Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Administrative Rules
CHAPTER 7864, GAMBLING EQUIPMENT MANUFACTURERS
GAMBLING CONTROL BOARD
| Part | Title |
|---|---|
| 7864.0010 | Repealed by subpart |
| 7864.0020 | [Repealed, 19 SR 1854] |
| 7864.0030 | Repealed by subpart |
| 7864.0210 | MANUFACTURER LICENSES. |
| 7864.0230 | MANUFACTURER STANDARDS FOR LAWFUL GAMBLING EQUIPMENT. |
| 7864.0240 | MANUFACTURER OPERATIONS, ACCOUNTS, REPORTS, AND RECORDS. |
7864.0010
Published Electronically:
April 7, 2011
7864.0020
[Repealed, 19 SR 1854]
Published Electronically:
April 7, 2011
7864.0030
Published Electronically:
April 7, 2011
7864.0210 MANUFACTURER LICENSES.
Subpart 1.
Manufacturer license required.
A manufacturer of gambling equipment may not sell or furnish gambling equipment for use in Minnesota to any licensed distributor or linked bingo game provider unless the manufacturer has obtained a manufacturer's license or license renewal issued by the board.
Subp. 2.
Manufacturer licensing qualifications.
A manufacturer is not eligible for a manufacturer's license unless they have met the requirements of Minnesota Statutes, sections 349.155, subdivision 3, and 349.163. 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 manufacturer'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 manufacturer's department or division.
Subp. 3.
Manufacturer restrictions.
In addition to the prohibitions in Minnesota Statutes, sections 349.155, subdivision 3, and 349.163, the following restrictions apply when conducting business with distributors or linked bingo game providers authorized to sell lawful gambling equipment in Minnesota. A manufacturer, or any representative, agent, affiliate, or employee of a manufacturer may not:
A.
be an officer, director, paid employee, gambling volunteer, or gambling manager of an organization involved in the conduct of lawful gambling;
D.
lease or rent storage space in Minnesota from any other licensee or employee of a licensee of the board;
E.
provide or permit an affiliate or person acting on behalf of the manufacturer to provide any compensation, gift, gratuity, premium, contribution, or thing of value to a board employee or board members;
G.
directly or indirectly give gifts, trips, prizes, loans of money, premiums, or other gratuities to gambling organizations or their employees, other than nominal gifts not exceeding a value of $25 per organization in a calendar year. "Value" means actual market value or suggested market value, whichever is less. A manufacturer, or a representative, agent, affiliate, or employee of a manufacturer may not contribute more than $250 in any calendar year to an organization or participate in a fund-raising event if the contribution or fund-raising event is related to the organization's conduct of lawful gambling; or
H.
provide any merchandise prize, as part of the sale of any game, either through a gift or sale, to an organization or employees of an organization conducting lawful gambling.
Subp. 4.
Contents of manufacturer license application.
The manufacturer license application must contain the following information:
A.
manufacturer's legal name, any other names used, the legal nature of the business (sole proprietorship, partnership, limited liability company, or corporation), Minnesota tax identification number, and federal employer identification number;
B.
business address, telephone number, and mailing address, if different than the business address;
E.
names and titles of the owners, officers, directors, persons in a supervisory or management position, sales employees, and persons or entities with a direct or indirect financial interest of five percent or more in the manufacturer;
J.
an acknowledgment regarding licensing qualifications in subpart 2 and restrictions in subpart 3;
Subp. 5.
Attachments to manufacturer license application.
The manufacturer must attach the following items to the application.
A.
A manufacturer's 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)
sales employee who is located in Minnesota, makes sales trips to Minnesota, or contacts distributors or linked bingo game providers in Minnesota for sales of gambling equipment;
(7)
person or entity with a direct or indirect financial interest of five percent or more in the manufacturer; and
(8)
consultant who provides advice for the sale or design of gambling equipment for sale in Minnesota.
B.
The manufacturer personnel form must include:
(2)
name and address, date of birth, Social Security number, and daytime telephone number of the person;
(4)
Minnesota tax identification number of businesses the person has owned during the past ten years;
(6)
name, address, and license number, exempt permit number, or excluded authorization of any organization conducting lawful gambling in Minnesota of which the person is a member;
(8)
an acknowledgment regarding the licensing qualifications in subpart 2 and restrictions in subpart 3;
C.
The manufacturer must submit a copy of its logos which will be used to identify the manufacturer on all gambling equipment sold in Minnesota.
Subp. 6.
Changes in manufacturer license application information.
If any information submitted in the application changes during the license term, the manufacturer must notify the board within ten days of the change.
Subp. 7.
Issuing or denying a new or renewal manufacturer license.
This subpart applies to a manufacturer license issued or denied by the board.
A.
Before issuing or denying a new or renewal manufacturer license, the board must conduct or request the director of alcohol and gambling enforcement to conduct a background investigation that includes a review of the manufacturer's sources of financing, ownership, and organizational structure. Actual costs in addition to the new or renewal application fee must be paid by the manufacturer.
