Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1994, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 633-S.F.No. 103
An act relating to gambling; repealing references in
law to off-track betting on horse racing; authorizing
revocation of racetrack license for failure to conduct
live racing; recodifying gambling tax laws and
applying them to gambling other than lawful gambling;
setting out licensing qualifications for the division
of gambling enforcement; prohibiting unauthorized
possession of a gambling device; redefining lawful
purposes; allowing pull-tab dispensing devices under
certain circumstances; setting out licensing
procedures for the gambling control board; repealing
requirements for gambling stamps and substituting
requirements for bar coding of gambling equipment;
specifying who may negotiate tribal-state compacts on
behalf of the state; establishing revolving funds and
appropriating money; prescribing penalties; providing
for a report on state gambling policy; providing
appointments; amending Minnesota Statutes 1992,
sections 3.9221, subdivisions 2 and 5; 240.05,
subdivision 1; 240.06, subdivision 7; 240.09, by
adding a subdivision; 240.13, subdivisions 1, 2, 3, 5,
6, and 8; 240.15, subdivision 6; 240.16, subdivision
1a; 240.25, subdivision 2, and by adding a
subdivision; 240.26, subdivision 3; 240.27,
subdivision 1; 240.28, subdivision 1; 270.101,
subdivision 1; 299L.01, subdivision 1, and by adding a
subdivision; 299L.02, subdivisions 2, 5, and by adding
subdivisions; 299L.03, subdivisions 1, 2, 6, and by
adding a subdivision; 299L.07; 349.12, subdivisions 1,
3a, 4, 8, 11, 16, 18, 19, 21, 23, 30, 32, 34, and by
adding subdivisions; 349.13; 349.15; 349.151,
subdivision 4, and by adding subdivisions; 349.152,
subdivisions 2 and 3; 349.153; 349.154; 349.16,
subdivisions 2, 3, 6, 8, and by adding a subdivision;
349.161, subdivisions 1 and 5; 349.162, subdivisions
1, 2, 4, and 5; 349.163, subdivisions 1, 3, 5, 6, and
by adding a subdivision; 349.164, subdivisions 1, 6,
and by adding a subdivision; 349.1641; 349.166,
subdivisions 1, 2, and 3; 349.167, subdivisions 1, 2,
4, and by adding a subdivision; 349.168, subdivisions
3, 6, and by adding a subdivision; 349.169,
subdivision 1; 349.17, subdivisions 2, 4, 5, and by
adding a subdivision; 349.174; 349.18, subdivisions 1,
1a, and 2; 349.19, subdivisions 2, 5, 8, 9, and 10;
349.191, subdivisions 1, 4, and by adding
subdivisions; 349.211, subdivisions 1, 2, and 2a;
349.2123; 349.2125, subdivisions 1 and 3; 349.2127,
subdivisions 2, 3, 4, and by adding subdivisions;
349.213, subdivision 1; 349.22, subdivision 1;
349A.06, by adding a subdivision; 349A.10, by adding a
subdivision; 349A.12, subdivisions 1, 2, 5, and 6;
541.21; and 609.755; Minnesota Statutes 1993
Supplement, section 349.12, subdivision 25; proposing
coding for new law in Minnesota Statutes, chapters 4;
325E; and 349; proposing coding for new law as
Minnesota Statutes, chapter 297E; repealing Minnesota
Statutes 1992, sections 240.091; 299L.04; 299L.07,
subdivision 7; 349.16, subdivisions 4 and 5; 349.161,
subdivisions 3, 6, and 7; 349.163, subdivisions 1a and
2a; 349.164, subdivisions 3, 5, and 8; 349.166,
subdivision 4; 349.167, subdivisions 3 and 5; 349.212,
subdivisions 1, 2, 5, 6, and 7; 349.2121; 349.2122;
349.215; 349.2151; 349.2152; 349.216; 349.217,
subdivisions 3, 4, 5, 6, 7, 8, and 9; 349.2171; and
349.219; Minnesota Statutes 1993 Supplement, sections
349.2115; 349.212, subdivision 4; and 349.217,
subdivisions 1, 2, and 5a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
PARI-MUTUEL RACING
Section 1. Minnesota Statutes 1992, section 240.05,
subdivision 1, is amended to read:
Subdivision 1. [CLASSES.] The commission may issue five
four classes of licenses:
(a) class A licenses, for the ownership and operation of a
racetrack with horse racing on which pari-mutuel betting is
conducted;
(b) class B licenses, for the sponsorship and management of
horse racing on which pari-mutuel betting is conducted;
(c) class C licenses, for the privilege of engaging in
certain occupations related to horse racing; and
(d) class D licenses, for the conduct of pari-mutuel horse
racing by county agricultural societies or associations; and
(e) class E licenses, for the management of a teleracing
facility.
No person may engage in any of the above activities without
first having obtained the appropriate license from the
commission.
Sec. 2. Minnesota Statutes 1992, section 240.06,
subdivision 7, is amended to read:
Subd. 7. [LICENSE SUSPENSION AND REVOCATION.] The
commission:
(1) may revoke a class A license for (i) a violation of
law, order, or rule which in the commission's opinion adversely
affects the integrity of horse racing in Minnesota, or for an
intentional false statement made in a license application,
or for (ii) a willful failure to pay any money required to be
paid by Laws 1983, chapter 214, and
(2) may revoke a class A license for failure to perform
material covenants or representations made in a license
application; and
(3) shall revoke a class A license if live racing has not
been conducted on at least 50 racing days assigned by the
commission during any period of 12 consecutive months, unless
the commission authorizes a shorter period because of
circumstances beyond the licensee's control.
The commission may suspend a class A license for up to one
year for a violation of law, order, or rule which in the
commission's opinion adversely affects the integrity of horse
racing in Minnesota, and may suspend a class A license
indefinitely if it determines that the licensee has as an
officer, director, shareholder, or other person with a direct,
indirect, or beneficial interest a person who is in the
commission's opinion inimical to the integrity of horse racing
in Minnesota or who cannot be certified under subdivision 1,
clause (d).
A license revocation or suspension under this subdivision
is a contested case under sections 14.57 to 14.69 of the
Administrative Procedure Act, and is in addition to criminal
penalties imposed for a violation of law or rule.
Sec. 3. Minnesota Statutes 1992, section 240.09, is
amended by adding a subdivision to read:
Subd. 3a. [INVESTIGATION.] Before granting a class D
license the director shall conduct, or request the division of
gambling enforcement to conduct, a comprehensive background and
financial investigation of the applicant and the sources of
financing. The director may charge an applicant an
investigation fee to cover the cost of the investigation, and
shall from this fee reimburse the division of gambling
enforcement for its share of the cost of the investigation. The
director has access to all criminal history data compiled by the
division of gambling enforcement on class A licensees and
applicants.
Sec. 4. Minnesota Statutes 1992, section 240.13,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZED.] (a) Class B and class D
licenses give the licensees authority to conduct pari-mutuel
betting on the results of races run at the licensed racetrack,
and on other races as authorized by the commission under this
section.
(b) A class B or class E D license gives the licensee the
authority to transmit and receive telecasts and conduct
pari-mutuel betting on the results of horse races run at its
class A facility, and of other horse races run at other
locations outside of the state, as authorized by the
commission. A class E licensee must present, for pari-mutuel
wagering purposes, all live horse races conducted at its class A
facility. The class B or class E D licensee may present racing
programs separately or concurrently.
(c) Subject to the approval of the commission, for
simulcasts and telerace simulcasts the types of betting,
takeout, and distribution of winnings on pari-mutuel pools of on
simulcast races at a class B or class E D facility are those in
effect at the sending racetrack. Pari-mutuel pools accumulated
at a class E facility must be commingled with the pools at the
class A facility for comparable pools on those races that are
being simultaneously presented at both facilities. Pari-mutuel
pools may be commingled with pools at the sending racetrack, for
the purposes of determining odds and payout prices, via the
totalizator computer at the class A facility.
(d) The commission may not authorize a class B or class E
licensee to conduct simulcasting or telerace simulcasting unless
125 days of live racing, consisting of not less than eight live
races on each racing day, have been conducted at the class A
facility within the preceding 12 months. The number of live
racing days required may be adjusted by agreement between the
licensee and the horsepersons' organization representing the
majority of horsepersons racing the breed racing the majority of
races at the licensee's class A facility during the preceding 12
months. The number of live racing days required must be reduced
by one day for each assigned racing day that the licensee is
unable to conduct live racing due to natural occurrences or
catastrophes beyond its control.
(e) The commission may authorize no more than five class D
licensees to conduct simulcasting in any year. Simulcasting may
be conducted at each class D licensee's facility:
(1) only on races conducted at another class D facility
during a county fair day at that facility; and
(2) only on standardbred races.
A class D licensee may not conduct simulcasting for
wagering purposes unless the licensee has a written contract,
permitting the simulcasting, with a horseperson's organization
representing the standardbred industry the breed being simulcast
under authority of the class D license.
Sec. 5. Minnesota Statutes 1992, section 240.13,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS.] (a) A licensee conducting
pari-mutuel betting must provide at the licensed track or at the
teleracing facility:
(1) the necessary equipment for issuing pari-mutuel
tickets; and
(2) mechanical or electronic equipment for displaying
information the commission requires. All mechanical or
electronic devises must be approved by the commission before
being used.
(b) A licensee conducting pari-mutuel betting must post
prominently at each point of sale of pari-mutuel tickets, in a
manner approved by the commissioner of human services, the
toll-free telephone number established by the commissioner of
human services in connection with the compulsive gambling
program established under section 245.98.
Sec. 6. Minnesota Statutes 1992, section 240.13,
subdivision 3, is amended to read:
Subd. 3. [TYPES OF BETTING.] The commission shall by rule
designate those types of pari-mutuel pools which are permitted
at licensed racetracks and teleracing facilities, and no
licensee may conduct any type of pari-mutuel pool which has not
been so designated. Pari-mutuel pools permitted at licensed
racetracks and pari-mutuel pools designated by the commission
are permitted at teleracing facilities.
Sec. 7. Minnesota Statutes 1992, section 240.13,
subdivision 5, is amended to read:
Subd. 5. [PURSES.] (a) From the amounts deducted from all
pari-mutuel pools by a licensee, an amount equal to not less
than the following percentages of all money in all pools must be
set aside by the licensee and used for purses for races
conducted by the licensee, provided that a licensee may agree by
contract with an organization representing a majority of the
horsepersons racing the breed involved to set aside amounts in
addition to the following percentages:
(1) for live races conducted at a class A facility, and for
races that are part of full racing card simulcasting or full
racing card telerace simulcasting that takes place within the
time period of the live races, 8.4 percent;
(2) for simulcasts and telerace simulcasts conducted during
the racing season other than as provided for in clause (1), 50
percent of the takeout remaining after deduction for taxes on
pari-mutuel pools, payment to the breeders fund, and payment to
the sending out-of-state racetrack for receipt of the signal;
and
(3) for simulcasts and telerace simulcasts conducted
outside of the racing season, 25 percent of the takeout
remaining after deduction for the state pari-mutuel tax, payment
to the breeders fund, payment to the sending out-of-state
racetrack for receipt of the signal and, before January 1, 2005,
a further deduction of eight percent of all money in all pools;
provided, however, that. In the event that wagering on
simulcasts and telerace simulcasts outside of the racing season
exceeds $125 million in any calendar year, the amount set aside
for purses by this formula is increased to 30 percent on amounts
between $125,000,000 and $150,000,000 wagered; 40 percent on
amounts between $150,000,000 and $175,000,000 wagered; and 50
percent on amounts in excess of $175,000,000 wagered. In lieu
of the eight percent deduction, a deduction as agreed to between
the licensee and the horsepersons' organization representing the
majority of horsepersons racing at the licensee's class A
facility during the preceding 12 months, is allowed after
December 31, 2004.
The commission may by rule provide for the administration
and enforcement of this subdivision. The deductions for payment
to the sending out-of-state racetrack must be actual, except
that when there exists any overlap of ownership, control, or
interest between the sending out-of-state racetrack and the
receiving licensee, the deduction must not be greater than three
percent unless agreed to between the licensee and the
horsepersons' organization representing the majority of
horsepersons racing the breed racing the majority of races
during the existing racing meeting or, if outside of the racing
season, during the most recent racing meeting.
In lieu of the amount the licensee must pay to the
commission for deposit in the Minnesota breeders fund under
section 240.15, subdivision 1, the licensee shall pay 5-1/2
percent of the takeout from all pari-mutuel pools generated by
wagering at the licensee's facility on full racing card
simulcasts and full racing card telerace simulcasts of races not
conducted in this state.
(b) From the money set aside for purses, the licensee shall
pay to the horseperson's organization representing the majority
of the horsepersons racing the breed involved and contracting
with the licensee with respect to purses and the conduct of the
racing meetings and providing representation, benevolent
programs, benefits, and services for horsepersons and their
on-track employees, an amount, sufficient to perform these
services, as may be determined by agreement by the licensee and
the horseperson's organization. The amount paid may be deducted
only from the money set aside for purses to be paid in races for
the breed represented by the horseperson's organization. With
respect to racing meetings where more than one breed is racing,
the licensee may contract independently with the horseperson's
organization representing each breed racing.
(c) Notwithstanding sections 325D.49 to 325D.66, a
horseperson's organization representing the majority of the
horsepersons racing a breed at a meeting, and the members
thereof, may agree to withhold horses during a meeting.
(d) Money set aside for purses from wagering, during the
racing season, on simulcasts and telerace simulcasts must be
used for purses for live races conducted at the licensee's class
A facility during the same racing season, over and above the 8.4
percent purse requirement or any higher requirement to which the
parties agree, for races conducted in this state. Money set
aside for purses from wagering, outside of the racing season, on
simulcasts and telerace simulcasts must be for purses for live
races conducted at the licensee's class A facility during the
next racing season, over and above the 8.4 percent purse
requirement or any higher requirement to which the parties
agree, for races conducted in this state.
(e) Money set aside for purses from wagering on simulcasts
and telerace simulcasts must be used for purses for live races
involving the same breed involved in the simulcast or telerace
simulcast except that money set aside for purses and payments to
the breeders fund from wagering on full racing card simulcasts
and full racing card telerace simulcasts of races not conducted
in this state, occurring during a live mixed meet, must be
allotted to the purses and breeders fund for each breed
participating in the mixed meet in the same proportion that the
number of live races run by each breed bears to the total number
of live races conducted during the period of the mixed meet.
(f) The allocation of money set aside for purses to
particular racing meets may be adjusted, relative to
overpayments and underpayments, by contract between the licensee
and the horsepersons' organization representing the majority of
horsepersons racing the breed involved at the licensee's
facility.
(g) Subject to the provisions of this chapter, money set
aside from pari-mutuel pools for purses must be for the breed
involved in the race that generated the pool, except that if the
breed involved in the race generating the pari-mutuel pool is
not racing in the current racing meeting, or has not raced
within the preceding 12 months at the licensee's class A
facility, money set aside for purses may be distributed
proportionately to those breeds that have run during the
preceding 12 months or paid to the commission and used for
purses or to promote racing for the breed involved in the race
generating the pari-mutuel pool, or both, in a manner prescribed
by the commission.
(h) This subdivision does not apply to a class D licensee.
Sec. 8. Minnesota Statutes 1992, section 240.13,
subdivision 6, is amended to read:
Subd. 6. [SIMULCASTING.] (a) The commission may permit an
authorized licensee to conduct simulcasting or telerace
simulcasting at the licensee's facility on any day authorized by
the commission. All simulcasts and telerace simulcasts must
comply with the Interstate Horse Racing Act of 1978, United
States Code, title 15, sections 3001 to 3007. In addition to
teleracing programs featuring live racing conducted at the
licensee's class A facility, the class E licensee may conduct
not more than seven teleracing programs per week during the
racing season, unless additional telerace simulcasting is
authorized by the director and approved by the horsepersons'
organization representing the majority of horsepersons racing
the breed racing the majority of races at the licensee's class A
facility during the preceding 12 months.
(b) The commission may not authorize any day for
simulcasting at a class A facility during the racing season, and
a licensee may not be allowed to transmit out-of-state telecasts
of races the licensee conducts, unless the licensee has obtained
the approval of the horsepersons' organization representing the
majority of the horsepersons racing the breed involved at the
licensed racetrack during the preceding 12 months.
(c) The licensee may pay fees and costs to an entity
transmitting a telecast of a race to the licensee for purposes
of conducting pari-mutuel wagering on the race. The licensee
may deduct fees and costs related to the receipt of televised
transmissions from a pari-mutuel pool on the televised race,
provided that one-half of any amount recouped in this manner
must be added to the amounts required to be set aside for purses.
(e) With the approval of the commission and subject to the
provisions of this subdivision, a licensee may transmit
telecasts of races it conducts, for wagering purposes, to
locations outside the state, and the commission may allow this
to be done on a commingled pool basis.
(f) Except as otherwise provided in this section,
simulcasting and telerace simulcasting may be conducted on a
separate pool basis or, with the approval of the commission, on
a commingled pool basis. All provisions of law governing
pari-mutuel betting apply to simulcasting and telerace
simulcasting except as otherwise provided in this subdivision or
in the commission's rules. If pools are commingled, wagering at
the licensed facility must be on equipment electronically linked
with the equipment at the licensee's class A facility or with
the sending racetrack via the totalizator computer at the
licensee's class A facility. Subject to the approval of the
commission, the types of betting, takeout, and distribution of
winnings on commingled pari-mutuel pools are those in effect at
the sending racetrack. Breakage for pari-mutuel pools on a
televised race must be calculated in accordance with the law or
rules governing the sending racetrack for these pools, and must
be distributed in a manner agreed to between the licensee and
the sending racetrack. Notwithstanding subdivision 7 and
section 240.15, subdivision 5, the commission may approve
procedures governing the definition and disposition of unclaimed
tickets that are consistent with the law and rules governing
unclaimed tickets at the sending racetrack. For the purposes of
this section, "sending racetrack" is either the racetrack
outside of this state where the horse race is conducted or, with
the consent of the racetrack, an alternative facility that
serves as the racetrack for the purpose of commingling pools.
(g) If there is more than one class B licensee conducting
racing within the seven-county metropolitan area, simulcasting
and telerace simulcasting may be conducted only on races run by
a breed that ran at the licensee's class A facility within the
12 months preceding the event.
Contractual agreements between licensees and horsepersons'
organizations entered into before June 5, 1991, regarding money
to be set aside for purses from pools generated by simulcasts at
a class A facility, are controlling regarding purse requirements
through the end of the 1992 racing season.
Sec. 9. Minnesota Statutes 1992, section 240.13,
subdivision 8, is amended to read:
Subd. 8. [PROHIBITED ACTS.] (a) A licensee may not accept
a bet or a pari-mutuel ticket for payment from any person under
the age of 18 years; and a licensee may not accept a bet of less
than $1. It is an affirmative defense to a charge under this
paragraph for the licensee to prove by a preponderance of the
evidence that the licensee, reasonably and in good faith, relied
upon representation of proof of age described in section
340A.503, subdivision 6, in accepting the bet or pari-mutuel
ticket for payment.
