the Minnesota Human Rights Act, chapter 363.  The commission may 
require a contract holder to submit to it documents and records 
the commission deems necessary to evaluate the contract.  
    Sec. 27.  Minnesota Statutes 1990, section 240.23, is 
amended to read: 
    240.23 [RULEMAKING AUTHORITY.] 
    The commission has the authority, in addition to all other 
rulemaking authority granted elsewhere in Laws 1983, this 
chapter 214, to promulgate rules governing:  
    (a) the conduct of horse races held at licensed racetracks 
in Minnesota, including but not limited to the rules of racing, 
standards of entry, operation of claiming races, filing and 
handling of objections, carrying of weights, and declaration of 
official results; 
    (b) wire communications between the premises of a licensed 
racetrack and any place outside the premises; 
    (c) information on horse races which is sold on the 
premises of a licensed racetrack; 
    (d) liability insurance which it may require of all class 
A, class B, and class D, and class E licensees; 
    (e) the auditing of the books and records of a licensee by 
an auditor employed or appointed by the commission; 
    (f) emergency action plans maintained by licensed 
racetracks and their periodic review; 
    (g) safety, security, and sanitation of stabling facilities 
at licensed racetracks; 
    (h) entry fees and other funds received by a licensee in 
the course of conducting racing which the commission determines 
must be placed in escrow accounts; and 
    (i) the operation of teleracing facilities; and 
    (j) any other aspect of horse racing or pari-mutuel betting 
which in its opinion affects the integrity of racing or the 
public health, welfare, or safety. 
    Rules of the commission are subject to chapter 14, the 
Administrative Procedure Act.  
    Sec. 28.  Minnesota Statutes 1990, section 240.25, 
subdivision 2, is amended to read: 
    Subd. 2.  [OFF-TRACK BETS.] (a) No person shall: 
    (1) for a fee, directly or indirectly, accept anything of 
value from another to be transmitted or delivered for wager in 
any licensed pari-mutuel system of wagering on horse races, or 
for a fee deliver anything of value which has been received 
outside of the enclosure of a licensed racetrack holding a race 
meet licensed under this chapter or a teleracing facility, to be 
placed as wagers in the pari-mutuel system of wagering on horse 
racing within the enclosure or facility; or 
    (2) give anything of value to be transmitted or delivered 
for wager in any licensed pari-mutuel system of wagering on 
horse races to another who charges a fee, directly or 
indirectly, for the transmission or delivery. 
    (b) Nothing in this subdivision prohibits the conducting of 
pari-mutuel wagering at a licensed teleracing facility.  
    Sec. 29.  Minnesota Statutes 1990, section 240.27, is 
amended to read: 
    240.27 [EXCLUSION OF CERTAIN PERSONS.] 
    Subdivision 1.  [PERSONS EXCLUDED.] The commission may 
exclude from any and all licensed racetracks or licensed 
teleracing facilities in the state a person who:  
    (a) has been convicted of a felony under the laws of any 
state or the United States; 
    (b) has had a license suspended, revoked, or denied by the 
commission or by the racing authority of any other jurisdiction; 
or 
    (c) is determined by the commission, on the basis of 
evidence presented to it, to be a threat to the integrity of 
racing in Minnesota.  
    Subd. 2.  [HEARING; APPEAL.] An order to exclude a person 
from any or all licensed racetracks or licensed teleracing 
facilities in the state must be made by the commission at a 
public hearing of which the person to be excluded must have at 
least five days' notice.  If present at the hearing, the person 
must be permitted to show cause why the exclusion should not be 
ordered.  An appeal of the order may be made in the same manner 
as other appeals under section 240.20. 
    Subd. 3.  [NOTICE TO RACETRACKS.] Upon issuing an order 
excluding a person from any or all licensed racetracks or 
licensed teleracing facilities, the commission shall send a copy 
of the order to the excluded person and to all racetracks or 
teleracing facilities named in it, along with other information 
as it deems necessary to permit compliance with the order.  
    Subd. 4.  [PROHIBITIONS.] It is a gross misdemeanor for a 
person named in an exclusion order to enter, attempt to enter, 
or be on the premises of a racetrack or a teleracing facility 
named in the order while it is in effect, and for a person 
licensed to conduct racing or operate a racetrack or a 
teleracing facility knowingly to permit an excluded person to 
enter or be on the premises.  
    Subd. 5.  [EXCLUSIONS BY RACETRACK.] The holder of a 
license to conduct racing or operate a teleracing facility may 
eject and exclude from its premises any licensee or any other 
person who is in violation of any state law or commission rule 
or order or who is a threat to racing integrity or the public 
safety.  A person so excluded from racetrack premises or 
teleracing facility may appeal the exclusion to the commission 
and must be given a public hearing on the appeal upon request.  
At the hearing the person must be given the opportunity to show 
cause why the exclusion should not have been ordered.  If the 
commission after the hearing finds that the integrity of racing 
and the public safety do not justify the exclusion, it shall 
order the racetrack or teleracing facility making the exclusion 
to reinstate or readmit the person.  An appeal of a commission 
order upholding the exclusion is governed by section 240.20. 
    Sec. 30.  Minnesota Statutes 1990, section 240.28, 
subdivision 1, is amended to read: 
    Subdivision 1.  [FINANCIAL INTEREST.] No person may serve 
on the commission or be employed by the division who has an 
interest in any corporation, association, or partnership which 
holds a license from the commission or which holds a contract to 
supply goods or services to a licensee or at a licensed 
racetrack or a licensed teleracing facility, including 
concessions contracts.  No member of the commission or employee 
of the division may own, wholly or in part, or have an interest 
in a horse which races at a licensed racetrack in Minnesota.  No 
member of the commission or employee of the division may have a 
financial interest in or be employed in a profession or business 
which conflicts with the performance of duties as a member or 
employee. 
    Sec. 31.  Minnesota Statutes 1990, section 240.29, is 
amended to read: 
    240.29 [REQUIRED RACES.] 
    Each holder of a class B or D license must declare and 
schedule, on each racing day it conducts, except for televised 
racing days, at least one race which: 
    (a) before January 1, 1988, is limited to horses which are 
Minnesota-bred, Minnesota-foaled, or Minnesota-owned, and 
    (b) on and after January 1, 1988, is limited to horses 
which are Minnesota-bred or Minnesota-foaled. 
    If there is not a sufficient number of such horses entered 
in the declared race to make up an adequate slate of entries, 
another similarly restricted race may be substituted. 
    The commission shall by rule define "Minnesota-bred," 
"Minnesota-foaled," and "Minnesota-owned." 
    Sec. 32.  [APPROPRIATION.] 
    $234,000 is appropriated from the general fund to the 
racing commission to license teleracing facilities.  $88,000 is 
for fiscal year 1992 and $146,000 is for fiscal year 1993.  The 
approved complement of the racing commission is increased by two 
positions in fiscal year 1992 and one additional position in 
fiscal year 1993. 
    Sec. 33.  [REPEALER.] 
    Minnesota Statutes 1990, sections 240.01, subdivision 13; 
240.13, subdivision 6a; and 240.14, subdivision 1a, are repealed.
    Sec. 34.  [SEVERABILITY.] 
    If article 1 is found unconstitutional, that finding does 
not affect the constitutionality of article 2. 
    Sec. 35.  [EFFECTIVE DATE.] 
    Sections 1 to 31, 33, and 34 are effective the day 
following the final enactment. 

                                ARTICLE 2

                              MISCELLANEOUS
    Section 1.  Minnesota Statutes 1990, section 3.9221, is 
amended by adding a subdivision to read: 
    Subd. 5.  [REPORT.] The governor, the attorney general, and 
the governor's designated representatives shall report to the 
house and senate committees having jurisdiction over gambling 
regulation semiannually.  This report shall contain information 
on compacts negotiated, and an outline of prospective 
negotiations. 
    Sec. 2.  Minnesota Statutes 1990, section 240.02, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPENSATION.] The compensation of commission 
members is $35 per day for time spent on commission activities, 
when authorized by the commission, is the same as the 
compensation provided for members of other boards and 
commissions under section 15.0575, subdivision 3, plus expenses 
in the same manner and amount as provided in the commissioner's 
plan adopted according to section 43A.18, subdivision 2.  
    Sec. 3.  Minnesota Statutes 1990, section 240.09, 
subdivision 2, is amended to read: 
    Subd. 2.  [OCCUPATIONAL LICENSES.] A person who 
participates in the management or conduct of horse racing or 
pari-mutuel betting for a county fair holding a class D license 
who is in an occupation listed in section 240.08, subdivision 1, 
or the rules of the commission must have a class C license from 
the commission except for active members, as defined in section 
349.12, of nonprofit organizations who act without compensation 
as concession workers or pari-mutuel clerks. 
