2004 Minnesota Statutes

CHAPTER 349. Lawful gambling and gambling devices

  349.01 Repealed, 1976 c 261 s 15 

  349.02 Repealed, 1976 c 261 s 15 

  349.03 Repealed, 1976 c 261 s 15 

REGULATION OF LAWFUL GAMBLING

     349.11 Purpose. 

    The purpose of sections 349.11 to 349.22 is to regulate 
 lawful gambling to prevent its commercialization, to insure 
 integrity of operations, and to provide for the use of net 
 profits only for lawful purposes. 

    HIST: 1976 c 261 s 1; 1Sp1981 c 4 art 1 s 162; 1984 c 502 art 
 12 s 2; 1989 c 334 art 2 s 1 

     349.12 Definitions. 

    Subdivision 1.    Scope.  As used in sections 349.11 to 
 349.23 the terms in this section have the meanings given them. 

    Subd. 2.    Active member.  "Active member" means a 
 member who has paid all dues to the organization, who is 18 
 years of age or older, who has equal voting rights with all 
 other members, who has equal opportunity to be an elected 
 officer, who has equal right and responsibilities of attendance 
 at the regularly scheduled meetings of the organization, whose 
 name and membership origination date appear with the member's 
 knowledge and consent on a list of members of the organization, 
 and who has been a member of the organization for at least six 
 months. 

    Subd. 3.    Affiliate.  "Affiliate" is any person or 
 entity directly or indirectly controlling, controlled by, or 
 under common control or ownership with a licensee of the board 
 or any officer or director of a licensee of the board. 

    Subd. 3a.    Allowable expense.  "Allowable expense" 
 means the percentage of the total cost incurred by the 
 organization in the purchase of any good, service, or other item 
 which corresponds to the proportion of the total actual use of 
 the good, service, or other item that is directly related to 
 conduct of lawful gambling.  Allowable expense includes the 
 advertising of the conduct of lawful gambling, provided that the 
 amount expended does not exceed five percent of the annual gross 
 profits of the organization or $5,000 per year per organization, 
 whichever is less.  The board may adopt rules to regulate the 
 content of the advertising to ensure that the content is 
 consistent with the public welfare. 

    Subd. 3b.    Bar operation.  "Bar operation" means a 
 method of selling and redeeming gambling equipment within a 
 leased premises which is licensed for the on-sale of alcoholic 
 beverages where such sales and redemptions are made by an 
 employee of the lessor from a common area where food and 
 beverages are also sold. 

    Subd. 4.    Bingo.  "Bingo" means a game where each 
 player has a bingo hard card or bingo paper sheet, for which a 
 consideration has been paid, and played in accordance with this 
 chapter and with rules of the board for the conduct of bingo.  
 "Bingo" also includes a linked bingo game. 

    Subd. 5.    Bingo occasion.  "Bingo occasion" means a 
 single gathering or session at which a series of one or more 
 successive bingo games is played. 

    Subd. 6.    Board.  "Board" is the gambling control 
 board. 

    Subd. 6a.    Booth operation.  "Booth operation" means a 
 method of selling and redeeming gambling equipment by an 
 employee of a licensed organization in a premises the 
 organization leases or owns where such sales and redemptions are 
 made within a separate enclosure that is distinct from areas 
 where food and beverages are sold. 

    Subd. 7.    Capital assets.  "Capital assets" means 
 property, real or personal, except gambling equipment, with an 
 expected useful life of at least one year.  

    Subd. 8.    Checker.  "Checker" means a person who 
 records the number of bingo hard cards purchased and played 
 during each game and records the prizes awarded to the recorded 
 hard cards, but does not collect the payment for the hard cards. 

    Subd. 9.    Deal.  "Deal" means each separate package, 
 or series of packages, consisting of one game of pull-tabs or 
 tipboards with the same serial number. 

    Subd. 10.    Director.  "Director" is the director of 
 the Gambling Control Board.  

    Subd. 11.    Distributor.  "Distributor" is a person who 
 sells gambling equipment for use within the state to licensed 
 organizations, or to organizations conducting excluded or exempt 
 activities under section 349.166. 

    Subd. 11a.    Distributor salesperson.  "Distributor 
 salesperson" means a person who in any manner receives orders 
 for gambling equipment or who solicits a licensed, exempt, or 
 excluded organization to purchase gambling equipment from a 
 licensed distributor. 

    Subd. 12. Repealed, 1991 c 233 s 110 

    Subd. 13.    Face value.  "Face value" means the price 
 per ticket printed on the ticket or the flare. 

    Subd. 14. Repealed, 2002 c 386 art 1 s 12 

    Subd. 15.    501(c)(3) organization.  "501(c)(3) 
 organization" is an organization exempt from the payment of 
 federal income taxes under section 501(c)(3) of the Internal 
 Revenue Code. 

    Subd. 15a.    Festival organization.  "Festival 
 organization" is an organization conducting a community festival 
 that is exempt from the payment of federal income taxes under 
 section 501(c)(4) of the Internal Revenue Code. 

    Subd. 16.    Flare.  "Flare" is the posted display, with 
 registration stamp affixed or bar code imprinted or affixed, 
 that sets forth the rules of a particular game of pull-tabs or 
 tipboards and that is associated with a specific deal of 
 pull-tabs or grouping of tipboards. 

    Subd. 17.    Free play.  "Free play" means a winning 
 ticket that is labeled as a free play or its equivalent.  

    Subd. 18.    Gambling equipment.  "Gambling equipment" 
 means:  bingo hard cards or paper sheets, linked bingo paper 
 sheets, devices for selecting bingo numbers, pull-tabs, jar 
 tickets, paddlewheels, paddlewheel tables, paddletickets, 
 paddleticket cards, tipboards, tipboard tickets, and pull-tab 
 dispensing devices. 

    Subd. 19.    Gambling manager.  "Gambling manager" means 
 a person who has been designated by the organization to 
 supervise the lawful gambling conducted by it and who: 

    (1) has been an active member of the organization for at 
 least two years at the time of the organization's initial 
 application for a license; 

    (2) has been an active member of the organization for at 
 least the most recent six months prior to the effective date of 
 the organization's renewal license; or 

    (3) meets other qualifications as prescribed by the board 
 by rule. 

    Subd. 20.    Gross profit.  "Gross profit" means the 
 gross receipts collected from lawful gambling, less reasonable 
 sums necessarily and actually expended for prizes. 

    Subd. 21.    Gross receipts.  "Gross receipts" means all 
 receipts derived from lawful gambling activity including, but 
 not limited to, the following items: 

    (1) gross sales of bingo hard cards and paper sheets before 
 reduction for prizes, expenses, shortages, free plays, or any 
 other charges or offsets; 

    (2) the ideal gross of pull-tab and tipboard deals or games 
 less the value of unsold and defective tickets and before 
 reduction for prizes, expenses, shortages, free plays, or any 
 other charges or offsets; 

    (3) gross sales of raffle tickets and paddletickets before 
 reduction for prizes, expenses, shortages, free plays, or any 
 other charges or offsets; 

    (4) admission, commission, cover, or other charges imposed 
 on participants in lawful gambling activity as a condition for 
 or cost of participation; and 

    (5) interest, dividends, annuities, profit from 
 transactions, or other income derived from the accumulation or 
 use of gambling proceeds. 

    Gross receipts does not include proceeds from rental under 
 section 349.164 or 349.18, subdivision 3. 

    Subd. 22.    Ideal gross.  "Ideal gross" means the total 
 amount of receipts that would be received if every individual 
 ticket in the pull-tab or tipboard deal was sold at its face 
 value.  In the calculation of ideal gross and prizes, a free 
 play ticket shall be valued at face value. 

    Subd. 23.    Ideal net.  "Ideal net" means the pull-tab 
 or tipboard deal's ideal gross, as defined under subdivision 22, 
 less the total predetermined prize amounts available to be paid 
 out.  When the prize is not entirely a monetary one, the ideal 
 net is 50 percent of the ideal gross. 

    Subd. 24.    Lawful gambling.  "Lawful gambling" is the 
 operation, conduct or sale of bingo, raffles, paddlewheels, 
 tipboards, and pull-tabs.  

    Subd. 25.    Lawful purpose.  (a) "Lawful purpose" means 
 one or more of the following:  

    (1) any expenditure by or contribution to a 501(c)(3) or 
 festival organization, as defined in subdivision 15a, provided 
 that the organization and expenditure or contribution are in 
 conformity with standards prescribed by the board under section 
 349.154, which standards must apply to both types of 
 organizations in the same manner and to the same extent; 

    (2) a contribution to an individual or family suffering 
 from poverty, homelessness, or physical or mental disability, 
 which is used to relieve the effects of that poverty, 
 homelessness, or disability; 

    (3) a contribution to an individual for treatment for 
 delayed posttraumatic stress syndrome or a contribution to a 
 program recognized by the Minnesota Department of Human Services 
 for the education, prevention, or treatment of compulsive 
 gambling; 

    (4) a contribution to or expenditure on a public or private 
 nonprofit educational institution registered with or accredited 
 by this state or any other state; 

    (5) a contribution to a scholarship fund for defraying the 
 cost of education to individuals where the funds are awarded 
 through an open and fair selection process; 

    (6) activities by an organization or a government entity 
 which recognize humanitarian or military service to the United 
 States, the state of Minnesota, or a community, subject to rules 
 of the board, provided that the rules must not include mileage 
 reimbursements in the computation of the per diem reimbursement 
 limit and must impose no aggregate annual limit on the amount of 
 reasonable and necessary expenditures made to support: 

    (i) members of a military marching or color guard unit for 
 activities conducted within the state; 

    (ii) members of an organization solely for services 
 performed by the members at funeral services; or 

    (iii) members of military marching, color guard, or honor 
 guard units may be reimbursed for participating in color guard, 
 honor guard, or marching unit events within the state or states 
 contiguous to Minnesota at a per participant rate of up to $35 
 per diem; 

    (7) recreational, community, and athletic facilities and 
 activities intended primarily for persons under age 21, provided 
 that such facilities and activities do not discriminate on the 
 basis of gender and the organization complies with section 
 349.154; 

    (8) payment of local taxes authorized under this chapter, 
 taxes imposed by the United States on receipts from lawful 
 gambling, the taxes imposed by section 297E.02, subdivisions 1, 
 4, 5, and 6, and the tax imposed on unrelated business income by 
 section 290.05, subdivision 3; 

    (9) payment of real estate taxes and assessments on 
 permitted gambling premises wholly owned by the licensed 
 organization paying the taxes, or wholly leased by a licensed 
 veterans organization under a national charter recognized under 
 section 501(c)(19) of the Internal Revenue Code, not to exceed: 

    (i) for premises used for bingo, the amount that an 
 organization may expend under board rules on rent for bingo; and 

    (ii) $35,000 per year for premises used for other forms of 
 lawful gambling; 

    (10) a contribution to the United States, this state or any 
 of its political subdivisions, or any agency or instrumentality 
 thereof other than a direct contribution to a law enforcement or 
 prosecutorial agency; 

    (11) a contribution to or expenditure by a nonprofit 
 organization which is a church or body of communicants gathered 
 in common membership for mutual support and edification in 
 piety, worship, or religious observances; 

    (12) payment of the reasonable costs of an audit required 
 in section 297E.06, subdivision 4, provided the annual audit is 
 filed in a timely manner with the Department of Revenue; 

    (13) a contribution to or expenditure on a wildlife 
 management project that benefits the public at-large, provided 
 that the state agency with authority over that wildlife 
 management project approves the project before the contribution 
 or expenditure is made; 

    (14) expenditures, approved by the commissioner of natural 
 resources, by an organization for grooming and maintaining 
 snowmobile trails and all-terrain vehicle trails that are (1) 
 grant-in-aid trails established under section 85.019, or (2) 
 other trails open to public use, including purchase or lease of 
 equipment for this purpose; 

    (15) conducting nutritional programs, food shelves, and 
 congregate dining programs primarily for persons who are age 62 
 or older or disabled; 

    (16) a contribution to a community arts organization, or an 
 expenditure to sponsor arts programs in the community, including 
 but not limited to visual, literary, performing, or musical 
 arts; 

    (17) an expenditure by a licensed veterans organization for 
 payment of water, fuel for heating, electricity, and sewer costs 
 for a building wholly owned or wholly leased by and used as the 
 primary headquarters of the licensed veterans organization; 

    (18) expenditure by a licensed veterans organization of up 
 to $5,000 in a calendar year in net costs to the organization 
 for meals and other membership events, limited to members and 
 spouses, held in recognition of military service.  No more than 
 $5,000 can be expended in total per calendar year under this 
 clause by all licensed veterans organizations sharing the same 
 veterans post home; or 

    (19) payment of fees authorized under this chapter imposed 
 by the state of Minnesota to conduct lawful gambling in 
 Minnesota. 

    (b) Notwithstanding paragraph (a), "lawful purpose" does 
 not include: 

    (1) any expenditure made or incurred for the purpose of 
 influencing the nomination or election of a candidate for public 
 office or for the purpose of promoting or defeating a ballot 
 question; 

    (2) any activity intended to influence an election or a 
 governmental decision-making process; 

    (3) the erection, acquisition, improvement, expansion, 
 repair, or maintenance of real property or capital assets owned 
 or leased by an organization, unless the board has first 
 specifically authorized the expenditures after finding that (i) 
 the real property or capital assets will be used exclusively for 
 one or more of the purposes in paragraph (a); (ii) with respect 
 to expenditures for repair or maintenance only, that the 
 property is or will be used extensively as a meeting place or 
 event location by other nonprofit organizations or community or 
 service groups and that no rental fee is charged for the use; 
 (iii) with respect to expenditures, including a mortgage payment 
 or other debt service payment, for erection or acquisition only, 
 that the erection or acquisition is necessary to replace with a 
 comparable building, a building owned by the organization and 
 destroyed or made uninhabitable by fire or natural disaster, 
 provided that the expenditure may be only for that part of the 
 replacement cost not reimbursed by insurance; (iv) with respect 
 to expenditures, including a mortgage payment or other debt 
 service payment, for erection or acquisition only, that the 
 erection or acquisition is necessary to replace with a 
 comparable building a building owned by the organization that 
 was acquired from the organization by eminent domain or sold by 
 the organization to a purchaser that the organization reasonably 
 believed would otherwise have acquired the building by eminent 
 domain, provided that the expenditure may be only for that part 
 of the replacement cost that exceeds the compensation received 
 by the organization for the building being replaced; or (v) with 
 respect to an expenditure to bring an existing building into 
 compliance with the Americans with Disabilities Act under item 
 (ii), an organization has the option to apply the amount of the 
 board-approved expenditure to the erection or acquisition of a 
 replacement building that is in compliance with the Americans 
 with Disabilities Act; 

    (4) an expenditure by an organization which is a 
 contribution to a parent organization, foundation, or affiliate 
 of the contributing organization, if the parent organization, 
 foundation, or affiliate has provided to the contributing 
 organization within one year of the contribution any money, 
 grants, property, or other thing of value; 

    (5) a contribution by a licensed organization to another 
 licensed organization unless the board has specifically 
 authorized the contribution.  The board must authorize such a 
 contribution when requested to do so by the contributing 
 organization unless it makes an affirmative finding that the 
 contribution will not be used by the recipient organization for 
 one or more of the purposes in paragraph (a); or 

    (6) a contribution to a statutory or home rule charter 
 city, county, or town by a licensed organization with the 
 knowledge that the governmental unit intends to use the 
 contribution for a pension or retirement fund. 

    Subd. 25a.    Linked bingo game.  "Linked bingo game" 
 means a bingo game played at two or more locations where 
 licensed organizations are authorized to conduct bingo, where 
 there is a common prize pool and a common selection of numbers 
 or symbols conducted at one location, and where the results of 
 the selection are transmitted to all participating locations by 
 satellite, telephone, or other means by a linked bingo game 
 provider. 

    Subd. 25b.    Linked bingo game provider.  "Linked bingo 
 game provider" means any person who provides the means to link 
 bingo prizes in a linked bingo game, who provides linked bingo 
 paper sheets to the participating organizations, who provides 
 linked bingo prize management, and who provides the linked bingo 
 game system. 

    Subd. 25c.    Linked bingo game system.  "Linked bingo 
 game system" means the equipment used by the linked bingo 
 provider to conduct, transmit, and track a linked bingo game.  
 The system must be approved by the board before its use in this 
 state and it must have dial-up or other capability to permit the 
 board to monitor its operation remotely. 

    Subd. 25d.    Linked bingo prize pool.  "Linked bingo 
 prize pool" means the total of all prize money that each 
 participating organization has contributed to the linked bingo 
 game prize.  No participating organization may contribute more 
 than $300 per bingo occasion to a linked bingo prize pool. 

    Subd. 26.    Manufacturer.  "Manufacturer" means a 
 person or entity who assembles from raw materials or subparts a 
 completed piece of gambling equipment, and who sells or 
 furnishes the equipment for resale or for use in the state.  The 
 term includes a person who converts, modifies, adds to, or 
 removes parts or a portion from an item, device, or assembly to 
 further its promotion, sale, or use as gambling equipment in 
 this state.  A person only adding or modifying promotional 
 flares to advise the public of the prizes available, the rules 
 of play, and the consideration required is not a manufacturer. 

    Subd. 26a.    Master flare.  "Master flare" is the 
 posted display, with registration stamp affixed or bar code 
 imprinted or affixed, that is used in conjunction with sealed 
 groupings of 100 or fewer sequentially numbered paddleticket 
 cards. 

    Subd. 27.    Net profit.  "Net profit" means gross 
 profit less reasonable sums actually expended for allowable 
 expenses. 

    Subd. 28.    Organization.  "Organization" means any 
 fraternal, religious, veterans, or other nonprofit organization. 

    Subd. 28a.    Paddleticket.  "Paddleticket" means a 
 preprinted ticket that can be used to place wagers on the spin 
 of a paddlewheel. 

    Subd. 28b.    Paddleticket card.  "Paddleticket card" 
 means a card to which detachable paddletickets are attached. 

    Subd. 28c.    Paddleticket card number.  "Paddleticket 
 card number" means the unique serial number preprinted by the 
 manufacturer on the stub of a paddleticket card and the 
 paddletickets attached to the card. 

    Subd. 29.    Paddlewheel.  "Paddlewheel" means a wheel 
 marked off into sections containing one or more numbers, and 
 which, after being turned or spun, uses a pointer or marker to 
 indicate winning chances. 

    Subd. 30.    Person.  "Person" is an individual, 
 organization, firm, association, partnership, limited liability 
 company, corporation, trustee, or legal representative. 

    Subd. 30a.    Profit carryover.  "Profit carryover" 
 means cumulative net profit less cumulative lawful purpose 
 expenditures.  

    Subd. 31.    Promotional ticket.  A pull-tab or tipboard 
 ticket with the words "no purchase necessary" and "for 
 promotional use only" and for which no consideration is given is 
 a promotional ticket. 

    Subd. 32.    Pull-tab.  "Pull-tab" means a single folded 
 or banded ticket or a multi-ply card with perforated break-open 
 tabs, the face of which is initially covered to conceal one or 
 more numbers or symbols, where one or more of each set of 
 tickets or cards has been designated in advance as a winner.  

    Subd. 32a.    Pull-tab dispensing device.  "Pull-tab 
 dispensing device" means a mechanical device that dispenses 
 paper pull-tabs and has no additional function as an amusement 
 or gambling device. 

    Subd. 33.    Raffle.  "Raffle" means a game in which a 
 participant buys a ticket for a chance at a prize with the 
 winner determined by a random drawing to take place at a 
 location and date printed upon the ticket.  

    Subd. 34.    Tipboard.  "Tipboard" means a board, 
 placard or other device containing a seal that conceals the 
 winning number or symbol, and that serves as the game flare for 
 a tipboard game. 

    Subd. 35.    Tipboard ticket.  "Tipboard ticket" is a 
 single folded or banded ticket, or multi-ply card, the face of 
 which is initially covered or otherwise hidden from view to 
 conceal a number, symbol, or set of symbols, some of which have 
 been designated in advance and at random as prize winners. 

    Subd. 36.    Veterans post home.  "Veterans post home" 
 means a building, or portion of a building, that is leased or 
 owned by one or more licensed veterans organizations, and that 
 is considered the post home for all licensed veterans 
 organizations at that site. 

    Subd. 37.    Wholly leased building.  "Wholly leased 
 building" means a building that is leased in its entirety by a 
 licensed organization, and no part or portion of the building is 
 subleased to any other entity or licensed organization. 

    Subd. 38.    Wholly owned building.  "Wholly owned 
 building" means a building that is owned in its entirety by a 
 licensed organization, and no part or portion of the building is 
 subleased to any other entity or licensed organization. 