Sec. 10. Minnesota Statutes 1992, section 240.15,
subdivision 6, is amended to read:
Subd. 6. [DISPOSITION OF PROCEEDS.] The commission shall
distribute all money received under this section, and all money
received from license fees and fines it collects, as follows:
all money designated for deposit in the Minnesota breeders fund
must be paid into that fund for distribution under section
240.18 except that all money generated by full racing card
simulcasts, or full racing card telerace simulcasts of races not
conducted in this state, must be distributed as provided in
section 240.18, subdivisions 2, paragraph (d), clauses (1), (2),
and (3); and 3. Revenue from an admissions tax imposed under
subdivision 1 must be paid to the local unit of government at
whose request it was imposed, at times and in a manner the
commission determines. All other revenues received under this
section by the commission, and all license fees, fines, and
other revenue it receives, must be paid to the state treasurer
for deposit in the general fund.
Sec. 11. Minnesota Statutes 1992, section 240.16,
subdivision 1a, is amended to read:
Subd. 1a. [SIMULCAST.] All simulcasts and telerace
simulcasts are subject to the regulation of the commission. The
commission may assign an official to preside over these
activities and, if so assigned, the official has the powers and
duties provided by rule.
Sec. 12. Minnesota Statutes 1992, section 240.25,
subdivision 2, is amended to read:
Subd. 2. [OFF-TRACK BETS.] (a) No person shall:
(1) for a fee, directly or indirectly, accept anything of
value from another to be transmitted or delivered for wager in
any licensed pari-mutuel system of wagering on horse races, or
for a fee deliver anything of value which has been received
outside of the enclosure of a licensed racetrack holding a race
meet licensed under this chapter or a teleracing facility, to be
placed as wagers in the pari-mutuel system of wagering on horse
racing within the enclosure or facility; or
(2) give anything of value to be transmitted or delivered
for wager in any licensed pari-mutuel system of wagering on
horse races to another who charges a fee, directly or
indirectly, for the transmission or delivery.
(b) Nothing in this subdivision prohibits the conducting of
pari-mutuel wagering at a licensed teleracing facility.
Sec. 13. Minnesota Statutes 1992, section 240.25, is
amended by adding a subdivision to read:
Subd. 8. [AGE UNDER 18.] A person under the age of 18 may
not place a bet or present a pari-mutuel ticket for payment with
an approved pari-mutuel system.
Sec. 14. Minnesota Statutes 1992, section 240.26,
subdivision 3, is amended to read:
Subd. 3. [MISDEMEANORS.] A violation of any other
provision of Laws 1983, this chapter 214 or of a rule or order
of the commission for which another penalty is not provided is a
misdemeanor.
Sec. 15. Minnesota Statutes 1992, section 240.27,
subdivision 1, is amended to read:
Subdivision 1. [PERSONS EXCLUDED.] The commission may
exclude from any and all licensed racetracks or licensed
teleracing facilities in the state a person who:
(a) has been convicted of a felony under the laws of any
state or the United States;
(b) has had a license suspended, revoked, or denied by the
commission or by the racing authority of any other jurisdiction;
or
(c) is determined by the commission, on the basis of
evidence presented to it, to be a threat to the integrity of
racing in Minnesota.
Sec. 16. Minnesota Statutes 1992, section 240.28,
subdivision 1, is amended to read:
Subdivision 1. [FINANCIAL INTEREST.] No person may serve
on or be employed by the commission who has an interest in any
corporation, association, or partnership which holds a license
from the commission or which holds a contract to supply goods or
services to a licensee or at a licensed racetrack or a licensed
teleracing facility, including concessions contracts. No member
or employee of the commission may own, wholly or in part, or
have an interest in a horse which races at a licensed racetrack
in Minnesota. No member or employee of the commission may have
a financial interest in or be employed in a profession or
business which conflicts with the performance of duties as a
member or employee.
Sec. 17. [REPEALER.]
Minnesota Statutes 1992, section 240.091, is repealed.
Sec. 18. [EFFECTIVE DATE.]
Sections 1, 3 to 8, 10 to 12, and 14 to 17 are effective
the day following final enactment. Sections 9 and 13 are
effective August 1, 1994. Section 2 is effective April 1, 1995.
ARTICLE 2
GAMBLING TAX RECODIFICATION
Section 1. [297E.01] [DEFINITIONS.]
Subdivision 1. [SCOPE.] Unless otherwise defined in this
chapter, or unless the context clearly indicates otherwise, the
terms used in this chapter have the meaning given them in
chapter 349. The definitions in this section are for tax
administration purposes and apply to this chapter.
Subd. 2. [BINGO.] For purposes of this chapter "bingo"
means the game of bingo as defined in section 349.12,
subdivision 4, and as conducted under chapter 349, and any other
game that is substantially the same as or similar to that game,
including but not limited to a game where:
(1) players pay compensation for a game sheet, card, or
paper that has spaces arranged on it in columns and rows
containing printed numbers or figures, or that has spaces in
which players are allowed to place their own numbers or figures,
or for an electronic, mechanical, or other facsimile of such
sheets, cards or paper;
(2) numbers or figures are randomly selected for comparison
with the numbers or figures on each game sheet, card, paper, or
facsimile;
(3) game winners are those who have a game sheet, card,
paper, or facsimile with some or all of the randomly selected
numbers or figures displayed thereon, in the same pattern or
arrangement that has been previously designated or understood to
be a winning pattern or arrangement for the game; and
(4) game winner receive or are eligible to receive a prize
such as money, property, or other reward or benefit.
Subd. 3. [COMMISSIONER.] "Commissioner" means the
commissioner of revenue or a person to whom the commissioner has
delegated functions.
Subd. 4. [CONTRABAND.] For purposes of this chapter,
"contraband" means all of the items listed in section 349.2125,
and all pull-tab or tipboard deals or portions of deals on which
the tax imposed under section 297E.02 has not been paid.
Subd. 5. [DISTRIBUTOR.] "Distributor" means a distributor
as defined in section 349.12, subdivision 11, or a person who
markets, sells, or provides gambling product to a person or
entity for resale or use at the retail level.
Subd. 6. [FISCAL YEAR.] "Fiscal year" means the period
from July 1 to June 30.
Subd. 7. [GAMBLING PRODUCT.] "Gambling product" means
bingo cards, paper, or sheets; pull-tabs; tipboards;
paddletickets and paddleticket cards; raffle tickets; or any
other ticket, card, board, placard, device, or token that
represents a chance, for which consideration is paid, to win a
prize.
Subd. 8. [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 paddle tickets 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. 9. [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. 10. [MANUFACTURER.] "Manufacturer" means a
manufacturer as defined in section 349.12, subdivision 26, or a
person or entity who: (1) assembles from raw materials, or from
subparts or other components, a completed item of gambling
product for resale, use, or receipt in Minnesota; or (2) sells,
furnishes, ships, or imports completed gambling product from
outside Minnesota for resale, use, receipt, or storage in
Minnesota; or (3) being within the state, assembles, produces,
or otherwise creates gambling products.
Subd. 11. [PRIZE.] "Prize" means a thing of value, other
than a free play, offered or awarded to the winner of a gambling
game.
Subd. 12. [PULL-TAB.] "Pull-tab" is a pull-tab as defined
in section 349.12, subdivision 32, or any other gambling ticket
or device that is substantially the same as or similar to such a
pull-tab, including but not limited to, a ticket or card that:
(1) has one or more concealed numbers, figures, or symbols,
or combination thereof, printed on it;
(2) may be used in games where the player knows in advance,
or can determine in advance, what the pre-designated winning
numbers, figures, symbols, or combinations are; and
(3) may be played by revealing the concealed ticket
information and comparing that information with the
pre-designated winning numbers, figures, symbols, or
combinations in order to determine a winner.
Subd. 13. [RAFFLE.] "Raffle" means a raffle as defined in
section 349.12, subdivision 33, and any other game that is
played in a manner substantially similar to the play of such a
raffle, including but not limited to raffles in which
compensation is paid for the chance to win a thing of value, the
chance is evidenced by a ticket, card, token, or equivalent
item, and the winner is selected by random drawing.
Subd. 14. [RETAIL LEVEL.] "Retail level" means an activity
where gambling product is sold to players or participants in
gambling games and where the players or participants give
consideration for a chance to win a prize.
Subd. 15. [TAXPAYER.] "Taxpayer" means a person subject to
or liable for a tax imposed by this chapter, a person required
to file reports or returns with the commissioner under this
chapter, a person required to keep or retain records under this
chapter, or a person required by this chapter to obtain or hold
a permit.
Subd. 16. [TICKET.] "Ticket" means a valid token, card, or
other tangible voucher, other than bingo cards, sheets, or
paper, that grants the holder a chance or chances to participate
in a game of gambling.
Subd. 17. [TIPBOARD.] "Tipboard" means a tipboard as
defined in section 349.12, subdivision 34, and any game that is
substantially the same as or similar to the game of tipboards
authorized under chapter 349, including but not limited to any
of the following games:
(1) a game that consists of one or more boards, placards,
or other devices in which (i) the board, placard, or other
device has been marked off into a grid or columns in which each
section represents a chance to win a prize, (ii) participants
pay a consideration to select a section or sections, (iii) all
or some of the winning numbers, figures, symbols, or other
winning criteria for the game are concealed or otherwise not
known by the player at the time the player obtains a chance in
the game, and (iv) the numbers, figures, symbols, or other
criteria for winning the game are later revealed for comparison
with the information on the board, placard, or other device in
order to determine a winner;
(2) a game that consists of one or more boards, placards,
or other devices that (i) have tickets attached to or otherwise
associated with them, and that have one or more concealed
numbers, figures, or combination thereof on the tickets; (ii)
participants pay a consideration to obtain the tickets, (iii)
all or some of the winning numbers, figures, symbols, or other
winning criteria for the game are concealed or otherwise not
known by the player at the time the player obtains a chance in
the game, and (iv) the numbers, figures, symbols, or other
criteria for winning the game are later revealed for comparison
with the information on the game tickets in order to determine a
winner; or
(3) a game that consists of a deal or set of tickets that
(i) have one or more concealed numbers, figures, or symbols, or
combination thereof, on the tickets, (ii) participants pay a
consideration to obtain the tickets, (iii) all or some of the
winning numbers, figures, symbols, or combination thereof, are
concealed or otherwise not known to the player at the time the
player obtains the ticket, and (iv) the tickets are used in
games where the numbers, figures, symbols, or other winning
criteria are later revealed for comparison with the information
on the game tickets in order to determine a winner.
"Tipboards" includes any game otherwise described in this
subdivision in which the winning chances are determined in whole
or in part by the outcome of one or more sporting events.
"Tipboard" does not include boards, placards, tickets, or other
devices lawfully used in connection with the operation of the
state lottery under chapter 349A or the lawful conduct of
pari-mutuel betting on horse racing under chapter 240.
Subd. 18. [OTHER WORDS.] Unless specifically defined in
this chapter, or unless the context clearly indicates otherwise,
the words used in this chapter have the meanings given them in
chapter 349.
Sec. 2. [297E.02] [TAX IMPOSED.]
Subdivision 1. [IMPOSITION.] A tax is imposed on all
lawful gambling other than (1) pull-tabs purchased and placed
into inventory after January 1, 1987, and (2) tipboards
purchased and placed into inventory after June 30, 1988, at the
rate of ten percent on the gross receipts as defined in section
349.12, subdivision 21, less prizes actually paid. The tax
imposed by this subdivision is in lieu of the tax imposed by
section 297A.02 and all local taxes and license fees except a
fee authorized under section 349.16, subdivision 8, or a tax
authorized under subdivision 5.
The tax imposed under this subdivision is payable by the
organization or party conducting, directly or indirectly, the
gambling.
Subd. 2. [TAX-EXEMPT GAMBLING.] An organization's receipts
from lawful gambling that are excluded or exempt from licensing
under section 349.166, are not subject to the tax imposed by
this section or section 297A.02. This exclusion from tax is
only valid if at the time of the event giving rise to the tax
the organization either has an exclusion under section 349.166,
subdivision 1, or has applied for and received a valid exemption
from the lawful gambling control board.
Subd. 3. [COLLECTION; DISPOSITION.] Taxes imposed by this
section are due and payable to the commissioner when the
gambling tax return is required to be filed. Returns covering
the taxes imposed under this section must be filed with the
commissioner on or before the 20th day of the month following
the close of the previous calendar month. The commissioner may
require that the returns be filed via magnetic media or
electronic data transfer. The proceeds, along with the revenue
received from all license fees and other fees under sections
349.11 to 349.191, 349.211, and 349.213, must be paid to the
state treasurer for deposit in the general fund.
Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed
on the sale of each deal of pull-tabs and tipboards sold by a
distributor. The rate of the tax is two percent of the ideal
gross of the pull-tab or tipboard deal. The sales tax imposed
by chapter 297A on the sale of the pull-tabs and tipboards by
the distributor is imposed on the retail sales price less the
tax imposed by this subdivision. The retail sale of pull-tabs
or tipboards by the organization is exempt from taxes imposed by
chapter 297A and is exempt from all local taxes and license fees
except a fee authorized under section 349.16, subdivision 8.
(b) The liability for the tax imposed by this section is
incurred when the pull-tabs and tipboards are delivered by the
distributor to the customer or to a common or contract carrier
for delivery to the customer, or when received by the customer's
authorized representative at the distributor's place of
business, regardless of the distributor's method of accounting
or the terms of the sale.
The tax imposed by this subdivision is imposed on all sales
of pull-tabs and tipboards, except the following:
(1) sales to the governing body of an Indian tribal
organization for use on an Indian reservation;
(2) sales to distributors licensed under the laws of
another state or of a province of Canada, as long as all
statutory and regulatory requirements are met in the other state
or province;
(3) sales of promotional tickets as defined in section
349.12; and
(4) pull-tabs and tipboards sold to an organization that
sells pull-tabs and tipboards under the exemption from licensing
in section 349.166, subdivision 2. A distributor shall require
an organization conducting exempt gambling to show proof of its
exempt status before making a tax-exempt sale of pull-tabs or
tipboards to the organization. A distributor shall identify, on
all reports submitted to the commissioner, all sales of
pull-tabs and tipboards that are exempt from tax under this
subdivision.
(c) A distributor having a liability of $120,000 or more
during a fiscal year ending June 30 must remit all liabilities
in the subsequent calendar year by a funds transfer as defined
in section 336.4A-104, paragraph (a). The funds transfer
payment date, as defined in section 336.4A-401, must be on or
before the date the tax is due. If the date the tax is due is
not a funds transfer business day, as defined in section
336.4A-105, paragraph (a), clause (4), the payment date must be
on or before the funds transfer business day next following the
date the tax is due.
Subd. 5. [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 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.
Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes
imposed under subdivisions 1 and 4, a tax is imposed on the
combined receipts of the organization. As used in this section,
"combined receipts" is the sum of the organization's gross
receipts from lawful gambling less gross receipts directly
derived from the conduct of bingo, raffles, and paddlewheels, as
defined in section 349.12, subdivision 21, for the fiscal year.
The combined receipts of an organization are subject to a tax
computed according to the following schedule:
If the combined receipts for the The tax is:
fiscal year are:
Not over $500,000 zero
Over $500,000, but not over
$700,000 two percent of the amount
over $500,000, but not
over $700,000
Over $700,000, but not over
$900,000 $4,000 plus four percent
of the amount over
$700,000, but not over
$900,000
Over $900,000 $12,000 plus six percent
of the amount over
$900,000
Subd. 7. [UNTAXED GAMBLING PRODUCT.] (a) In addition to
penalties or criminal sanctions imposed by this chapter, a
person, organization, or business entity possessing or selling a
pull-tab or tipboard upon which the tax imposed by subdivision 4
has not been paid is liable for a tax of six percent of the
ideal gross of each pull-tab or tipboard. The tax on a partial
deal must be assessed as if it were a full deal.
(b) In addition to penalties and criminal sanctions imposed
by this chapter, a person not licensed by the board who conducts
bingo, raffles, or paddlewheel games is liable for a tax of six
percent of the gross receipts from that activity.
(c) The tax must be assessed by the commissioner. An
assessment must be considered a jeopardy assessment or jeopardy
collection as provided in section 270.70. The commissioner
shall assess the tax based on personal knowledge or information
available to the commissioner. The commissioner shall mail to
the taxpayer at the taxpayer's last known address, or serve in
person, a written notice of the amount of tax, demand its
immediate payment, and, if payment is not immediately made,
collect the tax by any method described in chapter 270, except
that the commissioner need not await the expiration of the times
specified in chapter 270. The tax assessed by the commissioner
is presumed to be valid and correctly determined and assessed.
The burden is upon the taxpayer to show its incorrectness or
invalidity. The tax imposed under this subdivision does not
apply to gambling that is exempt from taxation under subdivision
2.
Subd. 8. [PERSONAL DEBT.] The tax imposed by this section,
and interest and penalties imposed with respect to it, are a
personal debt of the person required to file a return from the
time the liability for it arises, irrespective of when the time
for payment of the liability occurs. The debt must, in the case
of the executor or administrator of the estate of a decedent and
in the case of a fiduciary, be that of the person in the
person's official or fiduciary capacity only unless the person
has voluntarily distributed the assets held in that capacity
without reserving sufficient assets to pay the tax, interest,
and penalties, in which event the person is personally liable
for any deficiency.
Subd. 9. [PUBLIC INFORMATION.] All records concerning the
administration of the taxes under this chapter are classified as
public information.
Subd. 10. [REFUNDS; APPROPRIATION.] A person who has,
under this chapter, paid to the commissioner an amount of tax
for a period in excess of the amount legally due for that
period, may file with the commissioner a claim for a refund of
the excess. The amount necessary to pay the refunds is
appropriated from the general fund to the commissioner.
Subd. 11. [UNPLAYED OR DEFECTIVE PULL-TABS OR
TIPBOARDS.] If a deal of pull-tabs or tipboards registered with
the board or bar coded in accordance with chapter 349 and upon
which the tax imposed by subdivision 4 has been paid is returned
unplayed to the distributor, the commissioner shall allow a
refund of the tax paid.
If a defective deal registered with the board or bar coded
in accordance with chapter 349 and upon which the taxes have
been paid is returned to the manufacturer, the distributor shall
submit to the commissioner of revenue certification from the
manufacturer that the deal was returned and in what respect it
was defective. The certification must be on a form prescribed
by the commissioner and must contain additional information the
commissioner requires.
The commissioner may require that no refund under this
subdivision be made unless the returned pull-tabs or tipboards
have been set aside for inspection by the commissioner's
employee.
Reductions in previously paid taxes authorized by this
subdivision must be made when and in the manner prescribed by
the commissioner.
Sec. 3. [297E.03] [SPORTS BOOKMAKING TAX.]
Subdivision 1. [IMPOSITION OF TAX.] An excise tax of six
percent is imposed on the value of all bets received by,
recorded by, accepted by, forwarded by, or placed with a person
engaged in sports bookmaking.
Subd. 2. [BET DEFINED.] For purposes of this section, the
term "bet" has the meaning given it in section 609.75,
subdivision 2.
Subd. 3. [SPORTS BOOKMAKING DEFINED.] For purposes of this
section, the term "sports bookmaking" has the meaning given it
in section 609.75, subdivision 7.
Subd. 4. [AMOUNT OF BET.] In determining the value or
amount of any bet for purposes of this section, all charges
incident to the placing of the bet must be included.