    Sec. 4.  Minnesota Statutes 1990, section 240.13, 
subdivision 2, is amended to read: 
    Subd. 2.  [REQUIREMENTS.] (a) A licensee conducting 
pari-mutuel betting must provide at the licensed track:  
    (a) (1) the necessary equipment for issuing pari-mutuel 
tickets; and 
    (b) (2) mechanical or electronic equipment for displaying 
information the commission requires.  All mechanical or 
electronic devices must be approved by the commission before 
being used.  
    (b) A licensee conducting pari-mutuel betting must post 
prominently at each point of sale of pari-mutuel tickets, in a 
manner approved by the commissioner of human services, the 
toll-free telephone number established by the commissioner of 
human services in connection with the compulsive gambling 
program established under section 245.98.  
     Sec. 5.  Minnesota Statutes 1990, section 240.18, is 
amended to read: 
    240.18 [BREEDERS' FUND.] 
    Subdivision 1.  [ESTABLISHMENT; APPORTIONMENT.] The 
commission shall establish a Minnesota breeders' fund with the 
money paid to it under section 240.15, subdivision 1.  The 
commission, after paying the current costs of administering the 
fund, shall apportion the remaining net proceeds into categories 
corresponding with the various breeds of horses which are racing 
at licensed Minnesota racetracks in proportion to each 
category's contribution to the fund and distribute the available 
net proceeds in each category as follows: provided in this 
section. 
    (1) Subd. 2.  [THOROUGHBRED AND QUARTERHORSE 
CATEGORIES.] (a) With respect to available money apportioned in 
the thoroughbred and quarterhorse categories, 20 percent must be 
expended as grants for equine research and related education at 
public institutions of post-secondary learning within the state. 
follows: 
    (1) at least one-half in the form of grants, contracts, or 
expenditures for equine research and related education at the 
University of Minnesota school of veterinary medicine; and 
    (2) the balance in the form of grants, contracts, or 
expenditures for one or more of the following: 
    (i) additional equine research and related education; 
    (ii) substance abuse programs for licensed personnel at 
racetracks in this state; and 
    (iii) promotion and public information regarding industry 
and commission activities; racehorse breeding, ownership, and 
management; and development and expansion of economic benefits 
from racing. 
    (b) As a condition of a grant, contract, or expenditure 
under paragraph (a), the commission shall require an annual 
report from the recipient on the use of the funds to the 
commission, the chair of the house of representatives committee 
on general legislation, veterans affairs, and gaming, and the 
chair of the senate committee on gaming regulation. 
    (c) The commission shall include in its annual report a 
summary of each grant, contract, or expenditure under paragraph 
(a), clause (2), and a description of how the commission has 
coordinated activities among recipients to ensure the most 
efficient and effective use of funds. 
    (2) (d) After deducting the amount for paragraph (1) (a), 
the balance of the available proceeds in each category may be 
expended by the commission to:  
    (a) (1) supplement purses for races held exclusively for 
Minnesota-bred or Minnesota-foaled horses, and supplement purses 
for Minnesota-bred or Minnesota-foaled horses racing in 
nonrestricted races in that category; 
    (b) (2) pay breeders' or owners' awards to the breeders or 
owners of Minnesota-bred horses in that category which win money 
at licensed racetracks in the state; and 
    (c) (3) provide other financial incentives to encourage the 
horse breeding industry in Minnesota. 
    (3) Subd. 3.  [STANDARDBRED CATEGORY.] (a) With respect to 
the available money apportioned in the standardbred category, 20 
percent must be expended as follows: 
    (a) (1) one-half of that amount to supplement purses for 
standardbreds at non-pari-mutuel racetracks in the state; 
    (b) (2) one-fourth of that amount for the development of 
non-pari-mutuel standardbred tracks in the state; and 
    (c) (3) one-fourth of that amount as grants for equine 
research and related education at public institutions of 
post-secondary learning in the state. 
    (4) (b) After deducting the amount for paragraph (3) (a), 
the balance of the available proceeds in the standardbred 
category must be expended by the commission to: 
    (a) (1) supplement purses for races held exclusively for 
Minnesota-bred and Minnesota-foaled standardbreds; 
    (b) (2) pay breeders or owners awards to the breeders or 
owners of Minnesota-bred standardbreds which win money at 
licensed racetracks in the state; and 
    (c) (3) provide other financial incentives to encourage the 
horse breeding industry in Minnesota. 
    Subd. 4.  [RULES; ADVISORY COMMITTEES.] The commission 
shall adopt rules governing the distribution of the fund.  The 
commission may establish advisory committees to advise it on the 
distribution of money under this section, provided that the 
members of an advisory committee shall serve without 
compensation. 
    Sec. 6.  Minnesota Statutes 1990, section 240.24, 
subdivision 2, is amended to read: 
    Subd. 2.  [EXCEPTION.] Notwithstanding subdivision 1, the 
commission by rule shall allow the use of:  (1) topical external 
applications that do not contain anesthetics or steroids; (2) 
food additives; (3) Furosemide or other pulmonary hemostatic 
agents if the agents are administered under the visual 
supervision of the veterinarian or assistant a designee of the 
veterinarian employed by the commission; and (4) nonsteroidal 
anti-inflammatory drugs, provided that the test sample does not 
contain more than three micrograms of the substance or 
metabolites thereof per milliliter of blood plasma.  For 
purposes of this clause, "test sample" means any bodily 
substance including blood, urine, saliva, or other substance as 
directed by the commission, taken from a horse under the 
supervision of the commission veterinarian and in such manner as 
prescribed by the commission for the purpose of analysis. 
    The commission shall adopt emergency rules to implement the 
provisions of this subdivision. 
    Sec. 7.  Minnesota Statutes 1990, section 245.98, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [ASSESSMENT OF CERTAIN OFFENDERS.] The 
commissioner shall adopt by rule criteria to be used in 
conducting compulsive gambling assessments of offenders under 
section 42.  The commissioner shall also adopt by rule standards 
to qualify a person to:  (1) assess offenders for compulsive 
gambling treatment; and (2) provide treatment indicated in a 
compulsive gambling assessment.  The rules must specify the 
circumstances in which, in the absence of an independent 
assessor, the assessment may be performed by a person with a 
direct or shared financial interest or referral relationship 
resulting in shared financial gain with a treatment provider. 
    Sec. 8.  Minnesota Statutes 1990, section 299L.01, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
chapter, the terms defined in this subdivision have the meanings 
given them. 
    (b) "Division" means the division of gambling enforcement.  
    (c) "Commissioner" means the commissioner of public safety. 
    (d) "Director" means the director of gambling enforcement.  
    (e) "Manufacturer" means a person who assembles from raw 
materials or subparts a gambling device for sale or use in 
Minnesota. 
    (f) "Distributor" means a person who sells, offers to sell, 
or otherwise provides a gambling device to a person in Minnesota.
    Sec. 9.  [299L.07] [GAMBLING DEVICES.] 
    Subdivision 1.  [RESTRICTION.] A person may not 
manufacture, sell, offer to sell, or otherwise provide, in whole 
or in part, a gambling device as defined in sections 349.30, 
subdivision 2, and 609.75, subdivision 4, except that a gambling 
device may be: 
    (1) manufactured as provided in section 349.40; 
    (2) sold, offered for sale, or otherwise provided to a 
distributor licensed under subdivision 3; 
    (3) sold, offered for sale, or otherwise provided to the 
governing body of a federally recognized Indian tribe that is 
authorized to operate the gambling device under a tribal-state 
compact under the Indian Gaming Regulatory Act, United States 
Code, title 25, sections 2701 to 2721; 
    (4) sold, offered for sale, or otherwise provided to a 
person for use in the person's dwelling for display or amusement 
purposes in a manner that does not afford players an opportunity 
to obtain anything of value; or 
    (5) sold by a person who is not licensed under this section 
and who is not engaged in the trade or business of selling 
gambling devices, if the person does not sell more than one 
gambling device in any calendar year.  
    Subd. 2.  [LICENSE REQUIRED.] A person may not manufacture 
or distribute gambling devices without having obtained a license 
under this section.  
    Subd. 3.  [LICENSE ISSUANCE.] The commissioner may issue a 
license under this section if the commissioner determines that 
the applicant will conduct the business in a manner that will 
not adversely affect the public health, welfare, and safety or 
be detrimental to the effective regulation and control of 
gambling.  A license may not be issued under this section to a 
person, or a corporation, firm, or partnership that has an 
officer, director, or other person with a direct or indirect 
financial or management interest of five percent or more, who 
has ever: 
    (1) been convicted of a felony; 
    (2) been convicted of a crime involving gambling; 
    (3) been connected with or engaged in an illegal business; 
or 
    (4) had a license revoked or denied by another jurisdiction 
for a violation of law or rule related to gambling. 
