Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Administrative Rules
CHAPTER 7863, GAMBLING EQUIPMENT DISTRIBUTORS
GAMBLING CONTROL BOARD
| Part | Title |
|---|---|
| 7863.0010 | Repealed by subpart |
| 7863.0020 | [Repealed, 31 SR 1239] |
| 7863.0050 | [Repealed, 31 SR 1239] |
| 7863.0060 | [Repealed, 31 SR 1239] |
| 7863.0210 | DISTRIBUTORS; DISTRIBUTOR SALESPERSONS LICENSES. |
| 7863.0220 | DISTRIBUTOR OPERATIONS, ACCOUNTS, REPORTS, AND RECORDS. |
| 7863.0250 | LINKED BINGO GAME PROVIDER LICENSES. |
| 7863.0260 | LINKED BINGO GAME PROVIDER OPERATIONS, ACCOUNTS, REPORTS, AND RECORDS. |
| 7863.0270 | ELECTRONIC LINKED BINGO GAME SYSTEM STANDARDS AND REQUIREMENTS. |
7863.0010
Published Electronically:
April 7, 2011
7863.0020
[Repealed, 31 SR 1239]
Published Electronically:
April 7, 2011
7863.0050
[Repealed, 31 SR 1239]
Published Electronically:
April 7, 2011
7863.0060
[Repealed, 31 SR 1239]
Published Electronically:
April 7, 2011
7863.0210 DISTRIBUTORS; DISTRIBUTOR SALESPERSONS LICENSES.
Subpart 1.
Distributor or distributor salesperson license required.
A person may not sell, offer for sale, or furnish gambling equipment for use in Minnesota to any organization that conducts lawful gambling unless the person has obtained a distributor's or distributor salesperson's license or license renewal issued by the board.
Subp. 2.
Distributor or distributor salesperson licensing qualifications.
A distributor or distributor salesperson is not eligible for a license unless they have met the requirements of Minnesota Statutes, sections 349.155, subdivision 3, and 349.161, subdivision 5. For purposes of compliance with Minnesota Statutes, section 349.155, subdivision 3, the following definitions apply.
B.
"Officer" means any person elected, appointed, or designated as an officer by the distributor's board of directors.
C.
"Other person in a supervisory or management position" means any person employed to direct or control the personnel and activities of a distributor's department or division.
Subp. 3.
Distributor restrictions.
In addition to the prohibitions in Minnesota Statutes, section 349.161, subdivisions 1 and 5, the following restrictions apply when conducting business with organizations authorized to conduct lawful gambling in Minnesota. A distributor, distributor salesperson, or any representative, agent, affiliate, or employee of a distributor may not:
A.
contribute more than $250 in any calendar year to an organization or participate in a fundraising event if the contribution or fundraising event is related to the organization's conduct of lawful gambling;
C.
be an officer, director, paid employee, gambling volunteer, or gambling manager of an organization involved in the conduct of lawful gambling;
D.
participate directly in the determination and purchase of gambling equipment for an organization;
E.
provide or permit an affiliate or person acting on behalf of the distributor to provide any compensation, gift, gratuity, premium, contribution, or thing of value to a board employee or board member;
F.
enter into any agreement with any other distributor that restricts either of them in the sale of gambling equipment; or
G.
enter into any agreement with any other distributor to establish the price at which any gambling equipment may be sold.
Subp. 4.
Contents of distributor license application.
The distributor license application must contain the following information:
A.
distributor's legal name, any other names used, the legal nature of the business (corporation, partnership, limited liability company, or sole proprietorship), Minnesota tax identification number, and federal employer identification number;
D.
names and titles of the owners, partners, officers, directors, managers, supervisors, sales employees, and persons or entities with a direct or indirect financial interest of five percent or more in the distributorship;
E.
address and telephone number of all facilities where gambling equipment and supplies are unloaded in Minnesota prior to sale;
F.
acknowledgment regarding the licensing qualifications and restrictions contained in subparts 2 and 3;
H.
an acknowledgment that if the license is terminated or suspended the distributor will file the certified physical inventory required in subpart 10 or 11;
Subp. 5.
Attachments to distributor license application.
The distributor must attach a distributor personnel form to the application for persons identified in item A.
A.
A distributor personnel form must be completed by each:
(4)
officer, including but not limited to president, vice-president, secretary, treasurer, controller, or general counsel;
(6)
person or entity with a direct or indirect financial interest of five percent or more in the distributorship;
(7)
consultant, contract employee, or independent contractor who provides advice or services for the sale or design of gambling equipment for sale or lease in Minnesota, or who is involved in the installation or maintenance of an electronic game system on behalf of a distributor; and
B.
For persons identified in item A, subitems (1) to (7), the distributor personnel form must include:
(2)
name, home address, date of birth, Social Security number, and daytime telephone number of the person;
(6)
name, address, license number, exempt permit number, or exclusion authorization of any organization conducting lawful gambling in Minnesota of which the person is a member;
(7)
Minnesota tax identification number of businesses that the person has owned for the past ten years;
Subp. 6.
Contents of distributor salesperson license application.
For a person who will be employed by a distributor to conduct sales, as identified in subpart 5, item A, subitems (3) to (6), a distributor salesperson license application must contain the following:
C.
acknowledgment regarding the licensing qualifications in subpart 2 and restrictions in subpart 3.
A person who is an independent contractor is not eligible for a license. A distributor salesperson license is not required for the owner or partner of a distributorship licensed by the board.
Subp. 7.
Changes in distributor or distributor salesperson license application information.
If any information submitted in the application changes during the license term, the distributor or distributor salesperson must notify the board within ten days of the change.
Subp. 8.
Issuing or denying a new or renewal distributor or distributor salesperson license.
This subpart governs a new or renewal distributor or distributor salesperson license issued or denied by the board.
A.
Before issuing a new or renewal distributor license, the board must conduct or request the director of alcohol and gambling enforcement to conduct a background investigation, which may include a review of the distributor's sources of financing, ownership, and organizational structure. Actual costs in addition to the new or renewal application fee must be paid by the distributor.
B.
The board must issue a license to a distributor or distributor salesperson who:
(1)
submits the information required in the application and attachments and for a renewal application submits a complete application at least 75 days before the expiration of the existing license;
C.
The board must deny a new or renewal application if a distributor or distributor salesperson:
(2)
has failed to submit all information required by subparts 5 and 6.
When the board determines that an application must be denied, the board must promptly give a written notice to the distributor or distributor salesperson. The notice must contain the grounds for the action and reasonable notice of the rights of the distributor or distributor salesperson to request an appeal under part 7865.0260, subpart 2 or 4, whichever is applicable.
D.
All fees submitted with a new or renewal license application are considered earned and are not refundable.
Subp. 9.
Distributor license effective date.
A distributor license issued by the board is effective on the first day of the month after board approval or as otherwise determined by the board.
Subp. 10.
Distributor license termination.
Before terminating its license, the distributor must submit to the board and commissioner of revenue a certified physical inventory in a format prescribed by the board. Termination of a license may occur due to revocation or denial of the license by the board, or the distributor voluntarily quitting its business. The certified physical inventory must include the following information:
A.
an inventory of all gambling equipment when the form is prepared, including name, form number, bar code information, and quantity of all gambling equipment in the distributor's inventory; and
B.
plans for disposal of all gambling equipment by the date of termination. After the date on which a license is terminated, it is illegal for a distributor to have gambling equipment in its possession.
The distributor or designated agent must keep all invoices and other required documentation related to the sale of gambling equipment for 3-1/2 years after the license has been terminated.
Subp. 11.
License suspension.
When a distributor's license is suspended under part 7865.0220, the licensee must provide to the commissioner of revenue a certified physical inventory of gambling equipment in inventory on the day the suspension begins. The certified physical inventory must include the name, form number, bar code information, and quantity of all gambling equipment in the distributor's inventory on the day the suspension begins.
Statutory Authority:
MS s 14.055; 349.12; 349.151; 349.154; 349.155; 349.16; 349.162; 349.163; 349.1635; 349.165; 349.166; 349.167; 349.169; 349.17; 349.1711; 349.1721; 349.173; 349.19; 349.191; 349.211
History:
31 SR 1239; 35 SR 1276; 38 SR 1613
Published Electronically:
January 30, 2024
7863.0220 DISTRIBUTOR OPERATIONS, ACCOUNTS, REPORTS, AND RECORDS.
Subpart 1.
Purchase or lease of gambling equipment.
When purchasing, leasing, or obtaining gambling equipment, the distributor must comply with Minnesota Statutes, sections 349.161 and 349.162.
A.
