1.1                          A bill for an act 
  1.2             relating to gambling; creating a State Gaming Board 
  1.3             and authorizing it to operate a casino in the 
  1.4             metropolitan area; proposing a constitutional 
  1.5             amendment to permit the legislature to authorize a 
  1.6             state-operated casino; amending Minnesota Statutes 
  1.7             2002, sections 299L.01, subdivision 1; 299L.07, 
  1.8             subdivisions 2, 2a; 541.20; 541.21; 609.761, by adding 
  1.9             a subdivision; proposing coding for new law in 
  1.10            Minnesota Statutes, chapter 299L.  
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12                             ARTICLE 1 
  1.13                     STATE GAMING BOARD; CASINO 
  1.14     Section 1.  Minnesota Statutes 2002, section 299L.01, 
  1.15  subdivision 1, is amended to read: 
  1.16     Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
  1.17  chapter, the terms defined in this subdivision have the meanings 
  1.18  given them. 
  1.19     (b) "Division" means the Division of Alcohol and Gambling 
  1.20  Enforcement.  
  1.21     (c) "Commissioner" means the commissioner of public safety. 
  1.22     (d) "Director" means the director of alcohol and gambling 
  1.23  enforcement.  
  1.24     (e) "Board" means the State Gaming Board. 
  1.25     (f) "Manufacturer" means a person who assembles from raw 
  1.26  materials or subparts a gambling device for sale or use in 
  1.27  Minnesota. 
  1.28     (f) (g) "Distributor" means a person who sells, offers to 
  2.1   sell, or otherwise provides a gambling device to a person in 
  2.2   Minnesota. 
  2.3      (g) (h) "Used gambling device" means a gambling device five 
  2.4   or more years old from the date of manufacture. 
  2.5      (h) (i) "Test" means the process of examining a gambling 
  2.6   device to determine its characteristics or compliance with the 
  2.7   established requirements of any jurisdiction. 
  2.8      (i) (j) "Testing facility" means a person in Minnesota who 
  2.9   is engaged in the testing of gambling devices for use in any 
  2.10  jurisdiction. 
  2.11     (k) "Gaming machine" means any machine in which a coin, 
  2.12  token, or other currency is deposited to play a game that (1) 
  2.13  uses a video display and microprocessors or an electromechanical 
  2.14  device with a spinning reel, (2) offers prizes in the form of 
  2.15  coin, currency, redeemable tokens or prize slips, or other 
  2.16  things of value other than free plays, and (3) has an outcome 
  2.17  that is determined primarily by chance.  
  2.18     (l) "Casino gross receipts" means total amounts wagered at 
  2.19  the casino and gross receipts from sale of chips or tokens for 
  2.20  play at the casino, less amounts paid out as prizes or winnings 
  2.21  or to redeem chips or tokens.  The term also includes all 
  2.22  revenue received by the board from the sale of goods or services 
  2.23  at a casino it operates. 
  2.24     Sec. 2.  Minnesota Statutes 2002, section 299L.07, 
  2.25  subdivision 2, is amended to read: 
  2.26     Subd. 2.  [EXCLUSIONS.] Notwithstanding subdivision 1, a 
  2.27  gambling device: 
  2.28     (1) may be sold by a person who is not licensed under this 
  2.29  section, if the person (i) is not engaged in the trade or 
  2.30  business of selling gambling devices, and (ii) does not sell 
  2.31  more than one gambling device in any calendar year; 
  2.32     (2) may be sold by the governing body of a federally 
  2.33  recognized Indian tribe described in subdivision 2a, paragraph 
  2.34  (b), clause (1), which is not licensed under this section, if 
  2.35  (i) the gambling device was operated by the Indian tribe, (ii) 
  2.36  the sale is to a distributor licensed under this section, and 
  3.1   (iii) the licensed distributor notifies the commissioner of the 
  3.2   purchase, in the same manner as is required when the licensed 
  3.3   distributor ships a gambling device into Minnesota; 
  3.4      (3) may be possessed by a person not licensed under this 
  3.5   section if the person holds a permit issued under section 
  3.6   299L.08; and 
  3.7      (4) may be possessed by a state agency, with the written 
  3.8   authorization of the director, for display or evaluation 
  3.9   purposes only and not for the conduct of gambling; and 
  3.10     (5) may be possessed by the State Gaming Board. 