    Subd. 4.  [APPLICATION.] An application for a 
manufacturer's or distributor's license must be on a form 
prescribed by the commissioner and must, at a minimum, contain: 
    (1) the name and address of the applicant and, if it is a 
corporation, the names of all officers, directors, and 
shareholders with a financial interest of five percent or more; 
    (2) the names and addresses of any holding corporation, 
subsidiary, or affiliate of the applicant, without regard to 
whether the holding corporation, subsidiary, or affiliate does 
business in Minnesota; and 
    (3) if the applicant does not maintain a Minnesota office, 
an irrevocable consent statement signed by the applicant, 
stating that suits and actions relating to the subject matter of 
the application or acts of omissions arising from it may be 
commenced against the applicant in a court of competent 
jurisdiction in this state by service on the secretary of state 
of any summons, process, or pleadings authorized by the laws of 
this state.  If any summons, process, or pleading is served upon 
the secretary of state, it must be by duplicate copies.  One 
copy must be retained in the office of the secretary of state 
and the other copy must be forwarded immediately by certified 
mail to the address of the applicant, as shown on the 
application.  
    Subd. 5.  [INVESTIGATION.] Before a manufacturer's or 
distributor's license is granted, the director may conduct a 
background and financial investigation of the applicant, 
including the applicant's sources of financing.  The director 
may, or shall when required by law, require that fingerprints be 
taken and the director may forward the fingerprints to the 
Federal Bureau of Investigation for a national criminal history 
check.  The director may charge an investigation fee to cover 
the cost of the investigation. 
    Subd. 6.  [LICENSE FEES.] (a) A license issued under this 
section is valid for one year. 
    (b) For a person who distributes 100 or fewer used gambling 
devices per year, the fee is $1,500.  For a person who 
distributes more than 100 used gambling devices per year, the 
fee is $2,000.  For purposes of this subdivision, a used 
gambling device is a gambling device five or more years old. 
    (c) For a person who manufactures or distributes 100 or 
fewer new, or new and used gambling devices in a year, the fee 
is $5,000.  For a person who manufactures or distributes more 
than 100 new, or new and used gambling devices in a year, the 
fee is $7,500. 
    Subd. 7.  [RENEWAL.] Upon making the same determination as 
in subdivision 3, the commissioner may renew a license issued 
under this section. 
    Subd. 8.  [LICENSE SUSPENSION AND REVOCATION.] (a) The 
commissioner may suspend a license under this section for a 
violation of law or rule.  The commissioner may revoke a license:
    (1) for a violation of law or rule which, in the 
commissioner's opinion, adversely affects the integrity of 
gambling in Minnesota; 
    (2) for an intentional false statement in a license 
application; or 
    (3) if the licensee is the subject of a disciplinary 
proceeding in another jurisdiction which results in the 
revocation of a license. 
    A revocation or suspension is a contested case under 
sections 14.57 to 14.69. 
    (b) The commissioner may summarily suspend a license prior 
to a contested case hearing if the commissioner determines that 
a summary suspension is necessary to ensure the integrity of 
gambling.  A contested case hearing must be held within 20 days 
of the summary suspension and the administrative law judge must 
issue a report within 20 days of the close of the hearing 
record.  The commissioner shall issue a final decision within 30 
days from receipt of the report of the administrative law judge 
and subsequent exceptions and argument under section 14.61. 
     Subd. 9.  [REQUIRED INFORMATION.] A person to whom a 
license is issued under this section shall provide, in a manner 
prescribed by the commissioner, information required by the 
commissioner relating to the shipment and sale of gambling 
devices. 
    Subd.  10.  [TRANSPORTATION OF GAMBLING DEVICES.] In 
addition to the requirements of this section, the transportation 
of gambling devices into Minnesota must be in compliance with 
United States Code, title 15, sections 1171 to 1177, as amended. 
    Sec. 10.  Minnesota Statutes 1990, section 349.12, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [ALLOWABLE EXPENSE.] "Allowable expense" means 
an expense directly related to the conduct of lawful gambling. 
    Sec. 11.  Minnesota Statutes 1990, section 349.12, 
subdivision 25, is amended to read: 
    Subd. 25.  (a) "Lawful purpose" means one or more of the 
following:  
    (1) any expenditure by or contribution to a 501(c)(3) 
organization, provided that the organization and expenditure or 
contribution are in conformity with standards prescribed by the 
board under section 349.154; 
    (2) a contribution to an individual or family suffering 
from poverty, homelessness, or physical or mental disability, 
which is used to relieve the effects of that poverty, 
homelessness, or disability; 
    (3) a contribution to an individual for treatment for 
delayed posttraumatic stress syndrome or a contribution to a 
recognized program for the treatment of compulsive gambling on 
behalf of an individual who is a compulsive gambler; 
    (4) a contribution to or expenditure on a public or private 
nonprofit educational institution registered with or accredited 
by this state or any other state; 
    (5) a contribution to a scholarship fund for defraying the 
cost of education to individuals where the funds are awarded 
through an open and fair selection process; 
    (6) activities by an organization or a government entity 
which recognize humanitarian or military service to the United 
States, the state of Minnesota, or a community, subject to rules 
of the board; 
    (7) recreational, community, and athletic facilities and 
activities intended primarily for persons under age 21, provided 
that such facilities and activities do not discriminate on the 
basis of gender, as evidenced by (i) provision of equipment and 
supplies, (ii) scheduling of activities, including games and 
practice times, (iii) supply and assignment of coaches or other 
adult supervisors, (iv) provision and availability of support 
facilities, and (v) whether the opportunity to participate 
reflects each gender's demonstrated interest in the activity, 
provided that nothing in this clause prohibits a contribution to 
or expenditure on an educational institution or other entity 
that is excepted from the prohibition against discrimination 
based on sex contained in the Higher Education Act Amendments of 
1976, United States Code, title 20, section 1681; 
    (8) payment of local taxes authorized under this chapter, 
taxes imposed by the United States on receipts from lawful 
gambling, and the tax imposed by section 349.212, subdivisions 1 
and 4, and the tax imposed on unrelated business income by 
section 290.05, subdivision 3; 
    (9) payment of real estate taxes and assessments on 
licensed gambling premises wholly owned by the licensed 
organization paying the taxes, not to exceed: 
    (i) the amount which an organization may expend under board 
rule on rent for premises used for lawful gambling bingo; or 
    (ii) $15,000 per year for premises used for other forms of 
lawful gambling; 
     (10) a contribution to the United States, this state or any 
of its political subdivisions, or any agency or instrumentality 
thereof other than a direct contribution to a law enforcement or 
prosecutorial agency; or 
    (11) a contribution to or expenditure by a nonprofit 
organization, church, or body of communicants gathered in common 
membership for mutual support and edification in piety, worship, 
or religious observances; or 
    (12) payment of one-half of the reasonable costs of an 
audit required in section 349.19, subdivision 9. 
    (b) Notwithstanding paragraph (a), "lawful purpose" does 
not include: 
    (1) any expenditure made or incurred for the purpose of 
influencing the nomination or election of a candidate for public 
office or for the purpose of promoting or defeating a ballot 
question; 
    (2) any activity intended to influence an election or a 
governmental decision-making process; 
    (3) the erection, acquisition, improvement, expansion, 
repair, or maintenance of real property or capital assets owned 
or leased by an organization, except as provided in clause (6), 
unless the board has first specifically authorized the 
expenditures after finding that (i) the real property or capital 
assets will be used exclusively for one or more of the purposes 
in paragraph (a); (ii) with respect to expenditures for repair 
or maintenance only, that the property is or will be used 
extensively as a meeting place or event location by other 
nonprofit organizations or community or service groups and that 
no rental fee is charged for the use; (iii) with respect to 
expenditures, including a mortgage payment or other debt service 
payment, for erection or acquisition only, that the erection or 
acquisition is necessary to replace with a comparable building, 
a building owned by the organization and destroyed or made 
uninhabitable by fire or natural disaster, provided that the 
expenditure may be only for that part of the replacement cost 
not reimbursed by insurance; or (iv) with respect to 
expenditures, including a mortgage payment or other debt service 
payment, for erection or acquisition only, that the erection or 
acquisition is necessary to replace with a comparable building a 
building owned by the organization that was acquired from the 
organization by eminent domain or sold by the organization to a 
purchaser that the organization reasonably believed would 
otherwise have acquired the building by eminent domain, provided 
that the expenditure may be only for that part of the 
replacement cost that exceeds the compensation received by the 
organization for the building being replaced; 
    (4) an expenditure by an organization which is a 
contribution to a parent organization, foundation, or affiliate 
of the contributing organization, if the parent organization, 
foundation, or affiliate has provided to the contributing 
organization within one year of the contribution any money, 
grants, property, or other thing of value; 
    (5) a contribution by a licensed organization to another 
licensed organization unless the board has specifically 
authorized the contribution.  The board must authorize such a 
contribution when requested to do so by the contributing 
organization unless it makes an affirmative finding that the 
contribution will not be used by the recipient organization for 
one or more of the purposes in paragraph (a); or 
    (6) the erection, acquisition, improvement, or expansion of 
real property or capital assets which will be used for one or 
more of the purposes in paragraph (a), clause (7), unless the 
organization making the expenditures notifies the board at least 
15 days before making the expenditure. 