Subd. 5. [TAX RETURNS.] A person engaged in sports
bookmaking shall file monthly tax returns with the commissioner
of revenue, in the form required by the commissioner, of all
bookmaking activity, and shall include information on all bets
recorded, accepted, forwarded, and placed. The returns must be
filed on or before the 20th day of the month following the month
in which the bets reported were recorded, accepted, forwarded,
or placed. The tax imposed by this section is due and payable
at the time when the returns are filed.
Subd. 6. [PERSONS LIABLE FOR TAX.] Each person who is
engaged in receiving, recording, forwarding, or accepting sports
bookmaking bets is liable for and shall pay the tax imposed
under this section.
Subd. 7. [JEOPARDY ASSESSMENT; JEOPARDY COLLECTION.] The
tax may be assessed by the commissioner of revenue. An
assessment made pursuant to this section shall be considered a
jeopardy assessment or jeopardy collection as provided in
section 270.70. The commissioner shall assess the tax based on
personal knowledge or information available to the
commissioner. The commissioner shall mail to the taxpayer at
the taxpayer's last known address, or serve in person, a written
notice of the amount of tax, demand its immediate payment, and,
if payment is not immediately made, collect the tax by any
method described in chapter 270, except that the commissioner
need not await the expiration of the times specified in chapter
270. The tax assessed by the commissioner is presumed to be
valid and correctly determined and assessed.
Subd. 8. [DISCLOSURE PROHIBITED.] (a) Notwithstanding any
law to the contrary, neither the commissioner nor a public
employee may reveal facts contained in a sports bookmaking tax
return filed with the commissioner of revenue as required by
this section, nor can any information contained in the report or
return be used against the tax obligor in any criminal
proceeding, unless independently obtained, except in connection
with a proceeding involving taxes due under this section, or as
provided in section 270.064.
(b) Any person violating this section is guilty of a gross
misdemeanor.
(c) This section does not prohibit the commissioner from
publishing statistics that do not disclose the identity of tax
obligors or the contents of particular returns or reports.
Sec. 4. [297E.031] [GAMBLING TAX PERMIT.]
Subdivision 1. [APPLICATION AND ISSUANCE.] A distributor
who sells gambling products under this chapter must file with
the commissioner an application, on a form prescribed by the
commissioner, for a gambling tax permit and identification
number. The commissioner, when satisfied that the applicant has
a valid license from the board, shall issue the applicant a
permit and number. A permit is not assignable and is valid only
for the distributor in whose name it is issued.
Subd. 2. [SUSPENSION; REVOCATION.] (a) If a distributor
fails to comply with this chapter or a rule of the commissioner,
or if a license issued under chapter 349 is revoked or
suspended, the commissioner, after giving notice, may for
reasonable cause revoke or suspend a permit held by a
distributor. A notice must be sent to the distributor at least
15 days before the proposed suspension or revocation is to take
effect. The notice must give the reason for the proposed
suspension or revocation and must require the distributor to
show cause why the proposed action should not be taken. The
notice may be served personally or by mail.
(b) The notice must inform the distributor of the right to
a contested case hearing. If a request in writing is made to
the commissioner within 14 days of the date of the notice, the
commissioner shall defer action on the suspension or revocation
and shall refer the case to the office of administrative
hearings for the scheduling of a contested case hearing. The
distributor must be served with 20 days' notice in writing
specifying the time and place of the hearing and the allegations
against the distributor.
(c) The commissioner shall issue a final order following
receipt of the recommendation of the administrative law judge.
(d) Under section 271.06, subdivision 1, an appeal to the
tax court may be taken from the commissioner's order of
revocation or suspension. The commissioner may not issue a new
permit after revocation except upon application accompanied by
reasonable evidence of the intention of the applicant to comply
with all applicable laws and rules.
Sec. 5. [297E.04] [MANUFACTURER'S REPORTS AND RECORDS.]
Subdivision 1. [REPORTS OF SALES.] A manufacturer who
sells gambling product for use or resale in this state, or for
receipt by a person or entity in this state, shall file with the
commissioner, on a form prescribed by the commissioner, a report
of gambling product sold to any person in the state, including
the established governing body of an Indian tribe recognized by
the United States Department of the Interior. The report must
be filed monthly on or before the 20th day of the month
succeeding the month in which the sale was made. The
commissioner may require that the report be submitted via
magnetic media or electronic data transfer. The commissioner
may inspect the premises, books, records, and inventory of a
manufacturer without notice during the normal business hours of
the manufacturer. A person violating this section is guilty of
a misdemeanor.
Subd. 2. [BAR CODES.] The flare of each pull-tab and
tipboard game must be imprinted by the manufacturer with a bar
code that provides all information prescribed by the
commissioner. The commissioner must require that the bar code
include the serial number of the game. A manufacturer must also
affix to the outside of the box containing these games a bar
code providing all information prescribed by the commissioner.
The commissioner may also prescribe additional bar coding
requirements.
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.
Subd. 3. [PADDLETICKET CARD MASTER FLARES.] Each sealed
grouping of 100 paddleticket cards must have its own individual
master flare. The manufacturer of the paddleticket cards must
affix to or imprint at the bottom of each master flare a bar
code that provides:
(1) the name of the manufacturer;
(2) the first paddleticket card number in the group;
(3) the number of paddletickets attached to each
paddleticket card in the group; and
(4) all other information required by the commissioner.
This subdivision applies to paddleticket cards (i) sold by a
manufacturer after June 30, 1995, for use or resale in Minnesota
or (ii) shipped into or caused to be shipped into Minnesota by a
manufacturer after June 30, 1995. Paddleticket cards that are
subject to this subdivision may not have a registration stamp
affixed to the master flare.
Sec. 6. [297E.05] [DISTRIBUTOR REPORTS AND RECORDS.]
Subdivision 1. [BUSINESS RECORDS.] A distributor shall
keep at each place of business complete and accurate records for
that place of business, including itemized invoices of gambling
product held, purchased, manufactured, or brought in or caused
to be brought in from without this state, and of all sales of
gambling product. The records must show the names and addresses
of purchasers, the inventory at the close of each period for
which a return is required of all gambling product on hand, and
other pertinent papers and documents relating to the purchase,
sale, or disposition of gambling product. Books, records,
itemized invoices, and other papers and documents required by
this section must be kept for a period of at least 3-1/2 years
after the date of the documents, or the date of the entries
appearing in the records, unless the commissioner of revenue
authorizes in writing their destruction or disposal at an
earlier date.
Subd. 2. [SALES RECORDS.] A distributor must maintain a
record of all gambling product that it sells. The record must
include:
(1) the identity of the person from whom the distributor
purchased the product;
(2) the registration number of the product;
(3) the name, address, and license or exempt permit number
of the organization or person to which the sale was made;
(4) the date of the sale;
(5) the name of the person who ordered the product;
(6) the name of the person who received the product;
(7) the type of product;
(8) the serial number of the product;
(9) the name, form number, or other identifying information
for each game; and
(10) in the case of bingo hard cards or sheets sold on and
after January 1, 1991, the individual number of each card or
sheet.
Subd. 3. [INVOICES.] A distributor shall give with each
sale of gambling product an itemized invoice showing the
distributor's name and address, the purchaser's name and
address, the date of the sale, description of the deals,
including the ideal gross from every deal of pull-tabs and every
deal of tipboards.
Subd. 4. [REPORTS.] A distributor shall report monthly to
the commissioner, on a form the commissioner prescribes, its
sales of each type of gambling product. This report must be
filed monthly on or before the 20th day of the month succeeding
the month in which the sale was made. The commissioner may
require that a distributor submit the monthly report and
invoices required in this subdivision via magnetic media or
electronic data transfer.
Subd. 5. [CERTIFIED PHYSICAL INVENTORY.] The commissioner
may, upon request, require a distributor to furnish a certified
physical inventory of all gambling product in stock. The
inventory must contain the information required by the
commissioner.
Sec. 7. [297E.06] [ORGANIZATION REPORTS AND RECORDS.]
Subdivision 1. [REPORTS.] An organization must file with
the commissioner, on a form prescribed by the commissioner, a
report showing all gambling activity conducted by that
organization for each month. Gambling activity includes all
gross receipts, prizes, all gambling taxes owed or paid to the
commissioner, all gambling expenses, and all lawful purpose and
board-approved expenditures. The report must be filed with the
commissioner on or before the 20th day of the month following
the month in which the gambling activity takes place. The
commissioner may require that the reports be filed via magnetic
media or electronic data transfer.
Subd. 2. [BUSINESS RECORDS.] An organization shall
maintain records supporting the gambling activity reported to
the commissioner. Records include, but are not limited to, the
following items:
(1) all winning and unsold tickets, cards, or stubs for
pull-tab, tipboard, paddlewheel, and raffle games;
(2) all reports and statements, including checker's
records, for each bingo occasion;
(3) all cash journals and ledgers, deposit slips, register
tapes, and bank statements supporting gambling activity
receipts;
(4) all invoices that represent purchases of gambling
product;
(5) all canceled checks, check recorders, journals and
ledgers, vouchers, invoices, bank statements, and other
documents supporting gambling activity expenditures; and
(6) all organizational meeting minutes.
All records required to be kept by this section must be
preserved by the organization for at least 3-1/2 years and may
be inspected by the commissioner of revenue at any reasonable
time without notice or a search warrant.
Subd. 3. [ACCOUNTS.] All gambling activity transactions
must be segregated from all other revenues and expenditures made
by the conducting organization.
Subd. 4. [ANNUAL AUDIT.] (a) An organization licensed
under chapter 349 with gross receipts from lawful gambling of
more than $250,000 in any year must have an annual financial
audit of its lawful gambling activities and funds for that
year. An organization licensed under chapter 349 with gross
receipts from lawful gambling of more than $50,000 but not more
than $250,000 in any year must have an annual financial review
of its lawful gambling activities and funds for that year.
Audits and financial reviews under this subdivision must be
performed by an independent accountant licensed by the state of
Minnesota.
(b) The commissioner of revenue shall prescribe standards
for audits and financial review required under this
subdivision. The standards may vary based on the gross receipts
of the organization. The standards must incorporate and be
consistent with standards prescribed by the American institute
of certified public accountants. A complete, true, and correct
copy of the audit report must be filed as prescribed by the
commissioner.
Sec. 8. [297E.07] [INSPECTION RIGHTS.]
At any reasonable time, without notice and without a search
warrant, the commissioner may enter a place of business of a
manufacturer, distributor, or organization; any site from which
pull-tabs or tipboards or other gambling equipment or gambling
product are being manufactured, stored, or sold; or any site at
which lawful gambling is being conducted, and inspect the
premises, books, records, and other documents required to be
kept under this chapter to determine whether or not this chapter
is being fully complied with. If the commissioner is denied
free access to or is hindered or interfered with in making an
inspection of the place of business, books, or records, the
permit of the distributor may be revoked by the commissioner,
and the license of the manufacturer, the distributor, or the
organization may be revoked by the board.
Sec. 9. [297E.08] [EXAMINATIONS.]
Subdivision 1. [EXAMINATION OF TAXPAYER.] To determine the
accuracy of a return or report, or in fixing liability under
this chapter, the commissioner may make reasonable examinations
or investigations of a taxpayer's place of business, tangible
personal property, equipment, computer systems and facilities,
pertinent books, records, papers, vouchers, computer printouts,
accounts, and documents.
Subd. 2. [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION
WITH EXAMINATION OF TAXPAYER.] When conducting an investigation
or an audit of a taxpayer, the commissioner may examine, except
where privileged by law, the relevant records and files of a
person, business, institution, financial institution, state
agency, agency of the United States government, or agency of
another state where permitted by statute, agreement, or
reciprocity. The commissioner may compel production of these
records by subpoena. A subpoena may be served directly by the
commissioner.
Subd. 3. [POWER TO COMPEL TESTIMONY.] In the
administration of this chapter, the commissioner may:
(1) administer oaths or affirmations and compel by subpoena
the attendance of witnesses, testimony, and the production of a
person's pertinent books, records, papers, or other data;
(2) examine under oath or affirmation any person regarding
the business of a taxpayer concerning a matter relevant to the
administration of this chapter. The fees of witnesses required
by the commissioner to attend a hearing are equal to those
allowed to witnesses appearing before courts of this state. The
fees must be paid in the manner provided for the payment of
other expenses incident to the administration of state tax law;
and
(3) in addition to other remedies available, bring an
action in equity by the state against a taxpayer for an
injunction ordering the taxpayer to file a complete and proper
return or amended return. The district courts of this state
have jurisdiction over the action, and disobedience of an
injunction issued under this clause must be punished as for
contempt.
Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY
IS KNOWN.] An investigation may extend to any person that the
commissioner determines has access to information that may be
relevant to the examination or investigation. If a subpoena
requiring the production of records under subdivision 2 is
served on a third-party record keeper, written notice of the
subpoena must be mailed to the taxpayer and to any other person
who is identified in the subpoena. The notices must be given
within three days of the day on which the subpoena is served.
Notice to the taxpayer required by this section is sufficient if
it is mailed to the last address on record with the commissioner
of revenue.
The provisions of this subdivision relating to notice to
the taxpayer or other parties identified in the subpoena do not
apply if there is reasonable cause to believe that the giving of
notice may lead to attempts to conceal, destroy, or alter
records relevant to the examination, to prevent the
communication of information from other persons through
intimidation, bribery, or collusion, or to flee to avoid
prosecution, testifying, or production of records.
Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY
IS NOT KNOWN.] A subpoena that does not identify the person or
persons whose tax liability is being investigated may be served
only if:
(1) the subpoena relates to the investigation of a
particular person or ascertainable group or class of persons;
(2) there is a reasonable basis for believing that the
person or group or class of persons may fail or may have failed
to comply with tax laws administered by the commissioner of
revenue;
(3) the subpoena is clear and specific concerning
information sought to be obtained; and
(4) the information sought to be obtained is limited solely
to the scope of the investigation.
A party served with a subpoena that does not identify the
person or persons with respect to whose tax liability the
subpoena is issued may, within three days after service of the
subpoena, petition the district court in the judicial district
in which that party is located for a determination whether the
commissioner of revenue has complied with all the requirements
in clauses (1) to (4), and whether the subpoena is enforceable.
If no petition is made by the party served within the time
prescribed, the subpoena has the effect of a court order.
Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] If the
commissioner has the power to issue a subpoena for investigative
or auditing purposes, the commissioner shall honor a reasonable
request by the taxpayer to issue a subpoena on the taxpayer's
behalf in connection with the investigation or audit.
Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF
SUBPOENA.] The commissioner or the taxpayer may apply to the
district court of the county of the taxpayer's residence, place
of business, or county where the subpoena can be served as with
any other case at law, for an order compelling the appearance of
the subpoenaed witness or the production of the subpoenaed
records. Failure to comply with the order of the court for the
appearance of a witness or the production of records may be
punished by the court as for contempt.
Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of
producing records of a third party required by a subpoena must
be paid by the taxpayer if the taxpayer requests the subpoena to
be issued or if the taxpayer has the records available but has
refused to provide them to the commissioner. In other cases
where the taxpayer cannot produce records and the commissioner
then issues a subpoena for third-party records, the commissioner
shall pay the reasonable cost of producing the records. The
commissioner may later assess the reasonable costs against the
taxpayer if the records contribute to the determination of an
assessment of tax against the taxpayer.
Sec. 10. [297E.09] [ASSESSMENTS.]
Subdivision 1. [GENERALLY.] The commissioner shall make
determinations, corrections, and assessments with respect to
taxes, including interest, additions to taxes, and assessable
penalties, imposed under this chapter.
Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails
to file a return required by this chapter, the commissioner may
make a return for the taxpayer from information in the
commissioner's possession or obtainable by the commissioner.
The return is prima facie correct and valid.
Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO
TAXPAYER.] (a) If a return has been filed and the commissioner
determines that the tax disclosed by the return is different
from the tax determined by the examination, the commissioner
shall send an order of assessment to the taxpayer. The order
must explain the basis for the assessment and must explain the
taxpayer's appeal rights. An assessment by the commissioner
must be made by recording the liability of the taxpayer in the
office of the commissioner, which may be done by keeping a copy
of the order of assessment sent to the taxpayer. An order of
assessment is final when made but may be reconsidered by the
commissioner under section 349.219.
(b) The amount of unpaid tax shown on the order must be
paid to the commissioner:
(1) within 60 days after notice of the amount and demand
for its payment have been mailed to the taxpayer by the
commissioner; or
(2) if an administrative appeal is filed under section
349.219 within 60 days following the determination or compromise
of the appeal.
Subd. 4. [ERRONEOUS REFUNDS.] An erroneous refund is
considered an underpayment of tax on the date made. An
assessment of a deficiency arising out of an erroneous refund
may be made at any time within two years from the making of the
refund. If part of the refund was induced by fraud or
misrepresentation of a material fact, the assessment may be made
at any time.
Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or
assessment made by the commissioner is prima facie correct and
valid. The taxpayer has the burden of establishing the
incorrectness or invalidity of the return or assessment in any
action or proceeding in respect to it.
Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] On examining
returns of a taxpayer for more than one year or period, the
commissioner may issue one order covering the period under
examination that reflects the aggregate refund or additional tax
due.
Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment
sent by United States mail, postage prepaid to the taxpayer at
the taxpayer's last known address, is sufficient even if the
taxpayer is deceased or is under a legal disability, or, in the
case of a corporation, has terminated its existence, unless the
department has been provided with a new address by a party
authorized to receive notices of assessment.
Sec. 11. [297E.10] [EXTENSIONS FOR FILING RETURNS AND
PAYING TAXES.]
If, in the commissioner's judgment, good cause exists, the
commissioner may extend the time for filing tax returns, paying
taxes, or both, for not more than six months.
Sec. 12. [297E.11] [LIMITATIONS ON TIME FOR ASSESSMENT OF
TAX.]
Subdivision 1. [GENERAL RULE.] Except as otherwise
provided in this chapter, the amount of taxes assessable must be
assessed within 3-1/2 years after the return is filed, whether
or not the return is filed on or after the date prescribed. A
return must not be treated as filed until it is in processible
form. A return is in processible form if it is filed on a
permitted form and contains sufficient data to identify the
taxpayer and permit the mathematical verification of the tax
liability shown on the return.
Subd. 2. [FALSE OR FRAUDULENT RETURN.] Notwithstanding
subdivision 1, the tax may be assessed at any time if a false or
fraudulent return is filed or if a taxpayer fails to file a
return.
Subd. 3. [OMISSION IN EXCESS OF 25 PERCENT.] Additional
taxes may be assessed within 6-1/2 years after the due date of
the return or the date the return was filed, whichever is later,
if the taxpayer omits from a tax return taxes in excess of 25
percent of the taxes reported in the return.
Subd. 4. [TIME LIMIT FOR REFUNDS.] Unless otherwise
provided in this chapter, a claim for a refund of an overpayment
of tax must be filed within 3-1/2 years from the date prescribed
for filing the return, plus any extension of time granted for
filing the return, but only if filed within the extended time,
or two years from the time the tax is paid, whichever period
expires later. Interest on refunds must be computed at the rate
specified in section 270.76 from the date of payment to the date
the refund is paid or credited. For purposes of this
subdivision, the date of payment is the later of the date the
tax was finally due or was paid.
Subd. 5. [BANKRUPTCY; SUSPENSION OF TIME.] The time during
which a tax must be assessed or collection proceedings begun is
suspended during the period from the date of a filing of a
petition in bankruptcy until 30 days after either:
(1) notice to the commissioner that the bankruptcy
proceedings have been closed or dismissed; or
(2) the automatic stay has been ended or has expired,
whichever occurs first.