B.
The board must issue a new or renewal license to a manufacturer 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 the application if a manufacturer:
(2)
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 manufacturer. The notice must contain the grounds for the action and reasonable notice of the rights of the manufacturer 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. 8.
Manufacturer license effective date.
A manufacturer 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
Published Electronically:
April 7, 2011
7864.0230 MANUFACTURER STANDARDS FOR LAWFUL GAMBLING EQUIPMENT.
Subpart 1.
Prior board approval required for pull-tab and tipboard games and promotional pull-tab or tipboard tickets; conformance with standards for previously approved games.
The following pertain to prior board approval required for pull-tab and tipboard games and promotional pull-tab or tipboard tickets manufactured for sale in Minnesota, and conformance with standards for previously approved games.
A.
To obtain prior board approval, a manufacturer must submit to the director a deal of tickets, flare, and prize pool board, if any, that has been produced to comply with the manufacturing standards prescribed in this chapter.
B.
Within 14 days of receipt of the deal, the director must notify the manufacturer in writing of the director's decision to recommend approval or denial of the game.
(1)
The written notice to recommend denial, or denial by the board, must state the basis for the recommendation or the denial.
(2)
Within 14 days of receipt of a notice recommending denial, the manufacturer may request a contested case hearing under Minnesota Statutes, chapter 14.
(3)
The board may withdraw its approval if it determines that the tickets, flares, and prize pool boards, if any, were not manufactured in such a manner to be tamper-resistant. If the board decides that its approval should be withdrawn, the board must issue an order initiating a contested case hearing under Minnesota Statutes, chapter 14.
C.
Manufacturers are in compliance if the game is approved by the board, and all tickets, flares, and any prize pool boards are produced in compliance with the manufacturing standards prescribed in this chapter. Once approved, a manufacturer may not change a game without prior approval of the board, in compliance with subpart 11.
D.
All pull-tab and tipboards deals and promotional pull-tab or tipboard tickets submitted for approval and approved in Minnesota after July 1, 2011, must be in compliance with the standards by July 1, 2011.
E.
All pull-tab and tipboard deals and promotional pull-tab or tipboard tickets approved for sale in Minnesota prior to July 1, 2011, and manufactured after July 1, 2011, must be in compliance by December 31, 2011.
Subp. 1a.
Manufacturing standards for pull-tab and tipboard ticket information.
Pull-tab and tipboard tickets manufactured for sale in Minnesota must, at a minimum, include the following information printed on the front of a ticket and be the same for all tickets in a deal:
C.
game serial number, which must be a minimum of five and a maximum of eight characters, printed on the game information side of the pull-tab, and must not be repeated on gambling equipment of the same form number for 3-1/2 years from the date of the manufacturer's invoice to the distributor. There must not be more than one serial number in a deal;
F.
quantity of winners in each tier, and the respective winning numbers or symbols and prize amount;
G.
tickets with an unopened, overall area of 1.6 square inches or less are exempt from items D, E, and F; and
H.
tickets with an overall area of less than 2.5 square inches but more than 1.6 square inches are exempt from item F.
Subp. 1b.
Manufacturing standards for design and manufacture of pull-tab and tipboard tickets.
The design and manufacture of pull-tab and tipboard tickets must comply with the following.
A.
Except for folded and banded tickets, symbol blocks must be a minimum of 2.5/32 inch from the die-cut edge of the ticket.
B.
To be tamper-resistant, tickets must be designed, constructed, glued, and assembled to prevent the determination of a winning or losing ticket before its sale to the public:
(4)
due to any manufacturing or color variations in the tickets.
The glue must be of sufficient strength and type to prevent the separation or delamination of the ticket.
C.
All winning tickets must have a primary and secondary form of identifying a winner. A secondary form of identifying a winner is not required for folded and banded tickets.
D.
Winning tickets must comply with the following:
(1)
tickets with both a primary and secondary win indicator must be designed so the win indicators are a minimum of 3.5/32 inch from the die-cut edge of the ticket;
(2)
if a win bar is used and extends into the column farthest from the hinged side of the ticket, it must be 5/32 inch from the die-cut edge; and
(3)
if randomly generated alphanumeric win indicators are used, they must be printed in the space between the hinge and the column closest to the hinge, or located in any position except the column farthest from the hinged side. Alphanumeric win indicators must be designed so that the code numbers, or any color used to highlight the code numbers, are a minimum of 3.5/32 inch from the die-cut edge.
G.
The winning tickets for a multiple seal or cumulative game must specify the seal to be opened or uncovered by the seller.
H.
Pull-tab tickets for an event game must be designed in such a way to avoid duplicate winning hold tickets. This item pertains to event games allowed by Minnesota Statutes, section 349.1721, subdivision 2.
Subp. 1c.
Manufacturing standards for packaging of pull-tab and tipboard tickets.
The packaging of pull-tab and tipboard tickets for each deal must comply with the following.
A.