    HIST: 1976 c 261 s 2; 1984 c 502 art 12 s 3; 1986 c 444; 1986 
 c 467 s 4-6; 1987 c 327 s 2-5; 1988 c 596 s 1; 1988 c 719 art 9 
 s 1-3; 1989 c 203 s 1; 1989 c 334 art 2 s 2-15,51; 1Sp1989 c 1 
 art 13 s 1-6; 1990 c 590 art 1 s 4-9; 1991 c 199 art 2 s 1; 1991 
 c 233 s 100; 1991 c 336 art 2 s 10-12; 1993 c 244 art 5 s 1; 
 1994 c 633 art 2 s 19; art 5 s 1-20; 1995 c 186 s 68; 1995 c 261 
 s 20,21; 1995 c 264 art 9 s 9; 1997 c 155 s 2,3; 1998 c 322 s 1; 
 2000 c 300 s 1,2; 2000 c 336 s 3; 2001 c 96 s 6; 2002 c 377 art 
 12 s 14; 2002 c 386 art 3 s 1; 2003 c 110 s 1-13; 1Sp2003 c 1 
 art 2 s 84,85 

     349.13 Lawful gambling. 

    Lawful gambling is not a lottery or gambling within the 
 meaning of sections 609.75 to 609.76 if it is conducted under 
 this chapter.  A pull-tab dispensing device permitted by board 
 rule is not a gambling device within the meaning of sections 
 609.75 to 609.76 and chapter 299L. 

    HIST: 1976 c 261 s 3; 1984 c 502 art 12 s 4; 1994 c 633 art 5 
 s 21 

  349.14 Repealed, 1990 c 590 art 1 s 55 

     349.15 Use of gross profits. 

    Subdivision 1.    Expenditure restrictions.  Gross 
 profits from lawful gambling may be expended only for lawful 
 purposes or allowable expenses as authorized by the membership 
 of the conducting organization at a monthly meeting of the 
 organization's membership.  Provided that no more than 70 
 percent of the gross profit less the tax imposed under section 
 297E.02, subdivision 1, from bingo, and no more than 55 percent 
 of the gross profit from other forms of lawful gambling, may be 
 expended for allowable expenses related to lawful gambling.  

    Subd. 1a.    Disaster relief.  An organization may 
 expend net profits from lawful gambling to relieve the effects 
 of a disaster as defined in section 12.03, subdivision 2, 
 without the prior approval of its membership if: 

    (1) the contribution is a lawful purpose under section 
 349.12, subdivision 25; 

    (2) the contribution is authorized by the organization's 
 chief executive officer and gambling manager; and 

    (3) the contribution is approved by the membership of the 
 organization at its next regularly scheduled monthly meeting. 

 If the contribution is not approved by the membership of the 
 organization at its next regularly scheduled monthly meeting, 
 the organization shall reimburse its gambling account in the 
 amount of the contribution. 

    Subd. 2.    Cash shortages.  In computing gross profit 
 to determine maximum amounts which may be expended for allowable 
 expenses under subdivision 1, an organization may not reduce its 
 gross receipts by any cash shortages.  An organization may 
 report cash shortages to the board only as an allowable 
 expense.  An organization may not report cash shortages in any 
 fiscal year beginning on July 1, 2004, that in total exceed 
 three-tenths of one percent of the organization's gross receipts 
 from lawful gambling at each permitted premises where the 
 organization conducts lawful gambling. 

    Subd. 3.    Refunds and credits.  For purposes of this 
 section "gross profit" does not include any refund or credit 
 received under section 297E.02, subdivision 4, paragraph (d). 

    Subd. 4.    Alternative premises payment.  An 
 organization eligible to expend gross profits on real estate 
 taxes and assessments under section 349.12, subdivision 25, 
 paragraph (a), clause (9), may in the alternative, elect on a 
 calendar year basis to pay itself up to $1,000 per month for the 
 use of its premises for lawful gambling.  Any payments made 
 under this subdivision shall be considered an allowable expense. 

    HIST: 1976 c 261 s 5; 1984 c 502 art 12 s 6; 1986 c 467 s 7; 
 1Sp1986 c 3 art 2 s 16; 1987 c 327 s 7; 1989 c 203 s 2; 1989 c 
 334 art 2 s 16; 1Sp1989 c 1 art 13 s 7; 1990 c 590 art 1 s 10; 
 1991 c 336 art 2 s 13; 1994 c 633 art 2 s 19; art 5 s 22; 1996 c 
 471 art 13 s 16; 1997 c 155 s 4; 2000 c 300 s 3; 2001 c 96 s 
 7,8; 2002 c 386 art 2 s 1; 2004 c 172 s 1 

     349.151 Gambling Control Board. 

    Subdivision 1.    Board created.  The Gambling Control 
 Board is created with the powers and duties established by 
 subdivision 4.  

    Subd. 2.    Membership.  (a) On and after July 1, 1991, 
 the board consists of seven members, as follows:  (1) those 
 members appointed by the governor before July 1, 1991, whose 
 terms expire June 30, 1992, June 30, 1993, and June 30, 1994; 
 (2) one member appointed by the governor for a term expiring 
 June 30, 1994; (3) one member appointed by the commissioner of 
 public safety for a term expiring June 30, 1995; and (4) one 
 member appointed by the attorney general for a term expiring 
 June 30, 1995. 

    (b) All appointments under this subdivision are with the 
 advice and consent of the senate. 

    (c) After expiration of the initial terms, appointments are 
 for four years. 

    (d) The board shall select one of its members to serve as 
 chair.  No more than three members appointed by the governor 
 under this subdivision may belong to the same political party. 

    Subd. 3. Repealed, 1989 c 334 art 2 s 52 

    Subd. 3a.    Compensation.  The compensation of board 
 members is as provided in section 15.0575, subdivision 3. 

    Subd. 4.    Powers and duties.  (a) The board has the 
 following powers and duties:  

    (1) to regulate lawful gambling to ensure it is conducted 
 in the public interest; 

    (2) to issue licenses to organizations, distributors, 
 distributor salespersons, bingo halls, manufacturers, linked 
 bingo game providers, and gambling managers; 

    (3) to collect and deposit license, permit, and 
 registration fees due under this chapter; 

    (4) to receive reports required by this chapter and inspect 
 all premises, records, books, and other documents of 
 organizations, distributors, manufacturers, linked bingo game 
 providers, and bingo halls to insure compliance with all 
 applicable laws and rules; 

    (5) to make rules authorized by this chapter; 

    (6) to register gambling equipment and issue registration 
 stamps; 

    (7) to provide by rule for the mandatory posting by 
 organizations conducting lawful gambling of rules of play and 
 the odds and/or house percentage on each form of lawful 
 gambling; 

    (8) to report annually to the governor and legislature on 
 its activities and on recommended changes in the laws governing 
 gambling; 

    (9) to impose civil penalties of not more than $500 per 
 violation on organizations, distributors, distributor 
 salespersons, manufacturers, bingo halls, linked bingo game 
 providers, and gambling managers for failure to comply with any 
 provision of this chapter or any rule or order of the board; 

    (10) to issue premises permits to organizations licensed to 
 conduct lawful gambling; 

    (11) to delegate to the director the authority to issue or 
 deny license and premises permit applications and renewals under 
 criteria established by the board; 

    (12) to suspend or revoke licenses and premises permits of 
 organizations, distributors, distributor salespersons, 
 manufacturers, bingo halls, linked bingo game providers, or 
 gambling managers as provided in this chapter; 

    (13) to register employees of organizations licensed to 
 conduct lawful gambling; 

    (14) to require fingerprints from persons determined by 
 board rule to be subject to fingerprinting; 

    (15) to delegate to a compliance review group of the board 
 the authority to investigate alleged violations, issue consent 
 orders, and initiate contested cases on behalf of the board; 

    (16) to order organizations, distributors, distributor 
 salespersons, manufacturers, bingo halls, linked bingo game 
 providers, and gambling managers to take corrective actions; and 

    (17) to take all necessary steps to ensure the integrity of 
 and public confidence in lawful gambling.  

    (b) The board, or director if authorized to act on behalf 
 of the board, may by citation assess any organization, 
 distributor, employee eligible to make sales on behalf of a 
 distributor, manufacturer, bingo hall licensee, linked bingo 
 game provider, or gambling manager a civil penalty of not more 
 than $500 per violation for a failure to comply with any 
 provision of this chapter or any rule adopted or order issued by 
 the board.  Any organization, distributor, bingo hall licensee, 
 gambling manager, linked bingo game provider, or manufacturer 
 assessed a civil penalty under this paragraph may request a 
 hearing before the board.  Appeals of citations imposing a civil 
 penalty are not subject to the provisions of the Administrative 
 Procedure Act.  

    (c) All penalties received by the board must be deposited 
 in the general fund. 

    (d) All fees imposed by the board under sections 349.16 to 
 349.167 must be deposited in the state treasury and credited to 
 a lawful gambling regulation account in the special revenue 
 fund.  Receipts in this account are available for the operations 
 of the board up to the amount authorized in biennial 
 appropriations from the legislature. 

    Subd. 4a. MS 1989 Supp Repealed, 1990 c 590 art 1 s 55 

    Subd. 4a.    Paddlewheel rules.  The board shall 
 promulgate rules governing paddlewheels before July 1, 1992.  
 The rules must provide for operation procedures, internal 
 control standards, posted information, records, and reports. 

    Subd. 4b.    Pull-tab sales from dispensing devices.  (a)
 The board may by rule authorize but not require the use of 
 pull-tab dispensing devices. 

    (b) Rules adopted under paragraph (a): 

    (1) must limit the number of pull-tab dispensing devices on 
 any permitted premises to three; and 

    (2) must limit the use of pull-tab dispensing devices to a 
 permitted premises which is (i) a licensed premises for on-sales 
 of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
 licensed bingo hall that allows gambling only by persons 18 
 years or older. 

    (c) Notwithstanding rules adopted under paragraph (b), 
 pull-tab dispensing devices may be used in establishments 
 licensed for the off-sale of intoxicating liquor, other than 
 drugstores and general food stores licensed under section 
 340A.405, subdivision 1. 

    Subd. 5.  MS 1988 Repealed, 1989 c 334 art 2 s 52 

    Subd. 5.    Attorney general.  The attorney general is 
 the attorney for the board.  

    Subd. 6. Renumbered subd 5 

    Subd. 7.    Orders.  The board may order any person 
 subject to its jurisdiction who has violated this chapter or a 
 board rule or order to take appropriate action to correct the 
 violation. 

    Subd. 8.    Criminal history.  The board may request the 
 director of alcohol and gambling enforcement to assist in 
 investigating the background of an applicant for a license under 
 this chapter, and the director of alcohol and gambling 
 enforcement may bill the license applicant for the cost 
 thereof.  The board has access to all criminal history data 
 compiled by the Division of Alcohol and Gambling Enforcement on 
 licensees and applicants. 

    Subd. 9.    Response to requests.  An applicant, 
 licensee, or other person subject to the board's jurisdiction 
 must: 

    (1) comply with requests for information or documents, or 
 other requests, from the board or director within the time 
 specified in the request or, if no time is specified, within 30 
 days of the date the board or director mails the request; and 

    (2) appear before the board or director when requested to 
 do so, and must bring documents or materials requested by the 
 board or director. 

    Subd. 10.    Production of evidence.  For the purpose of 
 any investigation, inspection, compliance review, audit, or 
 proceeding under this chapter, the board or director may (1) 
 administer oaths and affirmations, (2) subpoena witnesses and 
 compel their attendance, (3) take evidence, and (4) require the 
 production of books, papers, correspondence, memoranda, 
 agreements, or other documents or records that the board or 
 director determines are relevant or material to the inquiry. 

    Subd. 11.    Court orders.  In the event of a refusal to 
 appear by, or refusal to obey a subpoena issued to, any person 
 under this chapter, the district court may on application of the 
 board or director issue to the person an order directing the 
 person to appear before the board or director, and to produce 
 documentary evidence if so ordered or to give evidence relating 
 to the matter under investigation or in question.  Failure to 
 obey such an order may be punished by the court as contempt of 
 court. 

    Subd. 12.    Access.  The board or director has free 
 access during normal business hours to the offices and places of 
 business of licensees or organizations conducting excluded or 
 exempt gambling, and to all books, accounts, papers, records, 
 files, safes, and vaults maintained in the places of business or 
 required to be maintained. 

    Subd. 13.    Rulemaking.  In addition to any authority 
 to adopt rules specifically authorized under this chapter, the 
 board may adopt, amend, or repeal rules under chapter 14, when 
 necessary or proper in discharging the board's powers and duties.

    HIST: 1984 c 502 art 12 s 7; 1984 c 640 s 32; 1986 c 444; 1986 
 c 467 s 8,9; 1987 c 327 s 8,9; 1989 c 334 art 2 s 17; 1990 c 590 
 art 1 s 11,12; 1991 c 233 s 101; 1991 c 336 art 2 s 14,15; 1993 
 c 13 art 1 s 3; 1994 c 465 art 3 s 33; 1994 c 633 art 5 s 23-31; 
 1995 c 233 art 2 s 56; 1995 c 254 art 1 s 78; 1996 c 467 s 3; 
 1997 c 129 art 2 s 15; 1999 c 206 s 10; 2002 c 386 art 2 s 2; 
 2003 c 110 s 14,15; 1Sp2003 c 1 art 2 s 86,87; 1Sp2003 c 23 s 7 

     349.152 Director. 

    Subdivision 1.    Appointed.  The governor shall 
 appoint, with the advice and consent of the senate, a director 
 from a list of one or more persons submitted by the board.  The 
 director serves in the unclassified service at the pleasure of 
 the governor.  

    Subd. 2.    Duties of director.  The director has the 
 following duties: 

    (1) to carry out gambling policy established by the board; 

    (2) to employ and supervise personnel of the board; 

    (3) to advise and make recommendations to the board on 
 rules; 

    (4) to issue licenses and premises permits as authorized by 
 the board; 

    (5) to issue cease and desist orders; 

    (6) to make recommendations to the board on license 
 issuance, denial, censure, suspension and revocation, civil 
 penalties, and corrective action the board imposes; 

    (7) to ensure that board rules, policy, and decisions are 
 adequately and accurately conveyed to the board's licensees; 

    (8) to conduct investigations, inspections, compliance 
 reviews, and audits under this chapter; and 

    (9) to issue subpoenas to compel the attendance of 
 witnesses and the production of documents, books, records, and 
 other evidence relating to an investigation, compliance review, 
 or audit the director is authorized to conduct. 

    Subd. 3.    Cease and desist orders.  (a) Whenever it 
 appears to the director that any person has engaged or is about 
 to engage in any act or practice constituting a violation of 
 this chapter or any board rule or order the director may issue 
 and cause to be served upon the person an order requiring the 
 person to cease and desist from violations of this chapter or 
 board rule or order.  The order must give reasonable notice of 
 the rights of the person to request a hearing and must state the 
 reason for the entry of the order.  Unless otherwise agreed 
 between the parties, a hearing shall be held not later than 
 seven days after the request for the hearing is received by the 
 board after which and within 20 days after the receipt of the 
 administrative law judge's report and subsequent exceptions and 
 argument the board shall issue an order vacating the cease and 
 desist order, modifying it, or making it permanent as the facts 
 require.  If no hearing is requested within 30 days of the 
 service of the order, the order becomes final and remains in 
 effect until modified or vacated by the board or director.  All 
 hearings shall be conducted in accordance with the provisions of 
 chapter 14.  If the person to whom a cease and desist order is 
 issued fails to appear at the hearing after being duly notified, 
 the person shall be deemed in default, and the proceeding may be 
 determined against the person upon consideration of the cease 
 and desist order, the allegations of which may be deemed to be 
 true.  

    (b) Whenever it appears to the board that any person has 
 engaged or is about to engage in any act or practice that 
 violates this chapter or any board rule or order, the board may 
 bring an action in the district court in the appropriate county 
 to enjoin the acts or practices and to enforce compliance with 
 this chapter or any board rule or order and may refer the matter 
 to the attorney general.  Upon a proper showing, a permanent or 
 temporary injunction, restraining order, or writ of mandamus 
 shall be granted.  The court may not require the board to post a 
 bond. 

    Subd. 4.    Executive assistant.  The director may 
 appoint an executive assistant to the director, who is in the 
 unclassified service. 

    HIST: 1989 c 334 art 2 s 18; 1990 c 590 art 1 s 13-15; 1994 c 
 633 art 5 s 32,33 

     349.153 Conflict of interest. 

    (a) A person may not serve on the board, be the director, 
 or be an employee of the board who has an interest in any 
 corporation, association, limited liability company, or 
 partnership that is licensed by the board as a distributor, 
 manufacturer, linked bingo game provider, or bingo hall under 
 section 349.164.  

    (b) A member of the board, the director, or an employee of 
 the board may not accept employment with, receive compensation 
 directly or indirectly from, or enter into a contractual 
 relationship with an organization that conducts lawful gambling, 
 a distributor, a linked bingo game provider, a bingo hall, or a 
 manufacturer while employed with or a member of the board or 
 within one year after terminating employment with or leaving the 
 board. 

    (c) A distributor, bingo hall, manufacturer, linked bingo 
 game provider, or organization licensed to conduct lawful 
 gambling may not hire a former employee, director, or member of 
 the Gambling Control Board for one year after the employee, 
 director, or member has terminated employment with or left the 
 Gambling Control Board.  

    HIST: 1989 c 334 art 2 s 19; 1991 c 233 s 109; 1994 c 633 art 
 5 s 34; 2003 c 110 s 16 

     349.154 Expenditure of net profits from lawful gambling. 

    Subdivision 1.    Standards for certain organizations.  
 The board shall by rule prescribe standards that must be met by 
 any licensed organization that is a 501(c)(3) organization.  The 
 standards must provide: 

    (1) operating standards for the organization, including a 
 maximum percentage or percentages of the organization's total 
 expenditures that may be expended for the organization's 
 administration and operation; and 

    (2) standards for any expenditure by the organization of 
 net profits from lawful gambling, including a requirement that 
 the expenditure be related to the primary purpose of the 
 organization. 

    Subd. 2.    Net profit reports.  (a) Each licensed 
 organization must report monthly to the board on a form 
 prescribed by the board each expenditure and contribution of net 
 profits from lawful gambling.  The reports must provide for each 
 expenditure or contribution: 

    (1) the name, address, and telephone number of the 
 recipient of the expenditure or contribution; 

    (2) the date the contribution was approved by the 
 organization; 

    (3) the date, amount, and check number or electronic 
 transfer confirmation number of the expenditure or contribution; 

    (4) a brief description of how the expenditure or 
 contribution meets one or more of the purposes in section 
 349.12, subdivision 25; and 

    (5) in the case of expenditures authorized under section 
 349.12, subdivision 25, paragraph (a), clause (7), whether the 
 expenditure is for a facility or activity that primarily 
 benefits male or female participants. 

    (b) The board shall make available to the commissioners of 
 revenue and public safety copies of reports received under this 
 subdivision and requested by them. 

    (c) The report required under this subdivision must provide 
 for a separate accounting for all expenditures made from the 
 reporting organization's tax refund or credit authorized under 
 section 297E.02, subdivision 4, paragraph (d). 

    Subd. 3. Repealed, 1991 c 336 art 2 s 53 

    Subd. 3a.    Expenditures for recreational, community, and 
 athletic programs.  An organization that makes a greater 
 percentage of its lawful purpose expenditures under section 
 349.12, subdivision 25, paragraph (a), clause (7), on facilities 
 or activities for one gender rather than another may not deny a 
 reasonable request for funding of a facility or activity for the 
 underrepresented gender if the request is for funding for a 
 facility or activity that is a lawful purpose under that 
 clause.  An applicant for funding for a facility or activity for 
 an underrepresented gender who believes that an application for 
 funding was denied in violation of this subdivision may file a 
 complaint with the board.  The board shall prescribe a form for 
 the complaint and shall furnish a copy of the form to any 
 requester.  The board shall investigate each complaint filed 
 and, if the board finds that the organization against which the 
 complaint was filed has violated this subdivision, shall issue 
 an order directing the organization to take such corrective 
 action as the board deems necessary to bring the organization 
 into compliance with this subdivision. 

    HIST: 1989 c 334 art 2 s 51; 1990 c 590 art 1 s 16; 1991 c 336 
 art 2 s 16; 1994 c 633 art 5 s 35; 1996 c 471 art 13 s 17; 1997 
 c 231 art 7 s 33; 1998 c 322 s 2 

     349.155 Licenses; license actions. 

    Subdivision 1.    Forms.  All applications for a license 
 must be on a form prescribed by the board.  In the case of 
 applications by an organization the board may require the 
 organization to submit a copy of its articles of incorporation 
 and other documents the board deems necessary. 

    Subd. 2.    Investigation fee.  In addition to initial 
 and renewal application fees, the board may charge license and 
 renewal applicants a fee to cover the costs of background 
 investigations conducted under this chapter. 

    Subd. 3.    Mandatory disqualifications.  (a) In the 
 case of licenses for manufacturers, distributors, distributor 
 salespersons, bingo halls, linked bingo game providers, and 
 gambling managers, the board may not issue or renew a license 
 under this chapter, and shall revoke a license under this 
 chapter, if the applicant or licensee, or a director, officer, 
 partner, governor, or person in a supervisory or management 
 position of the applicant or licensee: 

    (1) has ever been convicted of a felony or a crime 
 involving gambling; 

    (2) has ever been convicted of (i) assault, (ii) a criminal 
 violation involving the use of a firearm, or (iii) making 
 terroristic threats; 

    (3) is or has ever been connected with or engaged in an 
 illegal business; 

    (4) owes $500 or more in delinquent taxes as defined in 
 section 270.72; 

    (5) had a sales and use tax permit revoked by the 
 commissioner of revenue within the past two years; or 

    (6) after demand, has not filed tax returns required by the 
 commissioner of revenue.  The board may deny or refuse to renew 
 a license under this chapter, and may revoke a license under 
 this chapter, if any of the conditions in this paragraph are 
 applicable to an affiliate or direct or indirect holder of more 
 than a five percent financial interest in the applicant or 
 licensee.  