The suspension of the statute of limitations under this
subdivision applies to the person the petition in bankruptcy is
filed against, and all other persons who may also be wholly or
partially liable for the tax.
Subd. 6. [EXTENSION AGREEMENT.] If before the expiration
of time prescribed in subdivisions 1 and 4 for the assessment of
tax or the filing of a claim for refund, both the commissioner
and the taxpayer have consented in writing to the assessment or
filing of a claim for refund after that time, the tax may be
assessed or the claim for refund filed at any time before the
expiration of the agreed upon period. The period may be
extended by later agreements in writing before the expiration of
the period previously agreed upon.
Sec. 13. [297E.13] [CIVIL PENALTIES.]
Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] If a tax
is not paid within the time specified for payment, a penalty is
added to the amount required to be shown as tax. The penalty is
five percent of the unpaid tax if the failure is for not more
than 30 days, with an additional penalty of five percent of the
amount of tax remaining unpaid during each additional 30 days or
fraction of 30 days during which the failure continues, not
exceeding 15 percent in the aggregate.
If the taxpayer has not filed a return, for purposes of
this subdivision the time specified for payment is the final
date a return should have been filed.
Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If
a taxpayer fails to make and file a return within the time
prescribed or an extension, a penalty is added to the tax. The
penalty is five percent of the amount of tax not paid on or
before the date prescribed for payment of the tax.
If a taxpayer fails to file a return within 60 days of the
date prescribed for filing of the return (determined with regard
to any extension of time for filing), the addition to tax under
this subdivision must be at least the lesser of: (1) $200; or
(2) the greater of (i) 25 percent of the amount required to be
shown as tax on the return without reduction for any payments
made or refundable credits allowable against the tax, or (ii)
$50.
Subd. 3. [COMBINED PENALTIES.] When penalties are imposed
under subdivisions 1 and 2, except for the minimum penalty under
subdivision 2, the penalties imposed under both subdivisions
combined must not exceed 38 percent.
Subd. 4. [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR
RULES.] If part of an additional assessment is due to negligence
or intentional disregard of the provisions of this chapter or
rules of the commissioner of revenue (but without intent to
defraud), there is added to the tax an amount equal to ten
percent of the additional assessment.
Subd. 5. [PENALTY FOR FALSE OR FRAUDULENT RETURN;
EVASION.] If a person files a false or fraudulent return, or
attempts in any manner to evade or defeat a tax or payment of
tax, there is imposed on the person a penalty equal to 50
percent of the tax found due for the period to which the return
related, less amounts paid by the person on the basis of the
false or fraudulent return.
Subd. 6. [PENALTY FOR REPEATED FAILURES TO FILE RETURNS OR
PAY TAXES.] If there is a pattern by a person of repeated
failures to timely file returns or timely pay taxes, and written
notice is given that a penalty will be imposed if such failures
continue, a penalty of 25 percent of the amount of tax not
timely paid as a result of each such subsequent failure is added
to the tax. The penalty can be abated under the abatement
authority in section 270.07, subdivisions 1, paragraph (e), and
6.
Subd. 7. [PENALTY FOR SALES AFTER REVOCATION, SUSPENSION,
OR EXPIRATION.] A distributor who engages in, or whose
representative engages in, the offering for sale, sale,
transport, delivery, or furnishing of gambling equipment to a
person, firm, or organization, after the distributor's license
or permit has been revoked or suspended, or has expired, and
until such license or permit has been reinstated or renewed, is
liable for a penalty of $1,000 for each day the distributor
continues to engage in the activity. This subdivision does not
apply to the transport of gambling equipment for the purpose of
returning the equipment to a licensed manufacturer.
Subd. 8. [PAYMENT OF PENALTIES.] The penalties imposed by
this section must be collected and paid in the same manner as
taxes.
Subd. 9. [PENALTIES ARE ADDITIONAL.] The civil penalties
imposed by this section are in addition to the criminal
penalties imposed by this chapter.
Subd. 10. [ORDER PAYMENTS CREDITED.] All payments received
may be credited first to the oldest liability not secured by a
judgment or lien in the discretion of the commissioner of
revenue, but in all cases must be credited first to penalties,
next to interest, and then to the tax due.
Sec. 14. [297E.135] [TAX-RELATED CRIMINAL PENALTIES.]
Subdivision 1. [PENALTY FOR FAILURE TO FILE OR PAY.] (a) A
person required to file a return, report, or other document with
the commissioner, who knowingly fails to file it when required,
is guilty of a gross misdemeanor. A person required to file a
return, report, or other document who willfully attempts to
evade or defeat a tax by failing to file it when required is
guilty of a felony.
(b) A person required to pay or to collect and remit a tax,
who knowingly fails to do so when required, is guilty of a gross
misdemeanor. A person required to pay or to collect and remit a
tax, who willfully attempts to evade or defeat a tax law by
failing to do so when required is guilty of a felony.
Subd. 2. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A
person required to file a return, report, or other document with
the commissioner, who delivers to the commissioner a return,
report, or other document known by the person to be fraudulent
or false concerning a material matter is guilty of a felony.
(b) A person who knowingly aids or assists in, or advises
in the preparation or presentation of a return, report, or other
document that is fraudulent or false concerning a material
matter, whether or not the falsity or fraud committed is with
the knowledge or consent of the person authorized or required to
present the return, report, or other document, is guilty of a
felony.
Subd. 3. [FALSE INFORMATION.] A person is guilty of a
felony if the person:
(1) is required by section 297E.05 to keep records or to
make returns, and falsifies or fails to keep the records or
falsifies or fails to make the returns; or
(2) knowingly submits materially false information in any
report, document, or other communication submitted to the
commissioner in connection with lawful gambling or with this
chapter.
Subd. 4. [SALES WITHOUT PERMIT; VIOLATIONS.] (a) A person
who engages in the business of selling gambling product in
Minnesota without the licenses or permits required under this
chapter or chapter 349, or an officer of a corporation who so
engages in the sales, is guilty of a gross misdemeanor.
(b) A person selling gambling product in Minnesota after
revocation of a license or permit under this chapter or chapter
349, when the commissioner or the board has not issued a new
license or permit, is guilty of a felony.
Subd. 5. [UNTAXED GAMBLING EQUIPMENT.] It is a gross
misdemeanor for a person to possess gambling equipment for
resale in this state that has not been stamped or bar-coded in
accordance with chapter 349 and upon which the taxes imposed by
chapter 297A or section 297E.02, subdivision 4, have not been
paid. The director of gambling enforcement or the commissioner
or the designated inspectors and employees of the director or
commissioner may seize in the name of the state of Minnesota any
unregistered or untaxed gambling equipment.
Subd. 6. [CRIMINAL PENALTIES.] (a) Criminal penalties
imposed by this section are in addition to civil penalties
imposed by this chapter.
(b) A person who violates a provision of this chapter for
which another penalty is not provided is guilty of a misdemeanor.
(c) A person who violates a provision of this chapter 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 a provision of this chapter.
(d) A person who in any manner violates a provision of this
chapter to evade a tax imposed by this chapter, or who aids and
abets the evasion of a tax, or hinders or interferes with a
seizing authority when a seizure is made as provided by section
297E.16 is guilty of a gross misdemeanor.
(e) This section does not preclude civil or criminal action
under other applicable law or preclude any agency of government
from investigating or prosecuting violations of this chapter or
chapter 349. County attorneys have primary responsibility for
prosecuting violations of this chapter, but the attorney general
may prosecute a violation of this chapter.
Subd. 7. [STATUTE OF LIMITATIONS.] Notwithstanding section
628.26, or other provision of the criminal laws of this state,
an indictment may be found and filed, or a complaint filed, upon
a criminal offense named in this section, in the proper court
within six years after the offense is committed.
Sec. 15. [297E.14] [INTEREST.]
Subdivision 1. [INTEREST RATE.] If an interest assessment
is required under this section, interest is computed at the rate
specified in section 270.75.
Subd. 2. [LATE PAYMENT.] If a tax is not paid within the
time specified by law for payment, the unpaid tax bears interest
from the date the tax should have been paid until the date the
tax is paid.
Subd. 3. [EXTENSIONS.] If an extension of time for payment
has been granted, interest must be paid from the date the
payment should have been made if no extension had been granted,
until the date the tax is paid.
Subd. 4. [ADDITIONAL ASSESSMENTS.] If a taxpayer is liable
for additional taxes because of a redetermination by the
commissioner, or for any other reason, the additional taxes bear
interest from the time the tax should have been paid, without
regard to any extension allowed, until the date the tax is paid.
Subd. 5. [ERRONEOUS REFUNDS.] In the case of an erroneous
refund, interest accrues from the date the refund was paid
unless the erroneous refund results from a mistake of the
department, then no interest or penalty is imposed unless the
deficiency assessment is not satisfied within 60 days of the
order.
Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section
549.09, if judgment is entered in favor of the commissioner with
regard to any tax, the judgment bears interest at the rate
specified in section 270.75 from the date the judgment is
entered until the date of payment.
Subd. 7. [INTEREST ON PENALTIES.] (a) A penalty imposed
under section 297E.12, subdivision 1, 2, 3, 4, or 5, bears
interest from the date the return or payment was required to be
filed or paid, including any extensions, to the date of payment
of the penalty.
(b) A penalty not included in paragraph (a) bears interest
only if it is not paid within ten days from the date of notice.
In that case interest is imposed from the date of notice to the
date of payment.
Sec. 16. [297E.15] [ADMINISTRATIVE REVIEW.]
Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A
taxpayer may obtain reconsideration by the commissioner of an
order assessing tax, a denial of a request for abatement of
penalty, or a denial of a claim for refund of money paid to the
commissioner under provisions, assessments, or orders under this
chapter by filing an administrative appeal as provided in
subdivision 4. A taxpayer cannot obtain reconsideration if the
action taken by the commissioner of revenue is the outcome of an
administrative appeal.
Subd. 2. [APPEAL BY TAXPAYER.] A taxpayer who wishes to
seek administrative review shall follow the procedure in
subdivision 4.
Subd. 3. [NOTICE DATE.] For purposes of this section,
"notice date" means the date of the order adjusting the tax or
order denying a request for abatement or, in the case of a
denied refund, the date of the notice of denial.
Subd. 4. [TIME AND CONTENT FOR ADMINISTRATIVE
APPEAL.] Within 60 days after the notice date, the taxpayer must
file a written appeal with the commissioner of revenue. The
appeal need not be in any particular form, but must contain the
following information:
(1) name and address of the taxpayer;
(2) if a corporation, the state of incorporation of the
taxpayer, and the principal place of business of the
corporation;
(3) the Minnesota identification number or social security
number of the taxpayer;
(4) the type of tax involved;
(5) the date;
(6) the tax years or periods involved and the amount of tax
involved for each year or period;
(7) the findings in the notice that the taxpayer disputes;
(8) a summary statement that the taxpayer relies on for
each exception; and
(9) the taxpayer's signature or signature of the taxpayer's
duly authorized agent.
Subd. 5. [EXTENSIONS.] If requested in writing and within
the time allowed for filing an administrative appeal, the
commissioner may extend the time for filing an appeal for a
period of not more than 30 days from the expiration of the 60
days from the notice date.
Subd. 6. [AUTOMATIC EXTENSION OF STATUTE OF
LIMITATIONS.] Notwithstanding any statute of limitations to the
contrary, if the commissioner has made a determination and the
taxpayer has authority to file an administrative appeal, the
period during which the commissioner can make further
assessments or other determinations does not expire before:
(1) 90 days after the notice date if no protest is filed
under subdivision 4; or
(2) 90 days after the commissioner notifies the taxpayer of
the determination on the appeal.
Subd. 7. [DETERMINATION OF APPEAL.] On the basis of
applicable law and available information, the commissioner shall
determine the validity, if any, in whole or part of the appeal
and notify the taxpayer of the decision. This notice must be in
writing and contain the basis for the determination.
Subd. 8. [AGREEMENT DETERMINING TAX LIABILITY.] If it
appears to be in the best interests of the state, the
commissioner may settle taxes, penalties, or interest that the
commissioner has under consideration by virtue of an appeal
filed under this section. An agreement must be in writing and
signed by the commissioner and the taxpayer or the taxpayer's
representative authorized by the taxpayer to enter into an
agreement. An agreement must be filed in the office of the
commissioner.
Subd. 9. [APPEAL OF AN ADMINISTRATIVE APPEAL.] Following
the determination or settlement of an appeal, the commissioner
must issue an order reflecting that disposition. Except in the
case of an agreement determining tax under this section, the
order is appealable to the Minnesota tax court under section
271.06.
Subd. 10. [APPEAL WHERE NO DETERMINATION.] If the
commissioner does not make a determination within six months of
the filing of an administrative appeal, the taxpayer may elect
to appeal to tax court.
Subd. 11. [EXEMPTION FROM ADMINISTRATIVE PROCEDURE
ACT.] This section is not subject to chapter 14.
Sec. 17. [297E.16] [CONTRABAND.]
Subdivision 1. [SEIZURE.] Contraband may be seized by the
commissioner or by any sheriff or other police officer,
hereinafter referred to as the "seizing authority," with or
without process, and is subject to forfeiture as provided in
subdivisions 2 and 3.
Subd. 2. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] Within ten days after the
seizure of 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 or the director of 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 law involved. If 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 the tax imposed by section
297E.02, the seizing authority shall release the property seized
without further legal proceedings.
Subd. 3. [DISPOSAL.] (a) The property described in section
349.2125, 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 an answer is filed within the time provided, the
court shall fix a time for a hearing, which must not be less
than ten nor more than 30 days after the time for filing an
answer expires. At the time fixed for hearing, unless continued
for cause, the matter must 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 unlawfully used property 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 frees the
property sold from all liens on it. Appeal from the order of
the district court is available 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 at least $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.
Sec. 18. [297E.17] [DISTRIBUTOR'S BOND.]
On finding it necessary to ensure compliance with this
chapter, the commissioner may require that a distributor deposit
with the commissioner security in the form and amount determined
by the commissioner, but not more than the lesser of (1) twice
the estimated average monthly tax liability for the previous 12
months, or (2) $10,000.
In lieu of security, the commissioner may require a
distributor to file a bond issued by a surety company authorized
to transact business in this state and approved by the
commissioner of commerce as to solvency and responsibility.
The commissioner may make claim against this security or
bond for all taxes, penalties, and interest owed by the
distributor.
Sec. 19. [INSTRUCTIONS TO REVISOR.]
(a) If a provision of a section of Minnesota Statutes
repealed or amended by this article is amended or referred to by
an act enacted in 1994, the revisor shall codify the amendment
or reference consistent with the recodification of the affected
section by this act, notwithstanding any law to the contrary.
(b) In the next edition of Minnesota Statutes, in the
sections referred to in column A, the revisor of statutes shall
delete the reference in column B and insert the reference in
column C. The revisor may change the references in column C to
the sections of Minnesota Statutes in which the bill sections
are compiled.
Column A Column B Column C
270.101, subd. 1 349.212 297E.02
349.12, subd. 25 349.19, subd. 9 297E.06, subd. 4
349.12, subd. 25 349.212, subd. 1 297E.02, subd. 1
and 4 and 4
349.15 349.212, subd. 1 297E.02, subd. 1
349.16, subd. 2 349.212, subd. 6 297E.02, subd. 6
349.166, subd. 2, 349.212 297E.02
paragraph (a)
349.166, subd. 2, 349.212, subd. 4, 297E.02, subd. 4,
paragraph (e) paragraph (c) paragraph (b),
clause (4)
349.2125, subd. 3 349.2121, subd. 4 297E.02
349.213, subd. 1 349.212 297E.02
349.22, subd. 2 349.219 349.213, and
chapter 297E
(c) In the next edition of Minnesota Statutes, the revisor
shall change the reference to taxes under or by "this chapter"
to taxes under or by "chapter 297E" in sections 349.16,
subdivision 5; 349.1641; and 349.2127, subdivision 1.
Sec. 20. [PURPOSE.]
It is the intent of the legislature to simplify Minnesota's
lawful gambling tax laws by consolidating and recodifying tax
administration and compliance provisions now contained
throughout Minnesota Statutes, chapter 349. Due to the
complexity of the recodification, prior provisions are repealed
on the effective date of the new provisions. The repealed
provisions, however, continue to remain in effect until
superseded by the analogous provision in the new law.
Sec. 21. [REPEALER.]
Minnesota Statutes 1992, sections 349.166, subdivision 4;
349.212, subdivisions 1, 2, 5, 6, and 7; 349.2121; 349.2122;
349.215; 349.2151; 349.2152; 349.216; 349.217, subdivisions 3,
4, 5, 6, 7, 8, and 9; 349.2171; and 349.219; and Minnesota
Statutes 1993 Supplement, sections 349.2115; 349.212,
subdivision 4; and 349.217, subdivisions 1, 2, and 5a, are
repealed.
Sec. 22. [EFFECTIVE DATE.]
Sections 1, 8 to 16, and 18 to 20 are effective the day
following final enactment.
Sections 2, 3, 4, 5, 6, 7, and 21 are effective for
returns, reports, records, assessments, taxes, or other payments
first becoming due on or after August 1, 1994.
Section 4 is effective for sales or shipments of gambling
product inventory made on or after August 1, 1994.
ARTICLE 3
GAMBLING TAX AMENDMENTS
Section 1. Minnesota Statutes 1992, section 270.101,
subdivision 1, is amended to read:
Subdivision 1. [LIABILITY IMPOSED.] A person who, either
singly or jointly with others, has the control of, supervision
of, or responsibility for filing returns or reports, paying
taxes, or collecting or withholding and remitting taxes and who
fails to do so, or a person who is liable under any other law,
is liable for the payment of taxes, penalties, and interest
arising under chapters 296, 297, 297A, and 297C, or sections
290.92, 349.212, and 349.2121 297E.02.
Sec. 2. Minnesota Statutes 1992, section 349.2123, is
amended to read:
349.2123 [CERTIFIED PHYSICAL INVENTORY.]
The board or commissioner of revenue 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 or the commissioner.
Sec. 3. Minnesota Statutes 1992, section 349.22,
subdivision 1, is amended to read:
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 violates sections 349.11 to
349.23 to evade a tax imposed by a provision of this chapter, or
who aids and abets the evasion of a tax, or hinders or
interferes with a seizing authority when a seizure is made as
provided by section 349.2125, is guilty of a gross misdemeanor.
Sec. 4. [EFFECTIVE DATE.]
Section 1 is effective for taxes, returns, or reports first
becoming due on or after August 1, 1994.
Sections 2 and 3 are effective August 1, 1994.
ARTICLE 4
GAMBLING ENFORCEMENT
Section 1. Minnesota Statutes 1992, section 299L.01,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For the purposes of this
chapter, the terms defined in this subdivision have the meanings
given them.
(b) "Division" means the division of gambling enforcement.
(c) "Commissioner" means the commissioner of public safety.
(d) "Director" means the director of gambling enforcement.
(e) "Manufacturer" means a person who assembles from raw
materials or subparts a gambling device for sale or use in
Minnesota.
(f) "Distributor" means a person who sells, offers to sell,
or otherwise provides a gambling device to a person in Minnesota.