Winning tickets must be distributed and mixed among all other tickets in a deal to eliminate any pattern between deals or portions of deals from which the location or approximate location of any winning tickets may be determined. The deal must be assembled so that placement of winning or losing tickets does not allow for the possibility of prize manipulation or selection of winning tickets.
D.
Each deal's container must be sealed with a manufacturer's seal including a warning to the purchaser that the game may have been tampered with if the container was received by the purchaser with the manufacturer's seal broken.
(1)
The seal must be of sufficient strength to prevent the seal from breaking when shipped to a purchaser.
F.
Except for deals packaged using a heat-sealed process with plastic with a minimum thickness of 2 mil, each pull-tab deal, including the flare and any other required information, must be sealed in shrink-wrap. Each case of individual tipboard games in which the tipboard tickets are affixed to the flare must be sealed in shrink-wrap.
G.
The manufacturer must:
(1)
attach to the outside of the container a bar code that contains information required by the commissioner of revenue according to Minnesota Statutes, section 297E.04, subdivision 2; and
H.
Each deal must contain the same number of tickets and winning combinations in the same denomination as listed on the flare.
Subp. 1d.
Manufacturing standards for pull-tab and tipboard flares.
The front of the pull-tab and tipboard flare must include:
B.
game name and serial number, which must be identical to the same information printed on the tickets in the deal;
E.
prize structure, including the quantity of symbols or numbers for winning tickets by denomination, with their respective winning symbol or number combinations. The prize amounts may not exceed the limit under Minnesota Statutes, section 349.211;
H.
Minnesota geographic boundary symbol printed on the bottom front of the flare, as required by Minnesota Statutes, section 349.163, subdivision 5, paragraph (d);
I.
bar code affixed or printed on the bottom front of the flare, as required by the commissioner of revenue under Minnesota Statutes, section 297E.04, subdivision 2. The serial number in the bar code must be printed in numbers and letters at least one-half inch high and must be the same as the serial number on the tickets for that deal and on the flare;
J.
for each deal sold to a licensed distributor for use by an Indian tribe, the flare must contain the bar code but must not contain the Minnesota geographic boundary symbol;
K.
for flares containing a seal or seals, including progressive, multiple seal, and cumulative flares, the information required by items A to J, and:
(1)
the flare must be manufactured so that none of the information under the seals can be determined in advance of opening or uncovering the seals in any manner or by any device including but not limited to any pattern in manufacture, assembly, packaging, markings, or by use of a light. The glue must be of sufficient strength and type to prevent the separation or delamination of the flare;
L.
for pull-tab event games allowed by Minnesota Statutes, section 349.1721, subdivision 2, the alternative methods of selecting a winning ticket or tickets;
M.
a seal card that meets all of the requirements of this subpart may serve as the flare for the game; and
Subp. 1e.
Manufacturing standards for prize pool board for cumulative pull-tab or tipboard game.
The front of a prize pool board for a cumulative pull-tab or tipboard game must include, at a minimum:
D.
prize structure, including the quantity of symbols or numbers for winning tickets by denomination, with their respective winning symbol or number combinations. The prize amounts may not exceed the limit under Minnesota Statutes, section 349.211;
G.
Minnesota geographic boundary symbol printed on the bottom front of the flare, as required by Minnesota Statutes, section 349.163, subdivision 5, paragraph (d);
I.
be manufactured so that none of the information under the seals can be determined in advance of opening or uncovering the seals in any manner or by any device including but not limited to any pattern in manufacture, assembly, packaging, markings, or by use of a light.
A prize pool board that meets all of the requirements of this subpart may be used as the flare for the game.
Subp. 1f.
Manufacturing standards for separate progressive pull-tab or tipboard jackpot flare.
For a separate progressive jackpot flare, the minimum information printed on the front of the flare must include:
B.
game name and serial number, which must be identical to the same information printed on the tickets in the deal;
F.
seals for the progressive jackpot round and consolation prize amounts, if any. The prize amounts may not exceed the limit under Minnesota Statutes, section 349.211;
H.
amount to be contributed to the progressive jackpot from each deal in the game.
The flare must be manufactured so that none of the information under the seals can be determined in advance of opening or uncovering the seals in any manner or by any device including but not limited to any pattern in manufacture, assembly, packaging, markings, or by use of a light.
Subp. 1g.
Manufacturing standards for promotional pull-tab or tipboard tickets.
Promotional tickets that mimic pull-tab and tipboard tickets, as defined by part 7861.0210, subpart 43, and Minnesota Statutes, section 349.12, subdivisions 18 and 31, must contain:
Subp. 2.
Manufacturing standards for pull-tab dispensing devices.
Pull-tab dispensing devices used to dispense pull-tab tickets and manufactured to be sold or leased in Minnesota must have the manufacturer's name or board-registered logo, serial number, model number, and date of manufacture permanently attached to it, and conform to the following standards.
A.