  3.11     Sec. 3.  Minnesota Statutes 2002, section 299L.07, 
  3.12  subdivision 2a, is amended to read: 
  3.13     Subd. 2a.  [RESTRICTIONS.] (a) A manufacturer licensed 
  3.14  under this section may sell, offer to sell, lease, or rent, in 
  3.15  whole or in part, a gambling device only to a distributor 
  3.16  licensed under this section. 
  3.17     (b) A distributor licensed under this section may sell, 
  3.18  offer to sell, market, rent, lease, or otherwise provide, in 
  3.19  whole or in part, a gambling device only to: 
  3.20     (1) the governing body of a federally recognized Indian 
  3.21  tribe that is authorized to operate the gambling device under a 
  3.22  tribal state compact under the Indian Gaming Regulatory Act, 
  3.23  Public Law 100-497, and future amendments to it; 
  3.24     (2) a person for use in the person's dwelling for display 
  3.25  or amusement purposes in a manner that does not afford players 
  3.26  an opportunity to obtain anything of value; 
  3.27     (3) another distributor licensed under this section; or 
  3.28     (4) a person in another state who is authorized under the 
  3.29  laws of that state to possess the gambling device; or 
  3.30     (5) the State Gaming Board.  
  3.31     Sec. 4.  [299L.09] [GAMING BOARD.] 
  3.32     Subdivision 1.  [BOARD CREATED.] A State Gaming Board is 
  3.33  created within the Division of Alcohol and Gambling Enforcement. 
  3.34     Subd. 2.  [MEMBERSHIP; TERMS.] The board consists of five 
  3.35  members appointed by the governor.  The governor shall designate 
  3.36  one member as chair of the board.  Of the first appointees one 
  4.1   shall serve a term of two years, two shall serve a term of four 
  4.2   years, and two shall serve a term of six years.  Thereafter 
  4.3   appointments are for six years. 
  4.4      Subd. 3.  [COMPENSATION.] The compensation of board members 
  4.5   is as provided in section 15.0575, subdivision 3. 
  4.6      Subd. 4.  [REMOVAL; VACANCIES.] The removal of commission 
  4.7   members and filling of vacancies is as provided in section 
  4.8   15.0575, subdivision 4. 
  4.9      Subd. 5.  [ACTIONS.] The board may sue and be sued in its 
  4.10  own name but no action may be brought against the board or any 
  4.11  of its members for actions taken in good faith in the 
  4.12  performance of its duties.  Suits and actions may be commenced 
  4.13  against the board or any of its members in any court of 
  4.14  competent jurisdiction in this state by service, in the manner 
  4.15  provided in Minnesota rules of court, of any summons, process, 
  4.16  or pleadings authorized by the laws of this state.  The attorney 
  4.17  general is the legal counsel for the board. 
  4.18     Subd. 6.  [ANNUAL REPORT.] The board shall on February 15 
  4.19  of each year submit a report to the governor and legislature on 
  4.20  its activities, organizational structure, receipts and 
  4.21  disbursements, and recommendations for changes in this chapter. 
  4.22     Subd. 7.  [STAFF.] (a) The board shall utilize staff of the 
  4.23  division to carry out its administrative function.  The director 
  4.24  shall serve as executive secretary of the board. 
  4.25     (b) The board shall employ persons it deems necessary to 
  4.26  operate the casino authorized under section 299L.10.  
  4.27     Sec. 5.  [299L.10] [CASINO OPERATION.] 
  4.28     Subdivision 1.  [CASINO OPERATION.] The board shall 
  4.29  construct, acquire, or lease a facility in the metropolitan area 
  4.30  for the purpose of operating a casino.  The director shall 
  4.31  select the location for the casino that will maximize state 
  4.32  revenues from the casino.  
  4.33     Subd. 2.  [OPERATION.] (a) All gaming machines that are 
  4.34  placed at a casino under this section must be operated and 
  4.35  controlled by the board. 
  4.36     (b) Gaming machines must be maintained by the board, or by 
  5.1   a vendor with whom the board contracts for this purpose. 
  5.2      (c) The board must have a central communications system 
  5.3   that monitors activities on each gaming machine and with which 
  5.4   each such machine is connected electronically. 