(g) "Used gambling device" means a gambling device five or
more years old from the date of manufacture.
Sec. 2. Minnesota Statutes 1992, section 299L.01, is
amended by adding a subdivision to read:
Subd. 4. [CONFLICT OF INTEREST.] (a) The director and any
person employed by the division may not have a direct or
indirect financial interest in:
(1) a class A or B licensee of the racing commission;
(2) a lottery retailer under contract with the state
lottery;
(3) a person who is under a lottery procurement contract
with the state lottery;
(4) a bingo hall, manufacturer, or distributor licensed
under chapter 349; or
(5) a manufacturer or distributor licensed under this
chapter.
(b) The director or an employee of the division of gambling
enforcement may not participate in the conducting of lawful
gambling under chapter 349.
Sec. 3. Minnesota Statutes 1992, section 299L.02,
subdivision 2, is amended to read:
Subd. 2. [GAMBLING.] The director shall:
(1) conduct background investigations of applicants for
licensing as a manufacturer or distributor of gambling equipment
or as a bingo hall under chapter 349; and
(2) when requested by the director of gambling control, or
when the director believes it to be reasonable and necessary,
inspect the premises of a licensee under chapter 349 to
determine compliance with law and with the rules of the board,
or to conduct an audit of the accounts, books, records, or other
documents required to be kept by the licensee.
The director may charge applicants under clause (1) a
reasonable fee to cover the costs of the investigation.
Sec. 4. Minnesota Statutes 1992, section 299L.02, is
amended by adding a subdivision to read:
Subd. 6. [RESPONSE TO REQUESTS.] An applicant, licensee,
or the person subject to the jurisdiction of the commissioner or
director under this chapter, must:
(1) comply with a request from the commissioner or director
for information, documents, or other material within 30 days of
the mailing of the request by the commissioner or director
unless the notice specifies a different time; and
(2) appear before the commissioner or director when
requested to do so, and must bring documents or materials that
the commissioner or director has requested.
Sec. 5. Minnesota Statutes 1992, section 299L.03,
subdivision 1, is amended to read:
Subdivision 1. [INSPECTIONS; ACCESS.] In conducting any
inspection authorized under this chapter or chapter 240, 349, or
349A, the employees of the division of gambling enforcement have
free and open access to all parts of the regulated business
premises, and may conduct the inspection at any reasonable time
without notice and without a search warrant. For purposes of
this subdivision, "regulated business premises" means premises
where:
(1) lawful gambling is conducted by an organization
licensed under chapter 349 or by an organization exempt from
licensing under section 349.166;
(2) gambling equipment is manufactured, sold, distributed,
or serviced by a manufacturer or distributor licensed under
chapter 349;
(3) records required to be maintained under chapter
240, 297E, 349, or 349A are prepared or retained;
(4) lottery tickets are sold by a lottery retailer under
chapter 340A; or
(5) races are conducted by a person licensed under chapter
240; or
(6) gambling devices are manufactured or distributed,
including places of storage under section 299L.07.
Sec. 6. Minnesota Statutes 1992, section 299L.03,
subdivision 2, is amended to read:
Subd. 2. [ITEMS REQUIRED TO BE PRODUCED.] In conducting an
audit or inspection authorized under this chapter or chapter
240, 349 or 349A the director may inspect any book, record, or
other document the licensee, retailer, or vendor is required to
keep.
Sec. 7. Minnesota Statutes 1992, section 299L.03,
subdivision 6, is amended to read:
Subd. 6. [UNLICENSED SELLERS.] (a) If anyone not licensed
under chapter 349 sells gambling equipment at a business
establishment, the director may, in addition to any other
provisions of chapter 349:
(1) assess a civil penalty of not more than $300 for each
violation against each person participating in the sales and
assess a civil penalty of not more than $1,000 for each
violation against the owner or owners of the business
establishment; or
(2) if the subject violation is the second or subsequent
violation of this subdivision at the same business establishment
within any 24-month period, assess a civil penalty of not more
than $300 for each violation against each person participating
in such sales, and assess a civil penalty of not more than
$5,000 for each violation against the owner or owners of the
business establishment.
(b) The assessment of a civil penalty under this section
does not preclude a recommendation by the director at any time
deemed appropriate to a licensing authority for revocation,
suspension, or denial of a license controlled by the licensing
authority.
(c) Within ten days of an assessment under this
subdivision, the person assessed the penalty must pay the
assessment or request that a hearing be held under chapter 14.
If a hearing is requested, the hearing must be scheduled within
20 days of the request, and the recommendations of the
administrative law judge must be issued within five working days
of the close of the hearing. The director's final determination
must be issued within five working days of the issuance of the
recommendations of the administrative law judge.
Sec. 8. Minnesota Statutes 1992, section 299L.03, is
amended by adding a subdivision to read:
Subd. 12. [CEASE AND DESIST ORDERS.] (a) When it appears
to the director that any person has engaged in or is about to
engage in any act or practice constituting a violation of this
chapter, or any rule or order issued under this chapter, the
director may issue and cause to be served on the person an order
requiring the person to cease and desist from violations of this
chapter, or any rule or order issued under this chapter. 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
must be held not later than seven days after receiving the
request for a hearing. Within 20 days of receiving the
administrative law judge's report and subsequent exceptions and
argument, the director shall issue an order vacating the cease
and desist order, modifying the order, or making it permanent,
as the facts require. If no hearing is requested within 30 days
of service of the order, the order becomes final and remains in
effect until modified or vacated by the commissioner. All
hearings under this subdivision must be conducted in accordance
with sections 14.57 to 14.69 of the administrative procedure
act. If the person to whom a cease and desist order has been
issued under this subdivision fails to appear at a hearing after
being notified of the hearing, the person is deemed in default
and the proceeding may be determined against the person on
consideration of the cease and desist order, the allegations of
which are deemed to be true.
(b) When it appears to the director that any person has
engaged in or is about the engage in any act or practice
constituting a violation of this chapter, or any rule adopted or
subpoena or order issued under this chapter, the director 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 rule, subpoena, or order issued or adopted
under this chapter, and may refer the matter to the attorney
general. On a proper showing, the court shall grant a permanent
or temporary injunction, restraining order, or writ of
mandamus. The court may not require the director to post a bond.
Sec. 9. Minnesota Statutes 1992, section 299L.07, is
amended to read:
299L.07 [GAMBLING DEVICES.]
Subdivision 1. [RESTRICTION LICENSE REQUIRED.] Except as
provided in subdivision 2, a person may not manufacture, sell,
offer to sell, lease, rent, or otherwise provide, in whole or in
part, a gambling device as defined in sections 349.30,
subdivision 2, and 609.75, subdivision 4, except that a gambling
device may be:
(1) manufactured as provided in section 349.40;
(2) sold, offered for sale, or otherwise provided to a
distributor licensed under subdivision 3;
(3) sold, offered for sale, or otherwise provided to the
governing body of a federally recognized Indian tribe that is
authorized to operate the gambling device under a tribal-state
compact under the Indian Gaming Regulatory Act, United States
Code, title 25, sections 2701 to 2721;
(4) sold, offered for sale, or otherwise provided to a
person for use in the person's dwelling for display or amusement
purposes in a manner that does not afford players an opportunity
to obtain anything of value; or
(5) sold by a person who is not licensed under this section
and who is not engaged in the trade or business of selling
gambling devices, if the person does not sell more than one
gambling device in any calendar year without first obtaining a
license under this section.
Subd. 2. [LICENSE REQUIRED EXCLUSIONS.] A person may not
manufacture or distribute gambling devices without having
obtained a license under this section. Notwithstanding
subdivision 1, a gambling device:
(1) may be manufactured without a license as provided in
section 349.40; and
(2) may be sold by a person who is not licensed under this
section, if the person (i) is not engaged in the trade or
business of selling gambling devices, and (ii) does not sell
more than one gambling device in any calendar year.
Subd. 2a. [RESTRICTIONS.] (a) A manufacturer licensed
under this section may sell, offer to sell, lease, or rent, in
whole or in part, a gambling device only to a distributor
licensed under this section.
(b) A distributor licensed under this section may sell,
offer to sell, market, rent, lease, or other provide, in whole
or in part, a gambling device only to:
(1) the governing body of a federally recognized Indian
tribe that is authorized to operate the gambling device under a
tribal state compact under the Indian Gaming Regulatory Act,
Public Law Number 100-497, and future amendments to it;
(2) a person for use in the person's dwelling for display
or amusement purposes in a manner that does not afford players
an opportunity to obtain anything of value.
Subd. 3. [LICENSE ISSUANCE.] The commissioner may issue a
license under this section if the commissioner determines that
the applicant will conduct the business in a manner that will
not adversely affect the public health, welfare, and safety or
be detrimental to the effective regulation and control of
gambling. A license may not be issued under this section to a
person, or a corporation, firm, or partnership that has an
officer, director, or other person with a direct or indirect
financial or management interest of five percent or more, who
has ever:
(1) been convicted of a felony;
(2) been convicted of a crime involving gambling;
(3) been connected with or engaged in an illegal business;
or
(4) had a license revoked or denied by another jurisdiction
for a violation of law or rule related to gambling.
Subd. 4. [APPLICATION.] An application for a
manufacturer's or distributor's license must be on a form
prescribed by the commissioner and must, at a minimum, contain:
(1) the name and address of the applicant and, if it is a
corporation, the names of all officers, directors, and
shareholders with a financial interest of five percent or more;
(2) the names and addresses of any holding corporation,
subsidiary, or affiliate of the applicant, without regard to
whether the holding corporation, subsidiary, or affiliate does
business in Minnesota; and
(3) if the applicant does not maintain a Minnesota office,
an irrevocable consent statement signed by the applicant,
stating that suits and actions relating to the subject matter of
the application or acts of omissions arising from it may be
commenced against the applicant in a court of competent
jurisdiction in this state by service on the secretary of state
of any summons, process, or pleadings authorized by the laws of
this state. If any summons, process, or pleading is served upon
the secretary of state, it must be by duplicate copies. One
copy must be retained in the office of the secretary of state
and the other copy must be forwarded immediately by certified
mail to the address of the applicant, as shown on the
application.
Subd. 5. [INVESTIGATION.] Before a manufacturer's or
distributor's license is granted, the director may conduct a
background and financial investigation of the applicant,
including the applicant's sources of financing. The director
may, or shall when required by law, require that fingerprints be
taken and the director may forward the fingerprints to the
Federal Bureau of Investigation for a national criminal history
check. The director may charge an investigation fee to cover
the cost of the investigation.
Subd. 6. [LICENSE FEES.] (a) A license issued under this
section is valid for one year.
(b) For a person who distributes 100 or fewer used gambling
devices per year, the fee is $1,500. For a person who
distributes more than 100 used gambling devices per year, the
fee is $2,000. For purposes of this subdivision, a used
gambling device is a gambling device five or more years old.
(c) For a person who manufactures or distributes 100 or
fewer new, or new and used gambling devices in a year, the fee
is $5,000. For a person who manufactures or distributes more
than 100 new, or new and used gambling devices in a year, the
fee is $7,500.
Subd. 7. [RENEWAL.] Upon making the same determination as
in subdivision 3, the commissioner may renew a license issued
under this section.
Subd. 8. [LICENSE SUSPENSION AND , REVOCATION, DENIAL
ACTIONS.] (a) The commissioner may suspend a license under this
section for a violation of law or rule. The commissioner may
revoke a license:
(1) for a violation of law or rule which, in the
commissioner's opinion, adversely affects the integrity of
gambling in Minnesota;
(2) for an intentional false statement in a license
application; or
(3) if the licensee is the subject of a disciplinary
proceeding in another jurisdiction which results in the
revocation of a license.
A revocation or suspension is a contested case under
sections 14.57 to 14.69.
(b) The commissioner may summarily suspend a license prior
to a contested case hearing if the commissioner determines that
a summary suspension is necessary to ensure the integrity of
gambling. A contested case hearing must be held within 20 days
of the summary suspension and the administrative law judge must
issue a report within 20 days of the close of the hearing
record. The commissioner shall issue a final decision within 30
days from receipt of the report of the administrative law judge
and subsequent exceptions and argument under section 14.61. (a)
The commissioner 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, 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 ever been convicted of a felony, or of 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 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;
(6) after demand, has not filed tax returns required by the
commissioner of revenue; or
(7) had a license or permit revoked or denied by another
jurisdiction for a violation of law or rule relating to gambling.
The commissioner 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 subdivision is applicable to an
affiliate of or a direct or indirect holder of more than a five
percent financial interest in the applicant or licensee.
(b) The commissioner may by order deny, suspend, revoke,
refuse to renew a license or premises permit, or censure a
licensee or applicant, if the commissioner finds that the order
is in the public interest and that the applicant or licensee, or
a director, officer, partner, person in a supervisory or
management position of the applicant of licensee, or an employee
eligible to make sales on behalf of the applicant or licensee:
(1) has violated or failed to comply with any provision of
chapter 297E, 299L, or 349, 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 director, the commissioner, or
the commissioner of revenue, or has made a false statement in a
statement made to the director or commissioner;
(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, or has violated or failed to comply with
an order of such a regulator that imposed those actions;
(7) has been the subject of any of the following actions by
the director or commissioner: (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;
(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 the licensee's 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 danger 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. 8a. [CIVIL PENALTIES.] The commissioner may impose a
civil penalty not to exceed $500 per violation on a person who
has violated this chapter, or any rule adopted or order issued
under this chapter, unless a different penalty is specified.
Subd. 8b. [SHOW CAUSE ORDERS.] (a) If the commissioner
determines that one of the conditions listed in subdivision 8
exists, or that a licensee is no longer conducting business in
the manner required by subdivision 2a, the commissioner may
issue an order requiring a person to show cause why any or all
of the following should not occur: (1) the license be revoked
or suspended, (2) the licensee be censured, (3) a civil penalty
be imposed or (4) corrective action be taken.
(b) The order must give reasonable notice of the time and
place for hearing on the matter, and must state the reasons for
the entry of the order. The commissioner may by order summarily
suspend a license pending final determination of any order to
show cause. If a license is suspended pending final
determination of an order to show cause, a hearing on the merits
must be held within 30 days of the issuance of the order of
suspension. All hearings must be conducted in accordance with
sections 14.57 to 14.69 of the administrative procedure act.
(c) After the hearing the commissioner must enter an order
disposing of the matter as the facts require. If the licensee
fails to appear at a hearing after being notified of the
hearing, the person is deemed in default and the proceeding may
be determined against the person on consideration of the order
to show cause, the allegations of which are deemed to be true.
Subd. 8c. [APPLICATIONS; RENEWALS.] (a) When it appears to
the commissioner that a license application or renewal should be
denied under subdivision 8, the commissioner must promptly give
to the applicant a written notice of the denial. The notice
must state the grounds for the denial and give reasonable notice
of the rights of the applicant to request a hearing. A hearing
must be held not later than 30 days after the request for the
hearing is received by the commissioner, unless the applicant
and the commissioner agree that the hearing may be held at a
later date. If no hearing is requested within 30 days of the
service of the notice, the denial becomes final. All hearings
under this subdivision must be conducted in accordance with
sections 14.57 to 14.69 of the administrative procedure act.
(b) After the hearing, the commissioner shall enter an
order making such disposition as the facts require. If the
applicant fails to appear at a hearing after being notified of
the hearing, the applicant is deemed in default and the
proceeding may be determined against the applicant on
consideration of the notice denying application or renewal, the
allegations of which are deemed to be true. All fees
accompanying the initial or renewal application are considered
earned and are not refundable.
Subd. 8d. [ACTIONS AGAINST LAPSED LICENSE.] If a license
lapses, is surrendered, withdrawn, terminated, or otherwise
becomes ineffective, the commissioner may institute a proceeding
under this subdivision within two years after the license was
last effective and enter a revocation or suspension order as of
the last day on which the license was in effect, or impose a
civil penalty as provided in subdivision 8a.
Subd. 8e. [NOTIFICATION OF ACTIONS TAKEN BY OTHER
STATE.] A licensee under this section must notify the
commissioner within 30 days of the action whenever any of the
actions listed in subdivision 8, paragraph (b), clause (6) have
been taken against the licensee in another state or jurisdiction.
Subd. 9. [REQUIRED INFORMATION.] A person to whom a
license is issued under this section shall provide, in a manner
prescribed by the commissioner, information required by the
commissioner relating to the shipment and sale of gambling
devices.
Subd. 10. [TRANSPORTATION OF GAMBLING DEVICES.] In
addition to the requirements of this section, the transportation
of gambling devices into Minnesota must be in compliance with
United States Code, title 15, sections 1171 to 1177, as amended.
Subd. 11. [INSPECTION.] The commissioner, director, and
employees of the division may inspect the business premises of a
licensee under this section.
Sec. 10. Minnesota Statutes 1992, section 609.755, is
amended to read:
609.755 [ACTS OF OR RELATING TO GAMBLING.]
Whoever does any of the following is guilty of a
misdemeanor:
(1) makes a bet;
(2) sells or transfers a chance to participate in a
lottery;
(3) disseminates information about a lottery, except a
lottery conducted by an adjoining state, with intent to
encourage participation therein;
(4) permits a structure or location owned or occupied by
the actor or under the actor's control to be used as a gambling
place; or
(5) operates except where authorized by statute, possesses
a gambling device.
Clause (5) does not prohibit operation possession of a
gambling device in a person's dwelling for amusement purposes in
a manner that does not afford players an opportunity to obtain
anything of value.
Sec. 11. [REPEALER.]
Minnesota Statutes 1992, sections 299L.04 and 299L.07,
subdivision 7, are repealed.
Sec. 12. [EFFECTIVE DATE.]
Section 10 is effective August 1, 1994, and applies to
crimes committed on and after that date.
ARTICLE 5
LAWFUL GAMBLING REGULATION
Section 1. Minnesota Statutes 1992, section 349.12,
subdivision 1, is amended to read:
Subdivision 1. As used in sections 349.11 to 349.22 349.23
the following terms in this section have the meanings given them.
Sec. 2. Minnesota Statutes 1992, section 349.12,
subdivision 3a, is amended to read:
Subd. 3a. [ALLOWABLE EXPENSE.] "Allowable expense"
means an expense directly related to the conduct of lawful
gambling 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.
Sec. 3. Minnesota Statutes 1992, section 349.12,
subdivision 4, is amended to read:
Subd. 4. [BINGO.] "Bingo" means a game where each player
has a bingo hard card or board 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. containing five horizontal rows of spaces, with each row
except the central one containing five figures. The central row
has four figures with the word "free" marked in the center space
thereof. Bingo also includes games which are as described in
this subdivision except for the use of cards where the figures
are not preprinted but are filled in by the players. A player
wins a game of bingo by completing a preannounced combination of
spaces or, in the absence of a preannouncement of a combination
of spaces, any combination of five spaces in a row, either
vertical, horizontal or diagonal.
Sec. 4. Minnesota Statutes 1992, section 349.12,
subdivision 8, is amended to read:
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.
Sec. 5. Minnesota Statutes 1992, section 349.12,
subdivision 11, is amended to read:
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, or to other distributors.
Sec. 6. Minnesota Statutes 1992, section 349.12,
subdivision 16, is amended to read:
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.