The electrical, electronic, and programming features of the pull-tab dispensing device must:
(1)
have an electrical power source, be protected by a surge protector, and safely withstand static electricity;
(3)
have a time and date generator to record, display on an illuminated display, and maintain, at a minimum, the last 25 instances in which the ticket door and cash compartment were opened; and
(4)
have a tamper-resistant component that contains a programming code identical to the equipment specification approved for use in Minnesota by an independent testing laboratory.
B.
The column and dispensing features of a pull-tab dispensing device must comply with the following.
(1)
The pull-tab dispensing device must have dispensing columns located in a separately locking compartment and the columns must accommodate tickets of varying lengths, widths, and thicknesses.
(4)
A shatterproof covering must be placed directly in front of the columns, and the pull-tab dispensing device must contain an outlet or tray to catch dispensed tickets.
(5)
The pull-tab dispensing device must have at least one player button on the front which, when pressed, activates the dispensing of a ticket.
(6)
If a malfunction occurs when the pull-tab dispensing device contains only one deal in one column, the device must become inoperable for that deal until the columns are adjusted or a new game is added.
(7)
If a malfunction occurs when the pull-tab dispensing device contains more than one deal and the malfunction occurs in one of the columns containing a particular game, all of the columns containing tickets for that game must become inoperable until the malfunction is cleared.
(8)
If electrical power is interrupted after currency has been validated but prior to pull-tabs being dispensed, the dollar amount of validated currency must be accurately redisplayed immediately after electrical power is restored.
(9)
When tickets in a deal are dispensed from two or more columns and tickets remain in only one column, the tickets may continue to be dispensed without further splitting into multiple columns.
C.
The accounting and access features must comply with the following.
(1)
Accounting meters must redundantly and perpetually track the total currency validated and the total number of pull-tabs dispensed.
(3)
Accounting meters must not be cleared, erased, or replaced unless the board is notified and has given its approval.
(4)
Accounting information must be at least six numbers in length, and information must be retained for at least six months after electrical power to the pull-tab dispensing device has been disconnected or turned off.
(5)
When any nonresettable accounting meter or any component essential to the secure operation is disconnected, operation must automatically discontinue.
(6)
When in a test-vend or audit mode, test-vends of tickets or currency acceptances must not be recorded on the accounting meters. "Test-vend" means the intentional accepting of currency or vending of pull-tabs to properly calibrate columns to accept currency and vend pull-tabs of varying lengths, widths, and thicknesses. The pull-tab dispensing device must not perform test-vends of tickets or currency acceptances unless it is in a test-vend or audit mode and the exterior door of the pull-tab dispensing device is open.
(7)
The manufacturer must not furnish more than four keys to the exterior locking door, and not more than four keys to each separate locking compartment. The keys to the cash compartment may not be the same as the keys to the cash box.
D.
The electronic currency validator must:
(1)
accept and validate only United States currency and be capable of preventing acceptance of known manipulations of the currency and returning invalid currency to a player;
(3)
ensure that tickets will not be dispensed unless the validator has accepted and retained currency;
(4)
automatically discontinue accepting or validating currency if a malfunction should occur or if electrical power to the pull-tab dispensing device or currency validator is interrupted; and
(5)
have at least one removable stacker box that can stack at least 600 United States currency bills or have at least one removable drop box. The box must be located in a separately locking compartment.
E.
Each pull-tab dispensing device must be designed and constructed so that it can be securely attached to a floor, wall, or counter, and the appearance or design must not resemble a slot machine or other gambling device.
F.
Any pull-tab dispensing device provided to a licensed distributor for demonstration purposes must be clearly and permanently marked for use as a demonstration device only.
Subp. 4.
Manufacturing standards for bingo hard cards, bingo paper sheets, bingo paper sheet packets, and sealed bingo paper sheets.
Bingo hard cards, bingo paper sheets, bingo paper sheet packets, and sealed bingo paper sheets manufactured to be sold in Minnesota must include the manufacturer's name or board-registered logo and conform to the following standards.
A.
Each bingo face, including bingo paper sheets not containing preprinted numbers, may contain color variations or predetermined patterns, and must have:
(2)
the letters "B, I, N, G, O" preprinted above the five vertical columns, with one letter appearing above each column; and
B.
Numbers that are preprinted on the bingo hard card or bingo paper sheet face must not be repeated and must correspond with the following:
D.
Each sealed bingo paper sheet must be constructed so that the bingo face or faces is sealed to prevent revealing any part of the bingo face before the seal is opened by a bingo player, and so that all of the bingo numbers on each face cannot be determined from the outside of the sheet by using a light or by the naked eye.
E.
A "bingo permutation" or "perm" means a proprietary set of an arrangement of numbers on a bingo sheet face.
Subp. 5.
Manufacturing standards for bingo number selection devices.
Bingo number selection devices manufactured to be sold in Minnesota must include the manufacturer's name or its board-registered logo and conform to the following standards.
B.
Each device must not be able to be manipulated by a person to alter the outcome of a bingo game.
Subp. 6.
Manufacturing standards for electronic bingo devices.