  5.5      (d) The board must supervise the removal and accounting of 
  5.6   money taken from gaming machines. 
  5.7      (e) The board must supervise the general security 
  5.8   arrangements associated with and relating to the operation of 
  5.9   the gaming machines and implement procedures deemed appropriate. 
  5.10     Subd. 3.  [SPECIFICATIONS.] Gaming machines owned or leased 
  5.11  by the board must: 
  5.12     (1) maintain on nonresettable meters a permanent printable 
  5.13  record of all transactions by the machine and all entries into 
  5.14  the machine; and 
  5.15     (2) be capable of being linked electronically to a central 
  5.16  communication system to provide auditing program information as 
  5.17  required by the board. 
  5.18     Subd. 4.  [GAMES.] The board shall specify the games that 
  5.19  may be played on a gaming machine and the prize payout 
  5.20  percentage for each game. 
  5.21     Subd. 5.  [EXAMINATION OF MACHINES.] The board shall 
  5.22  examine prototypes of gaming machines and require that the 
  5.23  manufacturer of the machine pay the cost of the examination.  
  5.24  The board may contract for the examination of gaming machines. 
  5.25     Subd. 6.  [TESTING OF MACHINES.] The board may require 
  5.26  working models of a gaming machine to be transported to the 
  5.27  locations the board designates for testing, examination, and 
  5.28  analysis.  The manufacturer shall pay all costs for testing, 
  5.29  examination, analysis, and transportation of the machine model. 
  5.30     Subd. 7.  [PRIZES.] A person who participates in gambling 
  5.31  at the casino agrees to be bound by the rules and game 
  5.32  procedures applicable to that form of gambling.  The player 
  5.33  acknowledges that the determination of whether the player has 
  5.34  won a prize is subject to the rules and game procedures adopted 
  5.35  by the board, claim procedures established by the board for the 
  5.36  game, and any confidential or public validation tests 
  6.1   established by the board for that game. 
  6.2      Subd. 8.  [OTHER GAMES.] The board may conduct other forms 
  6.3   of gambling at the casino and by rule adopt the rules of play 
  6.4   for each such game.  
  6.5      Sec. 6.  [299L.11] [GAMING MACHINE VENDOR CONTRACTS.] 
  6.6      Subdivision 1.  [CONTRACTS AUTHORIZED.] The board may enter 
  6.7   into procurement contracts for the purchase, lease, or 
  6.8   lease-purchase of gaming machines from a licensed manufacturer 
  6.9   or distributor. 
  6.10     Subd. 2.  [INVESTIGATION.] The board shall investigate the 
  6.11  background, financial responsibility, security, and integrity of 
  6.12  any person who submits a bid, proposal, or offer as part of a 
  6.13  gaming machine contract.  The board may require the person 
  6.14  making the bid, proposal, or offer to pay for the cost of the 
  6.15  investigation.  Any fee collected under this subdivision must be 
  6.16  deposited into the casino operations account.  At the time of 
  6.17  submitting any bid, proposal, or offer, the bidder shall 
  6.18  disclose to the board the information the board considers 
  6.19  necessary to carry out the purposes of this section. 
  6.20     Subd. 3.  [PERSONS INELIGIBLE.] (a) The board may not enter 
  6.21  into a gaming machine procurement contract with an applicant 
  6.22  that has been convicted of a felony within the last ten years, 
  6.23  has been convicted of a gross misdemeanor or gambling-related 
  6.24  misdemeanor within the last five years, or has been found guilty 
  6.25  of any crime involving fraud or misrepresentation within the 
  6.26  last five years. 
  6.27     (b) The board may not enter into a gaming machine 
  6.28  procurement contract with an applicant that has (1) a person who 
  6.29  owns more than five percent of the stock in the applicant that 
  6.30  does not meet the requirements of this subdivision, or (2) a 
  6.31  partner, officer, or board that does not meet the requirements 
  6.32  of this subdivision. 
  6.33     (c) The restrictions under this subdivision do not apply to 
  6.34  an applicant for a contract if the board determines that the 
  6.35  applicant has terminated its relationship with the individuals 
  6.36  whose actions directly contributed to the disqualification of 
  7.1   the applicant under this subdivision. 