A distributor may only purchase, lease, or obtain gambling equipment that has been approved by the board and meets the requirements in parts 7864.0230 and 7864.0235.
B.
Within ten days of being notified by the board that a manufacturer has terminated its license, the license has expired, or the license was revoked by the board, a licensed distributor must submit a certified physical inventory to the board. The certified inventory must include the name, form number, and quantity of all gambling equipment in inventory or gambling equipment owned or leased that was manufactured by that manufacturer.
Subp. 2.
Sale or lease of gambling equipment.
This subpart applies to the sale or lease of gambling equipment.
A.
A distributor may not sell, lease, or furnish gambling equipment to an organization unless the organization has a license, exempt permit, or exclusion authorization issued by the board, or meets the requirements of Minnesota Statutes, section 349.166, subdivision 1, paragraph (b).
B.
A distributor may not sell, lease, or furnish gambling equipment to an organization before the effective date of the organization's license. This item does not pertain to exempt or excluded organizations if the distributor has a copy of the organization's exempt permit or exclusion authorization.
C.
Gambling equipment sold or leased for use in Minnesota must be delivered only to the licensed, exempt, or excluded organization that ordered the equipment.
D.
A distributor may not provide any merchandise prize, as part of the sale of any game or as a gift or sale, to a licensed, exempt, or excluded organization or its employees.
E.
A distributor must include a packing list that lists all items for each shipment of gambling equipment to an organization.
F.
A distributor must not sell or provide a partial series of bingo paper sheets or bingo paper sheet packets to a licensed organization. A distributor may sell a partial series to an exempt or excluded organization.
G.
A distributor may sell a game abandoned under part 7864.0230, subpart 1, item D, that the distributor had in possession before the date of abandonment.
H.
A distributor must document the terms of a lease or sale of permanent gambling equipment and comply with the following.
(1)
A distributor must not enter into a lease agreement for permanent gambling equipment with an organization unless the distributor owns or has a lease agreement with a licensed manufacturer for that equipment.
(2)
If an organization's license or authorization is suspended, revoked, lapsed, or terminated, the lease agreement must be canceled.
(3)
A distributor must not provide any additional keys for a pull-tab dispensing device after the pull-tab dispensing device has been leased or sold.
I.
Gambling equipment designated for sale to an Indian tribe must be stored in a separate area of the distributor's warehouse and cannot contain the Minnesota geographic symbol required by Minnesota Statutes, section 349.163, subdivision 5, paragraph (d).
J.
The following apply to the lease of electronic bingo devices used for nonlinked bingo games:
(1)
A distributor may only lease electronic bingo devices to a licensed organization and is prohibited from selling electronic bingo devices to a licensed organization.
(2)
The distributor may lease electronic bingo devices to more than one licensed organization at the same permitted premises.
(3)
The lease agreement must contain the organization's license number, name and address of the permitted premises where the electronic bingo devices will be used, and terms of the lease agreement, including a prohibition that the electronic bingo devices must not be transferred to another permitted premises unless approved in writing by the board.
(4)
The lease price of an electronic bingo device:
(a)
must be based on a predetermined monthly amount or based on the per unit lease amount for the previous calendar week; and
(5)
The distributor must submit a copy of the lease agreement to the board within ten days of signing or amending a lease agreement.
K.
Electronic pull-tab system and device leases must contain:
(2)
the name and address of the permitted premises where the electronic pull-tab system and devices will be used;
(4)
a clause prohibiting electronic pull-tab devices from being transferred to another permitted premises unless prior written approval by the board is obtained; and
M.
The distributor must submit a copy of the electronic pull-tab system and device lease agreement to the board within ten days of signing or amending a lease agreement.
N.
The following pertain to gambling equipment that is sold or leased on an exclusive basis.
(1)
Gambling equipment with a proprietary name of an organization that owns its permitted premises may be sold or leased on an exclusive basis to that organization.
(2)
Gambling equipment with a proprietary name for a leased site may not be sold or leased on an exclusive basis to an organization.
(3)
A distributor may not pay a royalty to another licensed distributor for the design and manufacture of gambling equipment that is sold or leased on an exclusive basis.
Subp. 3.
Registration of permanent gambling equipment.
A distributor must not sell, lease, transfer, furnish, or provide any permanent gambling equipment to an organization unless the equipment has been registered in the following manner.
A.
A distributor must place a state registration stamp, obtained from the board, on permanent equipment sold or leased to an organization. The distributor must place the stamp on the front of each paddlewheel, paddlewheel table, and pull-tab dispensing device, and on each bingo number selection device. This item does not pertain to a programmable electronic device as defined under Minnesota Statutes, section 349.12, subdivision 18, paragraph (b), clauses (2), (3), and (5).
B.
The distributor must keep a record of permanent gambling equipment leased to a licensed organization. The record must include the organization's name, address, and license number, and the date the equipment was leased to the organization, and if returned, the date the equipment was returned by the organization to the distributor.
C.
To register permanent gambling equipment with the board, the distributor must submit a report to the board, on a form prescribed by the board, that includes the information required by items A and B.
D.
A distributor must not transfer or give state registration stamps to any person, distributor, linked bingo game provider, or manufacturer.
Subp. 4.
Return of defective paper pull-tab and tipboard game; return of electronic pull-tab deals; issuing credit invoices.
This subpart pertains to the return of a paper pull-tab or tipboard game that was not manufactured in compliance with the standards in part 7864.0230 and was returned to the distributor according to this subpart and part 7861.0260, subpart 7.
A.
For a game that is returned from an organization before being put into play, the following apply.
(1)
Within five business days of accepting the return of a game, the distributor must return the game to the manufacturer with documentation that the game does not meet the standards in part 7864.0230.
(2)
Within five business days of receiving credit from the manufacturer, the distributor must issue a credit invoice to the organization unless the distributor notifies the commissioner of revenue in writing that there is a business dispute regarding the returned game. A copy of the credit invoice must be filed electronically, as required by the commissioner of revenue.
(3)
If the distributor ships a replacement game to the organization, the distributor must prepare a sales invoice as required in subpart 6.
B.
For a game returned to a distributor from an organization during play or after being removed from play, the following apply.
(1)
Within five business days of accepting the return of a game, the distributor must return the game to the manufacturer for a determination as to whether the game was manufactured in compliance with the standards in part 7864.0230. After a determination has been made and the game returned to the distributor, the distributor must return the game to the organization to keep as a played game.
(2)
Within five business days of receiving a credit invoice and written determination from the manufacturer, the distributor must issue a credit invoice to the organization for the cost of the game and any valid and documented losses incurred over which the organization had no control or ability to prevent. A copy of the credit invoice must be filed electronically, as required by the commissioner of revenue.
Subp. 4a.
Defective electronic pull-tab game.
B.
For an electronic pull-tab game that is returned from an organization before being put into play, the following apply:
(1)
Within five business days of returning a game, the distributor must return the game to the manufacturer with documentation that the game does not meet the standards in part 7864.0235.
(2)
Within five business days of receiving credit, if applicable, from the manufacturer, the distributor must issue a credit to the organization unless the distributor notifies the commissioner of revenue in writing that there is a business dispute regarding the returned game. A copy of the credit must be filed electronically, as required by the commissioner of revenue.
(3)
If the distributor provides a replacement game to the organization, the distributor must prepare a sales invoice as required in subpart 6.
C.
For an electronic pull-tab game found to be defective during play or after being removed from play, the following apply:
(1)
If a determination is made that the game was not manufactured in compliance with the standards in part 7864.0235, the distributor must notify the organization to close the game and to retain it as a played game in the organization's records.
(2)
Within five business days of receiving a credit and written determination from the manufacturer, the distributor must issue a credit to the organization for the cost of the game, if applicable, and any valid and documented losses incurred over which the organization had no control or ability to prevent. A copy of the credit must be filed electronically, as required by the commissioner of revenue.
Subp. 4b.
Defective, altered, lost, or stolen electronic pull-tab device.
A.
If an organization notifies a distributor of a defective or an altered electronic pull-tab device, the distributor must immediately notify the manufacturer, or the linked bingo game provider, if applicable, and the board. If the organization has not removed the device from play, the distributor or the linked bingo game provider must immediately ensure the device is removed from play.
B.
If an organization notifies a distributor of a lost or stolen electronic pull-tab device, the distributor must immediately notify the manufacturer, or the linked bingo game provider if applicable, and the board.
C.
The distributor or linked bingo game provider must report to the board any removal of a defective or an altered electronic pull-tab device at a site, or any lost or stolen device, within one business day.
Subp. 5.
Recall of gambling equipment; issuing credit invoices.