    (b) In the case of licenses for organizations, the board 
 may not issue or renew a license under this chapter, and shall 
 revoke a license under this chapter, if the organization, or an 
 officer or member of the governing body of the organization:  

    (1) has been convicted of a felony or gross misdemeanor 
 within the five years before the issuance or renewal of the 
 license; 

    (2) has ever been convicted of a crime involving gambling; 
 or 

    (3) has had a license issued by the board or director 
 permanently revoked for violation of law or board rule. 

    Subd. 4.    License revocation, suspension, denial; 
 censure.  The board may by order (i) deny, suspend, revoke, or 
 refuse to renew a license or premises permit, or (ii) censure a 
 licensee or applicant, if it finds that the order is in the 
 public interest and that the applicant or licensee, or a 
 director, officer, partner, governor, person in a supervisory or 
 management position of the applicant or licensee, an employee 
 eligible to make sales on behalf of the applicant or licensee, 
 or direct or indirect holder of more than a five percent 
 financial interest in the applicant or licensee: 

    (1) has violated or failed to comply with any provision of 
 this chapter or chapter 297E or 299L, or any rule adopted or 
 order issued thereunder; 

    (2) has filed an application for a license that is 
 incomplete in any material respect, or contains a statement 
 that, in light of the circumstances under which it was made, is 
 false, misleading, fraudulent, or a misrepresentation; 

    (3) has made a false statement in a document or report 
 required to be submitted to the board or the commissioner of 
 revenue, or has made a false statement to the board, the 
 compliance review group, or the director; 

    (4) has been convicted of a crime in another jurisdiction 
 that would be a felony if committed in Minnesota; 

    (5) is permanently or temporarily enjoined by any gambling 
 regulatory agency from engaging in or continuing any conduct or 
 practice involving any aspect of gambling; 

    (6) has had a gambling-related license revoked or 
 suspended, or has paid or been required to pay a monetary 
 penalty of $2,500 or more, by a gambling regulator in another 
 state or jurisdiction; 

    (7) has been the subject of any of the following actions by 
 the director of alcohol and gambling enforcement or commissioner 
 of public safety:  (i) had a license under chapter 299L denied, 
 suspended, or revoked, (ii) been censured, reprimanded, has paid 
 or been required to pay a monetary penalty or fine, or (iii) has 
 been the subject of any other discipline by the director or 
 commissioner; or 

    (8) has engaged in conduct that is contrary to the public 
 health, welfare, or safety, or to the integrity of gambling; or 

    (9) based on past activities or criminal record poses a 
 threat to the public interest or to the effective regulation and 
 control of gambling, or creates or enhances the dangers of 
 unsuitable, unfair, or illegal practices, methods, and 
 activities in the conduct of gambling or the carrying on of the 
 business and financial arrangements incidental to the conduct of 
 gambling. 

    Subd. 4a.    Illegal gambling.  (a) The board may not 
 deny, suspend, revoke, or refuse to renew an organization's 
 premises permit because illegal gambling occurred at the site 
 for which the premises permit was issued, unless the board 
 determines that: (1) the organization knowingly participated in 
 the illegal gambling; or (2) the organization or any of its 
 agents knew of the illegal gambling and the organization did not 
 notify the lessor of the premises, in writing and with 
 specificity, that illegal gambling was being conducted on the 
 premises and requesting that the lessor take appropriate 
 action.  For purposes of this paragraph, "agent" means any 
 person, compensated or otherwise, who participates in the 
 conduct of the organization's lawful gambling. 

    (b) The board may not deny, suspend, revoke, or refuse to 
 renew an organization's license because illegal gambling 
 occurred at a site for which a premises permit was issued to the 
 organization unless the board determines that the organization's 
 chief executive officer, gambling manager, or one or more of its 
 assistant gambling managers participated in or authorized the 
 illegal gambling.  

    Subd. 5.    Contested case.  When the board, or director 
 if the director is authorized to act on behalf of the board, 
 determines that a license should be revoked, suspended or a 
 licensee be censured under subdivision 3 or 4, or a civil 
 penalty be imposed or a person be required to take corrective 
 action, the board or director shall issue an order initiating a 
 contested case hearing.  Hearings under this subdivision must be 
 conducted in accordance with chapter 14. 

    Subd. 6.    Notice of denial.  When the board, or 
 director if authorized to act on behalf of the board, determines 
 that a license or premises permit application or renewal should 
 be denied under subdivision 3 or 4, the board or director shall 
 promptly give a written notice to the licensee or applicant 
 stating ground for the action and giving reasonable notice of 
 the rights of the licensee or applicant to request a hearing.  A 
 hearing must be held not later than 30 days after the board 
 receives the request for the hearing, unless the licensee or 
 applicant and the board agree on a later date.  If no hearing is 
 requested within 30 days of the service of the notice, the 
 denial becomes final.  Hearings under this subdivision must be 
 conducted in accordance with chapter 14.  After the hearing the 
 board may enter an order making such disposition as the facts 
 require.  If the applicant fails to appear at the hearing after 
 having been notified of it under this subdivision, the applicant 
 is considered in default and the proceeding may be determined 
 against the person on consideration of the written notice of 
 denial, the allegations of which may be considered to be true.  
 All fees accompanying the license or renewal application are 
 considered earned and are not refundable. 

    Subd. 7.    Lapsed licenses.  If a license lapses, or is 
 surrendered, withdrawn, terminated, or otherwise becomes 
 ineffective, the board may (1) institute a proceeding under this 
 section within two years after the last date on which the 
 license was effective, (2) enter a revocation or suspension 
 order as of the date on which the license was effective, (3) 
 impose a civil penalty as provided under section 349.151, 
 subdivision 4, or (4) order corrective action as provided in 
 section 349.151, subdivision 7. 

    Subd. 8.    Actions in another state.  A licensee under 
 this chapter must notify the board within 30 days of the action 
 whenever any of the actions listed in subdivision 4, clause (6), 
 have been taken against the licensee in another state or 
 jurisdiction. 

    HIST: 1994 c 633 art 5 s 36; 1997 c 129 art 2 s 15; 1997 c 155 
 s 5; 2001 c 96 s 9; 2003 c 110 s 17; 1Sp2003 c 1 art 2 s 88 

     349.16 Organization licenses. 

    Subdivision 1.    License required.  An organization may 
 conduct lawful gambling if it has a license to conduct lawful 
 gambling and complies with this chapter. 

    Subd. 1a. Repealed by amendment, 1990 c 590 art 1 s 17 

    Subd. 2.    Issuance of gambling licenses.  (a) Licenses 
 authorizing organizations to conduct lawful gambling may be 
 issued by the board to organizations meeting the qualifications 
 in paragraphs (b) to (h) if the board determines that the 
 license is consistent with the purpose of sections 349.11 to 
 349.22.  

    (b) The organization must have been in existence for the 
 most recent three years preceding the license application as a 
 registered Minnesota nonprofit corporation or as an organization 
 designated as exempt from the payment of income taxes by the 
 Internal Revenue Code. 

    (c) The organization at the time of licensing must have at 
 least 15 active members. 

    (d) The organization must not be in existence solely for 
 the purpose of conducting gambling. 

    (e) The organization has identified in its license 
 application the lawful purposes on which it proposes to expend 
 net profits from lawful gambling. 

    (f) The organization has identified on its license 
 application a gambling manager and certifies that the manager is 
 qualified under this chapter. 

    (g) The organization must not, in the opinion of the board 
 after consultation with the commissioner of revenue, be seeking 
 licensing primarily for the purpose of evading or reducing the 
 tax imposed by section 297E.02, subdivision 6. 

    Subd. 3.    Term of license.  Licenses issued under this 
 section are valid for two years.  

    Subd. 4. Repealed, 1994 c 633 art 5 s 99 

    Subd. 5. Repealed, 1994 c 633 art 5 s 99 

    Subd. 6.    License fees.  The board shall impose an 
 annual fee of $350 for an organization's license application.  
 Organizations that expect to receive less than $100,000 in gross 
 annual receipts may request from the board a waiver of 
 organization license fees. 

    Subd. 7.    Purchase of gambling equipment.  An 
 organization may purchase gambling equipment only from a person 
 licensed as a distributor. 

    Subd. 8.    Local investigation fee.  A statutory or 
 home rule charter city or county notified under section 349.213, 
 subdivision 2, may assess an investigation fee on organizations 
 or bingo halls applying for or renewing a premises permit or a 
 bingo hall license.  An investigation fee may not exceed the 
 following limits: 

    (1) for cities of the first class, $500; 

    (2) for cities of the second class, $250; 

    (3) for all other cities, $100; and 

    (4) for counties, $375. 

    Subd. 9.    License renewals; notice.  The board may not 
 deny or delay the renewal of a license under this section, a 
 premises permit, or a gambling manager's license under section 
 349.167 because of the licensee's failure to submit a complete 
 application by a specified date before the expiration of the 
 license or permit, unless the board has first (1) sent the 
 applicant by registered mail a written notice of the incomplete 
 application, and (2) given the applicant at least five business 
 days from the date of receipt of the notice to submit a complete 
 application, or the information necessary to complete the 
 application. 

    Subd. 10.    License renewal to merged fire relief 
 associations.  A new relief association formed from the merger 
 of the relief associations of two separate city fire 
 departments, mandated under Laws 1995, chapter 262, article 11, 
 may apply for a license renewal under this section.  The board 
 shall consider the application as a license renewal of one of 
 the relief associations that is a licensed organization and was 
 merged to form the new relief association. 

    Subd. 11.    Agreement to pay taxes.  An organization 
 which is recognized by federal law, regulation, or other ruling 
 as a quasi-governmental organization that would otherwise be 
 exempt from one or more taxes under chapter 297E must agree to 
 pay all taxes under chapter 297E on lawful gambling conducted by 
 the organization as a condition of receiving or renewing a 
 license or premises permit. 

    HIST: 1976 c 261 s 6; 1984 c 502 art 12 s 8; 1986 c 467 s 
 10,11; 1989 c 334 art 2 s 20,21; 1Sp1989 c 1 art 13 s 8; 1990 c 
 590 art 1 s 17; 1991 c 336 art 2 s 17; 1994 c 633 art 2 s 19; 
 art 5 s 37-41; 1997 c 155 s 6; 1Sp2003 c 1 art 2 s 89; 1Sp2003 c 
 21 art 9 s 14 

     349.161 Distributor licenses. 

    Subdivision 1.    Prohibited acts; licenses required.  
 (a) No person may:  

    (1) sell, offer for sale, or furnish gambling equipment for 
 use within the state other than for lawful gambling exempt or 
 excluded from licensing, except to an organization licensed for 
 lawful gambling; 

    (2) sell, offer for sale, or furnish gambling equipment for 
 use within the state without having obtained a distributor 
 license or a distributor salesperson license under this section; 

    (3) sell, offer for sale, or furnish gambling equipment for 
 use within the state that is not purchased or obtained from a 
 manufacturer or distributor licensed under this chapter; or 

    (4) sell, offer for sale, or furnish gambling equipment for 
 use within the state that has the same serial number as another 
 item of gambling equipment of the same type sold or offered for 
 sale or furnished for use in the state by that distributor. 

    (b) No licensed distributor salesperson may sell, offer for 
 sale, or furnish gambling equipment for use within the state 
 without being employed by a licensed distributor or owning a 
 distributor license.  

    Subd. 2.    License application.  The board may issue 
 licenses for the sale of gambling equipment to persons who meet 
 the qualifications of this section if the board determines that 
 a license is consistent with the purpose of sections 349.11 to 
 349.22.  Applications must be on a form the board prescribes. 

    Subd. 3. Repealed, 1994 c 633 art 5 s 99 

    Subd. 4.    Fees.  (a) The annual fee for a 
 distributor's license is $6,000.  

    (b) The annual fee for a distributor salesperson license is 
 $100. 

    Subd. 5.    Prohibition.  (a) No distributor, 
 distributor salesperson, or other employee of a distributor, may 
 also be a wholesale distributor of alcoholic beverages or an 
 employee of a wholesale distributor of alcoholic beverages. 

    (b) No distributor, distributor salesperson, or any 
 representative, agent, affiliate, or other employee of a 
 distributor, may:  (1) be involved in the conduct of lawful 
 gambling by an organization; (2) keep or assist in the keeping 
 of an organization's financial records, accounts, and 
 inventories; or (3) prepare or assist in the preparation of tax 
 forms and other reporting forms required to be submitted to the 
 state by an organization. 

    (c) No distributor, distributor salesperson, or any 
 representative, agent, affiliate, or other employee of a 
 distributor may provide a lessor of gambling premises any 
 compensation, gift, gratuity, premium, or other thing of value. 

    (d) No distributor, distributor salesperson, or any 
 representative, agent, affiliate, or other employee of a 
 distributor may participate in any gambling activity at any 
 gambling site or premises where gambling equipment purchased 
 from that distributor or distributor salesperson is being used 
 in the conduct of lawful gambling. 

    (e) No distributor, distributor salesperson, or any 
 representative, agent, affiliate, or other employee of a 
 distributor may alter or modify any gambling equipment, except 
 to add a "last ticket sold" prize sticker. 

    (f) No distributor, distributor salesperson, or any 
 representative, agent, affiliate, or other employee of a 
 distributor may:  (1) recruit a person to become a gambling 
 manager of an organization or identify to an organization a 
 person as a candidate to become gambling manager for the 
 organization; or (2) identify for an organization a potential 
 gambling location. 

    (g) No distributor or distributor salesperson may purchase 
 gambling equipment for resale to a person for use within the 
 state from any person not licensed as a manufacturer under 
 section 349.163, except for gambling equipment returned from an 
 organization licensed under section 349.16, or exempt or 
 excluded from licensing under section 349.166. 

    (h) No distributor or distributor salesperson may sell 
 gambling equipment to any person for use in Minnesota other than 
 (i) a licensed organization or organization excluded or exempt 
 from licensing, or (ii) the governing body of an Indian tribe. 

    (i) No distributor or distributor salesperson may sell or 
 otherwise provide a pull-tab or tipboard deal with the symbol 
 required by section 349.163, subdivision 5, paragraph (h), 
 visible on the flare to any person other than in Minnesota to a 
 licensed organization or organization exempt from licensing. 

    Subd. 6. Repealed, 1994 c 633 art 5 s 99 

    Subd. 7. Repealed, 1994 c 633 art 5 s 99 

    Subd. 8.    Employees of distributors.  Licensed 
 distributors shall provide the board upon request with the names 
 and home addresses of all employees.  Each distributor and 
 employee of a distributor must have in their possession a 
 picture identification card approved by the board.  No person 
 other than an employee of a licensed distributor shall make any 
 sales on behalf of a licensed distributor. 

    HIST: 1984 c 502 art 12 s 9; 1986 c 467 s 12,13; 1987 c 327 s 
 10-12; 1989 c 334 art 2 s 22; 1Sp1989 c 1 art 13 s 9; 1990 c 590 
 art 1 s 18; 1992 c 513 art 4 s 36; 1994 c 633 art 5 s 42,43; 
 2002 c 386 art 2 s 3; 2003 c 110 s 18; 1Sp2003 c 1 art 2 s 90-92 

     349.162 Equipment registered. 

    Subdivision 1.    Stamp required.  (a) A distributor may 
 not sell, transfer, furnish, or otherwise provide to a person, 
 and no person may purchase, borrow, accept, or acquire from a 
 distributor gambling equipment for use within the state unless 
 the equipment has been registered with the board and has a 
 registration stamp affixed, except for gambling equipment not 
 stamped by the manufacturer pursuant to section 349.163, 
 subdivision 5 or 8.  Each stamp must bear a registration number 
 assigned by the board.  

    (b) A manufacturer must return all unused registration 
 stamps in its possession to the board by February 1, 1995.  No 
 manufacturer may possess unaffixed registration stamps after 
 February 1, 1995. 

    (c) After February 1, 1996, no person may possess any 
 unplayed pull-tab or tipboard deals with a registration stamp 
 affixed to the flare or any unplayed paddleticket cards with a 
 registration stamp affixed to the master flare.  This paragraph 
 does not apply to unplayed pull-tab or tipboard deals with a 
 registration stamp affixed to the flare, or to unplayed 
 paddleticket cards with a registration stamp affixed to the 
 master flare, if the deals or cards are identified on a list of 
 existing inventory submitted by a licensed organization or a 
 licensed distributor, in a format prescribed by the commissioner 
 of revenue, to the commissioner of revenue on or before February 
 1, 1996.  Gambling equipment kept in violation of this paragraph 
 is contraband under section 349.2125. 

    Subd. 2.    Records required.  A distributor must 
 maintain a record of all gambling equipment which it sells to 
 organizations as required by section 297E.05, subdivision 2, and 
 provide copies of the record to the board upon demand.  
 Employees of the board and the Division of Alcohol and Gambling 
 Enforcement may inspect the business premises, books, records, 
 and other documents of a distributor at any reasonable time 
 without notice and without a search warrant.  

    The board may require that a distributor submit the monthly 
 report and invoices required in this subdivision via magnetic 
 media or electronic data transfer. 

    Subd. 3.    Exemption.  For purposes of this section, 
 bingo cards or sheets need not be stamped.  

    Subd. 4.    Prohibition.  (a) No person other than a 
 licensed distributor or licensed manufacturer may possess 
 unaffixed registration stamps. 

    (b) Unless otherwise provided in this chapter, no person 
 may possess gambling equipment that has not been stamped and 
 registered.  

    (c) On and after January 1, 1991, no distributor may: 

    (1) sell a bingo hard card or paper sheet that does not 
 bear an individual number; or 

    (2) sell a package of bingo paper sheets that does not 
 contain bingo paper sheets in numerical order. 

    Subd. 5.    Sales from facilities.  (a) All gambling 
 equipment purchased or possessed by a licensed distributor for 
 resale to any person for use in Minnesota must, prior to the 
 equipment's resale, be unloaded into a storage facility located 
 in Minnesota which the distributor owns or leases; and which has 
 been registered, in advance and in writing, with the Division of 
 Alcohol and Gambling Enforcement as a storage facility of the 
 distributor.  All unregistered gambling equipment and all 
 unaffixed registration stamps owned by, or in the possession of, 
 a licensed distributor in the state of Minnesota shall be stored 
 at a storage facility which has been registered with the 
 Division of Alcohol and Gambling Enforcement.  No gambling 
 equipment may be moved from the facility unless the gambling 
 equipment has been first registered with the board, except for 
 gambling equipment not stamped by the manufacturer pursuant to 
 section 349.163, subdivision 5 or 8. 

    (b) Notwithstanding section 349.163, subdivisions 5, 6, and 
 8, a licensed manufacturer may ship into Minnesota approved or 
 unapproved gambling equipment if the licensed manufacturer ships 
 the gambling equipment to a Minnesota storage facility that is:  
 (1) owned or leased by the licensed manufacturer; and (2) 
 registered, in advance and in writing, with the Division of 
 Alcohol and Gambling Enforcement as a manufacturer's storage 
 facility.  No gambling equipment may be shipped into Minnesota 
 to the manufacturer's registered storage facility unless the 
 shipment of the gambling equipment is reported to the Department 
 of Revenue in a manner prescribed by the department.  No 
 gambling equipment may be moved from the storage facility unless 
 the gambling equipment is sold to a licensed distributor and is 
 otherwise in conformity with this chapter, is shipped to an 
 out-of-state site and the shipment is reported to the Department 
 of Revenue in a manner prescribed by the department, or is 
 otherwise sold and shipped as permitted by board rule. 

    (c) All storage facilities owned, leased, used, or operated 
 by a licensed distributor or manufacturer may be entered upon 
 and inspected by the employees of the Division of Alcohol and 
 Gambling Enforcement, the Division of Alcohol and Gambling 
 Enforcement director's authorized representatives, employees of 
 the Gambling Control Board or its authorized representatives, 
 employees of the Department of Revenue, or authorized 
 representatives of the director of the Division of Special Taxes 
 of the Department of Revenue during reasonable and regular 
 business hours.  Obstruction of, or failure to permit, entry and 
 inspection is cause for revocation or suspension of a 
 manufacturer's or distributor's licenses and permits issued 
 under this chapter.  

    (d) Unregistered gambling equipment and unaffixed 
 registration stamps found at any location in Minnesota other 
 than the manufacturing plant of a licensed manufacturer or a 
 registered storage facility are contraband under section 
 349.2125.  This paragraph does not apply: 

    (1) to unregistered gambling equipment being transported in 
 interstate commerce between locations outside this state, if the 
 interstate shipment is verified by a bill of lading or other 
 valid shipping document; and 

    (2) to gambling equipment not stamped by the manufacturer 
 pursuant to section 349.163, subdivision 5 or 8. 