  7.2      Subd. 4.  [CONFLICT OF INTEREST.] The board may not enter 
  7.3   into a gaming machine procurement contract with a person if that 
  7.4   person has an ownership interest in an entity that had supplied 
  7.5   consultation services under a contract to the board regarding 
  7.6   the request for proposal pertaining to the gaming machines. 
  7.7      Subd. 5.  [BOND.] (a) The board shall require securities to 
  7.8   be deposited, or a performance bond or a letter of credit to be 
  7.9   executed by the person or corporation that is awarded a gaming 
  7.10  machine procurement contract in an amount as determined by the 
  7.11  board. 
  7.12     (b) Any securities deposited with the board under this 
  7.13  subdivision must be interest-bearing and limited to those 
  7.14  instruments identified in section 349A.07, subdivision 5. 
  7.15     Subd. 6.  [ASSIGNMENT.] A gaming machine procurement 
  7.16  contract entered into under this section may not be assigned 
  7.17  without the specific written approval of the board. 
  7.18     Sec. 7.  [299L.12] [EXCLUSION OF CERTAIN PERSONS.] 
  7.19     Subdivision 1.  [PERSONS EXCLUDED.] The board may by order 
  7.20  exclude from a casino operated by the board a person who: 
  7.21     (1) has a felony conviction of record under the laws of any 
  7.22  state or the United States; 
  7.23     (2) has had a gambling-related license suspended, revoked, 
  7.24  or denied by an authority in another jurisdiction; or 
  7.25     (3) is determined by the board, on the basis of evidence 
  7.26  presented to the board, to be a threat to the integrity of 
  7.27  gambling in Minnesota. 
  7.28     Subd. 2.  [HEARING; APPEAL.] An order to exclude a person 
  7.29  from the casino must be made by the board at a public hearing of 
  7.30  which the person to be excluded must have at least five days' 
  7.31  notice.  If present at the hearing, the person must be permitted 
  7.32  to show cause why the exclusion should not be ordered.  An 
  7.33  appeal of the order may be made in the same manner as other 
  7.34  appeals under sections 14.63 to 14.68. 
  7.35     Subd. 3.  [REASONABLE TIME TO CURE.] The board may not 
  7.36  issue an order under this subdivision unless the board has 
  8.1   granted the person who is the subject of the order a reasonable 
  8.2   amount of time to cure the violation or condition giving rise to 
  8.3   the order and, in the board's reasonable judgment, the person 
  8.4   has failed to do so. 
  8.5      Subd. 4.  [PROHIBITIONS.] It is a gross misdemeanor for a 
  8.6   person named in an exclusion order to enter, attempt to enter, 
  8.7   or be on the premises of the casino while the order is in 
  8.8   effect, and for a casino licensee knowingly to permit an 
  8.9   excluded person to enter or be on the premises. 
  8.10     Sec. 8.  [299L.13] [COMPULSIVE GAMBLING HOTLINE POSTING.] 
  8.11     The board must post prominently at locations throughout a 
  8.12  casino it operates, in a manner approved by the commissioner of 
  8.13  human services, the toll-free telephone number established by 
  8.14  the commissioner of human services in connection with the 
  8.15  compulsive gambling program. 
  8.16     Sec. 9.  [299L.14] [MINIMUM AGE.] 
  8.17     (a) No person under the age of 18 may enter the casino 
  8.18  operated by the board. 
  8.19     (b) The board and any employee of the board may not 
  8.20  knowingly permit a person under the age of 18 to enter or remain 
  8.21  in the casino. 
  8.22     Sec. 10.  [299L.15] [CASINO GROSS RECEIPTS.] 
  8.23     Subdivision 1.  [BOARD OPERATIONS.] The board may deposit 
  8.24  up to 15 percent of casino gross receipts in a casino operations 
  8.25  account.  Money in the account is appropriated to the board for 
  8.26  administration of sections 299L.09 to 299L.14. 
  8.27     Subd. 2.  [GENERAL FUND.] The board shall deposit all 
  8.28  remaining casino gross receipts in the general fund. 
  8.29                             ARTICLE 2 
  8.30                       CONFORMING PROVISIONS 
  8.31     Section 1.  Minnesota Statutes 2002, section 541.20, is 
  8.32  amended to read: 
  8.33     541.20 [RECOVERY OF MONEY LOST.] 