    Sec. 12.  Minnesota Statutes 1990, section 349.12, is 
amended by adding a subdivision to read: 
    Subd. 30a.  [PROFIT CARRYOVER.] "Profit carryover" means 
cumulative net profit less cumulative lawful purpose 
expenditures.  
    Sec. 13.  Minnesota Statutes 1990, section 349.15, is 
amended to read: 
    349.15 [USE OF GROSS PROFITS.] 
    (a) Gross profits from lawful gambling may be expended only 
for lawful purposes or allowable expenses as authorized at a 
regular meeting of the conducting organization.  Provided that 
no more than 60 percent of the gross profit less the tax imposed 
under section 349.212, subdivision 1, from bingo, and no more 
than 50 percent of the gross profit less the tax imposed by 
section 349.212, subdivision 6, from other forms of lawful 
gambling, may be expended for allowable expenses related to 
lawful gambling.  
    (b) The board shall provide by rule for the administration 
of this section, including specifying allowable expenses.  The 
rules must specify that no more than one-third of the annual 
premium on a policy of liability insurance procured by the 
organization may be taken as an allowable expense.  This expense 
shall be allowed by the board only to the extent that it relates 
directly to the conduct of lawful gambling and is verified in 
the manner the board prescribes by rule.  The rules may provide 
a maximum percentage of gross profits which may be expended for 
certain expenses.  
    (c) Allowable expenses also include reasonable costs of 
bank account service charges, and the reasonable costs of an 
audit required by the board, except an audit required under 
section 349.19, subdivision 9. 
    (d) Allowable expenses include reasonable legal fees and 
damages that relate to the conducting of lawful gambling, except 
for legal fees or damages incurred in defending the organization 
against the board, attorney general, United States attorney, 
commissioner of revenue, or a county or city attorney. 
    Sec. 14.  Minnesota Statutes 1990, section 349.151, 
subdivision 4, is amended to read: 
    Subd. 4.  [POWERS AND DUTIES.] (a) The board has the 
following powers and duties:  
    (1) to regulate lawful gambling to ensure it is conducted 
in the public interest; 
    (2) to issue licenses to organizations, distributors, bingo 
halls, manufacturers, and gambling managers; 
    (3) to collect and deposit license, permit, and 
registration fees due under this chapter; 
    (4) to receive reports required by this chapter and inspect 
all premises, records, books, and other documents of 
organizations, distributors, manufacturers, and bingo halls to 
insure compliance with all applicable laws and rules; 
    (5) to make rules authorized by this chapter; 
    (6) to register gambling equipment and issue registration 
stamps; 
    (7) to provide by rule for the mandatory posting by 
organizations conducting lawful gambling of rules of play and 
the odds and/or house percentage on each form of lawful 
gambling; 
    (8) to report annually to the governor and legislature on 
its activities and on recommended changes in the laws governing 
gambling; 
    (9) to impose civil penalties of not more than $500 per 
violation on organizations, distributors, manufacturers, bingo 
halls, and gambling managers for failure to comply with any 
provision of this chapter or any rule of the board; 
    (10) to issue premises permits to organizations licensed to 
conduct lawful gambling; 
    (11) to delegate to the director the authority to issue 
licenses and premises permits under criteria established by the 
board; 
    (12) to suspend or revoke licenses and premises permits of 
organizations, distributors, manufacturers, bingo halls, or 
gambling managers as provided in this chapter; 
    (13) to register recipients of net profits from lawful 
gambling and to revoke or suspend the registrations; 
    (14) to register employees of organizations licensed to 
conduct lawful gambling; 
    (15) (14) to require fingerprints from persons determined 
by board rule to be subject to fingerprinting; and 
    (16) (15) to take all necessary steps to ensure the 
integrity of and public confidence in lawful gambling.  
    (b) Any organization, distributor, bingo hall operator, or 
manufacturer assessed a civil penalty may request a hearing 
before the board.  Hearings conducted on appeals of imposition 
of penalties are not subject to the provisions of the 
administrative procedure act.  
    (c) All fees and penalties received by the board must be 
deposited in the general fund. 
    Sec. 15.  Minnesota Statutes 1990, section 349.151, is 
amended by adding a subdivision to read: 
    Subd. 4a.  [PADDLEWHEEL RULES.] The board shall promulgate 
rules governing paddlewheels before July 1, 1992.  The rules 
must provide for operation procedures, internal control 
standards, posted information, records, and reports. 
    Sec. 16.  Minnesota Statutes 1990, section 349.154, 
subdivision 2, is amended to read: 
    Subd. 2.  [NET PROFIT REPORTS.] (a) Each licensed 
organization must report monthly to the board on a form 
prescribed by the board each expenditure and contribution of net 
profits from lawful gambling.  The reports must provide for each 
expenditure or contribution: 
    (1) the name, address, and telephone number of the 
recipient of the expenditure or contribution; 
    (2) the date the contribution was approved by the 
organization; 
    (3) the date, amount, and check number of the expenditure 
or contribution; and 
    (4) a brief description of how the expenditure or 
contribution meets one or more of the purposes in section 
349.12, subdivision 25, paragraph (a). 
    (b) Each report required under paragraph (a) must be 
accompanied by an acknowledgment, on a form the board 
prescribes, of each contribution of net profits from lawful 
gambling included in the report.  The acknowledgment must be 
signed by the recipient of the contribution, or, if the 
recipient is not an individual, or other authorized 
representative of the recipient, by an officer.  The 
acknowledgment must include the name and address of the 
contributing organization and each item in paragraph (a), 
clauses (1) to (3).  
    (c) The board shall provide the commissioners of revenue 
and public safety copies of each report received under this 
subdivision. 
    Sec. 17.  Minnesota Statutes 1990, section 349.16, 
subdivision 3, is amended to read: 
    Subd. 3.  [TERM OF LICENSE:  SUSPENSION AND REVOCATION.] 
Licenses issued under this section are valid for one year two 
years and may be suspended by the board for a violation of law 
or board rule or revoked for what the board determines to be a 
willful violation of law or board rule.  A revocation or 
suspension is a contested case under sections 14.57 to 14.69 of 
the administrative procedure act.  
    Sec. 18.  Minnesota Statutes 1990, section 349.163, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [PADDLEWHEEL MORATORIUM.] The board must not 
approve new types of paddlewheel equipment for sale in this 
state until July 1, 1993.  This subdivision applies to new types 
of paddlewheel equipment, samples of which are submitted to the 
board after March 15, 1991. 
    Sec. 19.  Minnesota Statutes 1990, section 349.165, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PREMISES PERMIT REQUIRED; APPLICATION.] A 
licensed organization may not conduct lawful gambling at any 
site unless it has first obtained from the board a premises 
permit for the site.  The board shall prescribe a form for 
permit applications, and each application for a permit must be 
submitted on a separate form.  A premises permit issued by the 
board is valid for two years.  The board may by rule limit the 
number of premises permits that may be issued to an organization.
    Sec. 20.  Minnesota Statutes 1990, section 349.165, 
subdivision 3, is amended to read: 
    Subd. 3.  [FEES.] The board may issue four classes of 
premises permits corresponding to the classes of licenses 
authorized under section 349.16, subdivision 6.  The annual fee 
for each class of permit is: 
    (1) $200 $400 for a class A permit; 
    (2) $125 $250 for a class B permit; 
    (3) $100 $200 for a class C permit; and 
    (4) $75 $150 for a class D permit. 