In addition to the requirements of Minnesota Statutes, section 349.12, subdivision 12a, electronic bingo devices manufactured for sale or lease in Minnesota must include the manufacturer's name or board-registered logo and conform to the following standards:
A.
the number of bingo faces that may be played using a single electronic bingo device is limited to 36 per bingo game;
B.
must be designed to be used solely with facsimiles of bingo paper sheets, or with corresponding bingo paper sheets;
C.
may be designed to be used with facsimiles of bingo paper sheets not containing predesignated numbers, for which a player will select bingo numbers for each required pattern, and the numbers are secured and printed on the receipt at the point of sale;
D.
may be designed to be used with facsimiles of bingo paper sheets for a breakopen bingo game, for which duplicate facsimiles are not allowed in a single breakopen bingo game;
E.
must ensure that any other bingo faces other than those purchased by a player are not available for play on the device;
G.
must not mimic or appear to be a video game of chance as defined in Minnesota Statutes, section 609.75, subdivision 8;
H.
may have an audio component, in addition to a visual component, that notifies a player when a winning face has been completed, with a feature to allow an organization to activate the component;
I.
must have adequate security to ensure that the device is not capable of being accessed in any manner by unauthorized personnel to change or control the program and has not been marked, defaced, tampered with, or which is otherwise intended to deceive the public or affect a person's chances of winning; and
J.
must have, at a site used by an organization for the conduct of bingo, a central system that has at a minimum:
(1)
dial-up capability to permit the board to remotely monitor the operation, compliance, and the internal accounting systems at any time. The internal accounting system device must maintain accounting information for at least six months;
(2)
a point of sale station that prints a receipt for each sale, void, or reload that includes, at a minimum:
(b)
total dollar amount of the transaction and quantity of facsimiles of bingo paper sheets or bingo paper purchased;
(e)
if facsimiles not containing predesignated numbers are sold, the bingo numbers selected by a player; and
(3)
ability to provide accounting and revenue reports as required by the board and the commissioner of revenue.
Subp. 7.
Manufacturing standards for paddletickets.
Paddletickets manufactured to be sold in Minnesota must conform to the following standards.
A.
The minimum information printed on a paddleticket must include:
(2)
game serial number, which must be a minimum of five and a maximum of eight characters. The serial number must not be repeated on gambling equipment of the same type for 3-1/2 years from the date of the manufacturer's invoice to the distributor.
B.
Paddletickets must be preprinted, detachable from a paddleticket card, and correspond with the colored numbers on the paddlewheel and every available wager shown by a colored number or numbers on the paddlewheel.
D.
The serial number on each paddleticket must be identical to the serial number on the paddleticket card.
Subp. 8.
Manufacturing standards for paddlewheels intended for use without a paddlewheel table.
Paddlewheels used without a paddlewheel table and manufactured to be sold in Minnesota must include the manufacturer's name or board-registered logo and conform to the following standards:
A.
be a manually operated vertical wheel that operates only with a free-spinning bearing system and the contact of the pointer with pegs;
B.
be marked off into equally spaced sections with each section containing a different number or number and symbol combination;
C.
have protruding pegs located on the face of the paddlewheel within two inches of the outside edge and at each line which divides the paddlewheel into equally spaced sections:
(2)
any two pegs may not vary by more than one-eighth inch in distance from the center of the paddlewheel shaft; and
(3)
the distance between any two adjacent pegs may not vary by more than one-eighth inch from that of any two adjacent pegs; and
D.
have a pointer positioned above the paddlewheel. When the wheel is spun, the pointer must strike the pegs on the wheel to bring the wheel to a final stop.
Subp. 9.
Manufacturing standards for paddlewheels intended for use with a paddlewheel table.
Paddlewheels used with paddlewheel tables and manufactured to be sold in Minnesota must include the manufacturer's name or its board-registered logo, and must conform to the following standards:
D.
numbers of each circle must be sequential, starting with the number one, but they may be placed randomly on that circle;
E.
each circle must be divided into equally spaced sections and contain a sequential section number with the first section beginning with the number one. The section numbers may be randomly placed among the sections, but no number in the sequence may be missing or repeated. A section may also include a graphic symbol or symbols including stylized numbers. If stylized numbers are used, they must be clearly different from the type style used for the section number;
F.
each circle must be of a different color to correspond with the colored numbers or number and symbol combinations of a paddlewheel table playing surface;
G.
may have specially designated house numbers, or number and symbol combinations, for use with an optional odd or even bet; and
H.
have colored numbers or number and symbol combinations on the paddlewheel that are at least five-eighths inch high.
Subp. 10.
Manufacturing standards for paddlewheel tables.
Paddlewheel tables used with a paddlewheel as described in subpart 9 must include the manufacturer's name or board-registered logo and conform to the following standards:
A.
have a playing surface that is clearly and permanently printed with the colored numbers or number and symbol combinations that correspond to the same information of each concentric circle on the paddlewheel;
D.
be no longer than nine feet and no wider than four feet, including the chip rail used to hold a player's paddlewheel chips;
F.
have one lock that secures the drop box to the table, and at least one separate lock that secures the contents placed into the drop box. The key to each of the locks must be different from each of the other locks.