Sec. 7. Minnesota Statutes 1992, section 349.12,
subdivision 18, is amended to read:
Subd. 18. [GAMBLING EQUIPMENT.] "Gambling equipment"
means: bingo hard cards or paper sheets, devices for selecting
bingo numbers, pull-tabs, jar tickets, paddlewheels, and
paddlewheel tables, paddletickets, paddleticket cards, tipboards
, tipboard tickets, and pull-tab dispensing devices.
Sec. 8. Minnesota Statutes 1992, section 349.12,
subdivision 19, is amended to read:
Subd. 19. [GAMBLING MANAGER.] "Gambling manager" means a
person who has paid all dues to an organization and has been
a an active member of the organization for at least two years
and has been designated by the organization to supervise lawful
gambling conducted by it.
Sec. 9. Minnesota Statutes 1992, section 349.12,
subdivision 21, is amended to read:
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, for duly licensed
bingo hall lessors.
Sec. 10. Minnesota Statutes 1992, section 349.12,
subdivision 23, is amended to read:
Subd. 23. [IDEAL NET.] "Ideal net" means the pull-tab or
tipboard deal's ideal gross, as defined under subdivision 19 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.
Sec. 11. Minnesota Statutes 1993 Supplement, section
349.12, subdivision 25, is amended to read:
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)
organization, provided that the organization and expenditure or
contribution are in conformity with standards prescribed by the
board under section 349.154;
(2) a contribution to an individual or family suffering
from poverty, homelessness, or physical or mental disability,
which is used to relieve the effects of that poverty,
homelessness, or disability;
(3) a contribution to an individual for treatment for
delayed posttraumatic stress syndrome or a contribution to a
recognized program for the treatment of compulsive gambling on
behalf of an individual who is a compulsive gambler;
(4) a contribution to or expenditure on a public or private
nonprofit educational institution registered with or accredited
by this state or any other state;
(5) a contribution to a scholarship fund for defraying the
cost of education to individuals where the funds are awarded
through an open and fair selection process;
(6) activities by an organization or a government entity
which recognize humanitarian or military service to the United
States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage
reimbursements in the computation of the per occasion
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 colorguard unit for
activities conducted within the state; or
(ii) members of an organization solely for services
performed by the members at funeral services;
(7) recreational, community, and athletic facilities and
activities intended primarily for persons under age 21, provided
that such facilities and activities do not discriminate on the
basis of gender, as evidenced by (i) provision of equipment and
supplies, (ii) scheduling of activities, including games and
practice times, (iii) supply and assignment of coaches or other
adult supervisors, (iv) provision and availability of support
facilities, and (v) whether the opportunity to participate
reflects each gender's demonstrated interest in the activity,
provided that nothing in this clause prohibits a contribution to
or expenditure on an educational institution or other entity
that is excepted from the prohibition against discrimination
based on sex contained in the Higher Education Act Amendments of
1976, United States Code, title 20, section 1681 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, and the tax taxes imposed by section 349.212
297E.02, subdivisions 1 and, 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
licensed permitted gambling premises wholly owned by the
licensed organization paying the taxes, not to exceed:
(i) the amount which an organization may expend under board
rule on rent for premises used for bingo; or
(ii) $15,000 per year for premises used for other forms of
lawful gambling;
(10) a contribution to the United States, this state or any
of its political subdivisions, or any agency or instrumentality
thereof other than a direct contribution to a law enforcement or
prosecutorial agency;
(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; or
(12) payment of one-half of the reasonable costs of an
audit required in section 349.19, subdivision 9;
(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; or
(14) expenditures, approved by the commissioner of natural
resources, by an organization for grooming and maintaining
snowmobile trails that are (1) grant-in-aid trails established
under section 116J.406, or (2) other trails open to public use,
including purchase or lease of equipment for this purpose.
(b) Notwithstanding paragraph (a), "lawful purpose" does
not include:
(1) any expenditure made or incurred for the purpose of
influencing the nomination or election of a candidate for public
office or for the purpose of promoting or defeating a ballot
question;
(2) any activity intended to influence an election or a
governmental decision-making process;
(3) the erection, acquisition, improvement, expansion,
repair, or maintenance of real property or capital assets owned
or leased by an organization, except as provided in clause (6),
unless the board has first specifically authorized the
expenditures after finding that (i) the real property or capital
assets will be used exclusively for one or more of the purposes
in paragraph (a); (ii) with respect to expenditures for repair
or maintenance only, that the property is or will be used
extensively as a meeting place or event location by other
nonprofit organizations or community or service groups and that
no rental fee is charged for the use; (iii) with respect to
expenditures, including a mortgage payment or other debt service
payment, for erection or acquisition only, that the erection or
acquisition is necessary to replace with a comparable building,
a building owned by the organization and destroyed or made
uninhabitable by fire or natural disaster, provided that the
expenditure may be only for that part of the replacement cost
not reimbursed by insurance; or (iv) with respect to
expenditures, including a mortgage payment or other debt service
payment, for erection or acquisition only, that the erection or
acquisition is necessary to replace with a comparable building a
building owned by the organization that was acquired from the
organization by eminent domain or sold by the organization to a
purchaser that the organization reasonably believed would
otherwise have acquired the building by eminent domain, provided
that the expenditure may be only for that part of the
replacement cost that exceeds the compensation received by the
organization for the building being replaced;
(4) an expenditure by an organization which is a
contribution to a parent organization, foundation, or affiliate
of the contributing organization, if the parent organization,
foundation, or affiliate has provided to the contributing
organization within one year of the contribution any money,
grants, property, or other thing of value;
(5) a contribution by a licensed organization to another
licensed organization unless the board has specifically
authorized the contribution. The board must authorize such a
contribution when requested to do so by the contributing
organization unless it makes an affirmative finding that the
contribution will not be used by the recipient organization for
one or more of the purposes in paragraph (a); or
(6) the erection, acquisition, improvement, or expansion of
real property or capital assets which will be used for one or
more of the purposes in paragraph (a), clause (7), unless the
organization making the expenditures notifies the board at least
15 days before making the expenditure; or
(7) 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.
Sec. 12. Minnesota Statutes 1992, section 349.12, is
amended by adding a subdivision to read:
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 sequentially numbered paddleticket cards.
Sec. 13. Minnesota Statutes 1992, section 349.12, is
amended by adding a subdivision to read:
Subd. 28a. [PADDLETICKET.] "Paddleticket" means a
preprinted ticket that can be used to place wagers on the spin
of a paddlewheel.
Sec. 14. Minnesota Statutes 1992, section 349.12, is
amended by adding a subdivision to read:
Subd. 28b. [PADDLETICKET CARD.] "Paddleticket card" means
a card to which detachable paddletickets are attached.
Sec. 15. Minnesota Statutes 1992, section 349.12, is
amended by adding a subdivision to read:
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.
Sec. 16. Minnesota Statutes 1992, section 349.12,
subdivision 30, is amended to read:
Subd. 30. [PERSON.] "Person" is an individual,
organization, firm, association, partnership, limited liability
company, corporation, trustee, or legal representative.
Sec. 17. Minnesota Statutes 1992, section 349.12,
subdivision 32, is amended to read:
Subd. 32. [PULL-TAB.] "Pull-tab" means a single folded or
banded ticket or a multi-ply card with a 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. "Pull-tab" also includes a ticket sold in a gambling
device known as a ticket jar.
Sec. 18. Minnesota Statutes 1992, section 349.12, is
amended by adding a subdivision to read:
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.
Sec. 19. Minnesota Statutes 1992, section 349.12,
subdivision 34, is amended to read:
Subd. 34. "Tipboard" means a 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 containing a seal that conceals
the winning number or symbol, and that serves as the game flare
for a tipboard game.
Sec. 20. Minnesota Statutes 1992, section 349.12, is
amended by adding a subdivision to read:
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.
Sec. 21. Minnesota Statutes 1992, section 349.13, is
amended to read:
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.
Sec. 22. Minnesota Statutes 1992, section 349.15, is
amended to read:
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 regular monthly meeting of
the conducting organization organization's membership. Provided
that no more than 60 percent of the gross profit less the tax
imposed under section 349.212, subdivision 1, from bingo, and no
more than 50 percent of the gross profit from other forms of
lawful gambling, may be expended for allowable expenses related
to lawful gambling.
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
reporting period that in total exceed the following percentages
of the organization's gross receipts from lawful gambling for
that period: until August 1, 1995, four-tenths of one percent;
and on and after August 1, 1995, three-tenths of one percent.
Sec. 23. Minnesota Statutes 1992, section 349.151,
subdivision 4, is amended to read:
Subd. 4. [POWERS AND DUTIES.] (a) The board has the
following powers and duties:
(1) to regulate lawful gambling to ensure it is conducted
in the public interest;
(2) to issue licenses to organizations, distributors, bingo
halls, manufacturers, and gambling managers;
(3) to collect and deposit license, permit, and
registration fees due under this chapter;
(4) to receive reports required by this chapter and inspect
all premises, records, books, and other documents of
organizations, distributors, manufacturers, and bingo halls to
insure compliance with all applicable laws and rules;
(5) to make rules authorized by this chapter;
(6) to register gambling equipment and issue registration
stamps;
(7) to provide by rule for the mandatory posting by
organizations conducting lawful gambling of rules of play and
the odds and/or house percentage on each form of lawful
gambling;
(8) to report annually to the governor and legislature on
its activities and on recommended changes in the laws governing
gambling;
(9) to impose civil penalties of not more than $500 per
violation on organizations, distributors, manufacturers, bingo
halls, and gambling managers for failure to comply with any
provision of this chapter or any rule 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 licenses license and premises permits permit applications
and renewals under criteria established by the board;
(12) to suspend or revoke licenses and premises permits of
organizations, distributors, manufacturers, bingo halls, or
gambling managers as provided in this chapter;
(13) to register employees of organizations licensed to
conduct lawful gambling;
(14) to require fingerprints from persons determined by
board rule to be subject to fingerprinting; and
(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, manufacturers,
bingo halls, and gambling managers to take corrective actions;
and
(15) (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, manufacturer, bingo hall licensee, 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 operator licensee, gambling manager, or
manufacturer assessed a civil penalty under this paragraph may
request a hearing before the board. Hearings conducted on
appeals of imposition of penalties Appeals of citations imposing
a civil penalty are not subject to the provisions of the
administrative procedure act.
(c) All fees and penalties received by the board must be
deposited in the general fund.
Sec. 24. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
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;
(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; and
(3) must prohibit the use of pull-tab dispensing devices at
any licensed premises where pull-tabs are sold other than
through a pull-tab dispensing device by an employee of the
organization who is also the lessor or an employee of the lessor.
Sec. 25. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
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.
Sec. 26. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
Subd. 8. [CRIMINAL HISTORY.] The board may request the
director of gambling enforcement to assist in investigating the
background of an applicant for a license under this chapter, and
the director of 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 gambling
enforcement on licensees and applicants.
Sec. 27. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
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.
Sec. 28. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
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.
Sec. 29. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
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.
Sec. 30. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
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.
Sec. 31. Minnesota Statutes 1992, section 349.151, is
amended by adding a subdivision to read:
Subd. 13. [RULEMAKING.] In addition to any authority to
adopt rules specifically authorized under this chapter, the
board may adopt, amend, or repeal rules, including emergency
rules, under chapter 14, when necessary or proper in discharging
the board's powers and duties.
Sec. 32. Minnesota Statutes 1992, section 349.152,
subdivision 2, is amended to read:
Subd. 2. [DUTIES OF THE 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, and civil
penalties, and corrective action the board imposes; and
(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.
Sec. 33. Minnesota Statutes 1992, section 349.152,
subdivision 3, is amended to read:
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: (a) the director has
the power to 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 of the date of the hearing 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.
Sec. 34. Minnesota Statutes 1992, section 349.153, is
amended to read:
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, or a bingo hall under section 349.164.
(b) A member of the board, the director, or an employee of
the board may not participate in the conducting of lawful
gambling. 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 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, 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.
Sec. 35. Minnesota Statutes 1992, section 349.154, is
amended to read:
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 of the expenditure
or contribution; and
(4) a brief description of how the expenditure or
contribution meets one or more of the purposes in section
349.12, subdivision 25, paragraph (a); 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 provide make available to the
commissioners of revenue and public safety copies of each report
reports received under this subdivision and requested by them.
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.
Sec. 36. [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, bingo halls, 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, person in a supervisory or management
position of the applicant or licensee, or an employee eligible
to make sales on behalf 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 is
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
chapter 297E, 299L, or 349, 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 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. 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.
Sec. 37. Minnesota Statutes 1992, section 349.16,
subdivision 2, is amended to read:
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 must not have as an officer or member
of the governing body any person who, within the five years
before the issuance of the license, has been convicted in a
federal or state court of a felony or gross misdemeanor or who
has ever been convicted of a crime involving gambling or who has
had a license issued by the board or director revoked for a
violation of law or board rule.
(f) The organization has identified in its license
application the lawful purposes on which it proposes to expend
net profits from lawful gambling.
(g) (f) The organization has identified on its license
application a gambling manager and certifies that the manager is
qualified under this chapter.
(h) (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 349.212, subdivision 6.
Sec. 38. Minnesota Statutes 1992, section 349.16,
subdivision 3, is amended to read:
Subd. 3. [TERM OF LICENSE: SUSPENSION AND REVOCATION.]
Licenses issued under this section are valid for two years and
may be suspended by the board for a violation of law or board
rule or revoked for what the board determines to be a willful
violation of law or board rule. A revocation or suspension is a
contested case under sections 14.57 to 14.69 of the
administrative procedure act.
Sec. 39. Minnesota Statutes 1992, section 349.16,
subdivision 6, is amended to read:
Subd. 6. [FEES LICENSE CLASSIFICATIONS.] The board may
issue four classes of organization licenses: a class A license
authorizing all forms of lawful gambling; a class B license
authorizing all forms of lawful gambling except bingo; a class C
license authorizing bingo only, or bingo and pull-tabs if the
gross receipts for any combination of bingo and pull-tabs does
not exceed $50,000 per year; and a class D license authorizing
raffles only. The board shall not charge a fee for an
organization license.
Sec. 40. Minnesota Statutes 1992, section 349.16,
subdivision 8, is amended to read:
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 license to conduct
lawful gambling premises permit or operate 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.
Sec. 41. Minnesota Statutes 1992, section 349.16, is
amended by adding a subdivision to read:
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.
Sec. 42. Minnesota Statutes 1992, section 349.161,
subdivision 1, is amended to read:
Subdivision 1. [PROHIBITED ACTS; LICENSES REQUIRED.] No
person may:
(1) sell, offer for sale, or furnish gambling equipment for
use within the state for gambling purposes, 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
lawful gambling use within the state without having obtained a
distributor 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.
Sec. 43. Minnesota Statutes 1992, section 349.161,
subdivision 5, is amended to read:
Subd. 5. [PROHIBITION.] (a) No distributor, or 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, or any representative, agent,
affiliate, or employee of a distributor, may be: (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 or any representative, agent, affiliate,
or employee of a distributor may provide a lessor of gambling
premises any compensation, gift, gratuity, premium, or other
thing of value.
(d) No distributor or any representative, agent, affiliate,
or employee of a distributor may participate in any gambling
activity at any gambling site or premises where gambling
equipment purchased from that distributor is being used in the
conduct of lawful gambling.
(e) No distributor or any representative, agent, affiliate,
or employee of a distributor may alter or modify any gambling
equipment, except to add a "last ticket sold" prize sticker.
(f) No distributor or any representative, agent, affiliate,
or 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 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.
(h) No distributor 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 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.
Sec. 44. Minnesota Statutes 1992, section 349.162,
subdivision 1, is amended to read:
Subdivision 1. [STAMP REQUIRED.] (a) A distributor may not
sell, transfer, furnish, or otherwise provide to a person,
organization, or distributor, and no person, organization, or
distributor 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. The board shall charge a fee of five cents
for each stamp. Each stamp must bear a registration number
assigned by the board. A distributor or manufacturer is
entitled to a refund for unused registration stamps and
replacement for registration stamps which are defective or
canceled by the distributor or manufacturer.
(b) From January 1, 1991, to June 30, 1992, no distributor,
organization, or other person may sell a pull-tab which is not
clearly marked "For Sale in Minnesota Only." 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) On and after July 1, 1992, no distributor,
organization, or other person may sell a pull-tab which is not
clearly marked "Manufactured in Minnesota For Sale in Minnesota
Only."
(d) Paragraphs (b) and (c) do not apply to pull-tabs sold
by a distributor to the governing body of an Indian
tribe. 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. Gambling
equipment kept in violation of this paragraph is contraband
under section 349.2125.
Sec. 45. Minnesota Statutes 1992, section 349.162,
subdivision 2, is amended to read:
Subd. 2. [RECORDS REQUIRED.] A distributor must maintain a
record of all gambling equipment which it sells to
organizations. The record must include:
(1) the identity of the person or firm from whom the
distributor purchased the equipment;
(2) the registration number of the equipment;
(3) the name, address, and license or exempt permit number
of the organization to which the sale was made;
(4) the date of the sale;
(5) the name of the person who ordered the equipment;
(6) the name of the person who received the equipment;
(7) the type of equipment;
(8) the serial number of the equipment;
(9) the name, form number, or other identifying information
for each game; and
(10) in the case of bingo hard cards or paper sheets sold
on and after January 1, 1991, the individual number of each card
or sheet.
The invoice for each sale must be retained for at least
3-1/2 years after the sale is completed and a copy of each
invoice is to be delivered to the board in the manner and time
prescribed by the board. For purposes of this section, a sale
is completed when the gambling equipment is physically delivered
to the purchaser.
Each distributor must report monthly to the board, in a
form the board prescribes, its sales of each type of gambling
equipment. Employees of the board and the division of 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.
Sec. 46. Minnesota Statutes 1992, section 349.162,
subdivision 4, is amended to read:
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 cards paper sheets that does
not contain bingo cards paper sheets in numerical order.
Sec. 47. Minnesota Statutes 1992, section 349.162,
subdivision 5, is amended to read:
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 sales or 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 gambling enforcement as a sales or storage facility
of the distributor's 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 sales or storage facility which
has been registered with the division of 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
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 sales and 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
gambling enforcement or, the division of 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.
(c) (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 sales or 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.
Sec. 48. Minnesota Statutes 1992, section 349.163,
subdivision 1, is amended to read:
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 unless the manufacturer (1) does not manufacture any
gambling equipment other than paddlewheels, and (2) was licensed
as both a manufacturer and distributor on May 1, 1990.
Sec. 49. Minnesota Statutes 1992, section 349.163,
subdivision 3, is amended to read:
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 unless the
manufacturer is also a licensed distributor; 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;.
(3) from January 1, 1991, to June 30, 1992, sell to any
person in Minnesota, other than the governing body of an Indian
tribe, a pull-tab on which the manufacturer has not clearly
printed the words "For Sale in Minnesota Only";
(4) on and after July 1, 1992, sell to any person in
Minnesota, other than the governing body of an Indian tribe, a
pull-tab on which the manufacturer has not clearly printed the
words "Manufactured in Minnesota For Sale In Minnesota Only"; or
(5) sell a pull-tab marked as required in clauses (3) and
(4) to any person inside or outside the state, including the
governing body of an Indian tribe, who is not a licensed
distributor.
(b) On and after July 1, 1992, all pull-tabs sold by a
licensed manufacturer to a person in Minnesota must be
manufactured in Minnesota.
(c) 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 section
349.163, 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.