    Subd. 6.    Removal of equipment from inventory.  
 Authorized employees of the board, the Division of Alcohol and 
 Gambling Enforcement of the Department of Public Safety, and the 
 commissioner of revenue may remove gambling equipment from the 
 inventories of distributors and organizations and test that 
 equipment to determine its compliance with all applicable laws 
 and rules.  A distributor or organization may return to the 
 manufacturer thereof any gambling equipment which is determined 
 to be in violation of law or rule.  The cost to an organization 
 of gambling equipment removed from inventory under this 
 paragraph and found to be in compliance with all applicable law 
 and rules is an allowable expense under section 349.15. 

    HIST: 1984 c 502 art 12 s 10; 1986 c 467 s 14; 1987 c 327 s 
 13,14; 1989 c 334 art 2 s 23; 1990 c 590 art 1 s 19; 1991 c 233 
 s 109; 1994 c 633 art 5 s 44-47; 1995 c 261 s 22; 1997 c 129 art 
 2 s 15; 2002 c 386 art 1 s 1; 1Sp2003 c 1 art 2 s 93 

     349.163 Licensing of manufacturers. 

    Subdivision 1.    License required.  No manufacturer of 
 gambling equipment may sell any gambling equipment to any person 
 for use or resale within the state, unless the manufacturer has 
 a current and valid license issued by the board under this 
 section and has satisfied other criteria prescribed by the board 
 by rule. 

    A manufacturer licensed under this section may not also be 
 directly or indirectly licensed as a distributor under section 
 349.161. 

    Subd. 1a. Repealed, 1994 c 633 art 5 s 99 

    Subd. 1b.    Applications; information.  An applicant 
 for a manufacturer's license must list on the license 
 application the names and addresses of all subsidiaries, 
 affiliates, and branches in which the applicant has any form of 
 ownership or control, in whole or in part, without regard to 
 whether the subsidiary, affiliate, or branch does business in 
 Minnesota. 

    Subd. 2.    License; fee.  The annual fee for a 
 manufacturer's license is $9,000. 

    Subd. 2a. Repealed, 1994 c 633 art 5 s 99 

    Subd. 3.    Prohibited sales.  (a) A manufacturer may 
 not: 

    (1) sell gambling equipment for use or resale within the 
 state to any person not licensed as a distributor, except that 
 gambling equipment used exclusively in a linked bingo game may 
 be sold to a licensed linked bingo provider; or 

    (2) sell gambling equipment to a distributor in this state 
 that has the same serial number as another item of gambling 
 equipment of the same type that is sold by that manufacturer for 
 use or resale in this state. 

    (b) A manufacturer, affiliate of a manufacturer, or person 
 acting as a representative or agent of a manufacturer may not 
 provide a lessor of gambling premises or an appointed official 
 any compensation, gift, gratuity, premium, contribution, or 
 other thing of value. 

    (c) A manufacturer may not sell or otherwise provide a 
 pull-tab or tipboard deal with the symbol required by 
 subdivision 5, paragraph (h), imprinted on the flare to any 
 person other than a licensed distributor unless the manufacturer 
 first renders the symbol permanently invisible. 

    Subd. 4.    Inspection of manufacturers.  Employees of 
 the board and the Division of Alcohol and Gambling Enforcement 
 may inspect the books, records, inventory, and business premises 
 of a licensed manufacturer without notice during the normal 
 business hours of the manufacturer.  The board may charge a 
 manufacturer for the actual cost of conducting scheduled or 
 unscheduled inspections of the manufacturer's facilities, where 
 the amount charged to the manufacturer for such inspections in 
 any year does not exceed $7,500.  The board shall deposit in a 
 separate account in the state treasury all money received as 
 reimbursement for the costs of inspections.  Money in the 
 account is appropriated to the board to pay the costs of the 
 inspections. 

    Subd. 5.    Pull-tab and tipboard flares.  (a) A 
 manufacturer may not ship or cause to be shipped into this state 
 or sell for use or resale in this state any deal of pull-tabs or 
 tipboards that does not have its own individual flare as 
 required for that deal by this subdivision and rule of the 
 board.  A person other than a manufacturer may not manufacture, 
 alter, modify, or otherwise change a flare for a deal of 
 pull-tabs or tipboards except as allowed by this chapter or 
 board rules. 

    (b) The flare of each pull-tab and tipboard game must have 
 affixed to or imprinted at the bottom a bar code that provides 
 all information required by the commissioner of revenue under 
 section 297E.04, subdivision 2. 

    The serial number included in the bar code must be the same 
 as the serial number of the tickets included in the deal.  A 
 manufacturer who manufactures a deal of pull-tabs must affix to 
 the outside of the box containing that game the same bar code 
 that is affixed to or imprinted at the bottom of a flare for 
 that deal. 

    (c) No person may alter the bar code that appears on the 
 outside of a box containing a deal of pull-tabs and tipboards.  
 Possession of a box containing a deal of pull-tabs and tipboards 
 that has a bar code different from the bar code of the deal 
 inside the box is prima facie evidence that the possessor has 
 altered the bar code on the box. 

    (d) The flare of each deal of pull-tabs and tipboards sold 
 by a manufacturer for use or resale in Minnesota must have 
 imprinted on it a symbol that is at least one inch high and one 
 inch wide consisting of an outline of the geographic boundaries 
 of Minnesota with the letters "MN" inside the outline.  The 
 flare must be placed inside the wrapping of the deal which the 
 flare describes.  

    (e) Each pull-tab and tipboard flare must bear the 
 following statement printed in letters large enough to be 
 clearly legible: 

    "Pull-tab (or tipboard) purchasers -- This pull-tab (or 
 tipboard) game is not legal in Minnesota unless: 

    -- an outline of Minnesota with letters "MN" inside it is 
 imprinted on this sheet, and 

    -- the serial number imprinted on the bar code at the 
 bottom of this sheet is the same as the serial number on the 
 pull-tab (or tipboard) ticket you have purchased." 

    (f) The flare of each pull-tab and tipboard game must have 
 the serial number of the game imprinted on the bar code at the 
 bottom of the flare in numerals at least one-half inch high. 

    Subd. 6.    Samples of gambling equipment.  The board 
 shall require each licensed manufacturer to submit to the board 
 one or more samples of each item of gambling equipment the 
 manufacturer manufactures for use or resale in this state.  The 
 board shall inspect and test all the equipment it deems 
 necessary to determine the equipment's compliance with law and 
 board rules.  Samples required under this subdivision must be 
 approved by the board before the equipment being sampled is 
 shipped into or sold for use or resale in this state.  The board 
 shall impose a fee of $25 for each item of gambling equipment 
 that the manufacturer submits for approval or for which the 
 manufacturer requests approval.  The board shall impose a fee of 
 $100 for each sample of gambling equipment that it tests.  The 
 board may require samples of gambling equipment to be tested by 
 an independent testing laboratory prior to submission to the 
 board for approval.  All costs of testing by an independent 
 testing laboratory must be borne by the manufacturer.  An 
 independent testing laboratory used by a manufacturer to test 
 samples of gambling equipment must be approved by the board 
 before the equipment is submitted to the laboratory for 
 testing.  The board may request the assistance of the 
 commissioner of public safety and the director of the State 
 Lottery in performing the tests. 

    Subd. 6a. Repealed, 2002 c 386 art 1 s 12 

    Subd. 7.    Recycled paper.  The board may, after 
 January 1, 1991, by rule require that all pull-tabs sold in 
 Minnesota be manufactured using recycled paper. 

    Subd. 8.    Paddleticket card master flares.  Each 
 sealed grouping of 100 or fewer paddleticket cards must have its 
 own individual master flare.  The manufacturer must affix to or 
 imprint at the bottom of the master flare a bar code that 
 provides all information required by the commissioner of revenue 
 under section 297E.04, subdivision 3. 

    Subd. 9.    Sales required.  No licensed manufacturer 
 may refuse to sell gambling equipment to a licensed distributor 
 unless: 

    (1) a specific type of gambling equipment sold on an 
 exclusive basis is at issue; 

    (2) the manufacturer does not sell gambling equipment to 
 any distributor in Minnesota; 

    (3) a Minnesota statute or rule prohibits the sale; or 

    (4) the distributor is delinquent on any payment owed to 
 the manufacturer. 

    HIST: 1986 c 467 s 15; 1989 c 334 art 2 s 24; 1Sp1989 c 1 art 
 13 s 10; 1990 c 590 art 1 s 20; 1991 c 233 s 109; 1991 c 336 art 
 2 s 18; 1992 c 513 art 4 s 37; 1994 c 633 art 5 s 48-52; 1995 c 
 264 art 17 s 9; 1997 c 129 art 2 s 15; 1997 c 155 s 7; 1997 c 
 202 art 2 s 45; 1999 c 250 art 1 s 101; 2000 c 300 s 4; 2000 c 
 499 s 2; 2002 c 379 art 1 s 75; 2002 c 386 art 1 s 2-4; art 2 s 
 4; 2003 c 110 s 19; 1Sp2003 c 1 art 2 s 94,95; 2004 c 172 s 2 

     349.1635 Linked bingo game provider license. 

    Subdivision 1.    License required.  No person may do 
 any of the following without having first obtained a license 
 from the board: 

    (1) provide the means to link prizes in a linked bingo 
 game; 

    (2) provide linked bingo game prize management; 

    (3) provide the linked bingo system; or 

    (4) provide linked bingo paper sheets to an organization. 

    Subd. 2.    License application.  The board may issue a 
 license to a linked bingo game provider who meets the 
 qualifications of this chapter and the rules promulgated by the 
 board.  The application shall be on a form prescribed by the 
 board.  The license is valid for two years and the fee for a 
 linked bingo game provider license is $5,000 per year.  

    Subd. 3.    Attachments to application.  An applicant 
 for a linked bingo game provider license must attach to its 
 application: 

    (1) evidence of a bond in the principal amount of $250,000 
 payable to the state of Minnesota conditioned on the payment of 
 all linked bingo prizes and any other money due and payable 
 under this chapter; 

    (2) detailed plans and specifications for the operation of 
 the linked bingo game and the linked bingo system; and 

    (3) any other information required by the board by rule.  

    Subd. 4.    Prohibition.  (a) Except for services 
 associated exclusively with a linked bingo game, a linked bingo 
 game provider may not participate or assist in the conduct of 
 lawful gambling by an organization.  No linked bingo game 
 provider may: 

    (1) also be licensed as a bingo hall or hold any financial 
 or managerial interest in a bingo hall; 

    (2) also be licensed as a distributor or hold any financial 
 or managerial interest in a distributor; 

    (3) sell or lease linked bingo game equipment to any person 
 not licensed as an organization; 

    (4) purchase gambling equipment to be used exclusively in a 
 linked bingo game from any person not licensed as a manufacturer 
 under section 349.163; and 

    (5) provide an organization, a lessor of gambling premises, 
 or an appointed official any compensation, gift, gratuity, 
 premium, or contribution. 

    (b) Employees of the board and the Division of Alcohol and 
 Gambling Enforcement may inspect the books, records, inventory, 
 and business premises of a licensed linked bingo game provider 
 without notice during the normal business hours of the linked 
 bingo game provider.  The board may charge a linked bingo game 
 provider for the actual cost of conducting scheduled or 
 unscheduled inspections of the licensee's facilities. 

    HIST: 2003 c 110 s 20 

     349.164 Bingo hall licenses. 

    Subdivision 1.    License required.  No person may lease 
 a facility to more than one organization to conduct bingo 
 without a current and valid bingo hall license under this 
 section. 

    Subd. 2.    License application.  The board may issue a 
 bingo hall license to persons who meet the qualifications of 
 this section if the board determines that a license is 
 consistent with the purpose of sections 349.11 to 349.22.  
 Applications must be on a form the board prescribes.  The board 
 may not issue or renew a bingo hall license unless the 
 conditions of section 349.213, subdivision 2, have been 
 satisfied.  

    Subd. 3. Repealed, 1994 c 633 art 5 s 99 

    Subd. 4.    Fees; term of license.  The annual fee for a 
 bingo hall license is $4,000.  

    Subd. 5. Repealed, 1994 c 633 art 5 s 99 

    Subd. 6.    Prohibited acts.  No bingo hall licensee, 
 person holding a financial or managerial interest in a bingo 
 hall, or affiliate thereof may: 

    (1) be a licensed distributor or licensed manufacturer or 
 affiliate of the distributor or manufacturer under section 
 349.161 or 349.163 or a wholesale distributor of alcoholic 
 beverages; 

    (2) provide any staff to conduct or assist in the conduct 
 of bingo or any other form of lawful gambling on the premises; 

    (3) acquire, provide inventory control for, or report the 
 use of any gambling equipment used by an organization that 
 conducts lawful gambling on the premises; 

    (4) provide accounting services to an organization 
 conducting lawful gambling on the premises; 

    (5) solicit, suggest, encourage, or make any expenditures 
 of gross receipts of an organization from lawful gambling; 

    (6) charge any fee to a person without which the person 
 could not play a bingo game or participate in another form of 
 lawful gambling on the premises; 

    (7) provide assistance or participate in the conduct of 
 lawful gambling on the premises; or 

    (8) permit more than 21 bingo occasions to be conducted on 
 the premises in any week.  

    Subd. 7.  MS 1988 Renumbered in part subd 6 

    Subd. 7.    Leases.  All of the remuneration to be 
 received from the organization for the conduct of lawful 
 gambling must be stated in the lease.  No amount may be paid by 
 the organization or received by the bingo hall licensee based on 
 the number of participants attending the bingo occasion or 
 participating in lawful gambling on the premises, or based on 
 the gross receipts or profit received by the organization.  All 
 provisions of section 349.18 apply to lawful gambling conducted 
 in bingo halls. 

    Subd. 8.  MS 1988 Renumbered subd 7 

    Subd. 8.  MS 1992 Repealed, 1994 c 633 art 5 s 99 

    Subd. 9.  Renumbered subd 8 

    Subd. 10.    Records.  A bingo hall licensee must 
 maintain and preserve for at least 3-1/2 years records of all 
 remuneration it receives from organizations conducting lawful 
 gambling. 

    HIST: 1988 c 596 s 2; 1989 c 334 art 2 s 25; 1990 c 590 art 1 
 s 21; 1994 c 633 art 5 s 53-55; 2002 c 386 art 2 s 5; 1Sp2003 c 
 1 art 2 s 96 

     349.1641 Licenses; summary suspension. 

    The board may (1) summarily suspend the license of an 
 organization that is more than three months late in filing a tax 
 return or in paying a tax required under chapter 297E and may 
 keep the suspension in effect until all required returns are 
 filed and required taxes are paid; and (2) summarily suspend for 
 not more than 90 days any license issued by the board or 
 director for what the board determines are actions detrimental 
 to the integrity of lawful gambling in Minnesota.  The board 
 must notify the licensee at least 14 days before suspending the 
 license under this section.  If a license is summarily suspended 
 under this section, a contested case hearing on the merits must 
 be held within 20 days of the issuance of the order of 
 suspension, unless the parties agree to a later hearing date.  
 The administrative law judge's report must be issued within 20 
 days after the close of the hearing record.  In all cases 
 involving summary suspension, the board must issue its final 
 decision within 30 days after receipt of the report of the 
 administrative law judge and subsequent exceptions and argument 
 under section 14.61.  When an organization's license is 
 suspended under this section, the board shall within three days 
 notify all municipalities in which the organization's gambling 
 premises are located and all licensed distributors in the state. 

    HIST: 1990 c 590 art 1 s 22; 1994 c 633 art 5 s 56 

     349.165 Premises permits. 

    Subdivision 1.    Premises permit required; application. 
  A licensed organization may not conduct lawful gambling at 
 any site unless it has first obtained from the board a premises 
 permit for the site.  The board shall prescribe a form for 
 permit applications, and each application for a permit must be 
 submitted on a separate form.  The premises permit issued by the 
 board runs concurrently with the license of the organization 
 unless the premises permit is suspended, revoked, or voluntarily 
 terminated by the organization.  The board may by rule limit the 
 number of premises permits that may be issued to an organization.

    Subd. 2.    Contents of application.  An application for 
 a premises permit must contain: 

    (1) the name and address of the applying organization; 

    (2) a description of the site for which the permit is 
 sought, including its address and, where applicable, its 
 placement within another premises or establishment; 

    (3) if the site is leased, the name and address of the 
 lessor and information about the lease the board requires, 
 including all rents and other charges for the use of the site; 
 and 

    (4) other information the board deems necessary to carry 
 out its purposes. 

    An organization holding a premises permit must notify the 
 board in writing within ten days whenever any material change is 
 made in the above information. 

    Subd. 3.    Fees.  (a) The board may issue premises 
 permits to organizations licensed under section 349.16, 
 subdivision 6.  The annual fee for each premises permit is $150. 

    (b) In addition to the annual fee for a premises permit, an 
 organization must pay a monthly regulatory fee of 0.1 percent of 
 the organization's gross receipts from lawful gambling conducted 
 at that site.  The fee must be reported and paid on a monthly 
 basis in a format as determined by the commissioner of revenue, 
 and remitted to the commissioner of revenue along with the 
 organization's monthly tax return for that premises.  All 
 premises permit fees received by the commissioner of revenue 
 under this subdivision must be deposited in the lawful gambling 
 regulation account in the special revenue fund according to 
 section 349.151.  Failure to pay the monthly premises permit 
 fees in a timely manner may result in disciplinary action by the 
 board. 

    Subd. 4.    Identification of premises.  No organization 
 may seek or accept assistance from a manufacturer or 
 distributor, or a representative, agent, affiliate, or employee 
 of a manufacturer or distributor, in identifying potential 
 locations for gambling conducted by the organization. 

    HIST: 1990 c 590 art 1 s 23; 1991 c 336 art 2 s 19,20; 1Sp2001 
 c 10 art 2 s 75,76; 2002 c 386 art 1 s 5; 1Sp2003 c 1 art 2 s 97 

     349.166 Exclusions; exemptions. 

    Subdivision 1.    Exclusions.  (a) Bingo, with the 
 exception of linked bingo games, may be conducted without a 
 license and without complying with sections 349.168, 
 subdivisions 1 and 2; 349.17, subdivisions 1, 4, and 5; 349.18, 
 subdivision 1; and 349.19, if it is conducted:  

    (1) by an organization in connection with a county fair, 
 the state fair, or a civic celebration and is not conducted for 
 more than 12 consecutive days and is limited to no more than 
 four separate applications for activities applied for and 
 approved in a calendar year; or 

    (2) by an organization that conducts four or fewer bingo 
 occasions in a calendar year.  

    An organization that holds a license to conduct lawful 
 gambling under this chapter may not conduct bingo under this 
 subdivision.  

    (b) Bingo may be conducted within a nursing home or a 
 senior citizen housing project or by a senior citizen 
 organization if the prizes for a single bingo game do not exceed 
 $10, total prizes awarded at a single bingo occasion do not 
 exceed $200, no more than two bingo occasions are held by the 
 organization or at the facility each week, only members of the 
 organization or residents of the nursing home or housing project 
 are allowed to play in a bingo game, no compensation is paid for 
 any persons who conduct the bingo, and a manager is appointed to 
 supervise the bingo.  Bingo conducted under this paragraph is 
 exempt from sections 349.11 to 349.23, and the board may not 
 require an organization that conducts bingo under this 
 paragraph, or the manager who supervises the bingo, to register 
 or file a report with the board.  The gross receipts from bingo 
 conducted under the limitations of this subdivision are exempt 
 from taxation under chapter 297A.  

    (c) Raffles may be conducted by an organization without a 
 license and without complying with sections 349.154 to 349.165 
 and 349.167 to 349.213 if the value of all raffle prizes awarded 
 by the organization in a calendar year does not exceed $1,500.  

    (d) Except as provided in paragraph (b), the organization 
 must maintain all required records of excluded gambling activity 
 for 3-1/2 years. 

    Subd. 2.    Exemptions.  (a) Lawful gambling, with the 
 exception of linked bingo games, may be conducted by an 
 organization without a license and without complying with 
 sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4 
 and 5; 349.18, subdivision 1; and 349.19 if: 

    (1) the organization conducts lawful gambling on five or 
 fewer days in a calendar year; 

    (2) the organization does not award more than $50,000 in 
 prizes for lawful gambling in a calendar year; 

    (3) the organization pays a fee of $50 to the board, 
 notifies the board in writing not less than 30 days before each 
 lawful gambling occasion of the date and location of the 
 occasion, or 60 days for an occasion held in the case of a city 
 of the first class, the types of lawful gambling to be 
 conducted, the prizes to be awarded, and receives an exemption 
 identification number; 

    (4) the organization notifies the local government unit 30 
 days before the lawful gambling occasion, or 60 days for an 
 occasion held in a city of the first class; 

    (5) the organization purchases all gambling equipment and 
 supplies from a licensed distributor; and 

    (6) the organization reports to the board, on a single-page 
 form prescribed by the board, within 30 days of each gambling 
 occasion, the gross receipts, prizes, expenses, expenditures of 
 net profits from the occasion, and the identification of the 
 licensed distributor from whom all gambling equipment was 
 purchased.  