A distributor must participate in a gambling equipment recall mandated by the board or initiated by the manufacturer.
A.
Within three business days of receiving notification from the manufacturer or the board director, the distributor must initiate the recall from organizations to which it sold the gambling equipment.
B.
The distributor must complete the recall within 15 business days of initiation and notify the board and the commissioner of revenue in writing that it has completed the recall. The recall does not pertain to games already in play which must be kept by the organization as played games. The notification must include the following:
(3)
a list of all organizations, including license or exempt numbers, from which the gambling equipment was recalled.
C.
Within seven business days of receiving a credit invoice from the manufacturer, the distributor must issue credit invoices to all organizations returning gambling equipment under the recall. Credit invoices must include the cost of freight paid by the organization and any valid and documented losses incurred over which the organization had no control or ability to prevent. Copies of the credit invoices must be filed electronically as required by the commissioner of revenue.
Subp. 6.
Sales invoices.
A distributor who sells, leases, or provides gambling equipment must record the transaction on a sales invoice which must contain the following information:
B.
organization's name, address, license number or excluded or exempt authorization, and premises permit number of the site where the gambling equipment was delivered, and for a licensed organization the name and address of an entity as allowed under Minnesota Statutes, section 349.166, subdivision 1, paragraph (b);
D.
name of the person who ordered the gambling equipment, and name of the distributor's licensed salesperson who sold the gambling equipment;
H.
any value for discount, rebate, or other incentive affecting the unit price which must be separately stated.
Invoices must also contain information required for the type of gambling equipment sold, as required by subparts 7 to 12.
Subp. 7.
Sales invoice for pull-tabs and tipboards.
In addition to the requirements of subpart 6, invoices for pull-tabs and tipboards must contain the following information:
B.
description of each deal, including the game name, manufacturer identification, part number, and serial number;
Subp. 7a.
Sales invoice for promotional pull-tab and tipboard tickets.
A distributor who sells promotional pull-tab and tipboard tickets, as defined in part 7861.0210, subpart 43, and Minnesota Statutes, section 349.12, subdivisions 18 and 31, must record the transaction on a sales invoice which must contain the following information:
B.
name of the business entity to whom the tickets are sold and the address of the site where the tickets were delivered. If the tickets are sold to an individual, the sales invoice must contain the individual's name and address and the address of the site where the tickets were delivered;
D.
name of the person who ordered the tickets, and name of the distributor's licensed salesperson who sold the tickets;
E.
description of the tickets, including name, manufacturer identification, form number, part number, and serial number;
Subp. 8.
Sales invoice for paddleticket cards.
In addition to the requirements of subpart 6, invoices for paddleticket cards must contain the following information:
C.
for each sealed grouping, a complete description including the game name, manufacturer identification, part number, and serial number.
Subp. 9.
Sales invoice for sealed breakopen bingo paper.
In addition to the requirements of subpart 6, invoices for sealed breakopen bingo paper sheets must contain the following information:
Subp. 10.
Sales invoice for sets of bingo paper sheet packets.
In addition to the requirements of subpart 6, invoices for sets of bingo paper sheet packets must contain the following information:
F.
serial number from each sheet in the packet if the serial numbers are not uniform throughout the packet, or the serial number from the top sheet in each packet if the serial numbers are uniform throughout the packet. The serial numbers may be recorded on a separate document if the invoice states that the document is attached.
Subp. 11.
Sales invoice for bingo paper sheets (case paper).
In addition to the requirements of subpart 6, invoices for bingo paper sheets (case paper) must contain the following:
Subp. 11a.
Sales invoice for raffle boards.
In addition to the requirements of subpart 6, invoices for raffle boards must contain the following:
C.
a description of each board, including the game name, manufacturer identification, part number, and serial number; and
Subp. 12.
Sales invoice for permanent gambling equipment.
In addition to the requirements of subpart 6, invoices for permanent gambling equipment must contain the following information:
A.
a description of the equipment being sold or leased, including the manufacturer name and the make, model number, and serial number; and
B.
the state registration stamp number attached to the gambling equipment, as required by subpart 3.
Subp. 13.
Monthly sales report to board required for permanent gambling equipment.
After the sale or lease of permanent gambling equipment, the distributor must provide the following information to the board by the 20th of the next month:
B.
manufacturer's name, address, and license number from which the distributor purchased or leased the gambling equipment;
Subp. 14.
Monthly sales report to revenue required.
A distributor who sells, leases, or provides gambling equipment must electronically report the transactions made each month to the commissioner of revenue as required under Minnesota Statutes, section 297E.05. The report is due by the 20th of the next month.
Subp. 15.
Pricing report to director required.
A.
A distributor must submit a pricing report to the director on a monthly basis, in a format approved by the director, listing sales prices for which all gambling equipment was sold.
B.
A distributor must submit a pricing report to the director on an annual basis in a format approved by the director and must include:
(4)
prices at which all gambling equipment currently offered by the distributor will be sold or leased.
C.
Adjustments for transportation, discounts, and rebates must be reported separately on the annual pricing report, and are subject to review and approval by the director.
D.
Changes or additions to the previously filed reports must be reported ten days before the change or addition.
Subp. 16.
Delinquent organization notice to board required.
This subpart pertains to the notice to the board that an organization is delinquent in payment of an invoice or lease agreement.
A.
If a distributor has not received payment from an organization within 30 days of the day immediately following the date of the invoice or lease agreement, the distributor must report the delinquency to the board in writing in an electronic format authorized by the board. The distributor must ensure that the board will receive the notice by the 31st day, or the next business day, after the invoice date for the sale or lease of the gambling equipment. The notice must include:
(2)
an invoice or lease agreement date, invoice number, and total dollar amount of the invoice or lease agreement.
B.
If a distributor has not received payment in full within 60 days of its initial notice to the board, the distributor must notify the board of the continued delinquency. The distributor must ensure that the board will receive the notice on the 61st day, or the next business day, after the distributor's initial report to the board.
D.
Upon receipt of the initial notice under item A, the board must:
(2)
notify all distributors and linked bingo game providers that until further notice they may only sell or lease gambling equipment to the delinquent organization on a cash basis. "Cash" means a debit card payment, electronic transaction, or check drawn on the organization's gambling account.
E.
Upon receipt of the second notice under item B, the board must notify:
(1)
the organization that the sale and lease of gambling equipment to the organization will not be authorized until the delinquency is eliminated; and
(2)
all distributors or linked bingo game providers that they may not sell or lease any gambling equipment to the delinquent organization.
F.
When the board has been notified that the delinquency is paid in full, the board must notify all distributors and linked bingo game providers that the delinquency has been paid and that the sale or lease of gambling equipment to the organization is authorized.
G.
Until authorized by the board, a distributor or linked bingo game provider may not extend credit or sell or lease gambling equipment to an organization in violation of an order under items D and E.
Subp. 17.
Records and reports maintained.
A distributor must maintain reports and records of the purchase, sale, and lease of gambling equipment as required by this part and by Minnesota Statutes, section 297E.05, for 3-1/2 years. A distributor must maintain a record of the registration of permanent gambling equipment.
Statutory Authority:
MS s 14.055; 349.12; 349.151; 349.154; 349.155; 349.16; 349.162; 349.163; 349.1635; 349.165; 349.166; 349.167; 349.169; 349.17; 349.1711; 349.1721; 349.173; 349.19; 349.191; 349.211
History:
31 SR 1239; 35 SR 1276; 35 SR 1528; 38 SR 1613; 41 SR 137; 44 SR 25
Published Electronically:
July 22, 2019
7863.0250 LINKED BINGO GAME PROVIDER LICENSES.
Subpart 1.
Linked bingo game provider license required.
A person may not provide linked bingo paper, linked bingo game system equipment, or services to any licensed organization unless the person has obtained a linked bingo game provider license or license renewal issued by the board.
Subp. 2.
Linked bingo game provider licensing qualifications.
A person is not eligible for a license unless the requirements of Minnesota Statutes, sections 349.155, subdivision 3, and 349.1635, have been met. For purposes of compliance with Minnesota Statutes, section 349.155, subdivision 3, the following definitions apply.
B.
"Officer" means any person elected, appointed, or designated as an officer by the linked bingo game provider's board of directors.
C.
"Other person in a supervisory or management position" means any person employed to direct or control the personnel and activities of a linked bingo game provider's department or division.
Subp. 3.
Linked bingo game provider restrictions.