  8.34     Every person who, by playing at cards, dice, or other game, 
  8.35  or by betting on the hands or sides of such as are gambling, 
  8.36  shall lose to any person so playing or betting any sum of money 
  9.1   or any goods, and pays or delivers the same, or any part 
  9.2   thereof, to the winner, may sue for and recover such money by a 
  9.3   civil action, before any court of competent jurisdiction.  For 
  9.4   purposes of this section, gambling shall not include pari-mutuel 
  9.5   wagering conducted under a license issued pursuant to chapter 
  9.6   240, purchase or sale of tickets in the state lottery, or 
  9.7   gambling authorized under chapters chapter 349 and, 349A, or 
  9.8   299L. 
  9.9      Sec. 2.  Minnesota Statutes 2002, section 541.21, is 
  9.10  amended to read: 
  9.11     541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 
  9.12     Every note, bill, bond, mortgage, or other security or 
  9.13  conveyance in which the whole or any part of the consideration 
  9.14  shall be for any money or goods won by gambling or playing at 
  9.15  cards, dice, or any other game whatever, or by betting on the 
  9.16  sides or hands of any person gambling, or for reimbursing or 
  9.17  repaying any money knowingly lent or advanced at the time and 
  9.18  place of such gambling or betting, or lent and advanced for any 
  9.19  gambling or betting to any persons so gambling or betting, shall 
  9.20  be void and of no effect as between the parties to the same, and 
  9.21  as to all persons except such as hold or claim under them in 
  9.22  good faith, without notice of the illegality of the 
  9.23  consideration of such contract or conveyance.  The provisions of 
  9.24  this section shall not apply to:  (1) pari-mutuel wagering 
  9.25  conducted under a license issued pursuant to chapter 240; (2) 
  9.26  purchase of tickets in the state lottery under chapter 349A; (3) 
  9.27  gaming activities conducted pursuant to the Indian Gaming 
  9.28  Regulatory Act, 25 U.S.C. 2701 et seq.; or (4) lawful gambling 
  9.29  activities permitted under chapter 349; or (5) gambling 
  9.30  conducted by the State Gaming Board. 
  9.31     Sec. 3.  Minnesota Statutes 2002, section 609.761, is 
  9.32  amended by adding a subdivision to read: 
  9.33     Subd. 2a.  [CASINO.] Sections 609.755 and 609.76, 
  9.34  subdivision 1, do not prohibit gaming conducted by the State 
  9.35  Gaming Board.  
  9.36                             ARTICLE 3
 10.1                       CONSTITUTIONAL AMENDMENT
 10.2      Section 1.  [CONSTITUTIONAL AMENDMENT PROPOSED.] 
 10.3      The following amendment to the Minnesota Constitution, 
 10.4   article XIII, section 5, is proposed to the people.  If adopted, 
 10.5   article XIII, section 5, will read: 
 10.6      Sec. 5.  The legislature shall not authorize any lottery or 
 10.7   the sale of lottery tickets, other than (1) authorizing a 
 10.8   lottery and sale of lottery tickets for a lottery operated by 
 10.9   the state, and (2) authorizing a state-operated casino.  The 
 10.10  provisions of article XI, section 14, do not apply to a 
 10.11  state-operated casino. 
 10.12     Sec. 2.  [SUBMISSION TO VOTERS.] 
 10.13     The constitutional amendment proposed in section 1 must be 
 10.14  submitted to the people at the 2004 general election.  The 
 10.15  question submitted must be: 
 10.16     "Shall the Minnesota Constitution be amended to permit the 
 10.17  legislature to authorize a state-operated casino which is not 
 10.18  subject to the constitutional dedication of 40 percent of net 
 10.19  lottery proceeds to the environment and natural resources trust 
 10.20  fund? 
 10.21                                     Yes .......
 10.22                                     No ........" 
 10.23                             ARTICLE 4
 10.24                           EFFECTIVE DATE
 10.25     Section 1.  [EFFECTIVE DATE.] 
 10.26     Articles 1 and 2 are effective December 1, 2004, except 
 10.27  that if the constitutional amendment in article 3 is not adopted 
 10.28  at the 2004 general election, articles 1 and 2 shall not take 
 10.29  effect.