    (b) If the organization fails to file a timely report as 
 required by paragraph (a), clause (3) or (6), the board shall 
 not issue any authorization, license, or permit to the 
 organization to conduct lawful gambling on an exempt, excluded, 
 or licensed basis until the report has been filed. 

    (c) Merchandise prizes must be valued at their fair market 
 value. 

    (d) Unused pull-tab and tipboard deals must be returned to 
 the distributor within seven working days after the end of the 
 lawful gambling occasion.  The distributor must accept and pay a 
 refund for all returns of unopened and undamaged deals returned 
 under this paragraph. 

    (e) An organization that is exempt from taxation on 
 purchases of pull-tabs and tipboards under section 297E.02, 
 subdivision 4, paragraph (b), clause (4), must return to the 
 distributor any tipboard or pull-tab deal no part of which is 
 used at the lawful gambling occasion for which it was purchased 
 by the organization. 

    (f) The organization must maintain all required records of 
 exempt gambling activity for 3-1/2 years. 

    Subd. 3.    Raffles; certain organizations.  Sections 
 349.168, subdivision 4; and 349.211, subdivision 3, and the 
 membership requirements of section 349.16, subdivision 2, 
 paragraph (c), do not apply to raffles conducted by an 
 organization that directly or under contract to the state or a 
 political subdivision delivers health or social services and 
 that is a 501(c)(3) organization if the prizes awarded in the 
 raffles are real or personal property donated by an individual, 
 firm, or other organization.  The person who accounts for the 
 gross receipts, expenses, and profits of the raffles may be the 
 same person who accounts for other funds of the organization.  

    Subd. 4. Repealed, 1994 c 633 art 2 s 21 

    HIST: 1989 c 334 art 2 s 51; 1990 c 590 art 1 s 24; 1991 c 199 
 art 2 s 1; 1994 c 633 art 2 s 19; art 5 s 57-59; 1996 c 467 s 
 4,5; 1999 c 128 s 1; 2003 c 110 s 21,22; 1Sp2003 c 1 art 2 s 
 98,99 

     349.167 Gambling managers. 

    Subdivision 1.    Gambling manager required.  (a) All 
 lawful gambling conducted by a licensed organization must be 
 under the supervision of a gambling manager.  A gambling manager 
 designated by an organization to supervise lawful gambling is 
 responsible for the gross receipts of the organization and for 
 its conduct in compliance with all laws and rules.  A person 
 designated as a gambling manager shall maintain a fidelity bond 
 in the sum of $10,000 in favor of the organization conditioned 
 on the faithful performance of the manager's duties.  The terms 
 of the bond must provide that notice be given to the board in 
 writing not less than 30 days before its cancellation.  

    (b) A person may not act as a gambling manager for more 
 than one organization. 

    (c) An organization may not conduct lawful gambling without 
 having a gambling manager.  

    (d) An organization may not have more than one gambling 
 manager at any time. 

    Subd. 2.    Gambling managers; licenses.  A person may 
 not serve as a gambling manager for an organization unless the 
 person possesses a valid gambling manager's license issued by 
 the board.  In addition to the disqualifications in section 
 349.155, subdivision 3, the board may not issue a gambling 
 manager's license to a person applying for the license who: 

    (1) has not complied with subdivision 4, clause (1); 

    (2) within the five years before the date of the license 
 application, has committed a violation of law or board rule that 
 resulted in the revocation of a license issued by the board; 

    (3) has ever been convicted of a criminal violation 
 involving fraud, theft, tax evasion, misrepresentation, or 
 gambling; or 

    (4) has engaged in conduct the board determines is contrary 
 to the public health, welfare, or safety or the integrity of 
 lawful gambling. 

    A gambling manager's license runs concurrent with the 
 organization's license unless the gambling manager's license is 
 suspended or revoked.  The annual fee for a gambling manager's 
 license is $100.  

    Subd. 3. Repealed, 1994 c 633 art 5 s 99 

    Subd. 4.    Training of gambling managers.  The board 
 shall by rule require all persons licensed as gambling managers 
 to receive periodic training in laws and rules governing lawful 
 gambling.  The rules must contain the following requirements: 

    (1) each gambling manager must receive training before 
 being issued a new license, except that in the case of the 
 death, disability, or termination of a gambling manager, a 
 replacement gambling manager must receive the training within 90 
 days of being issued a license; 

    (2) each gambling manager applying for a renewal of a 
 license must have received continuing education training, as 
 required by board rule, each year of the two-year license 
 period, or pass a gambling manager examination as required in 
 subdivision 7; and 

    (3) the training required by this subdivision may be 
 provided by a person authorized by the board to provide the 
 training.  Before authorizing a person to provide training, the 
 board must determine that: 

    (i) the provider and all of the provider's personnel 
 conducting the training are qualified to do so; 

    (ii) the curriculum to be used fully and accurately covers 
 all elements of lawful gambling law and rules that the board 
 determines are necessary for a gambling manager to know and 
 understand; 

    (iii) the fee to be charged for participants in the 
 training sessions is fair and reasonable; and 

    (iv) the training provider has an adequate system for 
 documenting completion of training. 

    The board or the director may provide the training required 
 by this subdivision using employees of the board. 

    Subd. 5. Repealed, 1994 c 633 art 5 s 99 

    Subd. 6.    Recruitment of gambling managers.  No 
 organization may seek or accept assistance from a manufacturer, 
 distributor, or linked bingo game provider, or a representative, 
 agent, affiliate, or employee of a manufacturer, distributor, or 
 linked bingo game provider, in identifying or recruiting 
 candidates to become a gambling manager for the organization. 

    Subd. 7.    Gambling manager examination.  Each 
 applicant for a new gambling manager's license, and each 
 renewing applicant that has failed to receive training as 
 required in subdivision 4, must pass an examination prepared and 
 administered by the board that tests the applicant's knowledge 
 of the responsibilities of gambling managers, and of gambling 
 procedures, laws, and rules before being issued the license.  In 
 the case of the death, disability, or termination of a gambling 
 manager, a replacement gambling manager must pass the 
 examination within 90 days of being issued a gambling manager's 
 license.  The board shall revoke the replacement gambling 
 manager's license if the replacement gambling manager fails to 
 pass the examination as required in this subdivision. 

    HIST: 1990 c 590 art 1 s 25; 1991 c 233 s 109; 1991 c 336 art 
 2 s 21-23; 1994 c 633 art 5 s 60-63; 2002 c 386 art 1 s 6; 2003 
 c 110 s 23-25; 1Sp2003 c 23 s 9; 2004 c 172 s 3,4 

     349.168 Gambling employees. 

    Subdivision 1.    Registration of employees.  A person 
 may not receive compensation for participating in the conduct of 
 lawful gambling as an employee of a licensed organization unless 
 the person has first registered with the board on a form the 
 board prescribes.  The form must require each registrant to 
 provide the person's name, address, and date of birth, and the 
 name, address, and license number of the employing organization. 

    Subd. 2.    Identification of employees.  Each person 
 receiving compensation for the conduct of lawful gambling must 
 publicly display the person's name at all times while conducting 
 the lawful gambling. 

    Subd. 3. Repealed, 1996 c 467 s 9 

    Subd. 4.    Amounts paid.  The amounts of compensation 
 that may be paid under this section may be provided for in a 
 schedule of compensation adopted by the board by rule.  In 
 adopting a schedule, the board must consider the nature of the 
 participation and the types of lawful gambling participated in. 

    Subd. 5.    Compensation records.  An organization 
 paying compensation to persons who participate in the conduct of 
 lawful gambling must maintain a compensation record.  The record 
 must itemize each payment made to each recipient of compensation 
 and must include the amount and the full name, address, and 
 membership status of each recipient. 

    Subd. 6.    Compensation paid by check or electronic 
 transfer.  Compensation paid by an organization in connection 
 with lawful gambling must either be:  (1) in the form of a check 
 drawn on the organization's gambling account, as specified in 
 section 349.19, and paid directly to the person being 
 compensated; (2) transferred electronically from the 
 organization's gambling account, as specified in section 349.19, 
 subdivision 3, directly to the employee's bank account; (3) 
 transferred electronically from the organization's gambling 
 account to the account of a payroll processing firm from which 
 payment in the form of a check is paid directly to the person 
 being compensated; or (4) transferred electronically to and from 
 the account of a payroll processing firm for payment to the 
 employee's account and for the payment of local, state, and 
 federal withholding taxes, provided that the payroll processing 
 firm is (i) currently registered with and meets the criteria of 
 the Department of Revenue as a third-party bulk filer under 
 section 290.92, subdivision 30, (ii) is able to provide proof of 
 a third-party audit and an annual report and statement of 
 financial condition, (iii) is able to provide evidence of a 
 fidelity bond, and (iv) can provide proof of having been in 
 business as a third-party bulk filer for the most recent three 
 years. 

    Subd. 7.    Penalty.  (a) An organization that makes 
 payment of compensation, or causes compensation to be made, that 
 violates subdivision 4 must be assessed a civil penalty not to 
 exceed $1,000 for each violation of subdivision 4.  A second 
 violation within 12 months of notification by the board to the 
 organization of the first violation must result in suspension of 
 the organization's gambling license for a period of three 
 months, in addition to any civil penalty assessed.  A third 
 violation within 12 months of the board's notification to the 
 organization of the second violation must result in revocation 
 of the organization's gambling license in addition to any civil 
 penalty assessed. 

    (b) Upon each violation, the director shall notify the 
 organization in writing of its violation and of the penalties 
 under this subdivision for future violations.  Notification is 
 effective upon mailing.  

    (c) For purposes of this subdivision, a violation consists 
 of a payroll period or compensation date that includes payments 
 made in violation of subdivision 4. 

    Subd. 8.    Percentage of gross profit paid.  A licensed 
 organization may pay a percentage of the gross profit from 
 raffle ticket sales to a nonprofit organization that sells 
 raffle tickets for the licensed organization. 

    Subd. 9. Repealed, 2003 c 110 s 44 

    Subd. 10.    Employment of certain persons.  An 
 organization that sells pull-tabs and tip boards on leased 
 premises within a booth operation may not employ, other than as 
 a seller of pull-tabs and tip boards, the lessor of those 
 premises or a person who is employed by the lessor of those 
 premises. 

    HIST: 1990 c 590 art 1 s 26; 1994 c 633 art 5 s 64-66; 1998 c 
 322 s 3; 2001 c 96 s 10; 2002 c 386 art 1 s 7,8; 2003 c 110 s 
 26-29 

     349.169 Filing of prices. 

    Subdivision 1.    Filing required.  When required by the 
 board, manufacturers and distributors must file with the 
 director the prices at which the manufacturer or distributor 
 will sell all gambling equipment currently offered for sale by 
 that manufacturer or distributor.  The filing must be in a 
 format the director prescribes.  

    Subd. 2.    Copies.  The director shall provide copies 
 of price filings to any person requesting them and may charge a 
 reasonable fee for the copies.  Any person may examine price 
 filings in the board office at no cost, and the director shall 
 make the filings available for that purpose. 

    Subd. 3.    Sales at filed prices.  When required to 
 report under subdivision 1, no manufacturer may sell to a 
 distributor, and no distributor may sell to an organization, any 
 gambling equipment for any price other than a price the 
 manufacturer or distributor has filed with the director under 
 subdivision 1, including volume discounts, and exclusive of 
 transportation costs. 

    HIST: 1990 c 590 art 1 s 27; 1991 c 233 s 109; 1994 c 633 art 
 5 s 67; 2003 c 110 s 30,31 

     349.17 Conduct of bingo. 

    Subdivision 1.    Bingo occasions.  Not more than ten 
 bingo occasions each week may be conducted by an organization.  
 At least 15 bingo games must be held at each occasion and a 
 bingo occasion must continue for at least 1-1/2 hours but not 
 more than four consecutive hours. 

    Subd. 2.    Bingo.  During any bingo occasion conducted 
 by an organization, the organization is directly responsible for 
 the:  

    (1) staffing of the bingo occasion; 

    (2) conducting of lawful gambling during the bingo 
 occasion; 

    (3) acquiring, storage, inventory control, and reporting of 
 all gambling equipment used by the organization; 

    (4) receipt, accounting, and all expenditures of gross 
 receipts from lawful gambling; and 

    (5) preparation of the bingo packets. 

    Subd. 2a. Repealed, 2002 c 386 art 1 s 12 

    Subd. 3.    Winners.  Each bingo winner must be 
 determined and every prize shall be awarded and delivered the 
 same day on which the bingo occasion is conducted, except that 
 prizes won in a linked bingo game must be delivered within three 
 business days of the day on which the occasion was conducted. 

    Subd. 4.    Checkers.  One or more checkers must be 
 engaged for each bingo occasion when bingo is conducted using 
 bingo hard cards.  The checker or checkers must record, on a 
 form the board provides, the number of hard cards played in each 
 game and the prizes awarded to recorded hard cards.  The form 
 must provide for the inclusion of the face number of each 
 winning hard card and must include a checker's certification 
 that the figures recorded are correct to the best of the 
 checker's knowledge.  

    Subd. 5.    Bingo cards and sheets.  (a) The board shall 
 by rule require that all licensed organizations:  (1) conduct 
 bingo only using liquid daubers on bingo paper sheets that bear 
 an individual number recorded by the distributor; and (2) use 
 each bingo paper sheet for no more than one bingo occasion.  In 
 lieu of the requirements of clause (2), a licensed organization 
 may electronically record the sale of each bingo hard card or 
 paper sheet at each bingo occasion using an electronic recording 
 system approved by the board. 

    (b) The requirements of paragraph (a) shall only apply to a 
 licensed organization that received gross receipts from bingo in 
 excess of $150,000 in the organization's last fiscal year. 

    Subd. 6.    Conduct of bingo.  (a) Each bingo hard card 
 and paper sheets must have five horizontal rows of spaces with 
 each row except one having five numbers.  The center row must 
 have four numbers and the center space marked "free."  Each 
 column must have one of the letters B-I-N-G-O in order at the 
 top.  Bingo paper sheets may also have numbers that are not 
 preprinted but are filled in by players. 

    (b) A game of bingo begins with the first letter and number 
 called.  Each player must cover or mark with a liquid dauber the 
 numbers when bingo balls, similarly numbered, are randomly 
 drawn, announced, and displayed to the players, either manually 
 or with a flashboard and monitor.  The game is won when a player 
 has covered or marked a previously designated arrangement of 
 numbers on the card or sheet and declared bingo.  The game is 
 completed when a winning card or sheet is verified and a prize 
 awarded, except that prizes won in linked bingo games may be 
 awarded pursuant to subdivision 3.  

    Subd. 7.    Noon hour bingo.  Notwithstanding 
 subdivisions 1 and 3, an organization may conduct bingo subject 
 to the following restrictions: 

    (1) the bingo is conducted only between the hours of 11:00 
 a.m. and 2:00 p.m.; 

    (2) the bingo is conducted at a site the organization owns 
 or leases and which has a license for the sale of intoxicating 
 beverages on the premises under chapter 340A; 

    (3) the bingo is limited to one progressive bingo game per 
 site as defined by section 349.211, subdivision 2; 

    (4) the bingo is conducted using only bingo paper sheets; 

    (5) if the premises are leased, the rent may not exceed $25 
 per day for each day bingo is conducted; and 

    (6) linked bingo games may not be conducted at a noon hour 
 bingo occasion. 

    Subd. 8.    Linked bingo games.  (a) A licensed 
 organization may conduct or participate in a linked bingo game 
 in association with one or more other licensed organizations. 

    (b) Each participating licensed organization shall 
 contribute to each prize awarded in a linked bingo game in an 
 amount not to exceed $300 per occasion. 

    (c) The board may adopt rules to: 

    (1) specify the manner in which a linked bingo game must be 
 played and how the linked bingo prizes must be awarded; 

    (2) specify the records to be maintained by a linked bingo 
 game provider; 

    (3) require the submission of periodic reports by the 
 linked bingo game provider and specify the content of the 
 reports; 

    (4) establish the qualifications required to be licensed as 
 a linked bingo game provider; and 

    (5) any other matter involving the operation of a linked 
 bingo game. 

    HIST: 1976 c 261 s 7; 1979 c 166 s 1; 1984 c 502 art 12 s 11; 
 1986 c 467 s 16; 1987 c 327 s 15,16; 1988 c 596 s 3,4; 1989 c 
 334 art 2 s 26; 1990 c 590 art 1 s 28; 1991 c 336 art 2 s 24; 
 1994 c 633 art 5 s 68-71; 1995 c 186 s 69; 1995 c 261 s 23; 2001 
 c 96 s 11; 2003 c 110 s 32-35 

  349.171 Repealed, 1989 c 334 art 2 s 52 

     349.1711 Conduct of tipboards. 

    Subdivision 1.    Sale of tickets.  Tipboard games must 
 be played using only tipboard tickets that are either (1) 
 attached to a placard and arranged in columns or rows, or (2) 
 separate from the placard and contained in a receptacle while 
 the game is in play.  The placard serves as the game flare.  The 
 placard must contain a seal that conceals the winning number or 
 symbol.  When a tipboard ticket is purchased and opened, each 
 player having a tipboard ticket with one or more predesignated 
 numbers or symbols must sign the placard at the line indicated 
 by the number or symbol on the tipboard ticket. 

    Subd. 2.    Determination of winners.  When the 
 predesignated numbers or symbols have all been purchased, or all 
 of the tipboard tickets for that game have been sold, the seal 
 must be removed to reveal a number or symbol that determines 
 which of the predesignated numbers or symbols is the winning 
 number or symbol.  A tipboard may also contain consolation 
 winners that need not be determined by the use of the seal. 

    Subd. 3.    Prizes.  Cash or merchandise prizes may be 
 awarded in a tipboard game.  All prizes available in each game 
 must be stated on the game flare. 

    Subd. 4. Repealed, 2004 c 172 s 12 

    Subd. 5.    Tipboard rules.  The board shall adopt rules 
 for tipboard games with multiple seals.  The board shall also 
 adopt rules for cumulative or carryover tipboard prizes. 

    HIST: 1994 c 633 art 5 s 72; 1999 c 206 s 11; 2004 c 172 s 5 

     349.172 Pull-tabs; information required to be posted. 

    Subdivision 1.    Board may require certain posting.  
 The board may issue an order requiring an organization selling 
 pull-tabs to post major pull-tab prizes and the names of major 
 prize winners if the board has reasonable grounds to believe 
 that the organization, or a person receiving compensation from 
 the organization for participating in the sale of pull-tabs, has 
 been or is providing information to a player or players that 
 provides an unfair advantage related to the potential winnings 
 from pull-tabs.  The board must notify the organization at least 
 14 days before the order becomes effective.  The notice to the 
 organization must describe the organization's right to a hearing 
 under subdivision 3. 

    Subd. 2.    Posting; requirements.  The information 
 required to be posted under subdivision 1 must be posted 
 prominently at the point of sale of the pull-tabs.  An easily 
 legible pull-tab flare that lists prizes in the deal for that 
 flare, and on which prizes are marked off as they are awarded, 
 satisfies the requirements of this section that major prizes be 
 posted, provided that a separate flare is posted for each deal 
 of pull-tabs.  An organization must post or mark off each major 
 prize and post the name of the prize winner immediately on 
 awarding the prize. 

    Subd. 3.    Appeal.  An organization to which the board 
 issues an order under subdivision 1 may request a contested case 
 hearing on the order.  The hearing must be held within 20 days 
 of the effective date of the order, and the report by the 
 administrative law judge must be issued within 20 days after the 
 close of the hearing record.  The board must issue its final 
 decision within 30 days after receipt of the report of the 
 administrative law judge and subsequent exceptions and arguments 
 under section 14.61. 

    Subd. 4.    Major prizes.  For purposes of this section, 
 a "major prize" in a deal of pull-tabs is a prize of at least 50 
 times the face value of any pull-tab in the deal. 

    Subd. 5.    Compulsive gambling hotline number.  An 
 organization conducting lawful gambling must post at each point 
 of sale a sign containing the toll-free telephone number 
 established by the commissioner of human services in connection 
 with the compulsive gambling program established under section 
 245.98.  The sign must be kept in easily legible form and repair 
 by the owner, lessee, or person having control thereof, and must 
 either: 

    (1) be approved by the commissioner; or 

    (2) have lettering at least three-quarters of an inch in 
 height, of block letter design.  

    Subd. 6.    Voluntary posting.  Nothing in this section 
 limits the right of an organization voluntarily to post the 
 names of winners of lawful gambling prizes. 

    HIST: 1990 c 590 art 1 s 29; 1991 c 336 art 2 s 25 

     349.173 Conduct of raffles. 

    Raffle tickets at a minimum must list the three most 
 expensive prizes to be awarded.  If additional prizes will be 
 awarded that are not contained on the raffle ticket, the raffle 
 ticket must contain the statement "A complete list of additional 
 prizes is available upon request."  Notwithstanding section 
 349.12, subdivision 33, raffles conducted under the exemptions 
 in section 349.166 may use tickets that contain only the 
 sequential number of the raffle ticket and no other information 
 if the organization makes a list of prizes and a statement of 
 other relevant information required by rule available to persons 
 purchasing tickets and if tickets are only sold at the event and 
 on the date when the tickets are drawn. 