In addition to the prohibitions in Minnesota Statutes, sections 349.155, subdivision 3, and 349.1635, subdivision 4, the following restrictions apply when conducting business with licensed organizations authorized to conduct lawful gambling in Minnesota. A linked bingo game provider licensee; person holding a financial or managerial interest in a linked bingo game provider; or any agent, affiliate, or employee of a linked bingo game provider may not:
A.
be an officer, director, paid employee, gambling volunteer, or gambling manager of an organization involved in the conduct of lawful gambling;
B.
recruit a person to become a gambling manager or an assistant gambling manager, or identify to an organization a person as a candidate to become a gambling manager or assistant gambling manager;
C.
be involved in or influence the purchase of gambling equipment for an organization, except for equipment necessary to conduct linked bingo games;
D.
provide or permit an affiliate or person acting on behalf of the linked bingo game provider to provide any compensation, gift, gratuity, premium, contribution, or thing of value to a board employee or board member; or
E.
contribute more than $250 in any calendar year to an organization or participate in a fundraising event if the contribution or fundraising event is related to the organization's conduct of lawful gambling.
Subp. 4.
Contents of linked bingo game provider license application.
The linked bingo game provider license application must contain the following:
A.
the linked bingo game provider's legal name, any other names used, the legal nature of the business (corporation, partnership, limited liability company, or sole proprietorship), the Minnesota tax identification number, and the federal employer identification number;
D.
address where the selection of bingo numbers for a linked bingo game will be conducted, if different than the business address;
E.
names and titles of the owners, partners, officers, directors, managers, supervisors, sales employees, persons involved with the services provided by the linked bingo game provider, and persons or entities with a direct or indirect financial interest of five percent or more in the linked bingo game provider;
F.
identification of any person who or entity that develops or provides application software to the manufacturer;
G.
copies of licensing agreements with other entities for all software, except for operating system software, and hardware developed specifically for the purpose of conducting gambling on an electronic device. Operating system software agreements must be maintained by the linked bingo game provider, be current, and be available to the board upon request;
H.
acknowledgment regarding the licensing qualifications in subpart 2 and restrictions in subpart 3;
I.
acknowledgment that any linked bingo game agreement will identify any goods or services, including all costs, that the organization is required to buy or lease;
J.
acknowledgment that the linked bingo game provider will provide all necessary game monitoring equipment and monitoring systems to the board at no cost;
Subp. 5.
Attachments to linked bingo game provider license application.
The linked bingo game provider must attach the following items to the application.
A.
A linked bingo game provider personnel form, in a format prescribed by the board, must be completed by each:
(4)
officer, including but not limited to president, vice-president, secretary, treasurer, controller, or general counsel;
(6)
person or entity with a direct or indirect financial interest of five percent or more in the linked bingo game provider;
(7)
sales employee who promotes, approves orders for, and asks for sales for linked bingo paper and linked bingo game services; and
B.
The linked bingo game provider personnel form must include:
(2)
the name, home address, daytime telephone number, date of birth, and Social Security number of the person;
(6)
the name, address, and license number of any licensed organization conducting lawful gambling in Minnesota of which the person is a member;
(7)
the Minnesota tax identification number of businesses that the person has held ownership interest in during the past ten years;
(8)
an acknowledgment regarding licensing qualifications in subpart 2 and restrictions in subpart 3;
C.
An organization chart illustrating the management structure of the linked bingo game provider and the personnel involved in the conduct and administration of linked bingo games.
D.
A detailed description of the management plan for operation of the linked bingo game system and linked bingo game, including:
(1)
the technology to be used, method of selecting and transmitting selected bingo numbers, security of the transmission, and plans for continuation of the game in the event of an interruption in communications;
(2)
inventory control, inventory forms, sale and distribution of linked bingo paper, distribution of electronic bingo devices, and process for transferring gambling funds from licensed organizations;
(3)
the linked bingo game to be conducted, rules of play, prize levels, procedure to verify winning bingos and to pay winners, and procedure for handling ineligible winners;
(6)
a statement describing the linked bingo game provider's financial capability to provide the equipment and infrastructure necessary to operate the linked bingo game and manage the game's prize pool including the allocation of interest earnings from funds held in trust for progressive jackpots; and
(7)
a proposed fee schedule for the cost of providing services and equipment to licensed organizations.
Subp. 6.
Changes in linked bingo game provider license application information.
If any information submitted in the application changes during the license term, the linked bingo game provider must notify the board within ten days of the change.
Subp. 7.
Issuing or denying a new or renewal linked bingo game provider license.
This subpart applies to a new or renewal linked bingo game provider license issued or denied by the board.
A.
Before issuing a new or renewal linked bingo game provider license, the board must conduct or request the director of alcohol and gambling enforcement to conduct a background investigation which may include a review of the linked bingo game provider's sources of financing, ownership, and organizational structure. Actual costs in addition to the new or renewal application fee must be paid by the linked bingo game provider.
B.
All employees, contract employees, and independent contractors working on behalf of the linked bingo game provider are subject to a background investigation as determined by the board.
C.
Any entity providing application software not developed internally by the licensee is subject to a background investigation as determined by the board.
D.
Any independent contractor providing application software is subject to the requirements of Minnesota Statutes, sections 349.1635; and 349.155, subdivisions 3 and 4.
F.
The board must deny the application if a linked bingo game provider:
(2)
has failed to submit all information required by subparts 4 and 5.
When the board determines that an application must be denied, the board must promptly give a written notice to the linked bingo game provider. The notice must contain the grounds for the action and reasonable notice of the rights of the linked bingo game provider to request an appeal under part 7865.0260, subpart 2 or 4, whichever is applicable.
G.
Fees submitted with a new or renewal license application are considered earned and are not refundable.
Subp. 8.
Linked bingo game provider license effective date.
A linked bingo game provider license issued by the board is effective on the first day of the month after board approval or as otherwise determined by the board.
Statutory Authority:
MS s 14.055; 349.12; 349.151; 349.154; 349.155; 349.16; 349.162; 349.163; 349.1635; 349.165; 349.166; 349.167; 349.169; 349.17; 349.1711; 349.1721; 349.173; 349.19; 349.191; 349.211
History:
31 SR 1239; 35 SR 1276; 38 SR 1613; 44 SR 25
Published Electronically:
January 30, 2024
7863.0260 LINKED BINGO GAME PROVIDER OPERATIONS, ACCOUNTS, REPORTS, AND RECORDS.
Subpart 1.
Board approval; purchase or lease of gambling equipment and linked bingo services.
A.
To obtain board approval for linked bingo games, a linked bingo game provider must provide the linked bingo game on its system to the director, at no charge, to be used to determine compliance with subparts 1 and 1a and part 7863.0270.
B.
Previously approved electronic linked bingo games and systems approved before July 15, 2019, must come into compliance within 180 days of July 15, 2019.
C.
A linked bingo game provider may not purchase or obtain gambling equipment or linked bingo services from any other linked bingo game provider.
D.
Electronic linked bingo system and device leases must contain:
(2)
the name and address of the permitted premises where the electronic linked bingo system and devices will be used;
(4)
a clause prohibiting the electronic linked bingo devices from being transferred to another permitted premises unless prior written approval by the board is obtained; and
F.
The linked bingo game provider must submit a copy of the lease agreement to the board within ten days of signing or amending a lease agreement.
G.
Within ten days of being notified by the board that a linked bingo game provider has terminated its license, the license has expired, or the license was revoked by the board, a licensed linked bingo game provider must submit to the board a certified physical inventory. The certified inventory must include the name, form number, and quantity of all gambling equipment currently in inventory or owned or leased by the linked bingo game provider.
Subp. 1a.
Linked bingo game system requirements.
The linked bingo game system must meet the following requirements:
A.
be capable of recording and printing detailed sales and accounting reports, including the price per face and the number of linked bingo paper sheets or facsimiles of linked bingo sheets sold at each permitted premises;
C.
be capable of recording and printing all financial transaction reports, in addition to maintaining, and printing on demand by the board, a log of significant events or exceptions relating to accounting and sales;
E.
allow for sales data corrections, if necessary, by authorized personnel through a password-controlled audit menu, and maintain and print on demand by the board, a log of all accounting changes including the name of the person who made the changes, date and time of the change, and the items adjusted;
F.
have the capability of supporting remote sales units that must immediately communicate all sales directly to the main linked bingo game system computer;
G.
have either a bingo ball blower system or an electronic random number generator to select bingo numbers, have the means to enter the selected numbers into the linked bingo game system for validation purposes, and have the means to correct any input errors up to the time a valid linked bingo game winner is determined;
H.
contain a means by which all bingo sheet perm numbers or electronic serial and face numbers are contained within the database for winning face identification. The linked bingo game system must be able to verify winning serial and face numbers, determine if there is more than one bingo, verify that each called bingo is valid, and print a record of all selected numbers and each winning bingo face;
I.
possess a database of all bingo perms used in conjunction with the linked bingo game. The linked bingo game system must not allow changes or modifications to the bingo faces. Access to the database must be controlled by password authorization or another secure method;
J.
maintain an internal clock with current synchronized time for all components in 24-hour format and date. The clock must be able to provide:
K.
be capable of producing general accounting reports, including the information prescribed by the board; and
L.
be tested by a board-approved independent testing laboratory certifying that the system meets the requirements in this subpart, with all costs associated with testing paid by the linked bingo game provider.