Subp. 10a.
Manufacturing standards for programmable electronic devices.
Programmable electronic devices, as defined in Minnesota Statutes, section 349.12, subdivision 18, must include the manufacturer's name or board-registered logo and conform to the following standards.
B.
Each device is solely used to provide a visual or auditory enhancement of a lawful gambling game.
C.
Each device must not be able to be manipulated by a person to alter the outcome of a lawful gambling game.
Subp. 11.
Prior board approval of all gambling equipment required; independent laboratory testing required for certain permanent gambling equipment.
This subpart applies to board approval of gambling equipment.
A.
Before the sale, lease, or distribution of any gambling equipment in Minnesota, the manufacturer must submit to the board a sample of the equipment.
(2)
Samples 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. The manufacturer must include information on any equipment that will be sold or leased on an exclusive basis according to part 7864.0240, subpart 1a.
(3)
The board must notify the manufacturer 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. Board approval is not considered approval of the bar code required by the commissioner of revenue.
(4)
For changes to the payout structure or ticket count for any approved game or for any game within a family of games, the manufacturer must assign a new game form number and submit the game to the board for approval before being offered for sale in Minnesota.
(5)
For changes to flares, prize pool boards, or tickets for approved games and for changes to approved permanent gambling equipment, the manufacturer must submit the changes 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.
B.
Pull-tab deals submitted for approval of a new family of games proposed for production or already in production but not yet approved for sale in Minnesota or new members to a previously approved family of games must include:
(1)
front of the flare, prize pool board if any, ticket for each game, and any cumulative or progressive jackpot flare;
(5)
for new members of a previously approved family of games, the date when that family of games was previously approved by the board.
If a game is approved by production copies, the manufacturer must submit to the board, simultaneously with the first shipment of the game into Minnesota, one complete deal of one family member to verify conformance with the previously approved production copies, and attach a high tier winning ticket and a losing ticket to a flare for all other game family members.
If the seal of a deal submitted to the board is broken or resealed to cover a broken seal, the deal will not be approved by the board.
C.
Tipboards submitted for approval must consist of the following:
(2)
for a new tipboard game proposed for production or already in production but not yet approved or new members to a previously approved family of games, production copies of the tipboard, the tickets, and the numbered sign-up sheet for the seal prize; and
(3)
if the tipboard is approved by production copies, the manufacturer must submit to the board, simultaneously with the first shipment of the game into Minnesota, one tipboard game for each family to verify conformance with the previously approved production copies.
D.
Bingo hard cards, bingo paper sheets, bingo paper sheet packets, and sealed bingo paper sheets submitted for approval must consist of the following:
(1)
a copy of the catalog or brochure illustrating that the equipment meets the standards in subpart 4; and
F.
Permanent gambling equipment, including bingo number selection devices, electronic bingo devices, paddlewheels, paddlewheel tables, pull-tab dispensing devices, and programmable electronic devices that are submitted for approval must consist of the following:
(1)
a copy of the manufacturer's catalog or brochure illustrating that the item meets board-prescribed manufacturing standards for the equipment;
(3)
the board may require the manufacturer to make the equipment available to the board for inspection; and
(4)
in addition to the requirements of subitems (1) to (3), manufacturers submitting a bingo number selection device, electronic bingo device, or pull-tab dispensing device for approval must also include a certificate from an independent testing laboratory approved by the board to perform testing services, stating that the equipment has been tested, analyzed, and meets the standards required in this chapter. The board may require that a programmable electronic device must be tested and certified by an independent testing laboratory approved 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; 35 SR 1528
Published Electronically:
April 7, 2011
7864.0240 MANUFACTURER OPERATIONS, ACCOUNTS, REPORTS, AND RECORDS.
Subpart 1.
Sales and lease restrictions and requirements.
This subpart does not pertain to gambling equipment designated for sale to an Indian tribe. In addition to the requirements of Minnesota Statutes, section 349.163, a manufacturer must comply with the following.
A.
A manufacturer must be able to identify the person to whom gambling equipment is sold and provide the buyer's identity upon the board's request.
C.
A manufacturer may not sell or provide a partial series of bingo paper sheets or bingo paper sheet packets.
D.
The lease or sale agreement of a pull-tab dispensing device must be recorded on a form prescribed by the board. If a distributor's license is suspended, revoked, denied by the board, not renewed, or terminated, the lease agreement must be canceled.
Subp. 1a.
Lawful gambling equipment sold or leased on an exclusive basis; restrictions and agreements.
This subpart pertains to gambling equipment designed or manufactured by a licensed manufacturer for sale or lease on an exclusive basis to a distributor or linked bingo game provider.
A.
Gambling equipment with a proprietary name of an organization that owns its permitted premises may be sold or leased on an exclusive basis.
B.
Gambling equipment with a proprietary name for a leased site may not be sold or leased on an exclusive basis.