    HIST: 1999 c 206 s 12; 1999 c 249 s 5 

  349.174 Repealed, 2002 c 386 art 1 s 12 

     349.18 Premises used for gambling. 

    Subdivision 1.    Lease or ownership required; rent 
 limitations.  (a) An organization may conduct lawful gambling 
 only on premises it owns or leases.  Leases must be on a form 
 prescribed by the board.  Except for leases entered into before 
 August 1, 1994, the term of the lease may not begin before the 
 effective date of the premises permit and must expire on the 
 same day that the premises permit expires.  Copies of all leases 
 must be made available to employees of the board and the 
 Division of Alcohol and Gambling Enforcement on request.  The 
 board may prescribe by rule limits on the amount of rent which 
 an organization may pay to a lessor for premises leased for 
 bingo.  Any rule adopted by the board limiting the amount of 
 rent to be paid may only be effective for leases entered into, 
 or renewed, after the effective date of the rule. 

    (b) Rent paid by an organization for leased premises is 
 subject to the following limits: 

    (1) for booth operations, including booth operations where 
 a pull-tab dispensing device is located, booth operations where 
 a bar operation is also conducted, and booth operations where 
 both a pull-tab dispensing device is located and a bar operation 
 is also conducted, the maximum rent is: 

    (i) in any month where the organization's gross profit at 
 those premises does not exceed $4,000, up to $400; and 

    (ii) in any month where the organization's gross profit at 
 those premises exceeds $4,000, up to $400 plus not more than ten 
 percent of the gross profit for that month in excess of $4,000; 

    (2) for bar operations, including bar operations where a 
 pull-tab dispensing device is located but not including bar 
 operations subject to clause (1), and for locations where only a 
 pull-tab dispensing device is located: 

    (i) in any month where the organization's gross profit at 
 those premises does not exceed $1,000, up to $200; and 

    (ii) in any month where the organization's gross profit at 
 those premises exceeds $1,000, up to $200 plus not more than 20 
 percent of the gross profit for that month in excess of $1,000; 

    (3) a lease not governed by clauses (1) and (2) must be 
 approved by the board before becoming effective; 

    (4) total rent paid to a lessor from all organizations from 
 leases governed by clause (1) may not exceed $1,750 per month.  
 Total rent paid to a lessor from all organizations from leases 
 governed by clause (2) may not exceed $2,500 per month. 

    (c) Amounts paid as rent under leases are all-inclusive.  
 No other services or expenses provided or contracted by the 
 lessor may be paid by the organization, including, but not 
 limited to, trash removal, janitorial and cleaning services, 
 snow removal, lawn services, electricity, heat, security, 
 security monitoring, storage, other utilities or services, and, 
 in the case of bar operations, cash shortages.  Any other 
 expenditure made by an organization that is related to a leased 
 premises must be approved by the director.  An organization may 
 not provide any compensation or thing of value to a lessor or 
 the lessor's employees from any fund source other than its 
 gambling account.  Rent payments may not be made to an 
 individual. 

    (d) Notwithstanding paragraph (b), an organization may pay 
 a lessor for food or beverages or meeting room rental if the 
 charge made is comparable to similar charges made to other 
 individuals or groups. 

    (e) No person, distributor, manufacturer, lessor, linked 
 bingo game provider, or organization other than the licensed 
 organization leasing the space may conduct any activity other 
 than the sale or serving of food and beverages on the leased 
 premises during times when lawful gambling is being conducted on 
 the premises. 

    (f) At a site where the leased premises consists of an area 
 on or behind a bar at which alcoholic beverages are sold and 
 employees of the lessor are employed by the organization as 
 pull-tab sellers at the site, pull-tabs and tipboard tickets may 
 be sold and redeemed by those employees at any place on or 
 behind the bar, but the tipboards and receptacles for pull-tabs 
 and cash drawers for lawful gambling receipts must be maintained 
 only within the leased premises. 

    (g) Employees of a lessor may participate in lawful 
 gambling on the premises provided (1) if pull-tabs or tipboards 
 are sold, the organization voluntarily posts, or is required to 
 post, the major prizes as specified in section 349.172; and (2) 
 any employee of the lessor participating in lawful gambling is 
 not a gambling employee for the organization conducting lawful 
 gambling on the premises. 

    (h) A gambling employee may purchase pull-tabs at the site 
 of the employee's place of employment provided: 

    (1) the organization voluntarily posts, or is required to 
 post, the major prizes for pull-tab or tipboard games as 
 specified in section 349.172; and 

    (2) the employee is not involved in the sale of pull-tabs 
 at that site. 

    (i) At a leased site where an organization uses a 
 paddlewheel consisting of 30 numbers or less or a tipboard 
 consisting of 30 tickets or less, tickets may be sold throughout 
 the permitted premises, but winning tickets must be redeemed, 
 the paddlewheel must be located, and the tipboard seal must be 
 opened within the leased premises. 

    (j) A member of the lessor's immediate family may not be a 
 compensated employee of an organization leasing space at the 
 premises.  For purposes of this paragraph, a "member of the 
 immediate family" is a spouse, parent, child, or sibling. 

    Subd. 1a.    Storage of gambling equipment.  (a) 
 Gambling equipment owned by or in the possession of an 
 organization must be kept at a permitted premises owned or 
 leased by the organization, or at other storage sites within the 
 state that the organization has notified the board are being 
 used as gambling equipment storage sites.  At each storage site 
 or permitted premises, the organization must have the invoices 
 or true and correct copies of the invoices for the purchase of 
 all gambling equipment at the site or premises.  Gambling 
 equipment owned by an organization may not be kept at a 
 distributor's office, warehouse, storage unit, or other place of 
 the distributor's business.  

    (b) Gambling equipment, other than devices for selecting 
 bingo numbers, owned by an organization must be secured and kept 
 separate from gambling equipment owned by other persons, 
 organizations, distributors, or manufacturers. 

    (c) Paddlewheels must be covered or disabled when not in 
 use by the organization in the conduct of lawful gambling. 

    (d) Gambling equipment kept in violation of this 
 subdivision is contraband under section 349.2125.  

    (e) An organization may transport gambling equipment it 
 owns or possesses between approved gambling equipment storage 
 sites and to and from licensed distributors, if the invoices or 
 true and correct copies of the invoices for the organization's 
 acquisition of the gambling equipment accompany the gambling 
 equipment at all times and are available for inspection. 

    Subd. 2.    Exceptions.  (a) An organization may conduct 
 raffles on a premise it does not own or lease.  

    (b) An organization may, with the permission of the board, 
 conduct bingo on premises it does not own or lease for up to 12 
 consecutive days in a calendar year, in connection with a county 
 fair, the state fair, or a civic celebration.  

    (c) A licensed organization may, after compliance with 
 section 349.213, conduct lawful gambling on premises other than 
 the organization's permitted premises for four days per calendar 
 year and one event up to 12 consecutive days in a calendar year 
 in connection with a county fair, the state fair, a church 
 festival, or a civic celebration.  A lease for that time period 
 for the exempted premises must accompany the request to the 
 board. 

    Subd. 3.    Proceeds from rental.  Rental proceeds from 
 premises owned by an organization and leased to one or more 
 other organizations for the purposes of conducting lawful 
 gambling shall not be reported as gambling proceeds under this 
 chapter.  

    Subd. 4.    Prohibition.  (a) An organization may not 
 pay rent to itself or to any of its affiliates for use of space 
 for conducting lawful gambling. 

    (b) An organization may not pay rent for space for 
 conducting lawful gambling from any account or fund other than 
 the organization's separate gambling account. 

    Subd. 5.    Certain agreements prohibited.  An 
 organization may not enter into or be a party to a lending 
 agreement under which any of the organization's receipts from 
 lawful gambling are pledged as collateral for a loan.  

    HIST: 1976 c 261 s 8; 1984 c 502 art 12 s 12; 1986 c 467 s 18; 
 1987 c 327 s 17,18; 1989 c 334 art 2 s 27,28; 1990 c 590 art 1 s 
 31; 1991 c 233 s 109; 1991 c 336 art 2 s 26,27; 1994 c 633 art 5 
 s 74-76; 1996 c 467 s 6; 1997 c 129 art 2 s 15; 1998 c 322 s 4; 
 2000 c 300 s 5,6; 2003 c 110 s 36; 2004 c 172 s 6,7 

     349.19 Records and reports. 

    Subdivision 1.    Required record of receipts.  A 
 licensed organization must keep a record of each occasion on 
 which it conducts gambling, including each bingo occasion and 
 each day on which other forms of lawful gambling are conducted.  
 The record must include gross receipts, quantities of free plays 
 if any, expenses, prizes, and gross profit.  The board may by 
 rule provide for the methods by which expenses are documented.  
 In the case of bingo, gross receipts must be compared to the 
 checkers' records for the occasion by a person who did not sell 
 cards for the occasion.  Separate records must be kept for bingo 
 and all other forms of lawful gambling.  

    Subd. 2.    Accounts.  Gross receipts from lawful 
 gambling by each organization must be segregated from all other 
 revenues of the conducting organization and placed in a separate 
 account.  All expenditures for expenses, taxes, and lawful 
 purposes must be made from the separate account except (1) in 
 the case of expenditures previously approved by the 
 organization's membership for emergencies as defined by board 
 rule, or (2) as provided in subdivision 2a.  The name and 
 address of the bank, the account number for the separate 
 account, and the names of organization members authorized as 
 signatories on the separate account must be provided to the 
 board when the application is submitted.  Changes in the 
 information must be submitted to the board at least ten days 
 before the change is made.  Gambling receipts must be deposited 
 into the gambling bank account within four business days of 
 completion of the bingo occasion, deal, or game from which they 
 are received.  A deal of pull-tabs is considered complete when 
 either the last pull-tab of the deal is sold or the organization 
 does not continue the play of the deal during the next scheduled 
 period of time in which the organization will conduct 
 pull-tabs.  A tipboard game is considered complete when the seal 
 on the game flare is uncovered.  Deposit records must be 
 sufficient to allow determination of deposits made from each 
 bingo occasion, deal, or game at each permitted premises.  The 
 person who accounts for gambling gross receipts and profits may 
 not be the same person who accounts for other revenues of the 
 organization. 

    Subd. 2a.    Tax refund or credit.  (a) Each 
 organization that receives a refund or credit under section 
 297E.02, subdivision 4, paragraph (d), must within four business 
 days of receiving a refund under that paragraph deposit the 
 refund in the organization's gambling account.  

    (b) The organization may expend the tax refund or credit 
 issued under section 297E.02, subdivision 4, paragraph (d), only 
 for lawful purposes, other than lawful purposes described in 
 section 349.12, subdivision 25, paragraph (a), clauses (8), (9), 
 and (12).  Amounts subject to this paragraph must be spent for 
 qualifying lawful purposes no later than one year after the 
 refund or credit is received. 

    Subd. 2b.    Linked bingo prize pool account.  A 
 licensed organization participating in a linked bingo game must 
 maintain a separate account in a bank for the deposit of the 
 organization's portion of the linked bingo game prize pool.  The 
 name of the bank, the account number, and authorization for 
 electronic funds transfer must be provided by the organization 
 to the linked bingo game provider.  Deposits must be made into 
 the account by the organization as designated by the linked 
 bingo game provider.  Money in the account must be available to 
 the linked bingo game provider at all times by electronic funds 
 transfer, unless the linked bingo provider agrees to the 
 transfer of the funds by other means. 

    Subd. 3.    Expenditures.  (a) All expenditures of gross 
 profits from lawful gambling must be itemized as to payee, 
 purpose, amount, and date of payment, and must be in compliance 
 with section 349.154.  Authorization of the expenditures must be 
 recorded in the monthly meeting minutes of the licensed 
 organization.  Checks or authorizations for electronic fund 
 transfers for expenditures of gross profits must be signed by at 
 least two persons authorized by board rules to sign the checks.  
 Expenditures of gross profits from lawful gambling for local, 
 state, and federal taxes as identified in section 349.12, 
 subdivision 25, paragraph (a), clause (8), may be:  (1) 
 transferred electronically from the organization's gambling 
 account directly to bank accounts identified by local, state, or 
 federal agencies if the organization's gambling account monthly 
 bank statement specifically identifies the payee by name, the 
 amount transferred, and the date of the transaction; or (2) 
 transferred electronically to and from the account of a payroll 
 processing firm that meets the criteria for such a firm 
 established under section 349.168, subdivision 6.  Expenditures 
 of gross profits from lawful gambling as identified in section 
 349.12, subdivision 3a, and as authorized by section 349.15, 
 subdivision 1, for payments for utilities, insurance, and 
 payroll processing charges may be transferred electronically 
 from the organization's gambling account directly to bank 
 accounts identified by the vendor if the organization's gambling 
 account monthly bank statement specifically identifies the payee 
 by name, the amount transferred, the account number of the 
 account into which the funds were transferred, and the date of 
 the transaction.  Electronic payments of local, state, and 
 federal taxes and utility, payroll processing, or insurance 
 payments are permitted only if they have been authorized by the 
 membership, the organization maintains supporting documentation, 
 and the expenditures can be verified. 

    (b) Expenditures authorized by the board according to 
 section 349.12, subdivision 25, paragraph (b), clause (3), must 
 be 51 percent completed within two years of the date of board 
 approval.  "Fifty-one percent completed" means that the work 
 completed must represent at least 51 percent of the value of the 
 project as documented by the contractor or vendor.  An 
 organization that fails to comply with this paragraph shall 
 reapply to the board for approval of the project. 

    Subd. 4.    Discrepancies.  If at a bingo occasion a 
 discrepancy of more than $20 is found between the gross receipts 
 as reported by the checkers and the gross receipts determined by 
 adding the cash receipts, the discrepancy must be reported to 
 the board within five days of the bingo occasion.  

    Subd. 5.    Reports.  A licensed organization must 
 report to the Department of Revenue and to its membership 
 monthly, or quarterly in the case of a licensed organization 
 which does not report more than $1,000 in gross receipts from 
 lawful gambling in any calendar quarter, on its gross receipts, 
 expenses, profits, and expenditure of profits from lawful 
 gambling.  The report must include a reconciliation of the 
 organization's profit carryover with its cash balance on hand.  
 If the organization conducts both bingo and other forms of 
 lawful gambling, the figures for both must be reported 
 separately.  

    Subd. 6.    Preservation of records.  Records required 
 to be kept by this section must be preserved by a licensed 
 organization for at least 3-1/2 years and may be inspected by 
 the commissioner of revenue, the board, or the commissioner of 
 public safety at any reasonable time without notice or a search 
 warrant. 

    Subd. 7.    Tax records.  The board may by rule require 
 each licensed organization to provide copies of forms it files 
 with the United States Department of the Treasury which are 
 required for organizations exempt from income tax.  

    Subd. 8.    Termination plan.  Upon termination of a 
 license for any reason, a licensed organization must notify the 
 board in writing within 30 calendar days of the license 
 termination date of its plan for disposal of gambling equipment 
 and distribution of remaining gambling proceeds.  Before 
 implementation, a plan must be approved by the board as provided 
 in board rule.  The board may accept or reject a plan and order 
 submission of a new plan or amend a proposed plan.  The board 
 may specify a time for submission of new or amended plans or for 
 completion of an accepted plan. 

    Subd. 9.    Annual audit; filing requirement.  An 
 organization licensed under this chapter must have an annual 
 financial audit or financial review when required by section 
 297E.06, subdivision 4. 

    Subd. 9a.    Records.  An organization licensed under 
 this chapter must maintain records that account for the assets, 
 liabilities, and fund balance of the organization.  The records 
 must also account for the revenues, taxes, prize payouts, 
 expenses, and lawful purpose expenditures of the organization.  
 The records must include a perpetual inventory of games 
 purchased but not yet played and games in play. 

    Subd. 9b.    Accounting manual.  The board must prepare 
 and distribute to each organization licensed under this chapter 
 a manual designed to facilitate compliance with section 349.19, 
 subdivision 9a.  The manual must include a clear description of 
 the processes needed to maintain the records required in section 
 349.19, subdivision 9a.  The board may contract for preparation 
 of the manual. 

    Subd. 10.    Pull-tab records.  (a) The board shall by 
 rule require a licensed organization to require each winner of a 
 pull-tab prize of $50 or more to present identification in the 
 form of a driver's license, Minnesota identification card, or 
 other identification the board deems sufficient to allow the 
 identification and tracing of the winner.  The rule must require 
 the organization to retain winning pull-tabs of $50 or more, and 
 the identification of the winner of the pull-tab, for 3-1/2 
 years. 

    (b) An organization must maintain separate cash banks for 
 each deal of pull-tabs unless (1) two or more deals are 
 commingled in a single receptacle, or (2) the organization uses 
 a cash register, of a type approved by the board, which records 
 all sales of pull-tabs by separate deals.  The board shall (1) 
 by rule adopt minimum technical standards for cash registers 
 that may be used by organizations, and shall approve for use by 
 organizations any cash register that meets the standards, and 
 (2) before allowing an organization to use a cash register that 
 commingles receipts from several different pull-tab games in 
 play, adopt rules that define how cash registers may be used and 
 that establish a procedure for organizations to reconcile all 
 pull-tab games in play at the end of each month. 

    Subd. 11.    Information made part of organization 
 minutes.  A licensed organization which receives a copy of a 
 written audit under subdivision 9, or an audit or compliance 
 report prepared by an agency of the state, must place the audit 
 report or compliance report in the minutes of the next meeting 
 of the organization following receipt of the report.  Copies of 
 such minutes must be made available to all members of the 
 organization upon request. 

    HIST: 1976 c 261 s 9; 1984 c 502 art 12 s 13; 1986 c 467 s 
 19,20; 1987 c 327 s 19; 1988 c 596 s 5; 1989 c 334 art 2 s 
 29-33; 1Sp1989 c 1 art 13 s 11; 1990 c 590 art 1 s 32; 1991 c 
 336 art 2 s 28-32; 1993 c 13 art 1 s 4; 1994 c 633 art 5 s 
 77-81; 1996 c 467 s 7; 1996 c 471 art 13 s 18,19; 1997 c 7 art 1 
 s 128; 1997 c 231 art 7 s 34; 1998 c 322 s 5; 1998 c 389 art 13 
 s 6; 1Sp2001 c 5 art 13 s 13; 2002 c 386 art 1 s 9; 2003 c 110 s 
 37,38; 2004 c 172 s 8 

     349.191 Sales on credit. 

    Subdivision 1.    Credit restriction.  A manufacturer 
 may not offer or extend to a distributor, a linked bingo game 
 provider may not offer or extend to an organization, and a 
 distributor may not offer or extend to an organization, credit 
 for a period of more than 30 days for the sale or lease of any 
 gambling equipment.  No right of action exists for the 
 collection of any claim based on credit prohibited by this 
 subdivision.  The 30-day period allowed by this subdivision 
 begins with the day immediately following the day of invoice and 
 includes all successive days, including Sundays and holidays, to 
 and including the 30th successive day. 

    Subd. 1a.    Credit and sales to delinquent organizations. 
  (a) If a distributor or linked bingo game provider does not 
 receive payment in full from an organization within 35 days of 
 the day immediately following the date of the invoice, the 
 distributor or linked bingo game provider must notify the board 
 in writing of the delinquency on the next business day. 

    (b) If a distributor or linked bingo game provider who has 
 notified the board under paragraph (a) has not received payment 
 in full from the organization within 60 days of the notification 
 under paragraph (a), the distributor or linked bingo game 
 provider must notify the board of the continuing delinquency. 

    (c) On receipt of a notice under paragraph (a), the board 
 shall order all distributors and linked bingo game providers 
 that until further notice from the board, they may sell gambling 
 equipment to the delinquent organizations only on a cash basis 
 with no credit extended.  On receipt of a notice under paragraph 
 (b), the board shall order all distributors and linked bingo 
 game providers not to sell any gambling equipment to the 
 delinquent organization. 

    (d) No distributor or linked bingo game provider may extend 
 credit or sell gambling equipment to an organization in 
 violation of an order under paragraph (c) until the board has 
 authorized such credit or sale. 

    Subd. 1b.    Credit and sales to delinquent distributors. 
  (a) If a manufacturer does not receive payment in full from a 
 distributor within 35 days of the day immediately following the 
 date of invoice, the manufacturer must notify the board in 
 writing of the delinquency on the next business day. 

    (b) If a manufacturer who has notified the board under 
 paragraph (a) has not received payment in full from the 
 distributor within 60 days of the notification under paragraph 
 (a), the manufacturer must notify the board of the continuing 
 delinquency. 

    (c) On receipt of a notice under paragraph (a), the board 
 shall order all manufacturers that until further notice from the 
 board, they may sell gambling equipment to the delinquent 
 distributor only on a cash basis with no credit extended.  On 
 receipt of a notice under paragraph (b), the board shall order 
 all manufacturers not to sell any gambling equipment to the 
 delinquent distributor. 

    (d) No manufacturer may extend credit or sell gambling 
 equipment to a distributor in violation of an order under 
 paragraph (c) until the board has authorized such credit or sale.

    Subd. 2.    Invoices.  All invoices prepared by a 
 manufacturer or distributor and presented as part of a credit 
 transaction for the purchase of gambling equipment must clearly 
 bear the words "Notice:  State Law Prohibits the Extension of 
 Credit For This Sale For More Than 30 Days." 

    Subd. 3.    Rules.  Any rule of the board which requires 
 a manufacturer to report to the board any distributor who is 
 delinquent in payment for gambling equipment must provide that a 
 distributor is subject to the rule if the distributor is more 
 than 30 days delinquent in payment to a manufacturer. 

    Subd. 4.    Credit; postdated checks.  For purposes of 
 this section, "credit" includes acceptance by a manufacturer or 
 distributor of a postdated check in payment for gambling 
 equipment. 

    HIST: 1990 c 590 art 1 s 33; 1994 c 633 art 5 s 82-85; 1995 c 
 261 s 24; 1997 c 231 art 7 s 35; 2002 c 386 art 1 s 10,11; 2003 
 c 110 s 39,40 

  349.20 Repealed, 1990 c 590 art 1 s 55 

  349.21 Repealed, 1990 c 590 art 1 s 55 

     349.211 Prize limits. 

    Subdivision 1.    Bingo.  Except as provided in 
 subdivisions 1a and 2, prizes for a single bingo game may not 
 exceed $200 except prizes for a cover-all game, which may exceed 
 $200 if the aggregate value of all cover-all prizes in a bingo 
 occasion does not exceed $1,000.  Total prizes awarded at a 
 bingo occasion may not exceed $2,800, unless a cover-all game is 
 played in which case the limit is $3,800.  A prize may be 
 determined based on the value of the bingo packet sold to the 
 player.  For purposes of this subdivision, a cover-all game is 
 one in which a player must cover all spaces except a single free 
 space to win. 

    Subd. 1a.    Linked bingo prizes.  Prizes for a linked 
 bingo game shall be limited as follows: 

    (1) no organization may contribute more than $300 per 
 occasion to a linked bingo game prize pool; and 

    (2) if an organization contributes to a linked bingo game 
 prize pool, the organization's aggregate value of cover-all 
 prizes available during the bingo occasion must be reduced by 
 the amount contributed to the linked bingo game prize pool. 

    Subd. 2.    Progressive bingo games.  A prize of up to 
 $2,000 may be awarded for a progressive bingo game, including a 
 cover-all game.  The prize for a progressive bingo game may 
 start at $500 and be increased by up to $100 for each occasion 
 during which the progressive bingo game is played.  A 
 consolation prize of up to $200 for a progressive bingo game may 
 be awarded in each occasion during which the progressive bingo 
 game is played and the accumulated prize is not won.  The total 
 amount awarded in progressive bingo game prizes in any calendar 
 year may not exceed $48,000. 

    Subd. 2a.    Pull-tab prizes.  The maximum prize which 
 may be awarded for any single pull-tab is $599.  An organization 
 may not sell any pull-tab for more than $2. 

    Subd. 2b.    Paddlewheel prizes.  The maximum cash prize 
 which may be awarded for a paddleticket is $70.  An organization 
 may not sell any paddleticket for more than $2. 

    Subd. 2c.    Tipboard prizes.  The maximum prize which 
 may be awarded for a tipboard ticket is $500, not including any 
 cumulative or carryover prizes.  Cumulative or carryover prizes 
 in tipboard games shall not exceed $2,500.  

    Subd. 3.    Other gambling.  The board by rule shall 
 establish a schedule of prize limits for all other forms of 
 gambling consistent with the purposes set out in section 
 349.11.  The schedule may include daily and annual prize limits 
 and prize limits for each game, raffle or operation of a 
 gambling device.  

    Subd. 4.    Prize value.  (a) Merchandise prizes must be 
 valued at their fair market value.  For purposes of sections 
 349.11 to 349.22 "prizes" do not include free plays awarded. 

    (b) Merchandise prizes for a paddlewheel consisting of 30 
 numbers or less or a tipboard consisting of 30 tickets or less 
 may be paid for by the organization up to 30 days after the 
 prize is received by the organization.  

    HIST: 1984 c 502 art 12 s 16; 1986 c 467 s 21; 1991 c 336 art 
 2 s 33; 1994 c 633 art 5 s 86-88; 1995 c 261 s 25; 1997 c 155 s 
 8,9; 1999 c 206 s 13,14; 2000 c 300 s 7; 2002 c 386 art 2 s 6,7; 
 2003 c 110 s 41,42; 2004 c 172 s 9 

     349.2113 Prize payout limit. 

    On or after January 1, 2004, a licensed organization may 
 not put into play a pull-tab or tipboard deal that provides for 
 a prize payout of greater than 85 percent of the ideal gross of 
 the deal. 

    HIST: 1Sp2003 c 1 art 2 s 100 

  349.2115 Repealed, 1994 c 633 art 2 s 21 

    349.212 Subdivision 1. Repealed, 1994 c 633 art 2 
 s 21 

    Subd. 2. Repealed, 1994 c 633 art 2 s 21 

    Subd. 3. Repealed, 1Sp1985 c 13 s 376 subd 1 

    Subd. 4. Repealed, 1994 c 633 art 2 s 21 

    Subd. 5. Repealed, 1994 c 633 art 2 s 21 

    Subd. 6. Repealed, 1994 c 633 art 2 s 21 

    Subd. 7. Repealed, 1994 c 633 art 2 s 21 

  349.2121 Repealed, 1994 c 633 art 2 s 21 

  349.2122 Repealed, 1994 c 633 art 2 s 21 

     349.2123 Certified physical inventory. 

    The board may, upon request, require a distributor to 
 furnish a certified physical inventory of all gambling equipment 
 in stock.  The inventory must contain the information required 
 by the board. 

    HIST: 1987 c 268 art 15 s 12; 1988 c 719 art 9 s 13; 1990 c 
 590 art 1 s 36; 1994 c 633 art 3 s 2 

     349.2124 Sales to Indian tribes. 

    A distributor may set aside that part of the distributor's 
 stock necessary for the conduct of business in making sales to 
 the established governing body of any Indian tribe recognized by 
 the United States Department of Interior.  A distributor shall, 
 when shipping or delivering any stock to an Indian tribal 
 organization, make a true duplicate invoice showing the complete 
 details of the sale or delivery and shall keep the duplicate. 

    HIST: 1987 c 268 art 15 s 13 

     349.2125 Contraband. 

    Subdivision 1.    Contraband defined.  The following are 
 contraband: 

    (1) all pull-tab or tipboard deals or paddleticket cards 
 not stamped or bar coded in accordance with this chapter or 
 chapter 297E; 

    (2) all pull-tab or tipboard deals in the possession of any 
 unlicensed person, firm, or organization, whether stamped or 
 unstamped; 

    (3) any container used for the storage and display of any 
 contraband pull-tab or tipboard deals as defined in clauses (1) 
 and (2); 

    (4) all currency, checks, and other things of value used 
 for pull-tab or tipboard transactions not expressly permitted 
 under this chapter, and any cash drawer, cash register, or any 
 other container used for illegal pull-tab or tipboard 
 transactions including its contents; 

    (5) any device including, but not limited to, motor 
 vehicles, trailers, snowmobiles, airplanes, and boats used, with 
 the knowledge of the owner or of a person operating with the 
 consent of the owner, for the storage or transportation of more 
 than five pull-tab or tipboard deals that are contraband under 
 this subdivision.  When pull-tabs and tipboards are being 
 transported in the course of interstate commerce between 
 locations outside this state, the pull-tab and tipboard deals 
 are not contraband, notwithstanding the provisions of clauses 
 (1) and (12); 

    (6) any unaffixed registration stamps except as provided in 
 section 349.162, subdivision 4; 

    (7) any prize used or offered in a game utilizing 
 contraband as defined in this subdivision; 

    (8) any altered, modified, or counterfeit pull-tab or 
 tipboard ticket; 

    (9) any unregistered gambling equipment except as permitted 
 by this chapter; 

    (10) any gambling equipment kept in violation of section 
 349.18; 

    (11) any gambling equipment not in conformity with law or 
 board rule; 

    (12) any pull-tab or tipboard deal in the possession of a 
 person other than a licensed distributor or licensed 
 manufacturer for which the person, upon demand of a licensed 
 peace officer or authorized agent of the commissioner of revenue 
 or director of alcohol and gambling enforcement, does not 
 immediately produce for inspection the invoice or a true and 
 correct copy of the invoice for the acquisition of the deal from 
 a licensed distributor; 

    (13) any pull-tab or tipboard deals or portions of deals on 
 which the tax imposed under chapter 297E has not been paid; and 

    (14) any device prohibited by section 609.76, subdivisions 
 4 to 6. 

    Subd. 2.    Seizure.  Property made contraband by 
 subdivision 1 may be seized by the commissioner of revenue or 
 the director of alcohol and gambling enforcement or their 
 authorized agents or by any sheriff or other police officer, 
 hereinafter referred to as the seizing authority, with or 
 without process, and shall be subject to forfeiture as provided 
 in subdivisions 3 and 4. 

    Subd. 3.    Inventory; judicial determination; appeal; 
 disposition of seized property.  Within ten days after the 
 seizure of any alleged contraband, the person making the seizure 
 shall make available an inventory of the property seized to the 
 person from whom the property was seized, if known, and file a 
 copy with the commissioner of revenue or the director of alcohol 
 and gambling enforcement.  Within ten days after the date of 
 service of the inventory, the person from whom the property was 
 seized or any person claiming an interest in the property may 
 file with the seizing authority a demand for judicial 
 determination of whether the property was lawfully subject to 
 seizure and forfeiture.  Within 60 days after the date of filing 
 of the demand, the seizing authority must bring an action in the 
 district court of the county where seizure was made to determine 
 the issue of forfeiture.  The action must be brought in the name 
 of the state and be prosecuted by the county attorney or by the 
 attorney general.  The court shall hear the action without a 
 jury and determine the issues of fact and laws involved.  When a 
 judgment of forfeiture is entered, the seizing authority may, 
 unless the judgment is stayed pending an appeal, either (1) 
 cause the forfeited property to be destroyed; or (2) cause it to 
 be sold at a public auction as provided by law.  

    If demand for judicial determination is made and no action 
 is commenced by the seizing authority as provided in this 
 subdivision, the property must be released by the seizing 
 authority and delivered to the person entitled to it.  If no 
 demand is made, the property seized is considered forfeited to 
 the seizing authority by operation of law and may be disposed of 
 by the seizing authority as provided where there has been a 
 judgment of forfeiture.  When the seizing authority is satisfied 
 that a person from whom property is seized was acting in good 
 faith and without intent to evade a tax imposed by chapter 297E, 
 the seizing authority shall release the property seized without 
 further legal proceedings.  

    Subd. 4.    Disposal.  (a) The property described in 
 subdivision 1, clauses (4) and (5), must be confiscated after 
 conviction of the person from whom it was seized, upon 
 compliance with the following procedure:  the seizing authority 
 shall file with the court a separate complaint against the 
 property, describing it and charging its use in the specific 
 violation, and specifying substantially the time and place of 
 the unlawful use.  A copy of the complaint must be served upon 
 the defendant or person in charge of the property at the time of 
 seizure, if any.  If the person arrested is acquitted, the court 
 shall dismiss the complaint against the property and order it 
 returned to the persons legally entitled to it.  Upon conviction 
 of the person arrested, the court shall issue an order directed 
 to any person known or believed to have any right, title or 
 interest in, or lien upon, any of the property, and to persons 
 unknown claiming any right, title, interest, or lien in it, 
 describing the property and (1) stating that it was seized and 
 that a complaint against it, charging the specified violation, 
 has been filed with the court, (2) requiring the persons to file 
 with the court administrator their answer to the complaint, 
 setting forth any claim they may have to any right or title to, 
 interest in, or lien upon the property, within 30 days after the 
 service of the order, and (3) notifying them in substance that 
 if they fail to file their answer within the time, the property 
 will be ordered sold by the seizing authority.  The court shall 
 cause the order to be served upon any person known or believed 
 to have any right, title, interest, or lien as in the case of a 
 summons in a civil action, and upon unknown persons by 
 publication, as provided for service of summons in a civil 
 action.  If no answer is filed within the time prescribed, the 
 court shall, upon affidavit by the court administrator, setting 
 forth the fact, order the property sold by the seizing 
 authority.  Seventy percent of the proceeds of the sale of 
 forfeited property, after payment of seizure, storage, 
 forfeiture and sale expenses, must be forwarded to the seizing 
 authority for deposit as a supplement to its operating fund or 
 similar fund for official use, and 20 percent must be forwarded 
 to the county attorney or other prosecuting agency that handled 
 the forfeiture for deposit as a supplement to its operating fund 
 or similar fund for prosecutorial purposes.  The remaining ten 
 percent of the proceeds must be forwarded within 60 days after 
 resolution of the forfeiture to the Department of Human Services 
 to fund programs for the treatment of compulsive gamblers.  If 
 answer is filed within the time provided, the court shall fix a 
 time for a hearing, which shall be not less than ten nor more 
 than 30 days after the time for filing answer expires.  At the 
 time fixed for hearing, unless continued for cause, the matter 
 shall be heard and determined by the court, without a jury, as 
 in other civil actions.  

    (b) If the court finds that the property, or any part of 
 it, was used in the violation specified in the complaint, it 
 shall order the property unlawfully used, sold as provided by 
 law, unless the owner shows to the satisfaction of the court 
 that the owner had no notice or knowledge or reason to believe 
 that the property was used or intended to be used in the 
 violation.  The officer making a sale, after deducting the 
 expense of keeping the property, the fee for seizure, and the 
 costs of the sale, shall pay all liens according to their 
 priority, which are established at the hearing as being bona 
 fide and as existing without the lienor having any notice or 
 knowledge that the property was being used or was intended to be 
 used for or in connection with the violation specified in the 
 order of the court, and shall pay the balance of the proceeds to 
 the seizing authority for official use and sharing in the manner 
 provided in paragraph (a).  A sale under this section shall free 
 the property sold from any and all liens on it.  Appeal from the 
 order of the district court will lie as in other civil cases.  
 At any time after seizure of the articles specified in this 
 subdivision, and before the hearing provided for, the property 
 must be returned to the owner or person having a legal right to 
 its possession, upon execution of a good and valid bond to the 
 state, with corporate surety, in the sum of not less than $100 
 and not more than double the value of the property seized, to be 
 approved by the court in which the case is triable, or a judge 
 of it, conditioned to abide any order and the judgment of the 
 court, and to pay the full value of the property at the time of 
 the seizure.  The seizing authority may dismiss the proceedings 
 outlined in this subdivision when the seizing authority 
 considers it to be in the public interest to do so.  

    HIST: 1988 c 719 art 9 s 14; 1989 c 334 art 2 s 40-42; 1990 c 
 590 art 2 s 1-3; 1994 c 633 art 5 s 89,90; 1997 c 129 art 2 s 
 15; 2000 c 336 s 4 

     349.2127 Prohibitions. 

    Subdivision 1.    Counterfeiting.  A person is guilty of 
 a felony who, with intent to defraud the state, makes, alters, 
 forges, or counterfeits any license or stamp provided for in 
 this chapter, or has in possession any forged, spurious, or 
 altered stamps, with the intent, or with the result of, 
 depriving the state of the tax imposed by chapter 297E.  

    Subd. 2.    Prohibition against possession.  (a) A 
 person is guilty of a crime who sells, offers for sale, or 
 possesses a pull-tab or tipboard deal or paddleticket cards not 
 stamped or bar coded in accordance with the provisions of this 
 chapter or chapter 297E.  A violation of this paragraph is a 
 gross misdemeanor if it involves ten or fewer pull-tab or 
 tipboard deals.  A violation of this paragraph is a felony if it 
 involves more than ten pull-tab or tipboard deals, or a 
 combination of more than ten deals of pull-tabs and tipboards. 

    (b) A person, other than a licensed manufacturer, a 
 licensed distributor, or an organization licensed or exempt or 
 excluded from licensing under this chapter, is guilty of a crime 
 who sells, offers to sell, or possesses gambling equipment.  A 
 violation of this paragraph is a gross misdemeanor if it 
 involves ten or fewer pull-tab or tipboard deals.  A violation 
 of this paragraph is a felony if it involves more than ten 
 pull-tab or tipboard deals, or a combination of more than ten 
 deals of pull-tabs and tipboards. 

    (c) A person is guilty of a crime who alters, modifies, or 
 counterfeits pull-tabs, tipboards, or tipboard tickets, or 
 possesses altered, modified, or counterfeit pull-tabs, 
 tipboards, or tipboard tickets.  A violation of this paragraph 
 is a gross misdemeanor if the total face value for all such 
 pull-tabs, tipboards, or tipboard tickets does not exceed $200.  
 A violation of this paragraph is a felony if the total face 
 value exceeds $200.  For purposes of this paragraph, the face 
 value of all pull-tabs, tipboards, and tipboard tickets altered, 
 modified, or counterfeited within a six-month period may be 
 aggregated and the defendant charged accordingly. 

    (d) A person, other than a licensed distributor or licensed 
 manufacturer, is guilty of a crime who possesses a pull-tab or 
 tipboard deal for which the person, upon demand of a licensed 
 peace officer or authorized agent of the commissioner of revenue 
 or director of alcohol and gambling enforcement, does not 
 immediately produce for inspection the invoice or a true and 
 correct copy of the invoice for the acquisition of the deal from 
 a licensed distributor.  A violation of this paragraph is a 
 gross misdemeanor if it involves ten or fewer pull-tab or 
 tipboard deals.  A violation of this paragraph is a felony if it 
 involves more than ten pull-tab or tipboard deals, or a 
 combination of more than ten deals of pull-tabs and tipboards.  
 This paragraph does not apply to pull-tab and tipboard deals 
 being transported in interstate commerce between locations 
 outside this state. 

    Subd. 3.    False information.  A person is guilty of a 
 felony who: 

    (1) knowingly submits materially false information in any 
 license application or other document or communication submitted 
 to the board; 

    (2) knowingly places materially false information on a 
 pull-tab or tipboard deal invoice or a copy of the invoice; or 

    (3) knowingly presents to a licensed peace officer or 
 authorized agent of the commissioner of revenue or director of 
 alcohol and gambling enforcement a pull-tab or tipboard deal 
 invoice, or a copy of the invoice, that contains materially 
 false information. 

    Subd. 4.    Transporting unstamped deals.  A person is 
 guilty of a gross misdemeanor who transports into, causes to be 
 transported into, receives, carries, moves from place to place, 
 or causes to be moved from place to place in this state, any 
 paddleticket cards or deals of pull-tabs or tipboards not 
 stamped or bar coded in accordance with this chapter or chapter 
 297E except in the course of interstate commerce between 
 locations outside this state.  A person is guilty of a felony 
 who violates this subdivision with respect to more than ten 
 pull-tab or tipboard deals, or a combination of more than ten 
 deals of pull-tabs and tipboards. 

    Subd. 5.    Providing information.  (a) An employee of 
 an organization may not provide any information to a player that 
 would provide an unfair advantage to the player related to the 
 potential winnings of any lawful gambling activity.  

    (b) An employee may not provide, and a person may not 
 receive, with expectation of pecuniary gain to either, any 
 information that would provide an unfair advantage to the 
 recipient of the information related to the potential winnings 
 of any lawful gambling activity.  A person who violates this 
 paragraph is guilty of a gross misdemeanor.  A person who 
 violates this paragraph within five years after a previous 
 conviction under this paragraph is guilty of a felony. 

    (c) For purposes of this subdivision, "employee" includes a 
 volunteer. 

    Subd. 6.    Unlawful expenditures.  (a) A person who 
 knowingly or with reason to know makes an unlawful expenditure 
 of gross profits from lawful gambling is guilty of a crime and 
 may be sentenced as provided in this subdivision. 

    (b) If the unlawful expenditure is of $200 or less, the 
 penalty in section 349.22, subdivision 1, applies. 

    (c) If the unlawful expenditure is of more than $200 but 
 not more than $2,500, the person is guilty of a gross 
 misdemeanor. 

    (d) If the unlawful expenditure is of more than $2,500, the 
 person is guilty of a felony.  

    (e) For purposes of this subdivision, expenditures made 
 within a six-month period may be aggregated and the defendant 
 charged accordingly. 

    Subd. 7.    Checks for gambling purchases.  An 
 organization may not accept checks in payment for the purchase 
 of any gambling equipment or for the chance to participate in 
 any form of lawful gambling except a raffle.  If an organization 
 accepts a check, the payment of which is subsequently 
 dishonored, the organization shall reimburse its gambling 
 account for the amount of the dishonored check within 30 days of 
 receiving notice of the dishonor.  This subdivision does not 
 apply to gaming activities conducted pursuant to the Indian 
 Gaming Regulatory Act, United States Code, title 25, section 
 2701 et seq. 

    Subd. 8.    Minimum age.  (a) A person under the age of 
 18 years may not buy a pull-tab, tipboard ticket, paddlewheel 
 ticket, or raffle ticket, or a chance to participate in a bingo 
 game other than (1) a bingo game exempt or excluded from 
 licensing, or (2) one bingo occasion conducted by a licensed 
 organization as part of an annual community event if the person 
 under age 18 is accompanied by a parent or guardian.  Violation 
 of this paragraph is a misdemeanor. 

    (b) A licensed organization or employee may not allow a 
 person under age 18 to participate in lawful gambling in 
 violation of paragraph (a).  Violation of this paragraph is a 
 misdemeanor. 

    (c) In a prosecution under paragraph (b), it is a defense 
 for the defendant to prove by a preponderance of the evidence 
 that the defendant reasonably and in good faith relied upon 
 representations of proof of age authorized in section 340A.503, 
 subdivision 6, paragraph (a). 

    Subd. 9.    Tipboard defined.  For purposes of this 
 section "tipboard" includes tipboards as defined in section 
 349.12, subdivision 34, and any board, placard or other device 
 marked off in a grid or columns, in which each section contains 
 a hidden number or numbers, or other symbol, which determines 
 the winning chances. 

    HIST: 1988 c 719 art 9 s 15; 1989 c 334 art 2 s 43; 1Sp1989 c 
 1 art 13 s 16,17; 1990 c 590 art 2 s 4-10; 1991 c 256 s 10; 1994 
 c 633 art 2 s 19; art 5 s 91-95; 1997 c 129 art 2 s 15; 2001 c 
 96 s 12; 2004 c 172 s 10 

     349.213 Local authority. 

    Subdivision 1.    Local regulation.  (a) A statutory or 
 home rule city or county has the authority to adopt more 
 stringent regulation of lawful gambling within its jurisdiction, 
 including the prohibition of lawful gambling, and may require a 
 permit for the conduct of gambling exempt from licensing under 
 section 349.166.  The fee for a permit issued under this 
 subdivision may not exceed $100.  The authority granted by this 
 subdivision does not include the authority to require a license 
 or permit to conduct gambling by organizations or sales by 
 distributors licensed by the board.  The authority granted by 
 this subdivision does not include the authority to require an 
 organization to make specific expenditures of more than ten 
 percent per year from its net profits derived from lawful 
 gambling.  For the purposes of this subdivision, net profits are 
 gross profits less amounts expended for allowable expenses and 
 paid in taxes assessed on lawful gambling.  A statutory or home 
 rule charter city or a county may not require an organization 
 conducting lawful gambling within its jurisdiction to make an 
 expenditure to the city or county as a condition to operate 
 within that city or county, except as authorized under section 
 349.16, subdivision 8, or 297E.02; provided, however, that an 
 ordinance requirement that such organizations must contribute 
 ten percent per year of their net profits derived from lawful 
 gambling conducted at premises within the city's or county's 
 jurisdiction to a fund administered and regulated by the 
 responsible local unit of government without cost to such fund, 
 for disbursement by the responsible local unit of government of 
 the receipts for (i) lawful purposes, or (ii) police, fire, and 
 other emergency or public safety-related services, equipment, 
 and training, excluding pension obligations, is not considered 
 an expenditure to the city or county nor a tax under section 
 297E.02, and is valid and lawful.  A city or county making 
 expenditures authorized under this paragraph must by March 15 of 
 each year file a report with the board, on a form the board 
 prescribes, that lists all such revenues collected and 
 expenditures for the previous calendar year. 

    (b) A statutory or home rule city or county may by 
 ordinance require that a licensed organization conducting lawful 
 gambling within its jurisdiction expend all or a portion of its 
 expenditures for lawful purposes on lawful purposes conducted or 
 located within the city's or county's trade area.  Such an 
 ordinance must be limited to lawful purpose expenditures of 
 gross profits derived from lawful gambling conducted at premises 
 within the city's or county's jurisdiction, must define the 
 city's or county's trade area, and must specify the percentage 
 of lawful purpose expenditures which must be expended within the 
 trade area.  A trade area defined by a city under this 
 subdivision must include each city and township contiguous to 
 the defining city. 

    (c) A more stringent regulation or prohibition of lawful 
 gambling adopted by a political subdivision under this 
 subdivision must apply equally to all forms of lawful gambling 
 within the jurisdiction of the political subdivision, except a 
 political subdivision may prohibit the use of paddlewheels. 

    Subd. 2.    Local approval.  Before issuing or renewing 
 a premises permit or bingo hall license, the board must notify 
 the city council of the statutory or home rule city in which the 
 organization's premises or the bingo hall is located or, if the 
 premises or hall is located outside a city, the county board of 
 the county and the town board of the town where the premises or 
 hall is located.  The board may require organizations or bingo 
 halls to notify the appropriate local government at the time of 
 application.  This required notification is sufficient to 
 constitute the notice required by this subdivision.  The board 
 may not issue or renew a premises permit or bingo hall license 
 unless the organization submits a resolution from the city 
 council or county board approving the premises permit or bingo 
 hall license.  The resolution must have been adopted within 90 
 days of the date of application for the new or renewed permit or 
 license. 

    Subd. 3.    Local gambling tax.  A statutory or home 
 rule charter city that has one or more licensed organizations 
 operating lawful gambling, and a county that has one or more 
 licensed organizations outside incorporated areas operating 
 lawful gambling, may impose a local gambling tax on each 
 licensed organization within the city's or county's 
 jurisdiction.  The tax may be imposed only if the amount to be 
 received by the city or county is necessary to cover the costs 
 incurred by the city or county to regulate lawful gambling.  The 
 tax imposed by this subdivision may not exceed three percent per 
 year of the gross receipts of a licensed organization from all 
 lawful gambling less prizes actually paid out by the 
 organization.  A city or county may not use money collected 
 under this subdivision for any purpose other than to regulate 
 lawful gambling.  A tax imposed under this subdivision is in 
 lieu of all other local taxes and local investigation fees on 
 lawful gambling.  A city or county that imposes a tax under this 
 subdivision shall annually, by March 15, file a report with the 
 board in a form prescribed by the board showing (1) the amount 
 of revenue produced by the tax during the preceding calendar 
 year, and (2) the use of the proceeds of the tax.  

    HIST: 1984 c 502 art 12 s 18; 1986 c 467 s 25; 1987 c 327 s 
 21; 1988 c 705 s 1; 1989 c 209 art 1 s 35; 1989 c 334 art 2 s 
 44,45; 1989 c 335 art 1 s 220; 1990 c 590 art 1 s 37; 1991 c 199 
 art 2 s 1; 1991 c 336 art 2 s 34; 1994 c 633 art 2 s 19; art 5 s 
 96; 1994 c 633 art 2 s 2; 1995 c 264 art 17 s 11; 1998 c 322 s 
 6; 2000 c 300 s 8; 2001 c 96 s 13 

  349.214 Repealed, 1990 c 590 art 1 s 55 

  349.215 Repealed, 1994 c 633 art 2 s 21 

  349.2151 Repealed, 1994 c 633 art 2 s 21 

  349.2152 Repealed, 1994 c 633 art 2 s 21 

  349.216 Repealed, 1994 c 633 art 2 s 21 

  349.217 Repealed, 1994 c 633 art 2 s 21 

  349.2171 Repealed, 1994 c 633 art 2 s 21 

  349.218 Repealed, 1996 c 305 art 1 s 73 

  349.219 Repealed, 1994 c 633 art 2 s 21 

     349.22 Penalty. 

    Subdivision 1.    Penalty.  (a) A person who violates 
 any provision of sections 349.11 to 349.23 for which another 
 penalty is not provided is guilty of a misdemeanor. 

    (b) A person who violates any provision of sections 349.11 
 to 349.23 for which another penalty is not provided is guilty of 
 a gross misdemeanor if the violation occurs within five years 
 after a previous conviction under any provision of sections 
 349.11 to 349.23. 

    (c) A person who in any manner hinders or interferes with a 
 seizing authority when a seizure is made as provided by section 
 349.2125, is guilty of a gross misdemeanor.  

    Subd. 2.    Other action.  This section does not 
 preclude civil or criminal actions under other applicable law or 
 preclude any agency of government from investigating or 
 prosecuting violations of the provisions of sections 349.11 to 
 349.213, and chapter 297E.  County attorneys and the attorney 
 general have joint responsibility for prosecuting violations of 
 sections 349.11 to 349.213, and chapter 297E, and the attorney 
 general may prosecute any violation of those sections.  If the 
 county attorney fails to initiate the prosecution within 30 
 days, the attorney general may initiate prosecution. 

    Subd. 3. Repealed, 1990 c 590 art 2 s 18 

    Subd. 3a.    Aggregation.  When the value of prizes or 
 pull-tabs received within a six-month period is aggregated under 
 this section and two or more offenses were committed by the same 
 person in two or more counties, the accused may be prosecuted in 
 any county in which one of the offenses was committed for all of 
 the offenses aggregated under this section. 

    Subd. 4.    Sales after revocation.  A person selling 
 pull-tabs or tipboards after the person's license or permit has 
 been revoked is guilty of a felony.  

    HIST: 1976 c 261 s 12; 1984 c 502 art 12 s 20; 1988 c 719 art 
 9 s 16-18; 1989 c 334 art 2 s 47,48; 1990 c 590 art 2 s 11,12; 
 1990 c 594 art 1 s 70; 1991 c 199 art 2 s 1; 1994 c 633 art 2 s 
 19; art 3 s 3 

     349.23 Validity of prior agreements. 

    Nothing in sections 349.11 to 349.22 shall be construed to 
 affect the validity of any agreement or contract between an 
 organization and any financial or lending institution, entered 
 into prior to August 1, 1976. 

    HIST: 1976 c 261 s 13 

  349.26 Repealed, 1984 c 502 art 12 s 25 

REGULATION OF GAMBLING DEVICES

     349.30 Definitions. 

    Subdivision 1.    Scope.  For the purposes of sections 349.30 to 
 349.39, unless a different meaning is indicated by the context, 
 the words, terms, and phrases defined in this section shall have 
 the meanings given them.  

    Subd. 2.    Gambling device.  "Gambling device" has the meaning 
 given it in 
 section 609.75, subdivision 4. 

    Subd. 3.    Person.  "Person" means an individual, a 
 copartnership, an 
 association, a corporation, or any other entity or organization. 

    Subd. 4.    Municipality.  "Municipality" means any county, 
 city, or town. 

    Subd. 5.    License.  "License" includes permits of every kind, 
 nature 
 and description issued pursuant to any statute or ordinance for 
 the carrying on of any business, trade, vocation, commercial 
 enterprise or undertaking.  

    Subd. 6.    Licensee.  "Licensee" means any person to whom a 
 license of 
 any kind is issued, but does not include a common carrier 
 transporting, or a public warehouse operator storing, any 
 gambling device for hire, or a manufacturer or distributor of 
 such devices keeping the same only for the purpose of sale or 
 distribution to others or repairing of same.  

    Subd. 7.    Licensed business.  "Licensed business" means any 
 business, trade, 
 vocation, commercial enterprise, or undertaking for which a 
 license is issued.  

    Subd. 8.    Licensed premises.  "Licensed premises" means the 
 place or building, 
 or the room in a building, designated in the license as the 
 place where the licensed business is to be carried on, and all 
 land adjacent thereto and used in connection with and in the 
 operation of a licensed business, and all adjacent or contiguous 
 rooms or buildings operated or used in connection with the 
 buildings where the licensed business is carried on.  If no 
 place is described in any license, then "licensed premises" 
 means the building or place where the licensed business is 
 carried on under such license.  

    Subd. 9.    Issuing authority.  "Issuing authority" and 
 "authority issuing the 
 license" mean and include the officer, board, bureau, 
 department, commission, or agency of the state, or of any of its 
 municipalities, by whom any license is issued and include the 
 councils and governing bodies of all municipalities.  

    HIST: 1947 c 586 s 1; 1973 c 123 art 5 s 7; 1981 c 204 s 9; 
 1986 c 444; 1990 c 590 art 1 s 38 

     349.31 Gambling device; possession of. 

    Subdivision 1.    Intentional possession; willful keeping. 
  The intentional possession or willful keeping of a gambling 
 device on a licensed premises is cause for the suspension or 
 revocation of any license under which the licensed business is 
 carried on upon the premises where the gambling device is found, 
 provided that possession of gambling equipment as defined in 
 section 349.12, subdivision 18, which is used for lawful 
 gambling authorized by this chapter, and the manufacture of 
 gambling devices for use in jurisdictions where use of the 
 gambling device is legal as provided for by section 349.40 shall 
 not be cause for revocation of a license. 

    Subd. 2.    Suspension and revocation of licenses.  All 
 licenses under which any licensed business is permitted to be 
 carried on upon the licensed premises shall be suspended or 
 revoked if the intentional possession or willful keeping of any 
 such gambling devices upon the licensed premises is established, 
 notwithstanding that it may not be made to appear that such 
 devices have actually been used or operated for the purpose of 
 gambling.  

    HIST: 1947 c 586 s 2; 1978 c 507 s 1; 1981 c 126 s 1; 1981 c 
 204 s 10; 1984 c 502 art 12 s 21; 1986 c 467 s 28; 1989 c 334 
 art 2 s 51; 1990 c 590 art 1 s 39; 1993 c 13 art 1 s 37 

     349.32 Issuing authority to suspend or revoke. 

    The proceedings for suspension or revocation are held 
 before the issuing authority, which has the power to suspend or 
 revoke the license or licenses involved, as hereinafter provided.

    HIST: 1947 c 586 s 3; 1990 c 590 art 1 s 40 

     349.33 Peace officers to observe and inspect premises.  

    Every sheriff, deputy sheriff, constable, marshal, police 
 officer, and peace officer shall observe and inspect the 
 premises where occupations are carried on under license and 
 ascertain whether gambling devices are present thereon and 
 immediately report the finding thereof to the authority or 
 authorities issuing the license or licenses applicable to the 
 premises in question.  

    HIST: 1947 c 586 s 4; 1986 c 444 

     349.34 Proceedings before issuing authority; order to 
  show cause. 

    If an issuing authority, on receipt of information from a 
 peace officer described in section 349.33, is of the opinion 
 that cause exists for the suspension or revocation of a license, 
 the authority shall issue an order to show cause directed to the 
 licensee of the premises, stating the ground upon which the 
 proceeding is based and requiring the licensee to appear and 
 show cause at a time and place, within the county in which the 
 licensed premises are located, not less than ten days after the 
 date of the order, why the license should not be suspended or 
 revoked.  That order to show cause shall be served upon the 
 licensee in the manner prescribed by law for the service of 
 summons in a civil action, or by certified mail, not less than 
 eight days before the date fixed for the hearing thereof.  A 
 copy of the order shall forthwith be mailed to the owner of the 
 premises, as shown by the records in the office of the county 
 recorder, at the owner's last known post office address.  A copy 
 of the order shall at the same time be mailed to any other 
 issuing authority, of which the authority issuing the order to 
 show cause has knowledge, by which other license to that 
 licensee may have been issued, and any such other authority may 
 participate in the suspension or revocation proceedings after 
 notifying the licensee and the officer or authority holding the 
 hearing of its intention so to do on or before the date of 
 hearing, and after the hearing take such action as it could have 
 taken had it instituted the suspension or revocation proceedings 
 in the first instance. 

    HIST: 1947 c 586 s 5; 1976 c 181 s 2; 1978 c 674 s 60; 1986 c 
 444; 1990 c 590 art 1 s 41 

     349.35 Revocation of license. 

    Subdivision 1.    Suspension; revocation; stay; appeal.  
 If, upon the hearing of the order to show cause, it appears that 
 the licensee intentionally possessed or willfully kept upon the 
 licensed premises any gambling device, then the license or 
 licenses under which the licensed business is operated on the 
 licensed premises, shall be suspended or revoked.  The order of 
 suspension or revocation shall not be enforced during the period 
 allowed by section 349.39 for taking an appeal.  

    Subd. 2.    Limitation as to issuance of new license on 
 premises.  No new license or licenses for the same business 
 upon the same premises shall be issued for the period of one 
 year thereafter, except as hereinafter provided.  

    HIST: 1947 c 586 s 6; 1986 c 444; 1990 c 590 art 1 s 42 

     349.36 Duties of county attorney or attorney general. 

    The county attorney of the county in which the hearing is 
 held, the city attorney if the issuing authority is the city, or 
 the attorney general shall attend the hearing, interrogate the 
 witnesses, advise the issuing authority, and appear for the 
 issuing authority on any appeal taken pursuant to the provisions 
 of section 349.39.  

    HIST: 1947 c 586 s 7; 1986 c 444; 1990 c 590 art 1 s 43; 1990 
 c 594 art 1 s 71 

     349.37 Witnesses.  

    The issuing authority may issue subpoenas and compel the 
 attendance of witnesses at any hearing.  Witnesses duly 
 subpoenaed and attending any such hearing shall be paid fees and 
 mileage by the issuing authority equal to the fees and mileage 
 paid witnesses in the district court.  

    HIST: 1947 c 586 s 8 

     349.38 Property owners liability. 

    When a license is suspended or revoked under the provisions 
 of sections 349.30 to 349.39, the owner of the premises upon 
 which any licensed business has been operated shall not be 
 penalized by reason thereof unless it is established that the 
 owner had knowledge of the existence of the gambling devices 
 resulting in license suspension or revocation.  

    HIST: 1947 c 586 s 9; 1986 c 444; 1990 c 590 art 1 s 44 

     349.39 Appeal to district court; stay; continuance under 
  bond; hearing upon one year limitation on premises. 

    Any licensee, or any owner of licensed premises, aggrieved 
 by an order of an issuing authority suspending or revoking any 
 license may appeal from that order to the district court of the 
 county in which the licensee resides by serving a notice of the 
 appeal upon the issuing authority or the clerk thereof.  The 
 notice of appeal shall state that the person appealing takes an 
 appeal to that district court from the order suspending or 
 revoking the license or licenses, describing them and 
 identifying the order appealed from.  This notice shall be 
 served within 15 days from the date of service of the order 
 appealed from, and the same, with proof of service thereof, 
 shall be filed with the court administrator of the district 
 court of the proper county.  The appeal shall stand for trial at 
 the next term of the district court following the filing of the 
 notice of appeal, without the service of any notice of trial, 
 and shall be tried in the district court de novo.  The trial 
 shall be by jury if the appellant shall so demand.  The licensee 
 may continue to operate the licensed business or businesses 
 until the final disposition of such appeal.  If the district 
 court upon the appeal shall determine that any license involved 
 in the appeal should be suspended or revoked, it may, 
 nevertheless, in its discretion permit the continuance of the 
 licensed business under a bond in the amount and in the form and 
 containing the conditions prescribed by the court.  The district 
 court on the appeal, or in a separate proceeding, may permit the 
 issuance of a new license to a different licensee before the 
 expiration of the period of one year specified in section 
 349.35, subdivision 2, upon such terms and conditions imposed by 
 the court as will insure that no gambling device shall 
 thereafter be maintained upon the licensed premises.  

    HIST: 1947 c 586 s 10; 1986 c 444; 1Sp1986 c 3 art 1 s 82; 
 1990 c 590 art 1 s 45 

     349.40 Gambling devices; manufacture for use in other 
  states. 

    The manufacture in this state of gambling devices, or any 
 component parts thereof, for shipment, sale, and use in 
 jurisdictions where use of the gambling device is legal is 
 allowed notwithstanding the provisions of this chapter, sections 
 349.31, 609.75, and 609.76, or other laws to the contrary.  

    HIST: 1981 c 126 s 2 

  349.50 Repealed, 1990 c 590 art 1 s 48 

  349.501 Repealed, 1990 c 590 art 1 s 48 

    349.502 Subdivision 1. Repealed, 1990 c 590 art 1 
 s 48 

    Subd. 2. Repealed, 1990 c 590 art 2 s 18 

  349.51 Repealed, 1990 c 590 art 1 s 48 

  349.52 Repealed, 1990 c 590 art 1 s 48 

  349.53 Repealed, 1990 c 590 art 1 s 48 

  349.54 Repealed, 1990 c 590 art 1 s 48 

  349.55 Repealed, 1990 c 590 art 1 s 48 

  349.56 Repealed, 1990 c 590 art 1 s 48 

  349.57 Repealed, 1990 c 590 art 1 s 48 

  349.58 Repealed, 1990 c 590 art 1 s 48 

  349.59 Repealed, 1990 c 590 art 1 s 48 

  349.60 Repealed, 1990 c 590 art 1 s 48 

     349.61 Repeal; termination of licenses. 

    Subdivision 1.    Repeal.  Section 299L.03, subdivision 
 9, and sections 349.50; 349.501; 349.502; 349.51; 349.52; 
 349.53; 349.54; 349.55; 349.56; 349.57; 349.58; 349.59; and 
 349.60 are repealed January 1, 1992.  All licenses issued under 
 sections 349.51 and 349.52 in effect on that date expire on that 
 date.  The commissioner of finance shall on that date transfer 
 all money in the video gaming license account to the general 
 fund.  

    Subd. 2.    Not to affect certain compacts.  Nothing in 
 subdivision 1 is intended to affect the validity of any compact 
 entered into before or after August 1, 1990, between the state 
 and the governing body of an Indian tribe that governs the 
 conduct of any form of gambling on Indian lands. 

    HIST: 1990 c 590 art 1 s 48