Before being implemented, any subsequent changes in the game system must be submitted to the director for review and approval. The linked bingo game provider must modify the system as required by the director to ensure compliance with these requirements.
Subp. 2.
Sales of linked bingo paper; sale and lease of linked bingo game system equipment and services.
This subpart applies to the sale of linked bingo paper and the sale or lease of linked bingo game system equipment and services.
A.
A linked bingo game provider may not provide any linked bingo paper or linked bingo game system equipment or services to a licensed distributor or a licensed organization before the effective date of the linked bingo game provider's license.
B.
The terms and conditions of an agreement to provide linked bingo game system equipment or services to a licensed organization must be in a form approved by the board. The agreement must include details on the operation of the linked bingo game and distribution of costs and proceeds. A copy of the agreement must be submitted to the board or director before the first linked bingo game is conducted by the organization. Before being implemented, any subsequent changes to an agreement must be submitted to the director for review and approval.
C.
If an organization's license is revoked, lapsed, or terminated, or if the premises permit is revoked, the linked bingo game agreement is canceled without further obligations on the part of the organization, except that all linked bingo equipment must be returned by the organization to the linked bingo game provider.
D.
Linked bingo paper sold for use in Minnesota must be delivered only to the licensed distributor that ordered the linked bingo paper.
E.
A linked bingo game provider may not provide a merchandise prize to a licensed organization conducting linked bingo.
F.
The following apply to the lease of electronic bingo devices used for linked bingo games:
(1)
A linked bingo game provider may only lease electronic bingo devices to a licensed organization and is prohibited from selling electronic bingo devices to a licensed organization.
(2)
A linked bingo game provider may lease electronic bingo devices to more than one licensed organization at the same permitted premises.
(3)
The lease agreement must contain the organization's license number, name and address of the permitted premises where the electronic bingo devices will be used, and terms of the lease agreement, including a prohibition that the electronic bingo devices must not be transferred to another permitted premises unless approved in writing by the board.
(4)
The lease price of an electronic bingo device:
(a)
must be based on a predetermined monthly amount or based on the per unit lease amount for the previous calendar week; and
(5)
The linked bingo game provider must submit a copy of the lease agreement to the board within ten days of signing or amending a lease agreement.
Subp. 2a.
Conduct of linked bingo game.
When conducting a linked bingo game in conjunction with the requirements of part 7861.0270, subpart 10, a linked bingo game provider must:
A.
comply with the management plan required by part 7863.0250, subpart 5, item D, and approved by the board, with any subsequent changes to be reviewed, modified if necessary, and approved by the director;
B.
ensure that the linked bingo system operates as required by subparts 1 and 1a and part 7863.0270;
C.
establish and maintain audio, video, and secured data transmission as necessary. Before the first bingo number is selected, the linked bingo game provider must verify the link status between all participating organizations and the location where the bingo numbers are being selected. Before the first bingo number is selected, the linked bingo game provider must announce or display to the players the jackpot amount;
D.
if the primary transmission of audio, video, or data fails, the linked bingo game provider must have procedures in place for game reconciliation;
E.
record and keep for a minimum of 60 days all activity related to the transmission of a linked bingo game;
F.
report winner verification to the board, which contains a jackpot winner's name, address, and phone number, within one business day of jackpot prize win. The winner verification form must include an eligibility acknowledgment by the jackpot winner;
G.
award linked bingo prizes of $600 or more within three business days of verification of the winning bingo. Linked bingo prizes of less than $600 may be awarded as determined by the linked bingo game provider and approved by the board. Linked bingo prizes are considered awarded when mailed payment is postmarked. If payment is transmitted in any other manner, linked bingo prizes are considered awarded upon receipt by the player. If there are multiple winners, the jackpot amount must be equally divided and awarded for each verified winning bingo face. Fractional dollars may be rounded to the nearest higher dollar; and
H.
prepare and submit to the appropriate state and federal agencies all relevant tax information pertaining to winners of linked bingo game jackpots.
Subp. 2b.
Seeding of progressive prize jackpots.
A.
All prize money from a progressive series of games must be awarded to players once the jackpot prize is won.
(1)
No portion of a player's wager may be used for supplementing the prizes offered for future progressive games.
(2)
The prize amount may not be reduced for the purpose of supplementing the prizes offered for future progressive games.
B.
If a progressive jackpot prize amount to be awarded exceeds the amount players have contributed toward that jackpot prize, the linked bingo game provider must fund the difference between the amount contributed by players and the amount awarded. Amounts paid by the linked bingo game provider for this purpose may not be recovered from proceeds of another current or subsequent series of progressive games.
Subp. 3.
Return of defective linked bingo paper; issuing credit invoice.
This subpart pertains to the return of linked bingo paper that was not manufactured in compliance with the standards in part 7864.0230 and was returned to the linked bingo game provider according to part 7861.0260, subpart 8.
A.
Within 14 business days of accepting the return of linked bingo paper and making a determination that the linked bingo paper was not manufactured according to part 7864.0230, subpart 4, the linked bingo game provider must issue a credit invoice to the organization. A copy of the credit invoice must be filed electronically, as required by the commissioner of revenue.
B.
If the linked bingo game provider ships replacement linked bingo paper to the organization, the linked bingo game provider must prepare a sales invoice as required in subpart 5.
Subp. 3a.
Defective electronic linked bingo game.
A.
If an electronic linked bingo game is found to be defective, the linked bingo game provider must immediately:
B.
The linked bingo game provider may resolve the defect and, if determined by the board to be a change affecting the outcome of an electronic linked bingo game, must assign the game a new form number and resubmit the game for recertification by an independent testing laboratory and board approval.
C.
If the defect does not have an effect on the outcome of an electronic linked bingo game, the director must first approve the resolution of the defect.
Subp. 3b.
Defective, altered, lost, or stolen electronic linked bingo device.
A.
If an organization notifies an electronic bingo game provider of a defective or an altered electronic linked bingo device, the linked bingo game provider must immediately notify the board. If the organization has not removed the device from play, the linked bingo game provider must immediately ensure the device is removed from play.
B.
If an organization notifies a linked bingo game provider of a lost or stolen electronic linked bingo device, the linked bingo game provider must immediately disable the device and notify the board.
C.
The linked bingo game provider must report to the board any removal of a defective or an altered electronic linked bingo device at a site, or any lost or stolen device, within one business day.
Subp. 4.
Recall of gambling equipment; issuing credit invoice.
A linked bingo game provider must participate in a gambling equipment recall mandated by the board or initiated by the manufacturer, or initiate a recall when it has determined that linked bingo paper does not meet the standards of part 7864.0230, subpart 4, and comply with the following requirements.
A.
Within three business days of receiving notification from the manufacturer or board director, the linked bingo game provider must initiate the recall from licensed organizations to which it sold the linked bingo paper.
B.
The linked bingo game provider must complete the recall within 15 business days of initiation and notify the board and the commissioner of revenue in writing that it has completed the recall. The notification must include the following:
(2)
a list of all organizations, including license numbers, from which the linked bingo paper was recalled.
C.
Within seven business days of receiving a credit invoice from the manufacturer, the linked bingo game provider must issue credit invoices to all organizations returning linked bingo paper under the recall. Credit invoices must include the cost of freight paid by the organization and any valid and documented losses incurred over which the organization had no control or ability to prevent. Copies of the credit invoices must be filed electronically as required by the commissioner of revenue.
Subp. 5.
Sales invoice; linked bingo game provider of other than electronic linked bingo equipment.
A linked bingo game provider who sells, leases, or provides linked bingo equipment must record the transaction on a sales invoice that contains the following:
B.
name, address, and license number of the organization or distributor to whom the sale was made, and premises permit number of the site;
D.
name of the person who ordered the linked bingo paper, and name of the linked bingo game provider's salesperson who sold the linked bingo paper;
I.
any value for discount, rebate, or other incentive affecting the unit price which must be separately stated; and
Subp. 5a.
Sales invoice; linked bingo game provider of electronic linked bingo equipment.