C.
To sell a specific pull-tab or tipboard game on an exclusive basis to only one licensed distributor, the manufacturer must document the terms in a valid, written exclusivity agreement. The written agreement must contain, at a minimum, the following:
(4)
a statement that the game will not be sold by the manufacturer to any other distributor unless the agreement has expired or is otherwise terminated;
(5)
a statement that if the agreement is terminated and the game is sold by the manufacturer to other distributors, the distributor is not entitled to any royalty or sales residuals of that game;
(6)
a statement that if a distributor's license is terminated for any reason, the agreement becomes null and void, and any pull-tab or tipboard games in the distributor's inventory that were purchased or leased on an exclusive basis must be returned to the manufacturer or destroyed by the distributor. If the games are returned to the manufacturer upon termination of the distributor's license, those games may be resold by the manufacturer to other distributors; and
(7)
signatures of both parties to the agreement.
This item does not apply to written agreements in effect prior to the effective date of this rule.
D.
To sell or lease a specific type and model of permanent gambling equipment on an exclusive basis to only one licensed distributor or linked bingo game provider, the manufacturer must document the terms in a valid, written exclusivity agreement. The written agreement must contain, at a minimum, the following:
(4)
a statement that the permanent gambling equipment will not be sold or leased to any other distributor or linked bingo game provider unless the agreement has expired or is otherwise terminated;
(5)
a statement that if the agreement is terminated and the permanent gambling equipment is sold or leased by the manufacturer to other distributors or linked bingo game providers, the distributor or linked bingo game provider is not entitled to any royalty or sales or lease residuals;
(6)
a statement that if a distributor's or linked bingo game provider's license is terminated for any reason, the agreement becomes null and void, and any permanent gambling equipment in the distributor's or linked bingo game provider's inventory that was purchased or leased on an exclusive basis must be returned to the manufacturer or destroyed by the distributor or linked bingo game provider. If the permanent gambling equipment is returned to the manufacturer upon termination of the distributor's or linked bingo game provider's license, that equipment may be resold by the manufacturer to other distributors or linked bingo game providers; and
(7)
signatures of both parties to the agreement.
This item does not apply to written agreements in effect prior to the effective date of this rule.
Subp. 2.
Sales invoices and report required.
A manufacturer who sells, leases, or provides gambling equipment must electronically report the sales or leases made each month to the commissioner of revenue by the 20th of the following month, as required under Minnesota Statutes, section 297E.04. A manufacturer must record the transaction on a sales invoice containing the information required by the commissioner of revenue:
A.
manufacturer's name, address, Minnesota tax identification number, federal employer identification number, and license number; and name, address, Minnesota tax identification number, federal employer identification number, and license number of the distributor or linked bingo game provider to whom the sale was made;
C.
unit price or lease price of each item, the total amount invoiced, and for permanent gambling equipment, a description of the equipment being sold or leased, including the make, model number, and serial number;
E.
for pull-tabs and tipboards, including promotional pull-tab and tipboard tickets as defined in part 7861.0210, subpart 43, and Minnesota Statutes, section 349.12, subdivisions 18 and 31, the number of deals and a description of each pull-tab deal or tipboard, including game name, manufacturer identification, form number, part number, and serial number;
G.
for each set of bingo paper sheet packets, the following information:
(5)
serial number from each sheet in the packet if the serial numbers are not uniform throughout the packet. If the serial numbers are uniform throughout the packet, the serial number from the top sheet in the packet must be recorded on the sales invoice. The serial numbers may be recorded on a separate document attached to the invoice, if the invoice states that the serial number listing is attached;
Subp. 3.
Pricing and rebate reports required.
A pricing report must be filed annually in an electronic format prescribed by the director. Records of rebates must be available for director review upon demand. For each type of gambling equipment offered for sale or lease by the manufacturer, the pricing report must include:
C.
for pull-tabs and tipboard tickets:
(5)
original and current price per ticket and per deal, and date the original and current prices were established;
D.
for all other gambling equipment, the unit of measure, original and current price per unit, and date the original and current prices were established;
F.
adjustments for shipping, discounts, and rebates must be reported separately on the annual pricing report, are subject to review and approval or denial by the director, and include:
(3)
rebates which must be based on total dollar volume of purchases for a time period determined by the manufacturer and uniformly applied; and
G.
only changes or additions to the previously filed report must be reported to the director at least two days before the date the new price will take effect. For products no longer available for sale, the current pricing must be reported as $0.
Subp. 4.
Return of pull-tab and tipboard games; determination of defective game; credit invoice issued.
A manufacturer must accept the return of a game of pull-tabs or tipboards from a distributor if the game was not manufactured according to the standards in part 7864.0230 and take the following corrective actions.
A.
For games returned before being put into play, the following apply.
(1)
Within 15 business days of receiving a game from a distributor, a manufacturer must issue a credit invoice if the distributor provided written proof that the game does not meet the standards, unless the manufacturer has notified the commissioner of revenue in writing that a business dispute exists regarding the returned game. A copy of the credit invoice must be filed electronically as required by the commissioner of revenue.