Sec. 50. Minnesota Statutes 1992, section 349.163,
subdivision 5, is amended to read:
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) A manufacturer must comply with either paragraphs (c)
to (g) or (f) to (j) with respect to pull-tabs and tipboards
sold by the manufacturer before January 1, 1995, for use or
resale in Minnesota or shipped into or caused to be shipped into
Minnesota by the manufacturer before January 1, 1995. A
manufacturer must comply with paragraphs (f) to (j) with respect
to pull-tabs and tipboards sold by the manufacturer on and after
January 1, 1995, for use or resale in Minnesota or shipped into
or caused to be shipped into Minnesota by the manufacturer on
and after January 1, 1995. Paragraphs (c) to (e) expire January
1, 1995.
(c) The flare of each deal of pull-tabs and tipboards sold
by a manufacturer for use or resale in Minnesota must have the
Minnesota gambling stamp affixed. The flare, with the stamp
affixed, must be placed inside the wrapping of the deal which
the flare describes.
(c) (d) 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:
-- a Minnesota gambling stamp is affixed to this sheet, and
-- the serial number handwritten on the gambling stamp is
the same as the serial number printed on this sheet and on the
pull-tab (or tipboard) ticket you have purchased."
(d) (e) The flare of each pull-tab and tipboard game must
bear the serial number of the game, printed in numbers at least
one-half inch high.
(e) (f) The flare of each pull-tab and tipboard game must
be have affixed to or imprinted at the bottom with a bar code
that provides: all information required by the commissioner of
revenue under section 297E.04, subdivision 2.
(1) the name of the game;
(2) the serial number of the game;
(3) the name of the manufacturer;
(4) the number of tickets in the deal;
(5) the odds of winning each prize in the deal; and
(6) other information the board by rule requires.
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.
(f) (g) 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.
(h) 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.
(i) 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."
(j) 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.
Sec. 51. Minnesota Statutes 1992, section 349.163,
subdivision 6, is amended to read:
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 sale 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 may request the
assistance of the commissioner of public safety and the director
of the state lottery board in performing the tests.
Sec. 52. Minnesota Statutes 1992, section 349.163, is
amended by adding a subdivision to read:
Subd. 8. [PADDLETICKET CARD MASTER FLARES.] Each sealed
grouping of 100 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.
This subdivision applies to paddleticket cards sold by a
manufacturer after June 30, 1995, for use or resale in Minnesota
or shipped into or caused to be shipped into Minnesota by a
manufacturer after June 30, 1995. Paddleticket cards which are
subject to this subdivision shall not have a registration stamp
affixed to the master flare.
Sec. 53. Minnesota Statutes 1992, section 349.164,
subdivision 1, is amended to read:
Subdivision 1. [LICENSE REQUIRED.] No person may lease a
facility to more than one individual, corporation, partnership,
or organization to conduct bingo without a current and valid
bingo hall license under this section.
Sec. 54. Minnesota Statutes 1992, section 349.164,
subdivision 6, is amended to read:
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 storage or 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.
Sec. 55. Minnesota Statutes 1992, section 349.164, is
amended by adding a subdivision to read:
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.
Sec. 56. Minnesota Statutes 1992, section 349.1641, is
amended to read:
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 this 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 paragraph section. A contested case hearing
must be held within 20 days of the summary suspension and 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 or revoked under
this subdivision 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.
Sec. 57. Minnesota Statutes 1992, section 349.166,
subdivision 1, is amended to read:
Subdivision 1. [EXCLUSIONS.] (a) Bingo may be conducted
without a license and without complying with sections 349.168,
subdivisions 1 and 2; 349.17, subdivision 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 if it 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 without compliance with sections 349.11 to 349.15
and 349.153 to 349.213 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, a manager is
appointed to supervise the bingo, and the manager registers 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 349.11 to 349.13 and
349.151 349.154 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 $750.
(d) The organization must maintain all required records of
excluded gambling activity for 3-1/2 years.
Sec. 58. Minnesota Statutes 1992, section 349.166,
subdivision 2, is amended to read:
Subd. 2. [EXEMPTIONS.] (a) Lawful gambling may be
conducted by an organization as defined in section 349.12,
subdivision 28, without a license and without complying with
sections 349.151 to 349.16; 349.167; 349.168, subdivisions 1 and
2; 349.17, subdivisions 4 and 5; 349.18, subdivision 1; and
349.19; and 349.212 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 $25 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), a $250 penalty is
imposed on the organization. Failure to file a timely report
does not disqualify the organization as exempt under this
paragraph subdivision if a report is later filed and the penalty
paid.
(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 349.212,
subdivision 4, paragraph (c), 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.
Sec. 59. Minnesota Statutes 1992, section 349.166,
subdivision 3, is amended to read:
Subd. 3. [RAFFLES; CERTAIN ORGANIZATIONS.] Sections 349.21
349.168, subdivisions 3 and 4; and 349.211, subdivision 3, and
the membership requirements of sections 349.14 and 349.20
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.
Sec. 60. Minnesota Statutes 1992, section 349.167,
subdivision 1, is amended to read:
Subdivision 1. [GAMBLING MANAGER REQUIRED.] (a) All lawful
gambling conducted by a licensed organization must be under the
supervision of a gambling manager. A gambling manager
designated by an organization to supervise lawful gambling is
responsible for the gross receipts of the organization and for
its conduct in compliance with all laws and rules. 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. The board must be notified in
writing of a change in gambling managers. Notification must be
made within ten days of the date the gambling manager assumes
the manager's duties.
(d) An organization may not have more than one gambling
manager at any time.
Sec. 61. Minnesota Statutes 1992, section 349.167,
subdivision 2, is amended to read:
Subd. 2. [GAMBLING MANAGERS; LICENSES.] A person may not
serve as a gambling manager for an organization unless the
person possesses a valid gambling manager's license issued by
the board. 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) has never been convicted of a felony;
(3) within the five years before the date of the license
application, has not committed a violation of law or board rule
that resulted in the revocation of a license issued by the
board;
(4) (3) has never ever been convicted of a criminal
violation involving fraud, theft, tax evasion,
misrepresentation, or gambling; or
(5) has never been convicted of (i) assault, (ii) a
criminal violation involving the use of a firearm, or (iii)
making terroristic threats; and
(6) (4) has not engaged in conduct the board determines is
contrary to the public health, welfare, or safety or the
integrity of lawful gambling.
A gambling manager's license is valid for one year 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 $200. During the second year
of an organization's license the license fee for a new gambling
manager is $100.
Sec. 62. Minnesota Statutes 1992, section 349.167,
subdivision 4, is amended to read:
Subd. 4. [TRAINING OF GAMBLING MANAGERS.] The board shall
by rule require all persons licensed as gambling managers to
receive periodic training in laws and rules governing lawful
gambling. The rules must contain the following requirements:
(1) each gambling manager must 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 within
the three years prior to the date of application for the
renewal, as required by board rule, each year of the two-year
license period; and
(3) the training required by this subdivision may be
provided by a person, firm, association, or organization
authorized by the board to provide the training. Before
authorizing a person, firm, association, or organization to
provide training, the board must determine that:
(i) the provider and all of the provider's personnel
conducting the training are qualified to do so;
(ii) the curriculum to be used fully and accurately covers
all elements of lawful gambling law and rules that the board
determines are necessary for a gambling manager to know and
understand;
(iii) the fee to be charged for participants in the
training sessions is fair and reasonable; and
(iv) the training provider has an adequate system for
documenting completion of training.
The rules may provide for differing training requirements
for gambling managers based on the class of license held by the
gambling manager's organization.
The board or the director may provide the training required
by this subdivision using employees of the board.
Sec. 63. Minnesota Statutes 1992, section 349.167, is
amended by adding a subdivision to read:
Subd. 7. [GAMBLING MANAGER EXAMINATION.] (a) By January 1,
1996, each gambling manager must pass an examination prepared
and administered by the board that tests the gambling manager's
knowledge of the responsibilities of gambling managers and of
gambling procedures, laws, and rules. The board shall revoke
the license of any gambling manager who has not passed the
examination by January 1, 1996.
(b) On and after January 1, 1996, each applicant for a new
gambling manager's license must pass the examination provided
for in paragraph (a) 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 paragraph.
Sec. 64. Minnesota Statutes 1992, section 349.168,
subdivision 3, is amended to read:
Subd. 3. [COMPENSATION.] Compensation to persons who
participate in the conduct of lawful gambling may be paid only
to active members of the conducting organization or its
auxiliary, or the spouse or surviving spouse of an active
member, except that the following persons may receive
compensation without being active members: (1) sellers of
pull-tabs, tipboards, raffle tickets, paddlewheel tickets
paddletickets, and bingo hard cards or paper sheets; (2)
accountants performing auditing or bookkeeping services for the
organization; and (3) attorneys providing legal services to the
organization. The board may by rule allow other persons not
active members of the organization to receive compensation.
Sec. 65. Minnesota Statutes 1992, section 349.168,
subdivision 6, is amended to read:
Subd. 6. [COMPENSATION PAID BY CHECK.] Compensation paid
by an organization in connection with lawful gambling must be in
the form of a check drawn on the organization's gambling
account, as specified in section 349.19, and paid directly to
the employee person being compensated.
Sec. 66. Minnesota Statutes 1992, section 349.168, is
amended by adding a subdivision to read:
Subd. 9. [COMPENSATION REPORT.] A licensed organization
must submit to the board once each year, on a form the board
prescribes, a compensation report that specifies for the year
being reported: (1) each job category for which the
organization pays compensation, (2) each compensation rate paid
in each job category, and (3) the number of employees being paid
each compensation rate during the year.
Sec. 67. Minnesota Statutes 1992, section 349.169,
subdivision 1, is amended to read:
Subdivision 1. [FILING REQUIRED.] All manufacturers and
distributors must file with the director, not later than the
first day of each month, the prices at which the manufacturer or
distributor will sell all gambling equipment in that month. The
filing must be on a form the director prescribes. Prices filed
must include all charges the manufacturer or distributor makes
for each item of gambling equipment sold, including all volume
discounts, exclusive of transportation costs. All filings are
effective on the first day of the month for which they are
filed, except that a manufacturer or distributor may amend a
filed price within five days of filing it and may file a price
any time during a month for gambling equipment not previously
included on that month's filed pricing report, but may not later
amend the price during the month.
Sec. 68. Minnesota Statutes 1992, section 349.17,
subdivision 2, is amended to read:
Subd. 2. [BINGO ON LEASED PREMISES.] 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.
Sec. 69. Minnesota Statutes 1992, section 349.17,
subdivision 4, is amended to read:
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 registration 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.
Sec. 70. Minnesota Statutes 1992, section 349.17,
subdivision 5, is amended to read:
Subd. 5. [BINGO CARD NUMBERING CARDS AND SHEETS.] (a) The
board shall by rule require that all licensed organizations: (1)
conduct bingo only using liquid daubers on cards bingo paper
sheets that bear an individual number recorded by the
distributor; and (2) sell all bingo cards only in the order of
the numbers appearing on the cards; and (3) use each bingo card
paper sheet for no more than one bingo occasion. In lieu of the
requirements of clauses clause (2) and (3), 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) do not shall only
apply to a licensed organization that has never received gross
receipts from bingo in excess of $150,000 in any the
organization's last fiscal year.
Sec. 71. Minnesota Statutes 1992, section 349.17, is
amended by adding a subdivision to read:
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 or 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.
Sec. 72. [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.
Sec. 73. Minnesota Statutes 1992, section 349.174, is
amended to read:
349.174 [PULL-TABS; DEADLINE FOR USE.]
A deal of pull-tabs and or tipboards received by an
organization before September 1, 1989, must be put into play by
that organization before September 1, 1990, unless the deal
bears a serial number that allows it to be traced back to its
manufacturer and to the distributor who sold it to the
organization. An organization in possession on and after
September 1, 1990, of a deal of pull-tabs and or tipboards the
organization received before September 1, 1989, may not put such
a deal in play but must remove it from the organization's
inventory and return it to the manufacturer.
Sec. 74. Minnesota Statutes 1992, section 349.18,
subdivision 1, is amended to read:
Subdivision 1. [LEASE OR OWNERSHIP REQUIRED.] (a) An
organization may conduct lawful gambling only on premises it
owns or leases. Leases must be for a period of at least one
year and must be on a form prescribed by the board. Except for
leases entered into before the effective date of this section,
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 gambling
enforcement on request. A lease may not provide for payments
determined directly or indirectly by the receipts or profits
from lawful gambling. The board may prescribe by rule limits on
the amount of rent which an organization may pay to a lessor for
premises leased for lawful gambling provided that no rule of the
board may prescribe a limit of less than $1,000 per month on
rent paid for premises used for lawful gambling other than
bingo. Any rule adopted by the board limiting the amount of
rent to be paid may only be effective for leases entered into,
or renewed, after the effective date of the rule.
(b) No person, distributor, manufacturer, lessor, or
organization other than the licensed organization leasing the
space may conduct any activity on the leased premises during
times when lawful gambling is being conducted on the premises.
(c) 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.
(d) 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.
Sec. 75. Minnesota Statutes 1992, section 349.18,
subdivision 1a, is amended to read:
Subd. 1a. [STORAGE OF GAMBLING EQUIPMENT.] (a) Gambling
equipment owned by or in the possession of an organization must
be kept at a licensed gambling permitted premises owned
or operated 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 licensed 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.
Sec. 76. Minnesota Statutes 1992, section 349.18,
subdivision 2, is amended to read:
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 licensed premise permitted premises for one
day per year for not more than 12 hours that day. A lease for
that time period for the exempted premises must accompany the
request to the board.
Sec. 77. Minnesota Statutes 1992, section 349.19,
subdivision 2, is amended to read:
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 in the
case of expenditures previously approved by the organization's
membership for emergencies as defined by board rule. The name
and address of the bank, 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 three 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.
Sec. 78. Minnesota Statutes 1992, section 349.19,
subdivision 5, is amended to read:
Subd. 5. [REPORTS.] A licensed organization must report to
the board and to its membership monthly, or quarterly in the
case of a class C licensee or licensed organization which does
not report more than $1,000 in gross receipts from lawful
gambling in any calendar quarter, on its gross receipts,
expenses, profits, and expenditure of profits from lawful
gambling. The report must include a reconciliation of the
organization's profit carryover with its cash balance on hand.
If the organization conducts both bingo and other forms of
lawful gambling, the figures for both must be reported
separately. In addition, a licensed organization must report to
the board monthly on its purchases of gambling equipment and
must include the type, quantity, and dollar amount from each
supplier separately. The reports must be on a form the board
prescribes. Submission of the report required by section
349.154 satisfies the requirement for reporting monthly to the
board on expenditure of net profits.
Sec. 79. Minnesota Statutes 1992, section 349.19,
subdivision 8, is amended to read:
Subd. 8. [TERMINATION PLAN.] Upon termination of a license
for any reason, a licensed organization must notify the board in
writing within 15 30 calendar days of the license termination
date of its plan for disposal of registered 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.
Sec. 80. Minnesota Statutes 1992, section 349.19,
subdivision 9, is amended to read:
Subd. 9. [ANNUAL AUDIT; FILING REQUIREMENT.] An
organization licensed under this chapter must have an annual
financial audit of its lawful gambling activities and funds
performed by an independent accountant licensed by the state of
Minnesota. The commissioner of revenue shall prescribe
standards for the audit. A complete, true, and correct copy of
the audit report must be filed as prescribed by the commissioner
of revenue or financial review when required by section 297E.06,
subdivision 4.
Sec. 81. Minnesota Statutes 1992, section 349.19,
subdivision 10, is amended to read:
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 drivers 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.
Sec. 82. Minnesota Statutes 1992, section 349.191,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT RESTRICTION.] A manufacturer may
not offer or extend to a distributor, and a distributor may
not offer or extend to an organization, credit for a period of
more than 30 days for the sale 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.
Sec. 83. Minnesota Statutes 1992, section 349.191, is
amended by adding a subdivision to read:
Subd. 1a. [CREDIT AND SALES TO DELINQUENT
ORGANIZATIONS.] (a) If a distributor does not receive payment in
full from an organization within 30 days of the delivery of
gambling equipment, the distributor must notify the board in
writing of the delinquency.
(b) If a distributor 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 must notify the board of the continuing
delinquency.
(c) On receipt of a notice under paragraph (a), the board
shall order all distributors 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 not to sell any gambling equipment to the
delinquent organization.
(d) No distributor 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.
Sec. 84. Minnesota Statutes 1992, section 349.191, is
amended by adding a subdivision to read:
Subd. 1b. [CREDIT AND SALES TO DELINQUENT DISTRIBUTORS.]
(a) If a manufacturer does not receive payment in full from a
distributor within 30 days of the delivery of gambling
equipment, the manufacturer must notify the board in writing of
the delinquency.
(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.
Sec. 85. Minnesota Statutes 1992, section 349.191,
subdivision 4, is amended to read:
Subd. 4. [CREDIT; POSTDATED CHECKS.] For purposes of
this subdivision section, "credit" includes acceptance by a
manufacturer or distributor of a postdated check in payment for
gambling equipment.
Sec. 86. Minnesota Statutes 1992, section 349.211,
subdivision 1, is amended to read:
Subdivision 1. [BINGO.] Except as provided in subdivision
2, prizes for a single bingo game may not exceed $100 except
prizes for a cover-all game, which may exceed $100 if the
aggregate value of all cover-all prizes in a bingo occasion does
not exceed $500 $1,000. Total prizes awarded at a bingo
occasion may not exceed $2,500, unless a cover-all game is
played in which case the limit is $3,000 $3,500. 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.
Sec. 87. Minnesota Statutes 1992, section 349.211,
subdivision 2, is amended to read:
Subd. 2. [BINGO CUMULATIVE PRICES PROGRESSIVE BINGO
GAMES.] A prize of up to $1,000 may be awarded for a single
progressive bingo game if the prize is an accumulation of prizes
not won in games in previous bingo occasions, including a
cover-all game. The prize for a progressive bingo game may
start at $300 and be increased by up to $100 for each occasion
during which the progressive bingo game is played. A
consolation prize of up to $100 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 cumulative progressive bingo game prizes in
any calendar year may not exceed $12,000 $36,000. For bingo
occasions in which a cumulative prize is awarded the aggregate
value of prizes which may be awarded for the occasion is
increased by the amount of the cumulative prize so awarded less
$100.
Sec. 88. Minnesota Statutes 1992, section 349.211,
subdivision 2a, is amended to read:
Subd. 2a. [PULL-TAB PRIZES.] The maximum prize which may
be awarded for any single pull-tab is $250 $500. An
organization may not sell any pull-tab for more than $2.
Sec. 89. Minnesota Statutes 1992, section 349.2125,
subdivision 1, is amended to read:
Subdivision 1. [CONTRABAND DEFINED.] The following are
contraband:
(1) all pull-tab or tipboard deals that do not have stamps
affixed to them as provided in section 349.162 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, or from one
distributor to another between locations outside this state, the
pull-tab and tipboard deals are not contraband, notwithstanding
the provisions of clause 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; and
(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 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; and
(13) any pull-tab or tipboard deals or portions of deals on
which the tax imposed under chapter 297E has not been paid.
Sec. 90. Minnesota Statutes 1992, section 349.2125,
subdivision 3, is amended to read:
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
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 the a tax imposed by section
349.2121, subdivision 4 chapter 297E, the seizing authority
shall release the property seized without further legal
proceedings.