A linked bingo game provider who sells, leases, or provides electronic linked bingo equipment must record the transaction on a sales invoice that contains the following:
B.
the name, address, and license number of the organization or distributor to whom the sale was made, and premises permit number of the site;
H.
any value for discount, rebate, or other incentive affecting the unit price which must be separately stated.
Subp. 6.
Monthly sales report to revenue required.
A linked bingo game provider who sells, leases, or provides gambling equipment must electronically report the transactions made each month to the commissioner of revenue as required under Minnesota Statutes, section 297E.05. The report is due by the 20th of the next month.
Subp. 7.
Delinquent organization notice to board required.
This subpart pertains to the notice to the board that an organization is delinquent in payment of an invoice.
A.
If a linked bingo game provider has not received payment from an organization within 30 days of the day immediately following the invoice date or lease agreement, the linked bingo game provider must report the delinquency to the board in writing in an electronic format authorized by the board. The linked bingo game provider must ensure that the board will receive the notice by the 31st day, or the next business day, after the invoice date for the sale or lease of the gambling equipment. The notice must include:
(2)
an invoice or lease agreement date, invoice number, and total dollar amount of the invoice or lease agreement.
B.
If a linked bingo game provider has not received payment in full within 60 days of its initial notice to the board, the linked bingo game provider must notify the board of the continued delinquency. The linked bingo game provider must ensure that the board will receive the notice on the 61st day, or the next business day, after the linked bingo game provider's initial report to the board.
C.
When the delinquency is paid, the linked bingo game provider must notify the board immediately.
D.
Upon receipt of the initial notice under item A, the board must:
(2)
notify all linked bingo game providers and distributors that until further notice they may sell or lease gambling equipment to the delinquent organization on a cash basis only. "Cash" means a debit card payment, electronic transaction, or check drawn on the organization's gambling account.
E.
Upon receipt of the second notice under item B, the board must notify:
(1)
the organization that the sale and lease of gambling equipment to the organization will not be authorized until the delinquency is eliminated; and
(2)
all linked bingo game providers and distributors that they may not sell or lease any gambling equipment to the delinquent organization.
F.
When the board has been notified that the delinquency is paid in full, the board must notify all linked bingo game providers and distributors that the delinquency has been paid and that the sale or lease of gambling equipment to the organization is authorized.
G.
Until authorized by the board, a linked bingo game provider or distributor may not extend credit or sell or lease gambling equipment to an organization in violation of an order under items D and E.
Subp. 7a.
Game records and reporting required for electronic linked bingo.
The linked bingo game provider must keep a record of each electronic linked bingo game that includes at a minimum the following information:
A.
names and license numbers of all organizations participating, the date the linked bingo game was conducted, and a list of all participating permitted premises, including name and city;
I.
winner information, which must be reported to the board within one business day of the jackpot prize win, including the winner's name, address, and phone number, and the amount of the jackpot won;
K.
a copy of the check, along with all correspondence related to any returned, unclaimed, or voided checks. With the exception of this item and items I and J, all electronic linked bingo game information, including game sales, must be searchable by the board and recorded in a manner that allows the information to be electronically transmitted to the board's computer system upon demand by the board, and at the expense of the linked bingo game provider.
Subp. 8.
Game records required for linked bingo conducted with linked bingo paper sheets.
The linked bingo game provider must keep a record of each linked bingo game conducted with linked bingo paper sheets. The record must include, at a minimum, the following information for each linked bingo game:
A.
names and license numbers of all organizations participating, the date the linked bingo game was conducted, and a list of all permitted premises, including name and city;
B.
price per face for linked bingo paper sheets and the quantity of linked bingo paper sheets sold at each permitted premises, including serial numbers and face numbers;
C.
bingo pattern played; a list of all selected letters and numbers, in order selected, and the letter and number called that produced the winning bingo; and a copy of each winning face;
H.
amount of fees collected for each linked bingo game.
All linked bingo game information, including game sales, must be recorded in a manner that allows it to be electronically transmitted to the board's computer system upon demand by the board, and at the expense of the linked bingo game provider.
Subp. 9.
Records and reports maintained.
The linked bingo game provider must maintain reports and records of the sale of linked bingo paper, the sale or lease of linked bingo game system equipment, the conduct of each linked bingo game, and linked bingo game agreements as required by this part and by Minnesota Statutes, section 297E.05, for 3-1/2 years.
Statutory Authority:
MS s 14.055; 349.12; 349.151; 349.154; 349.155; 349.16; 349.162; 349.163; 349.1635; 349.165; 349.166; 349.167; 349.169; 349.17; 349.1711; 349.1721; 349.173; 349.19; 349.191; 349.211
History:
31 SR 1239; 35 SR 1276; 35 SR 1528; 38 SR 1613; 41 SR 137; 44 SR 25
Published Electronically:
July 22, 2019
7863.0270 ELECTRONIC LINKED BINGO GAME SYSTEM STANDARDS AND REQUIREMENTS.
Subpart 1.
Scope.
In addition to the provisions of parts 7861.0270 and 7863.0260, subparts 1 and 1a, and Minnesota Statutes, sections 349.12, subdivisions 12a, 25a, and 25c; 349.17, subdivisions 6, 8, and 9; and 349.211, subdivision 1a, an electronic linked bingo game system must meet the requirements contained in this part.
Subp. 2.
Activating play.
Coded entry to activate play may include manual entry or the use of a magnetic strip card or bar-coded receipt provided at the point of sale.
Subp. 3a.
No simultaneous play.
An electronic game device may be used to play an electronic linked bingo game or an electronic pull-tab game. The electronic game device must not allow for the purchase of an electronic pull-tab from any screen of an electronic linked bingo game.
Subp. 4.
Electronic monitoring by board.
Electronic monitoring of the operation of the electronic linked bingo device by the board will be limited to read-only access of transaction logs and status of devices. The board is not allowed to alter any data or game play.
Subp. 5.
Secured data transmission.
An electronic linked bingo game system must provide secured data transmission to all participating locations. Separate computing communications methods are required for each linked bingo game provider and each manufacturer. All data for each linked bingo game provider and manufacturer must be secure, separate from, and inaccessible to other linked bingo game providers and manufacturers.
Subp. 6.
Changes in software or hardware.
If there is any change in software or hardware by a linked bingo game provider, the linked bingo game provider must assign a new version or code build number and must submit the new software version or code build number to the director for review, and, if required by the director, the game or equipment must be submitted for review and approval by the board. The new version or code build number must be approved by a certified independent testing laboratory.
Subp. 6a.
Same version or updates.
An electronic linked bingo provider's devices must operate on the same version of all installed software.
Subp. 7.
Changes in version of system or game.
A.
If there is a change in the version or code build number of a system or game, the linked bingo game provider must assign a new version or code build number for any changes or upgrades to the electronic linked bingo system or game to indicate a change of the version or code build number of the system or game.
B.
Any changes to the electronic linked bingo game or system must be approved by the director before the game or system is placed into operation.
C.
Any changes in a version or code build number that have an effect on the outcome of a previously approved game must be retested by a certified independent testing laboratory.
Subp. 7a.
Daily system close for update.
All electronic linked bingo game systems must automatically close and update all site activity from the previous day to the central server by 2:30 a.m. central standard time.
Subp. 8.
Application software.
All application software must be owned by the linked bingo game provider. Software developed by the linked bingo game provider must also meet the requirements of this subpart.
A.
For purposes of this subpart, application software is developed by the linked bingo game provider if the linked bingo game provider designs the central system, database, user interface, the program architecture, and programs the source code.
B.
Application software must be designed to accommodate assistive technology. Assistive technology is any item, piece of equipment, software program, or product system that is used to increase, maintain, or improve the functional capabilities of persons with disabilities.
C.
A licensed linked bingo game provider may jointly develop application software for an electronic linked bingo system and an electronic pull-tab system with a licensed electronic pull-tab manufacturer if the jointly developed application software permits the operation of electronic linked bingo games and electronic pull-tab games on the same electronic linked bingo device or electronic pull-tab device.
D.
Any application software to be used by the linked bingo game provider must be wholly owned free and clear and without any obligation or condition by any entity other than the licensed linked bingo game provider.
E.
The linked bingo game provider must provide the board with documentation establishing ownership of the intellectual property rights to the entire game application software and system.
Subp. 9.
Secure communication.
Connections between all components and access points of the electronic linked bingo game system must only be through the use of secure communication protocols that are designed to prevent unauthorized access or tampering, employing:
A.
Advanced Encryption Standard (AES) specifications as defined by the National Institute of Standards and Technology (NIST); and
B.
IEEE 802.11 standards contained in the Wi-Fi Protected Access II (WPA2) authentication protocols.
Subp. 10.
Independent verification check.
The electronic linked bingo game system and all devices that communicate with the electronic linked bingo game system must have the ability to allow for an independent verification check of the system's software from an authorized source approved by the board. The independent verification check ability is required for all application software that the board determines may affect the integrity of the game. The verification check must provide a means for on-site and off-site field verification of the software and applicable devices to identify and validate the program. All Minnesota board-approved games must be identical to the games presented to a certified independent testing laboratory, including user-acceptance testing and quality assurance required under subpart 36.
Subp. 11.
Electronic accounting data.
Electronic accounting data must be at least ten digits in length and must be maintained in dollars and cents.
Subp. 12.
Cash and inventory verification.
The system must record the value of bingo faces purchased and played, and prizes won.
Subp. 13.
Restricted use.
A.
Individual components of an electronic linked bingo game system must not be capable of being used as stand-alone units for the purposes of engaging in any function or use not permitted by these standards at any time.
C.
No component of an electronic linked bingo system may retain any personal player information after the player has returned the device to the game operator, other than winner information required on a winner verification form.
Subp. 14.
Memory backup.
Central servers must have nonvolatile backup memory or its equivalent that must be maintained in a secure compartment on the central server for the purpose of storing and preserving a redundant set of critical data that include:
A.
error corrections that may have occurred on electronic linked bingo devices or central server, such as an invalid PIN or a game interrupt;
C.
recall of all wagers and other play information, such as electronic linked bingo face number, serial number, and permutation number of game, associated with all games in play and prior to closeout of daily activity;
D.
electronic accounting data capturing the record of transactions for electronic linked bingo devices in use for the central server including:
E.
comprehensive checks of critical memory for each device in operation following game initiation including each specific bingo face in play, bingo numbers selected, and winner verification. An unrecoverable corruption of critical memory must result in an error notification and cause all electronic linked bingo devices in play to cease further function. An unrecoverable critical memory error report must be immediately generated to the board and must include the name of the authorized person who performs any recapture or memory clear of the central server; and
F.
the ability to immediately, accurately, and securely cash out all players who have funds in the system in the event of power or communications network loss or other time of game or play interruption.
Subp. 15.
Randomization.
An electronic linked bingo game system must use randomizing procedures in the creation of games for electronic linked bingo faces that have been created using a method previously approved by the board. As used in this subpart, unless the context requires a different meaning, "face position" means the first bingo face dealt, second bingo face dealt, in sequential order, and "number position" means the first number drawn in sequential order. Any random number generation, shuffling, or randomization of outcomes used in connection with an electronic linked bingo system must be by use of a random number generation application that has successfully passed standard tests for randomness and unpredictability as defined in part 7861.0210, subpart 44.
Subp. 16.
Game information on system.
Prior to the commencement of an electronic linked bingo game, the following data must be maintained and be viewable electronically on the electronic linked bingo game system:
B.
a description of the game sufficient to categorize the game or session relative to other games or sessions;
C.
the jackpot prize for the game or session based on the number of electronic linked bingo faces in play for each game and the cost for each face; and
Subp. 17.
Game information on device.
The following data must be maintained and be viewable electronically on the electronic linked bingo device:
Subp. 18.
Electronic linked bingo face generation.
Upon purchase initiation request from an electronic linked bingo device, the electronic linked bingo system must dispense an electronic facsimile of a bingo face. Once dispensed, such face or outcome must not be reused until the bingo permutation is exhausted.
Subp. 18a.
Animated win determination.
Electronic linked bingo games may contain animated win determinations, but displays may not simulate spinning reels or nonstraight win line graphic representations.
Subp. 19.
Game auditing.
B.
If an audit or other game determination is conducted while a game is in play, termination of the entire game must immediately occur.
C.
Access to the reporting portal must be secure and limited only to the gambling manager, the authorized organization members who are not sellers, the organization's accountant, and the licensed distributor that leased the electronic game system to the organization. Access to the portal requires a unique identifying code and password for each individual user. Sellers may not have reporting portal access.
Subp. 21.
System security and access.
A.
The electronic linked bingo game system must be located in Minnesota in a secure location with limited, authorized access.
B.
Any system elements that hold game data, other than the electronic linked bingo devices, must be in a locked area or in a locked case or compartment with access limited to designated personnel.
C.
The linked bingo game provider must register employees having authorized system access with the board.
D.
The system must be in a secure location and provide electronic security for the games against alteration, tampering, or unauthorized access.
E.
The system must allow the board and other authorized state representatives real-time access to data and equipment, including all accounting for sales, prizes, and credits per device, per site.
Subp. 22.
Data alteration.
The electronic linked bingo system must not permit the alteration of any accounting or significant event log information that was communicated from the electronic linked bingo device without board-approved access controls. In the event financial data is changed, the electronic linked bingo system must be able to produce an automated audit log documenting the:
Subp. 23.
Backup and recovery.
A.
An electronic linked bingo system must have a separate physical medium for securely storing required data on the computer, which must be backed up in real time by a backup medium.
B.
All data required to be available or reported by this subpart must be retained for a period of not less than 3-1/2 years.
C.
All storage of critical data must use error checking and be stored on a nonvolatile physical medium.
D.
The database must be stored on redundant media so that no single failure of any portion of the system would result in the loss or corruption of data.
E.
In the event of a catastrophic failure when the electronic linked bingo system cannot be restarted in any other way, it must be possible to reload the electronic linked bingo system from the last viable backup point and fully recover the contents of that backup, to consist of at least the following information:
(3)
auditing information, including all open game schedules and the summary of completed games; and
Subp. 24.
System access; password requirements.
A.
The linked bingo game provider must maintain password access for the linked bingo game provider; the distributor must maintain password access for the distributor; and the organization must maintain password access for the gambling manager and sellers.
B.
The linked bingo game provider, the distributor, and the organization must register employees and volunteers with authorized system access with the board.
C.
The operating system software and application software must have multiple security access levels to control and restrict different classes of access. The accounts for the access levels must be unique when assigned to the authorized personnel and only one user per account is allowed.
D.
The operating system software and application software must provide comprehensive password security or other secure means of ensuring data integrity and enforcing user permission. It is required that:
(1)
all programs and data files must only be accessible via the entry of passwords that will be known only to the linked bingo game provider and the gambling manager;
(3)
a program must be available that will list all registered users on the system including their privilege level;
Subp. 25.
System log-in and log-out requirements.
Access to an electronic game system requires a password log-in with two-factor authentication (2FA) comprised of a personal identification code and a personal password. System log-in and log-out requirements apply to linked bingo game providers, distributors, gambling managers, assistant gambling managers, users authorized by the gambling manager, and sellers.
Subp. 26.
Electronic accounting and reporting; record of daily system transactions.
A.
One or more electronic accounting systems must perform reporting and other functions in support of the electronic linked bingo system. A linked bingo game provider may enhance its accounting system, with director approval, for innovation in lawful gambling reporting. The electronic accounting system must not interfere with the outcome of any gaming function.
B.
A database containing a permanent record of daily transactions played on the electronic linked bingo game system must be maintained by the electronic linked bingo game system on the central server. The database and central server must be accessible to the board at all times.
Subp. 26a.
Point-of-sale system requirements.
A.
The point-of-sale system used for the conduct of electronic games must require entry of the seller's unique identifying code to open the point-of-sale system.
B.
The point-of-sale system must record the unique identifying code of any person making any transaction at any time. The user list naming each seller with the seller's unique identifying code must be available on the linked bingo game provider's portal.
C.
The point-of-sale system must be capable of immediately producing an electronic game occasion report, using the prescribed terminology, that includes the following information:
Subp. 27.
Reporting requirements of electronic accounting system.
The electronic linked bingo game system must provide the following reports to the Gambling Control Board and the Department of Revenue.
A.
An electronic linked bingo game report must be available on demand for each game currently in play and prior to winner verification. The report must contain the following information:
B.
An electronic linked bingo game report must be available on demand for each completed game. The report must contain the following information:
C.
Other electronic linked bingo game reports that must be available on demand are:
(2)
sales reports, which must provide:
(a)
daily activity by site, by organization, and by linked bingo game provider for all active sites;
(l)
the cumulative net value of credits available for deposit at the close of each electronic game occasion;
(4)
inventory reports must:
(a)
provide for current site inventory showing beginning of the day inventory, additions, faces sold, and ending inventory;
(b)
contain month-end reports for each site showing faces received, put into play, and removed from play; and
(c)
provide for game tracking, from game creation to distribution, to game play, and to game close. Detail must include game number, participating sites, and date played and must be searchable by the board by any of the required data fields;
(6)
real-time site activity report with the ability to:
(a)
view game play activity in real time at each site without disruption or knowledge of the seller;
(c)
view each transaction with date and time stamp, including seller log-in and log-off, device load, game play, device credits redeemed, and any malfunction or misplay;
(7)
system user list, including:
(a)
full name of sellers, assistant gambling managers, gambling manager, board investigators, linked bingo game provider personnel, and distributor personnel, and their unique identifying codes;
(b)
position (seller, assistant gambling manager, gambling manager, distributor, linked bingo game provider, or board investigator);
D.