    Sec. 21.  Minnesota Statutes 1990, section 349.167, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GAMBLING MANAGER REQUIRED.] (a) All lawful 
gambling conducted by a licensed organization must be under the 
supervision of a gambling manager.  A gambling manager 
designated by an organization to supervise lawful gambling is 
responsible for the gross receipts of the organization and for 
its conduct in compliance with all laws and rules.  The 
organization must maintain, or require the A person designated 
as a gambling manager to shall maintain, a fidelity bond in the 
sum of $25,000 $10,000 in favor of the organization and the 
state, conditioned on (1) the faithful performance of the 
manager's duties; and (2) the payment of all taxes due under 
this chapter on lawful expenditures of gross profits from lawful 
gambling.  The terms of the bond must provide that notice be 
given to the board in writing not less than 30 days before its 
cancellation.  In the case of conflicting claims against a bond, 
a claim by the state has preference over a claim by the 
organization. 
    (b) A person may not act as a gambling manager for more 
than one organization. 
    (c) An organization may not conduct lawful gambling without 
having a gambling manager.  The board must be notified in 
writing of a change in gambling managers.  Notification must be 
made within ten days of the date the gambling manager assumes 
the manager's duties. 
    (d) An organization may not have more than one gambling 
manager at any time. 
    Sec. 22.  Minnesota Statutes 1990, section 349.167, 
subdivision 2, is amended to read: 
    Subd. 2.  [GAMBLING MANAGERS; LICENSES.] A person may not 
serve as a gambling manager for an organization unless the 
person possesses a valid gambling manager's license issued by 
the board.  The board may issue a gambling manager's license to 
a person applying for the license who: 
    (1) has received training as required in complied with 
subdivision 4, clause (1); 
    (2) has never been convicted of a felony; 
    (3) within the five years before the date of the license 
application, has not committed a violation of law or board rule 
that resulted in the revocation of a license issued by the 
board; 
    (4) has never been convicted of a criminal violation 
involving fraud, theft, tax evasion, misrepresentation, or 
gambling; 
    (5) has never been convicted of (i) assault, (ii) a 
criminal violation involving the use of a firearm, or (iii) 
making terroristic threats; and 
    (6) has not engaged in conduct the board determines is 
contrary to the public health, welfare, or safety or the 
integrity of lawful gambling. 
    A gambling manager's license is valid for one year unless 
suspended or revoked.  The annual fee for a gambling manager's 
license is $100. 
    Sec. 23.  Minnesota Statutes 1990, section 349.167, 
subdivision 4, is amended to read: 
    Subd. 4.  [TRAINING OF GAMBLING MANAGERS.] The board shall 
by rule require all persons licensed as gambling managers to 
receive periodic training in laws and rules governing lawful 
gambling.  The rules must contain the following requirements: 
    (1) each gambling manager must have received such receive 
training before being issued a new license, except that in the 
case of the death, disability, or termination of a gambling 
manager, a replacement gambling manager must receive the 
training within 90 days of being issued a license; 
    (2) each gambling manager applying for a renewal of a 
license must have received training within the three years prior 
to the date of application for the renewal; and 
    (3) the training required by this subdivision may be 
provided by a person, firm, association, or organization 
authorized by the board to provide the training.  Before 
authorizing a person, firm, association, or organization to 
provide training, the board must determine that: 
    (i) the provider and all of the provider's personnel 
conducting the training are qualified to do so; 
    (ii) the curriculum to be used fully and accurately covers 
all elements of lawful gambling law and rules that the board 
determines are necessary for a gambling manager to know and 
understand; 
    (iii) the fee to be charged for participants in the 
training sessions is fair and reasonable; and 
    (iv) the training provider has an adequate system for 
documenting completion of training. 
    The rules may provide for differing training requirements 
for gambling managers based on the class of license held by the 
gambling manager's organization. 
    The board or the director may provide the training required 
by this subdivision using employees of the division. 
    Sec. 24.  Minnesota Statutes 1990, section 349.17, 
subdivision 5, is amended to read: 
    Subd. 5.  [BINGO CARD NUMBERING.] (a) The board shall by 
rule require that all licensed organizations:  (1) conduct bingo 
only using liquid daubers on cards that bear an individual 
number recorded by the distributor; (2) sell all bingo cards 
only in the order of the numbers appearing on the cards; and (3) 
use each bingo card for no more than one bingo occasion.  In 
lieu of the requirements of clauses (2) and (3), a licensed 
organization may electronically record the sale of each bingo 
card at each bingo occasion using an electronic recording system 
approved by the board. 
    (b) The requirements of paragraph (a) do not apply to a 
licensed organization that (1) has never received gross receipts 
from bingo in excess of $150,000 in any year, and (2) does not 
pay compensation to any person for participating in the conduct 
of lawful gambling. 
    Sec. 25.  Minnesota Statutes 1990, section 349.172, is 
amended to read: 
    349.172 [PULL-TABS; INFORMATION REQUIRED TO BE POSTED.] 
    An organization selling pull-tabs must post for each deal 
of pull-tabs all major prizes that have been awarded for 
pull-tabs purchased from that deal.  The information must be 
posted prominently at the point of sale of the deal.  An easily 
legible pull-tab flare that lists prizes in that deal, and on 
which prizes are marked or crossed off as they are awarded, 
satisfies the requirement of this section that major prizes be 
posted, provided that a separate flare is posted for each deal 
of pull-tabs.  An organization must post or mark off each major 
prize immediately upon awarding the prize.  A "major prize" in a 
deal of pull-tabs is any prize that is at least 50 times the 
face value of any pull-tab in the deal.  Subdivision 1.  [BOARD 
MAY REQUIRE CERTAIN POSTING.] The board may issue an order 
requiring an organization selling pull-tabs to post major 
pull-tab prizes and the names of major prize winners if the 
board has reasonable grounds to believe that the organization, 
or a person receiving compensation from the organization for 
participating in the sale of pull-tabs, has been or is providing 
information to a player or players that provides an unfair 
advantage related to the potential winnings from pull-tabs.  The 
board must notify the organization at least 14 days before the 
order becomes effective.  The notice to the organization must 
describe the organization's right to a hearing under subdivision 
3. 
    Subd. 2.  [POSTING; REQUIREMENTS.] The information required 
to be posted under subdivision 1 must be posted prominently at 
the point of sale of the pull-tabs.  An easily legible pull-tab 
flare that lists prizes in the deal for that flare, and on which 
prizes are marked off as they are awarded, satisfies the 
requirements of this section that major prizes be posted, 
provided that a separate flare is posted for each deal of 
pull-tabs.  An organization must post or mark off each major 
prize and post the name of the prize winner immediately on 
awarding the prize. 
    Subd. 3.  [APPEAL.] An organization to which the board 
issues an order under subdivision 1 may request a contested case 
hearing on the order.  The hearing must be held within 20 days 
of the effective date of the order, and the report by the 
administrative law judge must be issued within 20 days after the 
close of the hearing record.  The board must issue its final 
decision within 30 days after receipt of the report of the 
administrative law judge and subsequent exceptions and arguments 
under section 14.61. 
    Subd. 4.  [MAJOR PRIZES.] For purposes of this section, a 
"major prize" in a deal of pull-tabs is a prize of at least 50 
times the face value of any pull-tab in the deal. 
    Subd. 5.  [COMPULSIVE GAMBLING HOTLINE NUMBER.] An 
organization conducting lawful gambling must post at each point 
of sale a sign containing the toll-free telephone number 
established by the commissioner of human services in connection 
with the compulsive gambling program established under section 
245.98.  The sign must be kept in easily legible form and repair 
by the owner, lessee, or person having control thereof, and must 
either: 
    (1) be approved by the commissioner; or 
    (2) have lettering at least three-quarters of an inch in 
height, of block letter design.  
    Subd. 6.  [VOLUNTARY POSTING.] Nothing in this section 
limits the right of an organization voluntarily to post the 
names of winners of lawful gambling prizes. 
    Sec. 26.  Minnesota Statutes 1990, section 349.18, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED.] An 
organization may conduct lawful gambling only on premises it 
owns or leases.  Leases must be for a period of at least one 
year and must be on a form prescribed by the board.  Copies of 
all leases must be made available to employees of the division 
and the division of gambling enforcement on request.  A lease 
may not provide for payments determined directly or indirectly 
by the receipts or profits from lawful gambling.  The board may 
prescribe by rule limits on the amount of rent which an 
organization may pay to a lessor for premises leased for lawful 
gambling provided that no rule of the board may prescribe a 
limit of less than $1,000 per month on rent paid for premises 
used for lawful gambling other than bingo.  Any rule adopted by 
the board limiting the amount of rent to be paid may only be 
effective for leases entered into, or renewed, after the 
effective date of the rule. 
    No person, distributor, manufacturer, lessor, or 
organization other than the licensed organization leasing the 
space may conduct any activity on the leased premises during 
times when lawful gambling is being conducted on the premises. 