(2)
If the manufacturer ships a new game to replace the returned game, the manufacturer must prepare a new invoice for the new game.
B.
For games returned during play or after being removed from play, the following apply.
(1)
Within 15 business days of receiving a game from a distributor, the manufacturer must determine whether the game was manufactured according to the standards. The manufacturer must return the game to the distributor, who will return it to the organization to keep as a played game.
(2)
Within 15 business days of determining that the game was not manufactured according to the standards, the manufacturer must issue a credit invoice to the distributor for the cost of the game, including any valid and documented losses over which the organization had no control or ability to prevent and which were reimbursed by the distributor. A copy of the credit invoice must be filed electronically as required by the commissioner of revenue.
Subp. 5.
Returned gambling equipment report required.
A manufacturer who accepts returns of gambling equipment not manufactured according to the standards in part 7864.0230 must file a report with the board no later than the 10th day of the following month. The report must be in a format approved by the board and include the following information:
A.
manufacturer's name and license number, and name and license number of the distributor returning the equipment;
C.
standards which were not met, actions taken to bring the equipment into compliance, and for pull-tab or tipboard games, a statement that the games were destroyed if they could not be brought into compliance;
E.
for bingo hard cards, bingo paper sheets, bingo paper sheet packets, and sealed bingo paper sheets, the number of cases, serial number, and series number for uncollated paper;
G.
for bingo number selection devices, electronic bingo devices, paddlewheels, paddlewheel tables, and pull-tab dispensing devices, the make, model, and serial number; and except for electronic bingo devices, the state registration stamp number attached to the equipment.
Subp. 6.
Recall of gambling equipment; credit invoices.
If a manufacturer sells gambling equipment that is not in compliance with part 7864.0230, the board may require the manufacturer to take corrective action, including a recall, if the integrity of the game is harmed or the fair play of the game may be adversely affected. These provisions also apply to a recall initiated by a manufacturer.
A.
Within three business days of receipt of notification from the board, the manufacturer must initiate the recall of gambling equipment from licensed distributors or linked bingo game providers.
B.
Within 25 business days of initiating the recall, the manufacturer must complete the recall and notify the board in writing that the recall has been completed. The notification must include:
(3)
listing of all distributors or linked bingo game providers, including license numbers, from whom the gambling equipment was recalled.
C.
Within 15 business days of notifying the board as required by item B, the manufacturer must issue credit invoices to distributors or linked bingo game providers for the cost of the gambling equipment returned, including any valid and documented losses over which the organization had no control or ability to prevent and which were reimbursed by distributors or linked bingo game providers. Copies of the credit invoices must be filed electronically as required by the commissioner of revenue.
D.
If a recalled pull-tab or tipboard game cannot be brought into compliance with the standards, the manufacturer must destroy the game. At the board's request, the manufacturer must submit an affidavit stating that the equipment was destroyed.
Subp. 7.
Report of delinquent distributor or linked bingo game provider required.
This subpart pertains to the notice to the board that a distributor or linked bingo game provider is delinquent in payment of an invoice or lease agreement.
A.
If a manufacturer has not received payment from a distributor or linked bingo game provider within 30 days of the day immediately following the date of invoice or lease agreement, the manufacturer must report the delinquency to the board in writing in an electronic format authorized by the board. The manufacturer 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 manufacturer has not received payment in full within 60 days of its initial notice to the board, the manufacturer must notify the board of the continued delinquency. The manufacturer must ensure that the board will receive the notice on the 61st day, or the next business day, after the manufacturer's initial report to the board.
D.
Upon receipt of the initial notice under item A, the board must:
(1)
notify and direct the distributor or linked bingo game provider to eliminate the delinquency; and
(2)
notify all manufacturers that until further notice they may only sell or lease gambling equipment to the delinquent distributor or linked bingo game provider on a cash basis. "Cash" means a debit card payment, check, electronic transaction, money order, or cashier's check.
E.
Upon receipt of the second notice under item B, the board must notify:
(1)
the distributor or linked bingo game provider that the sale and lease of gambling equipment to the distributor or linked bingo game provider will not be authorized until the delinquency is eliminated; and
(2)
all manufacturers that they may not sell or lease any gambling equipment to the delinquent distributor or linked bingo game provider.
F.
When the board has been notified that the delinquency is paid in full, the board must notify all manufacturers that the delinquency has been paid and that the sale or lease of gambling equipment to the distributor or linked bingo game provider is authorized.
G.
Until authorized by the board, a manufacturer may not extend credit or sell or lease gambling equipment to a distributor or linked bingo game provider in violation of an order under items D and E.
Subp. 8.
Examination of books and records.
The board, the commissioner of revenue, or the commissioner of public safety or their agents may examine the books and records of any manufacturer without notice at any time during normal business hours.
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
Published Electronically:
April 7, 2011
Official Publication of the State of Minnesota
Revisor of Statutes