By the tenth day of each month, the linked bingo game provider must provide an invoice to the organization that includes the following information, using the prescribed terminology, for the previous month's electronic linked bingo activity at each premises:
(6)
the prize amount payable or receivable, which is the difference between the electronic linked bingo prizes paid and the electronic linked bingo prizes awarded at premises;
(7)
the linked bingo game provider's fee, which must be listed both as a percentage of electronic linked bingo net receipts and as an amount to be paid by the organization; and
(8)
the line numbers where these amounts are to be reported on the organization's monthly reports to the board.
E.
Other statistical and activity reports as required by the board and maintained by the linked bingo game provider must be provided in a format prescribed by the board upon request.
F.
Historical data from all sites, both active and inactive, must be available to the board as follows:
(1)
the most recent data must be available on the linked bingo game provider's portal for at least 3-1/2 years;
(2)
archived data or data older than 3-1/2 years must be transferred to the board in a format prescribed by the board; and
(3)
all electronic linked bingo game information, including game sales and report data, must be searchable by the board and recorded in a manner that allows it to be electronically transmitted upon demand by the board and at the expense of the linked bingo game provider.
Subp. 28.
Electronic game system.
A.
Each component of an electronic game system must function as indicated by the communication protocol implemented by the licensed linked bingo game provider of the electronic linked bingo game system.
B.
All communication between the central server and the electronic linked bingo devices must use authentication and encryption protection employing Advanced Encryption Standard (AES) specifications as defined by the National Institute of Standards and Technology (NIST) and the IEEE 802.11 standards contained in the Wi-Fi Protected Access II (WPA2) authentication protocols to provide secure authentication of the device and the central server, ensure the integrity of the data communicated, and for confidentiality.
C.
The communicated data must be encrypted. All systems must require virtual private network (VPN) or secure sockets layer (SSL) encrypted tunneling protocols unless otherwise approved by the board. The certified testing laboratory must examine each submitted electronic game system to ensure that the proposed field configuration will be secure. The certified testing laboratory may provide additional security recommendations to maintain the integrity of the configuration.
D.
The electronic game system must be capable of being tested by the board to verify approved product.
Subp. 29.
Electronic game system security.
A.
The electronic game system security must be designed or programmed in such a way that it may only communicate with authorized electronic devices using a nonbroadcasting encrypted system.
B.
The electronic game system security must include the ability to automatically disable an electronic linked bingo device if the device goes beyond a physical property restriction at a sales location. The device must remain disabled until reactivated at the point of sale.
C.
The electronic game system must be secure from all other site communication systems and users at a gambling site.
Subp. 30.
Firewall protection.
All communications must pass through at least one application-level firewall recognized by the certified testing laboratory. Redundant communications methods are allowed if equally protected by a firewall. Each linked bingo game provider and manufacturer shall implement and maintain communications methods, including any redundancy, separate from other linked bingo game providers and manufacturers. The firewall application must maintain an audit log of the following information and must disable all communications if unauthorized access is detected:
Subp. 31.
Remote access.
Where permitted by the board, remote access must authenticate all computer systems based on the authorized settings or firewall application. The following are additional requirements:
B.
no unauthorized access to any database other than information retrieval using existing functions;
Subp. 32.
Data access by board.
The system must include on-demand remote access at all times by the board to all electronic reporting data without participation of the linked bingo game provider or the distributor.
Subp. 33.
Test system and equipment.
Linked bingo game providers must provide a test system and equipment to the Gambling Control Board, at the linked bingo game provider's expense, to test pending and approved games.
Subp. 34.
Test software.
A.
Linked bingo game providers must provide identical software to the board as part of system approval by an independent testing laboratory and must disable the ability to write to the hard drive.
B.
Linked bingo game providers must allow regulatory test software to be added to an electronic game system to verify approved product.
Subp. 35.
Activation of daubing.
The system must acknowledge that a player has activated the daubing process.
Subp. 36.
Prior board approval required for electronic gambling equipment; conformance with standards for previously approved electronic gambling equipment; independent laboratory testing required for certain electronic gambling equipment.
This subpart applies to board approval of electronic gambling equipment, conformance with standards for previously approved electronic gambling equipment, and independent laboratory testing required for certain electronic gambling equipment.
A.
Before the sale, lease, or distribution of any electronic gambling equipment in Minnesota, a linked bingo game provider must obtain prior board approval for the electronic gambling equipment. The linked bingo game provider must provide to the director at no charge the following:
(3)
the electronic linked bingo test system and equipment to be used to determine compliance with this part.
B.
Electronic gambling equipment must be received by the board on or before the 15th day of the month to ensure consideration at the board's meeting the following month.
C.
The board must notify the linked bingo game provider in writing no later than five days after a board meeting of the board's decision on whether the product is approved for sale in Minnesota.
D.
For changes to the payout structure for any approved game, the linked bingo game provider must assign a new game identification and submit the game for review and approval by the board before being offered for sale in Minnesota.
E.
For changes to approved electronic gambling equipment, the linked bingo game provider must submit the changes to the director for review, and, if required by the director, equipment must be submitted for review and approval by the board.
(1)
The version of gambling equipment containing changes approved by the director under this item is the only version of gambling equipment allowed to be available for sale in Minnesota.
(2)
Handheld, portable electronic devices with power cords approved before July 15, 2019, may remain in play for 180 days from July 15, 2019, at which time the devices must be permanently removed from play. All other previously approved electronic gambling equipment approved before July 15, 2019, must come into compliance within 180 days of July 15, 2019.
F.
Within 14 days of receipt of an electronic linked bingo game, the director must notify the linked bingo game provider in writing of the director's decision to recommend approval or recommend denial.
(1)
The written notice of the director's recommended denial must state the basis for the director's recommendation of denial. Within 14 days of receipt of a notice of the director's recommended denial, the linked bingo game provider may request a contested case hearing under Minnesota Statutes, chapter 14.
G.
Linked bingo game providers are in compliance if the electronic gambling equipment is approved by the board and is produced in compliance with the standards prescribed in this part. Once approved, a linked bingo game provider may not change the equipment without prior approval of the board, in compliance with this subpart and part 7863.0260, subpart 1a. The board shall withdraw its approval if it determines that the electronic gambling equipment:
(2)
is defective and the defect is not immediately corrected and submitted for reapproval by the board for sale in Minnesota.
If the board decides that its approval should be withdrawn, the board will notify the linked bingo game provider of its right to request a contested case hearing under Minnesota Statutes, chapter 14.
H.
Not later than December 31 of each calendar year, a linked bingo game provider must submit to the board, on a form prescribed by the board, a list of all board-approved games that it intends to sell in Minnesota. Any board-approved game not included on the linked bingo game provider's list, or any board-approved game that has not been played by a licensed organization in Minnesota in the previous two calendar years, will be considered abandoned by the linked bingo game provider and will be removed from the board's approved games database. Nothing in this subpart prohibits a linked bingo game provider from voluntarily informing the board at any time of an abandoned game. A voluntarily abandoned game may not be provided by a linked bingo game provider for play in Minnesota unless the game is reapproved by the director.
I.
Independent testing requirements for electronic gambling equipment when required by the board shall include a certification from a board-approved testing laboratory that the electronic gambling equipment tested meets the electronic linked bingo standards and requirements as established in Minnesota Statutes and Minnesota Rules and in conformance with game procedures as provided by the linked bingo game provider. The certification must include:
(1)
a detailed description of the equipment and related software applications that were tested, including applicable model numbers of specific equipment and the software version of the application used for testing;
(4)
any additional findings or issues of concern that might affect the performance or play of the equipment.
J.
Independent testing of electronic gambling equipment includes:
(6)
software applications and version upgrades used in conjunction with lawful gambling equipment;
(7)
user-acceptance testing, which ensures the different functionalities of the system and software work as they would in real-life scenarios. User-acceptance testing includes accurate game simulation; and
History:
38 SR 1613; 41 SR 137; 44 SR 25
Published Electronically:
January 30, 2024
Official Publication of the State of Minnesota
Revisor of Statutes