    Sec. 27.  Minnesota Statutes 1990, section 349.18, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [STORAGE OF GAMBLING EQUIPMENT.] (a) Gambling 
equipment owned by or in the possession of an organization must 
be kept at a licensed gambling premises owned or operated by the 
organization, or at other storage sites within the state that 
the organization has notified the board are being used as 
gambling equipment storage sites.  At each storage site or 
licensed premises, the organization must have the invoices or 
true and correct copies of the invoices for the purchase of all 
gambling equipment at the site or premises.  Gambling equipment 
owned by an organization may not be kept at a distributor's 
office, warehouse, storage unit, or other place of the 
distributor's business.  
    (b) Gambling equipment, other than devices for selecting 
bingo numbers, owned by an organization must be secured and kept 
separate from gambling equipment owned by other persons, 
organizations, distributors, or manufacturers. 
    (c) Paddlewheels must be covered or disabled when not in 
use by the organization in the conduct of lawful gambling. 
    (d) Gambling equipment kept in violation of this 
subdivision is contraband under section 349.2125.  
    (d) (e) An organization may transport gambling equipment it 
owns or possesses between approved gambling equipment storage 
sites and to and from licensed distributors. 
    Sec. 28.  Minnesota Statutes 1990, section 349.19, 
subdivision 2, is amended to read: 
    Subd. 2.  [ACCOUNTS.] Gross receipts from lawful gambling 
by each organization at each permitted premises must be 
segregated from all other revenues of the conducting 
organization and placed in a separate account.  All expenditures 
for expenses, taxes, and lawful purposes must be made from the 
separate account except in the case of expenditures previously 
approved by the organization's membership for emergencies as 
defined by board rule.  The name and address of the bank and, 
the account number for that the separate account for that 
licensed premises, and the names of organization members 
authorized as signatories on the separate account must be 
provided to the board when the application is submitted.  
Changes in the information must be submitted to the board at 
least ten days before the change is made.  Gambling receipts 
must be deposited into the gambling bank account within three 
days of completion of the bingo occasion, deal, or game from 
which they are received, and.  Deposit records must be 
sufficient to allow determination of deposits made from each 
bingo occasion, deal, or game at each permitted premises.  The 
person who accounts for gambling gross receipts and profits may 
not be the same person who accounts for other revenues of the 
organization. 
    Sec. 29.  Minnesota Statutes 1990, section 349.19, 
subdivision 5, is amended to read: 
    Subd. 5.  [REPORTS.] A licensed organization must report to 
the board and to its membership monthly, or quarterly in the 
case of a licensed organization which does not report more than 
$1,000 in gross receipts from lawful gambling in any calendar 
quarter, on its gross receipts, expenses, profits, and 
expenditure of profits from lawful gambling.  The report must 
include a reconciliation of the organization's profit carryover 
with its cash balance on hand.  If the organization conducts 
both bingo and other forms of lawful gambling, the figures for 
both must be reported separately.  In addition, a licensed 
organization must report to the board monthly on its purchases 
of gambling equipment and must include the type, quantity, and 
dollar amount from each supplier separately.  The reports must 
be on a form the board prescribes. Submission of the report 
required by section 349.154 satisfies the requirement for 
reporting monthly to the board on expenditure of net profits. 
    Sec. 30.  Minnesota Statutes 1990, section 349.19, 
subdivision 9, is amended to read: 
    Subd. 9.  [ANNUAL AUDIT; FILING REQUIREMENT.] An 
organization licensed under this chapter must have an annual 
financial audit of its lawful gambling activities and funds 
performed by an independent auditor accountant licensed by the 
state of Minnesota or performed by an independent accountant who 
has had prior approval of the board.  The board commissioner of 
revenue shall by rule prescribe standards for the audit, which 
must provide for the reconciliation of the organization's 
gambling account or accounts with the organization's reports 
filed under subdivision 5 and section 349.154.  A complete, 
true, and correct copy of the audit report must be filed with as 
prescribed by the board upon completion of the audit 
commissioner of revenue. 
    Sec. 31.  Minnesota Statutes 1990, section 349.19, is 
amended by adding a subdivision to read: 
    Subd. 9a.  [RECORDS.] An organization licensed under this 
chapter must maintain records that account for the assets, 
liabilities, and fund balance of the organization.  The records 
must also account for the revenues, taxes, prize payouts, 
expenses, and lawful purpose expenditures of the organization.  
The records must include a perpetual inventory of games 
purchased but not yet played and games in play. 
    Sec. 32.  Minnesota Statutes 1990, section 349.19, is 
amended by adding a subdivision to read: 
    Subd. 9b.  [ACCOUNTING MANUAL.] The board must prepare and 
distribute to each organization licensed under this chapter a 
manual designed to facilitate compliance with section 31.  The 
manual must include a clear description of the processes needed 
to maintain the records required in section 31.  The board may 
contract for preparation of the manual. 
    Sec. 33.  Minnesota Statutes 1990, section 349.211, is 
amended by adding a subdivision to read: 
     Subd. 2b.  [PADDLEWHEEL PRIZES.] The maximum cash prize 
which may be awarded for a paddleticket is $70.  An organization 
may not sell any paddleticket for more than $2. 
    Sec. 34.  Minnesota Statutes 1990, section 349.213, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LOCAL REGULATION.] (a) A statutory or home 
rule city or county has the authority to adopt more stringent 
regulation of lawful gambling within its jurisdiction, including 
the prohibition of lawful gambling, and may require a permit for 
the conduct of gambling exempt from licensing under section 
349.214.  The fee for a permit issued under this subdivision may 
not exceed $100.  The authority granted by this subdivision does 
not include the authority to require a license or permit to 
conduct gambling by organizations or sales by distributors 
licensed by the board.  The authority granted by this 
subdivision does not include the authority to require an 
organization to make specific expenditures of more than ten 
percent from its net profits derived from lawful gambling.  For 
the purposes of this subdivision, net profits are profits less 
amounts expended for allowable expenses.  A statutory or home 
rule charter city or a county may not require an organization 
conducting lawful gambling within its jurisdiction to make an 
expenditure to the city or county as a condition to operate 
within that city or county, except as authorized under section 
349.16, subdivision 4, or 349.212; provided, however, that an 
ordinance requirement that such organizations must contribute 
ten percent of their net profits derived from lawful gambling to 
a fund administered and regulated by the responsible local unit 
of government without cost to such fund, for disbursement by the 
responsible local unit of government of the receipts for lawful 
purposes, is not considered an expenditure to the city or county 
nor a tax under section 349.212, and is valid and lawful.  
    (b) A statutory or home rule city or county may by 
ordinance require that a licensed organization conducting lawful 
gambling within its jurisdiction expend all or a portion of its 
expenditures for lawful purposes on lawful purposes conducted or 
located within the city's or county's trade area.  Such an 
ordinance must define the city's or county's trade area and must 
specify the percentage of lawful purpose expenditures which must 
be expended within the trade area.  A trade area defined by a 
city under this subdivision must include each city contiguous to 
the defining city. 
    (c) A more stringent regulation or prohibition of lawful 
gambling adopted by a political subdivision under this 
subdivision must apply equally to all forms of lawful gambling 
within the jurisdiction of the political subdivision, except a 
political subdivision may prohibit the use of paddlewheels. 
    Sec. 35.  Minnesota Statutes 1990, section 349A.02, 
subdivision 3, is amended to read: 
    Subd. 3.  [POWERS AND DUTIES.] In operating the lottery the 
director shall exercise the following powers and duties: 
    (1) adopt rules and game procedures; 
    (2) issue lottery retailer contracts and rule on appeals of 
decisions relating to those contracts; 
    (3) enter into lottery procurement contracts for the 
provision of goods and services to the lottery; 
    (4) employ personnel as are required to operate the 
lottery; 
    (5) enter into written agreements with one or more states 
government-authorized lotteries, or with an organization created 
and controlled by those lotteries, for the operation, marketing, 
and promotion of a joint lottery; 
    (6) adopt and publish advertising and promotional materials 
consistent with section 349A.09; and 
    (7) take all necessary steps to ensure the integrity of, 
and public confidence in, the state lottery. 
    Sec. 36.  Minnesota Statutes 1990, section 349A.06, 
subdivision 3, is amended to read: 
    Subd. 3.  [BOND.] The director shall require that each 
lottery retailer post a bond, securities, or an irrevocable 
letter of credit, in an amount as the director deems necessary, 
to protect the financial interests of the state.  If securities 
are deposited or an irrevocable letter of credit filed, the 
securities or letter of credit must be of a type or in the form 
provided under section 349A.07, subdivision 5, paragraphs (b) 
and (c).  
    Sec. 37.  Minnesota Statutes 1990, section 349A.06, 
subdivision 5, is amended to read: 
    Subd. 5.  [RESTRICTIONS ON LOTTERY RETAILERS.] (a) A 
lottery retailer may sell lottery tickets only on the premises 
described in the contract. 
    (b) A lottery retailer must prominently display a 
certificate issued by the director on the premises where lottery 
tickets will be sold. 
    (c) A lottery retailer must keep a complete set of books of 
account, correspondence, and all other records necessary to show 
fully the retailer's lottery transactions, and make them 
available for inspection by employees of the division at all 
times during business hours.  The director may require a lottery 
retailer to furnish information as the director deems necessary 
to carry out the purposes of this chapter, and may require an 
audit to be made of the books of account and records.  The 
director may select an auditor to perform the audit and may 
require the retailer to pay the cost of the audit.  The auditor 
has the same right of access to the books of account, 
correspondence, and other records as is given to employees of 
the division. 
    (d) A contract issued under this section may not be 
transferred or assigned. 
    (e) The director shall require that lottery tickets may be 
sold by retailers only for cash.  
    (f) A lottery retailer must prominently post at the point 
of sale of lottery tickets, in a manner approved by the 
commissioner of human services, the toll-free telephone number 
established by the commissioner of human services in connection 
with the compulsive gambling program established under section 
245.98. 
    Sec. 38.  Minnesota Statutes 1990, section 349A.06, 
subdivision 11, is amended to read: 
    Subd. 11.  [REVOCATION CANCELLATION, SUSPENSION, AND 
REFUSAL TO RENEW LICENSES CONTRACTS.] (a) The director shall 
cancel the contract of any lottery retailer who: 
    (1) has been convicted of a felony or gross misdemeanor; 
    (2) has committed fraud, misrepresentation, or deceit; 
    (3) has provided false or misleading information to the 
division; or 
    (4) has acted in a manner prejudicial to public confidence 
in the integrity of the lottery. 
    (b) The director may cancel, suspend, or refuse to renew 
the contract of any lottery retailer who: 
    (1) changes business location; 
    (2) fails to account for lottery tickets received or the 
proceeds from tickets sold; 
    (3) fails to remit funds to the director in accordance with 
the director's rules; 
    (4) violates a law or a rule or order of the director; 
    (5) fails to comply with any of the terms in the lottery 
retailer's contract; 
    (6) fails to comply with file a bond requirements, 
securities, or a letter of credit as required under this section 
subdivision 3; 
    (7) in the opinion of the director fails to maintain a 
sufficient sales volume to justify continuation as a lottery 
retailer; or 
    (8) has violated section 340A.503, subdivision 2, clause 
(1), two or more times within a two-year period. 
    (c) The director may also cancel, suspend, or refuse to 
renew a lottery retailer's contract if there is a material 
change in any of the factors considered by the director under 
subdivision 2.  
    (d) A contract cancellation, suspension, or refusal to 
renew under this subdivision is a contested case under sections 
14.57 to 14.69 and is in addition to any criminal penalties 
provided for a violation of law or rule. 
    (e) The director may temporarily suspend a contract without 
notice for any of the reasons specified in this subdivision 
provided that a hearing is conducted within seven days after a 
request for a hearing is made by a lottery retailer.  Within 20 
days after receiving the administrative law judge's report, the 
director shall issue an order vacating the temporary suspension 
or making any other appropriate order.  If no hearing is 
requested within 30 days of the temporary suspension taking 
effect, the director may issue an order making the suspension 
permanent suspension becomes permanent unless the director 
vacates or modifies the order.  
    Sec. 39.  Minnesota Statutes 1990, section 349A.08, is 
amended by adding a subdivision to read: 
    Subd. 9.  [PRIVACY.] The phone number and street address of 
a winner of a lottery prize is private data on individuals under 
chapter 13. 
    Sec. 40.  Minnesota Statutes 1990, section 349A.09, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTENT OF ADVERTISING.] (a) Advertising and 
promotional materials for the lottery adopted or published by 
the director must be consistent with the dignity of the state 
and may only: 
    (1) present information on how lottery games are played, 
prizes offered, where and how tickets may be purchased, when 
drawings are held, and odds on the games advertised; 
    (2) identify state programs supported by lottery net 
revenues; 
    (3) present the lottery as a form of entertainment; or 
    (4) state the winning numbers or identity of winners of 
lottery prizes.  
    (b) The director may not adopt or publish any advertising 
for the lottery which: 
    (1) presents directly or indirectly any lottery game as a 
potential means of relieving any person's financial 
difficulties; 
    (2) is specifically targeted with the intent to exploit a 
person, a specific group or an economic class of people, or a 
religious holiday by use of a religious theme or symbol; 
    (3) presents the purchase of a lottery ticket as a 
financial investment or a way to achieve financial security; 
    (4) uses the name or picture of a current elected state 
official to promote a lottery game; 
    (5) exhorts the public to bet by directly or indirectly 
misrepresenting a person's chance of winning a prize; or 
    (6) denigrates a person who does not buy a lottery ticket 
or unduly praises a person who does buy a ticket. 
     Sec. 41.  Minnesota Statutes 1990, section 349A.10, 
subdivision 3, is amended to read: 
    Subd. 3.  [LOTTERY OPERATIONS.] (a) The director shall 
establish a lottery operations account in the lottery fund.  The 
director shall pay all costs of operating the lottery, including 
payroll costs or amounts transferred to the state treasury for 
payroll costs, but not including lottery prizes, from the 
lottery operating account.  The director shall credit to the 
lottery operations account amounts sufficient to pay the 
operating costs of the lottery. 
    (b) The director may not credit in any fiscal year amounts 
to the lottery operations account which when totaled exceed 15 
percent of gross revenue to the lottery fund in that fiscal 
year.  In computing total amounts credited to the lottery 
operations account under this paragraph the director shall 
disregard amounts transferred to or retained by lottery 
retailers as sales commissions or other compensation. 
    (c) The director of the lottery may not expend after July 
1, 1992 1991, more than 2-3/4 percent of gross revenues in a 
fiscal year for contracts for the preparation, publication, and 
placement of advertising. 
    (d) Except as the director determines, the division is not 
subject to chapter 16A relating to budgeting, payroll, and the 
purchase of goods and services. 
    Sec. 42.  Minnesota Statutes 1990, section 609.115, is 
amended by adding a subdivision to read: 
    Subd. 9.  [COMPULSIVE GAMBLING ASSESSMENT REQUIRED.] (a)  
If a person is convicted of a felony for theft under section 
609.52, embezzlement of public funds under section 609.54, or 
forgery under section 609.625, 609.63, or 609.631, the probation 
officer shall determine in the report prepared under subdivision 
1 whether or not compulsive gambling contributed to the 
commission of the offense.  If so, the report shall contain the 
results of a compulsive gambling assessment conducted in 
accordance with this subdivision.  The probation officer shall 
make an appointment for the defendant to undergo the assessment 
if so indicated. 
    (b) The compulsive gambling assessment report must include 
a recommended level of care for the defendant if the assessor 
concludes that the defendant is in need of compulsive gambling 
treatment.  The assessment must be conducted by an assessor 
qualified under section 7 to perform these assessments or to 
provide compulsive gambling treatment.  An assessor providing a 
compulsive gambling assessment may not have any direct or shared 
financial interest or referral relationship resulting in shared 
financial gain with a treatment provider.  If an independent 
assessor is not available, the probation officer may use the 
services of an assessor with a financial interest or referral 
relationship as authorized under rules adopted by the 
commissioner of human services under section 7. 
    (c) The commissioner of human services shall reimburse the 
county for the costs associated with a compulsive gambling 
assessment at a rate established by the commissioner up to a 
maximum of $100 for each assessment. 
     Sec. 43.  Minnesota Statutes 1990, section 609.75, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LOTTERY.] (a) A lottery is a plan which 
provides for the distribution of money, property or other reward 
or benefit to persons selected by chance from among participants 
some or all of whom have given a consideration for the chance of 
being selected.  A participant's payment for use of a 900 
telephone number or another means of communication that results 
in payment to the sponsor of the plan constitutes consideration 
under this paragraph. 
    (b) An in-package chance promotion is not a lottery if all 
of the following are met:  
    (1) participation is available, free and without purchase 
of the package, from the retailer or by mail or toll-free 
telephone request to the sponsor for entry or for a game piece; 
    (2) the label of the promotional package and any related 
advertising clearly states any method of participation and the 
scheduled termination date of the promotion; 
    (3) the sponsor on request provides a retailer with a 
supply of entry forms or game pieces adequate to permit free 
participation in the promotion by the retailer's customers; 
    (4) the sponsor does not misrepresent a participant's 
chances of winning any prize; 
    (5) the sponsor randomly distributes all game pieces and 
maintains records of random distribution for at least one year 
after the termination date of the promotion; 
    (6) all prizes are randomly awarded if game pieces are not 
used in the promotion; and 
    (7) the sponsor provides on request of a state agency a 
record of the names and addresses of all winners of prizes 
valued at $100 or more, if the request is made within one year 
after the termination date of the promotion.  
     (c) Except as provided by section 349.40, acts in this 
state in furtherance of a lottery conducted outside of this 
state are included notwithstanding its validity where conducted. 
     (d) The distribution of property, or other reward or 
benefit by an employer to persons selected by chance from among 
participants who have made a contribution through a payroll or 
pension deduction campaign to a registered combined charitable 
organization, within the meaning of section 309.501, as a 
precondition to the chance of being selected, is not a lottery 
if: 
    (1) all of the persons eligible to be selected are employed 
by or retirees of the employer; 
    (2) the cost of the property or other reward or benefit 
distributed and all costs associated with the distribution are 
borne by the employer; and 
    (3) the total amount actually expended by the employer to 
obtain the property or other rewards or benefits distributed by 
the employer during the calendar year does not exceed $500. 
    Sec. 44.  Minnesota Statutes 1990, section 609.75, 
subdivision 4, is amended to read: 
    Subd. 4.  [GAMBLING DEVICE.] A gambling device is a 
contrivance which for a consideration affords the player an 
opportunity to obtain something of value, other than free plays, 
automatically from the machine or otherwise, the award of which 
is determined principally by chance.  "Gambling device" also 
includes any a video game of chance, as defined in section 
349.50, subdivision 8, that is not in compliance with sections 
349.50 to 349.60. 
    Sec. 45.  Minnesota Statutes 1990, section 609.75, is 
amended by adding a subdivision to read: 
    Subd. 8.  [VIDEO GAME OF CHANCE.] A video game of chance is 
a game or device that simulates one or more games commonly 
referred to as poker, blackjack, craps, hi-lo, roulette, or 
other common gambling forms, though not offering any type of 
pecuniary award or gain to players.  The term also includes any 
video game having one or more of the following characteristics: 
    (1) it is primarily a game of chance, and has no 
substantial elements of skill involved; 
    (2) it awards game credits or replays and contains a meter 
or device that records unplayed credits or replays. 
    Sec. 46.  Minnesota Statutes 1990, section 609.75, is 
amended by adding a subdivision to read: 
     Subd. 9.  [900 TELEPHONE NUMBER.] A 900 telephone number is 
a ten-digit number, the first three numbers of which are from 
900 to 999. 
    Sec. 47.  Minnesota Statutes 1990, section 609.755, is 
amended to read: 
    609.755 [ACTS OF OR RELATING TO GAMBLING.] 
    Whoever does any of the following is guilty of a 
misdemeanor: 
    (1) makes a bet; or 
    (2) sells or transfers a chance to participate in a 
lottery; or 
    (3) disseminates information about a lottery, except a 
lottery conducted by an adjoining state, with intent to 
encourage participation therein; or 
    (4) permits a structure or location owned or occupied by 
the actor or under the actor's control to be used as a gambling 
place; or 
    (5) operates a gambling device.  
     Clause (5) does not prohibit operation of a gambling device 
in a person's dwelling for amusement purposes in a manner that 
does not afford players an opportunity to obtain anything of 
value. 
    Sec. 48.  Minnesota Statutes 1990, section 609.76, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GROSS MISDEMEANORS.] (a) Whoever does any 
of the following may be sentenced to imprisonment for not more 
than one year or to payment of a fine of not more than $3,000, 
or both: 
    (1) maintains or operates a gambling place or operates a 
bucket shop; 
    (2) intentionally participates in the income of a gambling 
place or bucket shop; 
    (3) conducts a lottery, or, with intent to conduct a 
lottery, possesses facilities for doing so; 
    (4) sets up for use for the purpose of gambling, or 
collects the proceeds of, any gambling device or bucket shop; 
    (5) with intent that it shall be so used except as provided 
in section 9, manufactures, sells or, offers for sale, or 
otherwise provides, in whole or any part thereof, any gambling 
device including those defined in section 349.30, subdivision 2, 
and any facility for conducting a lottery, except as provided by 
section 349.40; 
    (6) with intent that it be so used, manufactures, sells, or 
offers for sale any facility for conducting a lottery, except as 
provided by section 349.40; or 
    (7) receives, records, or forwards bets or offers to bet 
or, with intent to receive, record, or forward bets or offers to 
bet, possesses facilities to do so; or 
    (7) pays any compensation for game credits earned on or 
otherwise rewards, with anything of value other than free plays, 
players of video games of chance as defined in section 349.50, 
subdivision 8, or who directs an employee to pay any such 
compensation or reward. 
    (b) On conviction of a person for the crime established in 
paragraph (a), clause (7), the court shall impose a fine of not 
less than $700. 
    Sec. 49.  [TRIBAL-STATE COMPACTS.] 
    Sections 8, 9, 44, 45, 47, and 48 do not affect the 
validity of, and must not be construed as prohibiting the state 
from entering into or participating in, a tribal-state compact 
with the governing body of an Indian tribe governing the conduct 
of video games of chance under the Indian Gaming Regulatory Act, 
United States Code, title 25, sections 2701 to 2721. 
    Sec. 50.  [REPORT.] 
    The director of the gambling control board, the 
commissioner of public safety, and the attorney general or their 
designees shall jointly study the issue of requiring that all 
gambling equipment as defined in Minnesota Statutes, section 
34.12, subdivision 24, be purchased from one or more suppliers 
who contract with the state for that purpose.  The study shall 
include a recommendation as to the adoption of the requirement 
and a plan for implementing such a requirement.  The study must 
include, among other things, the following options: 
    (1) requiring organizations to purchase gambling equipment 
directly from the state; and 
    (2) requiring organizations to purchase gambling equipment 
directly from suppliers who contract with the state.  
    The director, the commissioner, and the attorney general or 
their designees shall report to the legislature on the results 
of the study not later than February 1, 1992.  The report must 
contain draft legislation that implements any legislative 
recommendation contained in the study. 
    Sec. 51.  [REPORT ON COMPULSIVE GAMBLING ASSESSMENTS.] 
     By February 1, 1992, the commissioner of human services 
shall report to the chairs of the senate committees on 
judiciary, health and human services, and gaming regulation and 
the chairs of the house of representatives committees on 
judiciary, health and human services, and general legislation, 
veterans, and gaming, on a method to implement sections 245.98, 
subdivision 2a, and 609.115, subdivision 9. 
    Sec. 52.  [APPROPRIATION.] 
    $600,000 in fiscal year 1992 and $600,000 in fiscal year 
1993 is appropriated from the general fund to the commissioner 
of human services to implement the compulsive gambling treatment 
program established under Minnesota Statutes, section 245.98.  
Of the amounts appropriated in this section, not more than 
$91,500 in each fiscal year may be spent for administrative 
expenses. 
    The director of the state lottery shall transfer $200,000 
in fiscal year 1992 and $200,000 in fiscal year 1993 from the 
lottery operations account to the general fund for the costs 
incurred for the compulsive gambling treatment program under 
Minnesota Statutes, section 245.98.  This transfer is in 
addition to any amount the director is required to transfer in 
those years by any other law.  
    Sec. 53.  [REPEALER.] 
    Minnesota Statutes 1990, section 349.154, subdivision 3, is 
repealed. 
    Sec. 54.  [EFFECTIVE DATE.] 
    (a) Sections 1, 2, 3, 5, 6, 10, 11, 13 to 16, 21 to 24, 26, 
28, 30, 35, 36, 38 to 40, 50, 51, the provisions of section 47 
that amend Minnesota Statutes 1990, section 609.755, clause (3), 
50, 51, and 53 are effective are effective the day following 
final enactment. 
    (b) Sections 4, 25, 37, and 41 are effective July 1, 1991. 
    (c) Sections 18 to 20 are effective August 1, 1991, and 
apply to licenses and permits issued on and after that date. 
    (d) Section 32 is effective September 1, 1991, and the 
manual required by that section must be distributed by that date.
    (e) Sections 8, 9, 44, 45, 47 except as provided in 
paragraph (a), 48, and 49 are effective January 1, 1992. 
    (f) Sections 12, 29, and 31 are effective March 1, 1992. 
    (g) Sections 7 and 42 are effective July 1, 1993. 
    Presented to the governor May 31, 1991 
    Signed by the governor June 4, 1991, 8:38 p.m.

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