Sec. 91. Minnesota Statutes 1992, section 349.2127,
subdivision 2, is amended to read:
Subd. 2. [PROHIBITION AGAINST POSSESSION.] (a) A person,
other than a licensed distributor, 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, firm, or organization 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 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.
Sec. 92. Minnesota Statutes 1992, section 349.2127,
subdivision 3, is amended to read:
Subd. 3. [FALSE INFORMATION.] (a) A person is guilty of a
felony if the person is required by section 349.2121,
subdivision 2, to keep records or to make returns and falsifies
or fails to keep the records or falsifies or fails to make the
returns.
(b) 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; or
(2) knowingly submits materially false information in any
report, document, or other communication submitted to the
commissioner of revenue in connection with lawful gambling or
with any provision of this chapter 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
gambling enforcement a pull-tab or tipboard deal invoice, or a
copy of the invoice, that contains materially false information.
Sec. 93. Minnesota Statutes 1992, section 349.2127,
subdivision 4, is amended to read:
Subd. 4. [TRANSPORTING UNSTAMPED DEALS.] A person is
guilty of a gross misdemeanor who transports into, or causes to
be transported into, receives, carries, or 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.
Sec. 94. Minnesota Statutes 1992, section 349.2127, is
amended by adding a subdivision to read:
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 a bingo game exempt or excluded from licensing.
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).
Sec. 95. Minnesota Statutes 1992, section 349.2127, is
amended by adding a subdivision to read:
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.
Sec. 96. Minnesota Statutes 1992, section 349.213,
subdivision 1, is amended to read:
Subdivision 1. [LOCAL REGULATION.] (a) A statutory or home
rule city or county has the authority to adopt more stringent
regulation of lawful gambling within its jurisdiction, including
the prohibition of lawful gambling, and may require a permit for
the conduct of gambling exempt from licensing under section
349.166. 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 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 4 8, or 349.212 297E.02; provided, however, that an
ordinance requirement that such organizations must contribute
ten percent 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 lawful purposes, is not considered an
expenditure to the city or county nor a tax under section
349.212, and is valid and lawful.
(b) A statutory or home rule city or county may by
ordinance require that a licensed organization conducting lawful
gambling within its jurisdiction expend all or a portion of its
expenditures for lawful purposes on lawful purposes conducted or
located within the city's or county's trade area. Such an
ordinance must 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 contiguous to the defining
city.
(c) A more stringent regulation or prohibition of lawful
gambling adopted by a political subdivision under this
subdivision must apply equally to all forms of lawful gambling
within the jurisdiction of the political subdivision, except a
political subdivision may prohibit the use of paddlewheels.
Sec. 97. Minnesota Statutes 1992, section 541.21, is
amended to read:
541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.]
Every note, bill, bond, mortgage, or other security or
conveyance in which the whole or any part of the consideration
shall be for any money or goods won by gambling or playing at
cards, dice, or any other game whatever, or by betting on the
sides or hands of any person gambling, or for reimbursing or
repaying any money knowingly lent or advanced at the time and
place of such gambling or betting, or lent and advanced for any
gambling or betting to any persons so gambling or betting, shall
be void and of no effect as between the parties to the same, and
as to all persons except such as hold or claim under them in
good faith, without notice of the illegality of the
consideration of such contract or conveyance. The provisions of
this section shall not apply to: (1) pari-mutuel wagering
conducted under a license issued pursuant to chapters chapter
240 and 349 or; (2) purchase of tickets in the state lottery
under chapter 349A, or to; (3) gaming activities conducted
pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et
seq.; or (4) lawful gambling activities permitted under chapter
349.
Sec. 98. [REPORT ON RULES.]
The board shall develop and submit to the legislature by
January 15, 1995, a detailed implementation plan, including
proposed rules and legislation to provide for sale of pull-tabs
from dispensing devices. The rules must not be effective before
June 1, 1995.
Sec. 99. [REPEALER.]
Minnesota Statutes 1992, sections 349.16, subdivisions 4
and 5; 349.161, subdivisions 3, 6, and 7; 349.163, subdivisions
1a and 2a; 349.164, subdivisions 3, 5, and 8; and 349.167,
subdivisions 3 and 5; are repealed.
Sec. 100. [EFFECTIVE DATE.]
The requirement that a paddleticket must have a bar code is
effective July 1, 1995. The rulemaking authority granted in
this act is effective the day following final enactment.
Section 41 is effective the day following final enactment and
applies to all applications submitted to the board on or after
December 1, 1993.
ARTICLE 6
STATE LOTTERY
Section 1. Minnesota Statutes 1992, section 349A.06, is
amended by adding a subdivision to read:
Subd. 1a. [SALES AT AIRPORT.] The metropolitan airports
commission shall permit the sale of lottery tickets at the
Minneapolis-St. Paul International Airport in at least each
concourse of the Lindbergh terminal, or at other locations
mutually agreed to by the director and the commission. The
director shall issue a contract to a nonprofit organization to
operate an independent kiosk to sell lottery tickets at the
airport.
Sec. 2. Minnesota Statutes 1992, section 349A.10, is
amended by adding a subdivision to read:
Subd. 6. [BUDGET APPEARANCE.] The director shall appear at
least once each fiscal year before the senate and house of
representatives committees having jurisdiction over gambling
policy to present and explain the lottery's budget and spending
plans for the next fiscal year.
Sec. 3. Minnesota Statutes 1992, section 349A.12,
subdivision 1, is amended to read:
Subdivision 1. [PURCHASE BY MINORS.] A person under the
age of 18 years may not buy or redeem for a prize a ticket in
the state lottery.
Sec. 4. Minnesota Statutes 1992, section 349A.12,
subdivision 2, is amended to read:
Subd. 2. [SALE TO MINORS.] A lottery retailer may not sell
and a lottery retailer or other person may not furnish or redeem
for a prize a ticket in the state lottery to any person under
the age of 18 years. It is an affirmative defense to a charge
under this subdivision for the lottery retailer or other person
to prove by a preponderance of the evidence that the lottery
retailer or other person reasonably and in good faith relied
upon representation of proof of age described in section
340A.503, subdivision 6, in making the sale or furnishing or
redeeming the ticket.
Sec. 5. Minnesota Statutes 1992, section 349A.12,
subdivision 5, is amended to read:
Subd. 5. [EXCEPTIONS.] Nothing in this chapter prohibits
giving a state lottery ticket as a gift, or buying provided that
a state lottery ticket as a gift for may not be given to a
person under the age of 18.
Sec. 6. Minnesota Statutes 1992, section 349A.12,
subdivision 6, is amended to read:
Subd. 6. [VIOLATIONS.] A violation of subdivision 1 is a
petty misdemeanor. A violation of subdivision 1 or 2 or a rule
adopted by the director is a misdemeanor. A violation of
subdivision 3 or 4 is a gross misdemeanor.
Sec. 7. [TRANSITION.]
Sections 2 to 4 shall not prohibit a person under the age
of 18 from redeeming a prize for a lottery ticket furnished to
that person if the ticket was purchased prior to the effective
date of these sections or if the lottery ticket was for an
instant game that was introduced by the Minnesota state lottery
prior to the effective date of this act. A person under the age
of 18 may only claim a prize for the lottery under this section
by presenting the lottery ticket at a Minnesota state lottery
office or by mailing the ticket to the Minnesota state lottery.
Any prize for the lottery redeemed under this section will be
subject to Minnesota Statutes, section 349A.08, subdivision 3,
and the applicable game procedures adopted by the director of
the lottery.
Sec. 8. [EFFECTIVE DATE.]
Section 1 is effective January 1, 1995. Sections 2 to 7
are effective August 1, 1994.
ARTICLE 7
INDIAN GAMING
Section 1. Minnesota Statutes 1992, section 3.9221,
subdivision 2, is amended to read:
Subd. 2. [NEGOTIATIONS AUTHORIZED.] The governor or the
governor's designated representatives shall, pursuant to section
11 of the act, negotiate in good faith a tribal-state compact
regulating the conduct of class III gambling, as defined in
section 4 of the act, on Indian lands of a tribe requesting
negotiations. The agreement may include any provision
authorized under section 11(d)(3)(C) of the act. The attorney
general is the legal counsel for the governor or the governor's
representatives in regard to negotiating a compact under this
section. If the governor appoints designees to negotiate under
this subdivision, the designees must include at least two
members of the senate and two members of the house of
representatives, two of whom must be the chairs of the senate
and house of representatives standing committees with
jurisdiction over gambling policy.
Sec. 2. Minnesota Statutes 1992, section 3.9221,
subdivision 5, is amended to read:
Subd. 5. [REPORT.] The governor, the attorney general, and
the governor's designated representatives shall report to the
house and senate committees having jurisdiction over gambling
regulation semiannually annually. This report shall contain
information on compacts negotiated, and an outline of
prospective negotiations.
Sec. 3. [INDIAN GAMING REVOLVING ACCOUNT.]
The attorney general shall deposit in a separate account in
the state treasury all money received from Indian tribal
governments for the purpose of defraying the attorney general's
costs in providing legal services with respect to Indian
gaming. Money in the account is appropriated to the attorney
general for that purpose.
Sec. 4. Minnesota Statutes 1992, section 299L.02,
subdivision 5, is amended to read:
Subd. 5. [BACKGROUND CHECKS.] In any background check
required to be conducted by the division of gambling enforcement
under this chapter, chapter 240, 349, or 349A, or section
3.9221, the director may, or shall when required by law, require
that fingerprints be taken and the director may forward the
fingerprints to the Federal Bureau of Investigation for the
conducting of a national criminal history check. The director
may charge a fee for fingerprint recording and investigation
under section 3.9221.
Sec. 5. Minnesota Statutes 1992, section 299L.02, is
amended by adding a subdivision to read:
Subd. 7. [REVOLVING ACCOUNT.] The director shall deposit
in a separate account in the state treasury all money received
from Indian tribal governments for charges for investigations
and background checks under compacts negotiated under section
3.9221. Money in the account is appropriated to the director for
the purpose of carrying out the director's powers and duties
under those compacts.
Sec. 6. [MINIMUM AGE.]
Subdivision 1. [RENEGOTIATION OF COMPACTS.] The governor,
pursuant to Minnesota Statutes, section 3.9221, shall take all
feasible steps to renegotiate all compacts negotiated under that
section for the purpose of establishing a minimum age of 21
years for participating in gambling authorized under the Indian
gaming regulatory act, Public Law Number 100-497, and future
amendments to it.
Subd. 2. [LEGISLATIVE INTENT.] It is the intent of the
legislature that, in the event a minimum age of 21 is negotiated
with more than one-half of the tribes that conduct gaming in
Minnesota, legislation will be enacted adopting the same minimum
age for gambling conducted under Minnesota Statutes, chapters
240, 349, and 349A.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 and 2 are effective June 1, 1994. Sections 3 to
5 are effective July 1, 1994. Section 6 is effective the day
following final enactment.
ARTICLE 8
MISCELLANEOUS
Section 1. [4.47] [REPORT ON COMPULSIVE GAMBLING.]
The governor shall report to the legislature by February 1
of each odd-numbered year on the state's progress in addressing
the problem of compulsive gambling. The report must include:
(1) a summary of available data describing the extent of
the problem in Minnesota;
(2) a summary of programs, both governmental and private,
that
(i) provide diagnosis and treatment for compulsive
gambling,
(ii) enhance public awareness of the problem and the
availability of compulsive gambling services,
(iii) are designed to prevent compulsive gambling and other
problem gambling by elementary and secondary school students and
vulnerable adults;
(iv) offer professional training in the identification,
referral, and treatment of compulsive gamblers;
(3) the likely impact on compulsive gambling of each form
of gambling; and
(4) budget recommendations for state-level compulsive
gambling programs and activities.
Sec. 2. [325E.42] [DECEPTIVE TRADE PRACTICES; GAMBLING
ADVERTISING AND MARKETING CLAIMS.]
Subdivision 1. [REGULATION.] All advertising or marketing
materials relating to the conduct of any form of legal gambling
in Minnesota, including informational or promotional materials,
must:
(1) be sufficiently clear to prevent deception; and
(2) not overstate expressly, or by implication, the
attributes or benefits of participating in legal gambling.
Subd. 2. [ATTORNEY GENERAL'S ACTIONS.] The attorney
general may bring an action against any person violating this
section in accordance with section 8.31, except that no private
action is permitted to redress or correct a violation of this
section.
Subd. 3. [ADVERTISING MEDIA EXCLUDED.] This section
applies to actions of the owner, publisher, agent, or employee
of newspapers, magazines, other printed matter, or radio or
television stations or other advertising media used for the
publication or dissemination of an advertisement or marketing
materials, only if the owner, publisher, agent, or employee has
been personally served with a certified copy of a court order or
consent judgment or agreement prohibiting the publication of
particular gambling advertising or marketing materials and
thereafter publishes such materials.
Sec. 3. [LEGISLATIVE FINDINGS.]
The legislature finds that:
(a) The professional and amateur sports protection act of
1992 has been signed into law as Public Law Number 102-559.
(b) Public Law Number 102-559 prohibits any state from
operating or permitting any organized wagering on sports events,
but excludes those states which had as of October 2, 1992,
enacted legislation or had a referendum pending that would
legalize organized wagering on sports events, either by the
state or by private entities.
(c) By passage of Public Law Number 102-559 Congress has
infringed on the traditional rights of states to make their own
determinations as to appropriate methods of controlling or
combatting illegal gambling or raising state revenue, and raises
serious questions as to possible violations of the tenth
amendment to the United States Constitution.
(d) The exemptions granted in Public Law Number 102-559 to
a handful of states are unreasonable, arbitrary, and
discriminatory.
Sec. 4. [ATTORNEY GENERAL TO CONSIDER ACTION.]
The attorney general shall examine and analyze the legal
issues involved and the propriety of bringing an action in the
appropriate federal court to determine the constitutionality of
Public Law Number 102-559 to the extent that it infringes on the
authority of the legislature to enact legislation relating to
organized wagering on sports events. After this examination and
analysis the attorney general may, at the attorney general's
discretion, bring such an action to determine the
constitutionality of Public Law Number 102-559. No such action
may be brought before May 1, 1995. By March 1, 1995, the
attorney general shall report to the legislature on the attorney
general's activities under this section.
Sec. 5. [ADVISORY COUNCIL.]
Subdivision 1. [COUNCIL ESTABLISHED.] An advisory council
on gambling is created to study the conduct of all forms of
gambling in Minnesota and advise the governor and legislature on
all aspects of state policy on gambling.
Subd. 2. [MEMBERSHIP.] The council consists of 14 members,
as follows:
(1) one member, appointed by the governor, who shall be the
person on the governor's staff who is the primary responsible
person on the governor's staff for gambling policy, who shall
act as chair of the council;
(2) eight members appointed by the governor, each of whom
must reside in a different congressional district;
(3) one member appointed by the attorney general who must
be an attorney in the attorney generals' office; and
(4) the chairs of the committees having jurisdiction over
gambling in the senate and the house of representatives, a
member of the minority party in the house of representatives
appointed by the speaker of the house and a member of the
minority party of the senate appointed by the subcommittee on
committees of the senate committee on rules and administration.
Subd. 3. [DUTIES.] The council has the following duties:
(1) to consult with state agencies responsible for gambling
operation, policy, regulation, or enforcement, either on its own
initiative or on the initiative of the agency;
(2) to assist the governor in making recommendations
contained in the compulsive gambling report required by section
1;
(3) to advise the governor on the development of a
socio-economic model to support decision making on gambling
issues; and
(4) conduct the study required under subdivision 4.
Subd. 4. [STUDY.] The advisory council shall study all
forms of gambling conducted in Minnesota. The study shall
include but not be limited to the following areas and issues:
(1) the extent of all forms of gambling in this state;
(2) the purpose, intent, application, integration, and
relationship of the provisions of Minnesota laws relating to all
forms of gambling in the state;
(3) the relationship among the state government boards and
agencies that regulate gambling, including consideration of
abolishing the current boards that regulate gambling and
replacing them with a single permanent advisory board;
(4) the nature and extent of gambling in the state that is
not subject to state regulation;
(5) the financial and social impact of the growth of
gambling in the last decade;
(6) the likely results of authorization of use of video
lottery machines in the state;
(7) the appropriate level of regulation for the lawful
gambling industry in Minnesota;
(8) proposals for changes in taxes on pull-tabs and
tipboards to reflect unsold tickets; and
(9) expenditures of net profits from lawful gambling for
real estate taxes on premises used for lawful gambling.
Subd. 5. [CONTENTS OF REPORT.] The advisory council's
report to the legislature and governor must include
recommendations regarding:
(1) development of a comprehensive public policy on
gambling;
(2) establishment of an efficient state government
structure for regulation of gambling; and
(3) implementation and funding of compulsive gambling
programs.
Subd. 6. [STAFF.] The staff of the state lottery and
legislative staff shall provide administrative and staff
assistance when requested by the advisory council.
Administrative costs of the advisory council will be paid by the
state lottery.
Subd. 7. [COOPERATION BY OTHER AGENCIES.] State agencies
shall, upon request of the advisory council, provide data or
other information that the agencies collect or possess and that
is necessary or useful in conducting the study and preparing the
report required by this section.
Subd. 8. [REPORTS.] The advisory council shall, on
February 1, 1995, and February 1, 1996, report to the governor
and legislature on the results of it studies under subdivisions
4 and 5.
Sec. 6. [SOCIO-ECONOMIC MODEL.]
The governor shall include in the governor's budget
proposals for the 1996-1997 biennium a proposal to create and
maintain a socio-economic model that will allow executive
agencies and the legislature to estimate the social, economic,
and public revenue effects of different forms of gambling and
changes in Minnesota gambling laws.
Sec. 7. [INTENT.]
It is the intent of the legislature to establish a
permanent source of funding for compulsive gambling programs
using state revenues generated from legal forms of gambling in
the state and contributions from Indian tribes conducting gaming
under tribal-state compacts.
Sec. 8. [APPROPRIATIONS.]
Subdivision 1. [COMPULSIVE GAMBLING.] For the fiscal year
beginning July 1, 1994, the state lottery board shall deposit
$1,000,000 in the general fund for use by the commissioner of
human services to pay for compulsive gambling services. The
amount deposited by the board shall be deducted from the lottery
prize fund established under Minnesota Statutes, section
349A.10, subdivision 2. The amount deposited is appropriated to
the commissioner of human services for this purpose. No more
than 12 percent of the amount appropriated for compulsive
gambling services under this section may be used to pay
administrative costs of the department of human services. The
deposit in this section is in addition to the reimbursement
required by Laws 1993, chapter 146, article 3, section 4.
Subd. 2. [GAMBLING CONTROL BOARD.] $45,000 is appropriated
from the general fund to the gambling control board for fiscal
year 1995. Of this amount:
(1) $5,000 is for rulemaking to provide for implementation
of pull-tab dispensing devices; and
(2) $40,000 is for increased duties under article 5,
section 41.
Sec. 9. [EFFECTIVE DATE.]
Sections 3 and 4 are effective the day following final
enactment. Section 5 is effective the day following final
enactment and is repealed February 1, 1996. Section 8 is
effective July 1, 1994.
Presented to the governor May 6, 1994
Signed by the governor May 10, 1994, 4:00 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes