1.1                          A bill for an act
  1.2             relating to gambling; authorizing certain counties to 
  1.3             establish and operate casinos; authorizing certain 
  1.4             types of gambling to be conducted at county-operated 
  1.5             casinos; providing a penalty; amending Minnesota 
  1.6             Statutes 1994, sections 297A.25, by adding a 
  1.7             subdivision; 541.21; and 609.761, by adding a 
  1.8             subdivision; Minnesota Statutes 1995 Supplement, 
  1.9             section 299L.07, subdivision 2a; proposing coding for 
  1.10            new law as Minnesota Statutes, chapter 349C. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12                             ARTICLE 1 
  1.13                         CASINOS AUTHORIZED
  1.14     Section 1.  [349C.01] [DEFINITIONS.] 
  1.15     For purposes of this chapter: 
  1.16     (1) "Blackjack" means a card game in which each player's 
  1.17  aim is to obtain from the dealer cards totaling 21 points, or as 
  1.18  near as possible to that total without exceeding it.  Blackjack 
  1.19  does not include any electronic or mechanical simulation of the 
  1.20  game of blackjack. 
  1.21     (2) "Casino" means an establishment, owned or leased by a 
  1.22  county so authorized under section 349C.02, in which gambling is 
  1.23  conducted as authorized in this chapter. 
  1.24     (3) "Commissioner" means the commissioner of public safety. 
  1.25     (4) "Gambling equipment" means any device including any 
  1.26  electronic or mechanical device, paper, tickets, chips, or decks 
  1.27  of cards used in the conduct of gambling under this chapter. 
  1.28     (5) "Video gambling device" means an electronic machine 
  2.1   that, upon the insertion of a coin, token, or currency, is 
  2.2   available to play or simulate the play of a game using a video 
  2.3   display and microprocessors in which, entirely or primarily by 
  2.4   chance, a player may receive money, tokens, free plays, or 
  2.5   credits that may be redeemed for something of value. 
  2.6      Sec. 2.  [349C.02] [COUNTY CASINOS AUTHORIZED.] 
  2.7      Subdivision 1.  [COUNTIES MAY ESTABLISH.] The governing 
  2.8   body of any county that contains an establishment in which 
  2.9   gambling is conducted under authority of a tribal-state compact 
  2.10  negotiated under section 3.9221 may establish a casino at a 
  2.11  location within the county and may operate the casino or provide 
  2.12  for its operation under subdivision 4. 
  2.13     Subd. 2.  [FORMS OF GAMBLING ALLOWED.] The following forms 
  2.14  of gambling may be conducted at a casino established under 
  2.15  subdivision 1: 
  2.16     (1) any form of gambling that is defined as class II 
  2.17  gambling under the Indian gaming regulatory act, Public Law 
  2.18  Number 100-497, and future amendments to it, and that is being 
  2.19  conducted by one or more Indian tribes in Minnesota under 
  2.20  authority of that act; and 
  2.21     (2) any form of gambling that an Indian tribe may conduct 
  2.22  under authority of a tribal-state compact negotiated under 
  2.23  section 3.9221. 
  2.24     Subd. 3.  [LOCAL AUTHORITY.] A county may not establish a 
  2.25  casino under this section in any city unless the governing body 
  2.26  of the city has by a majority vote of all members approved the 
  2.27  location of the casino. 
  2.28     Subd. 4.  [OPERATION.] A county establishing a casino under 
  2.29  this section may operate the casino or may by contract provide 
  2.30  for the operation of the casino by another entity licensed under 
  2.31  section 349C.05. 
  2.32     Sec. 3.  [349C.03] [RULES FOR CONDUCT OF GAMBLING.] 
  2.33     Subdivision 1.  [RULES GENERALLY.] The commissioner may by 
  2.34  rule provide for the regulation of gambling at casinos 
  2.35  authorized under this chapter.  In addition to all other 
  2.36  authority for rules in this chapter, the commissioner may make 
  3.1   such rules governing the conduct of gambling in a casino 
  3.2   authorized under this section as the commissioner determines are 
  3.3   necessary to ensure the integrity of such gambling. 
  3.4      Subd. 2.  [CLASS II GAMES.] Rules for gambling authorized 
  3.5   under section 349C.02, subdivision 2, clause (1), must provide 
  3.6   for: 
  3.7      (1) the conduct of games; 
  3.8      (2) prizes and prize limits; 
  3.9      (3) the extent to which play on anything other than a cash 
  3.10  basis may be permitted; 
  3.11     (4) equipment, including mechanical or electronic 
  3.12  equipment, used in the conduct of gambling, and specifications 
  3.13  therefor; and 
  3.14     (5) posting of the rules of play. 
  3.15     Subd. 3.  [VIDEO GAMBLING DEVICES.] Rules for the conduct 
  3.16  of gambling on video gambling devices in a casino authorized 
  3.17  under this chapter must provide for: 
  3.18     (1) specifications of video gambling devices; 
  3.19     (2) prizes and prize limits; 
  3.20     (3) the extent to which play on anything other than a cash 
  3.21  basis may be permitted; 
  3.22     (4) minimum and maximum prize payout percentages for each 
  3.23  machine and for all machines collectively in a casino; 
  3.24     (5) posting of the rules of play; and 
  3.25     (6) limitations on access to interior components of video 
  3.26  gambling devices. 
  3.27     Subd. 4.  [BLACKJACK.] Rules for blackjack at a casino 
  3.28  authorized under this chapter must provide for: 
  3.29     (1) conduct of the game of blackjack; 
  3.30     (2) posting of rules of play; 
  3.31     (3) the extent to which play on anything other than a cash 
  3.32  basis may be permitted; 
  3.33     (4) specifications of cards; 
  3.34     (5) limits on wagers; 
  3.35     (6) conduct of tournaments; and 
  3.36     (7) staffing and surveillance requirements. 
  4.1      Sec. 4.  [349C.04] [INSPECTIONS; ACCESS.] 
  4.2      Subdivision 1.  [ACCESS TO PREMISES AND RECORDS.] The 
  4.3   commissioner and the commissioner's agents have free and open 
  4.4   access to all parts of the premises of a casino established 
  4.5   under this chapter and may inspect the premises and any gambling 
  4.6   equipment therein at any reasonable time without notice.  The 
  4.7   commissioner and the commissioner's agents may inspect and audit 
  4.8   any books, records, accounts, and other documents of the 
  4.9   casino.  The right of access in this subdivision extends to any 
  4.10  books, records, accounts, or other documents of the county that 
  4.11  the commissioner determines are reasonably related to the 
  4.12  operation of a casino under this chapter. 
  4.13     Subd. 2.  [SUBPOENA POWER.] The commissioner may issue 
  4.14  subpoenas to compel the attendance of witnesses and the 
  4.15  production of documents, books, records, and other evidence 
  4.16  relating to any investigation or audit the commissioner is 
  4.17  authorized to conduct under subdivision 1. 
  4.18     Sec. 5.  [349C.05] [OCCUPATIONAL LICENSES.] 
  4.19     Subdivision 1.  [LICENSED OCCUPATIONS; FEES.] The 
  4.20  commissioner shall by rule designate those occupations in a 
  4.21  casino authorized under this chapter that require licensing in 
  4.22  order to ensure the integrity of gambling in the casino.  No 
  4.23  person may be employed at a casino in an occupation so 
  4.24  designated unless the person has a license issued by the 
  4.25  commissioner.  The rule must designate the license fee for each 
  4.26  designated occupation.  The commissioner shall set each fee in 
  4.27  an amount that the commissioner determines is sufficient to 
  4.28  cover the commissioner's costs in investigating the applicant 
  4.29  and issuing the license. 
  4.30     Subd. 2.  [APPLICATION.] An application for a license under 
  4.31  this section must be on a form the commissioner prescribes and 
  4.32  must be accompanied by an affidavit of qualification that the 
  4.33  applicant: 
  4.34     (a) has never been convicted of a felony in a state or 
  4.35  federal court and does not have a state or federal felony charge 
  4.36  pending; 
  5.1      (b) is not and never has been connected with or engaged in 
  5.2   an illegal business; and 
  5.3      (c) has never been found guilty of a serious gambling 
  5.4   offense, as defined by rule of the commissioner, in Minnesota or 
  5.5   another jurisdiction. 
  5.6      Subd. 3.  [LICENSE ISSUANCE.] If the commissioner 
  5.7   determines that the applicant is qualified for the occupation 
  5.8   for which licensing is sought and will not adversely affect the 
  5.9   public health, welfare, and safety or the integrity of gambling 
  5.10  in Minnesota, it may issue an occupational license to the 
  5.11  applicant.  If it makes a similar finding for a renewal of an 
  5.12  occupational license, it may renew the license.  Licenses under 
  5.13  this section are effective for one year. 
  5.14     Subd. 4.  [REVOCATION AND SUSPENSION.] (a) The commissioner 
  5.15  may revoke a license under this section for a violation of law 
  5.16  or rule which in the commissioner's opinion adversely affects 
  5.17  the integrity of gambling, or for an intentional false statement 
  5.18  made in a license application. 
  5.19     (b) The commissioner may suspend a license under this 
  5.20  section for up to one year for a violation of law, order, or 
  5.21  rule. 
  5.22     (c) A license revocation or suspension under this section 
  5.23  is a contested case under sections 14.57 to 14.69 of the 
  5.24  administrative procedure act and is in addition to criminal 
  5.25  penalties imposed for a violation of law or rule. 
  5.26     Sec. 6.  [349C.06] [MANAGEMENT LICENSES.] 
  5.27     Subdivision 1.  [LICENSE REQUIRED; FEE.] A county operating 
  5.28  a casino under this chapter may not employ or contract with an 
  5.29  individual, firm, corporation, association, or partnership to 
  5.30  provide management services at the casino unless the individual, 
  5.31  firm, corporation, association, or partnership has been issued a 
  5.32  management license by the commissioner.  The commissioner shall 
  5.33  by rule establish the annual fee for a license under this 
  5.34  section in an amount that, when added to any investigation fee 
  5.35  charged under subdivision 3, is sufficient to cover the 
  5.36  commissioner's costs in investigating the applicant and issuing 
  6.1   the license. 
  6.2      Subd. 2.  [APPLICATION.] An application for a management 
  6.3   license must be on a form the commissioner prescribes.  The 
  6.4   commissioner may require such information of the applicant as 
  6.5   the commissioner determines is necessary to ensure that the 
  6.6   applicant is qualified for licensing under this section. 
  6.7      Subd. 3.  [INVESTIGATION.] The commissioner shall 
  6.8   investigate the background, financial responsibility, security, 
  6.9   and integrity of any person who applies for licensing under this 
  6.10  section and may require the applicant to pay the costs of the 
  6.11  investigation. 
  6.12     Subd. 4.  [LICENSE ACTIONS.] (a) The commissioner may not 
  6.13  issue or renew a license under this chapter, and shall revoke a 
  6.14  license under this chapter, if the applicant or licensee, or a 
  6.15  director, officer, partner, governor, person in a supervisory or 
  6.16  management position of the applicant or licensee, an employee 
  6.17  eligible to make sales on behalf of the applicant or licensee, 
  6.18  or a direct or indirect holder of more than a five percent 
  6.19  financial interest in the applicant or licensee: 
  6.20     (1) has ever been convicted of a felony, or of a crime 
  6.21  involving gambling; 
  6.22     (2) has ever been convicted of (i) assault, (ii) a criminal 
  6.23  violation involving the use of a firearm, or (iii) making 
  6.24  terroristic threats; 
  6.25     (3) is or has ever been connected with or engaged in an 
  6.26  illegal business; 
  6.27     (4) owes $500 or more in delinquent taxes as defined in 
  6.28  section 270.72; 
  6.29     (5) had a sales and use tax permit revoked by the 
  6.30  commissioner of revenue within the past two years; 
  6.31     (6) after demand, has not filed tax returns required by the 
  6.32  commissioner of revenue; or 
  6.33     (7) had a license or permit revoked or denied by another 
  6.34  jurisdiction for a violation of law or rule relating to gambling.
  6.35     The commissioner may deny or refuse to renew a license 
  6.36  under this chapter, and may revoke a license under this chapter, 
  7.1   if any of the conditions in this subdivision are applicable to 
  7.2   an affiliate of or a direct or indirect holder of more than a 
  7.3   five percent financial interest in the applicant or licensee. 
  7.4      (b) The commissioner may by order deny, suspend, revoke, or 
  7.5   refuse to renew a license if the commissioner finds that the 
  7.6   order is in the public interest and that the applicant or 
  7.7   licensee, or a director, officer, partner, person in a 
  7.8   supervisory or management position of the applicant or licensee, 
  7.9   or an employee eligible to make sales on behalf of the applicant 
  7.10  or licensee: 
  7.11     (1) has violated or failed to comply with any provision of 
  7.12  this chapter, or any rule adopted or order issued thereunder; 
  7.13     (2) has filed an application for a license that is 
  7.14  incomplete in any material respect or contains a statement that, 
  7.15  in light of the circumstances under which it was made, is false, 
  7.16  misleading, fraudulent, or a misrepresentation; 
  7.17     (3) has made a false statement in a document or report 
  7.18  required to be submitted to the commissioner, or the 
  7.19  commissioner of revenue, or has made a false statement in a 
  7.20  statement made to the commissioner; 
  7.21     (4) has been convicted of a crime in another jurisdiction 
  7.22  that would be a felony if committed in Minnesota; 
  7.23     (5) is permanently or temporarily enjoined by any gambling 
  7.24  regulatory agency from engaging in or continuing any conduct or 
  7.25  practice involving any aspect of gambling; 
  7.26     (6) has had a gambling-related license revoked or 
  7.27  suspended, has paid or been required to pay a monetary penalty 
  7.28  of $2,500 or more, by a gambling regulator in another state or 
  7.29  jurisdiction, or has violated or failed to comply with an order 
  7.30  of a regulator that imposed those actions; 
  7.31     (7) has been the subject of any of the following actions by 
  7.32  the director or commissioner:  (i) had a license under this 
  7.33  chapter denied, suspended, or revoked; (ii) been censured, 
  7.34  reprimanded, or has paid or been required to pay a monetary 
  7.35  penalty or fine; or (iii) has been the subject of any other 
  7.36  discipline by the commissioner; 
  8.1      (8) has engaged in conduct that is contrary to the public 
  8.2   health, welfare, or safety, or to the integrity of gambling; or 
  8.3      (9) based on the licensee's past activities or criminal 
  8.4   record, poses a threat to the public interest or to the 
  8.5   effective regulation and control of gambling, or creates or 
  8.6   enhances the danger of unsuitable, unfair, or illegal practices, 
  8.7   methods, and activities in the conduct of gambling or the 
  8.8   carrying on of the business and financial arrangements 
  8.9   incidental to the conduct of gambling. 
  8.10     Sec. 7.  [349C.07] [LICENSES; GENERAL PROVISIONS.] 
  8.11     Subdivision 1.  [ACCESS TO CRIMINAL HISTORY.] The 
  8.12  commissioner has access to all criminal history data compiled by 
  8.13  the bureau of criminal apprehension on any person licensed or 
  8.14  applying for a license under this chapter. 
  8.15     Subd. 2.  [FINGERPRINTING.] In any background check 
  8.16  undertaken in connection with a license application under this 
  8.17  chapter, the commissioner may (1) require that fingerprints be 
  8.18  taken; (2) forward the fingerprints to the Federal Bureau of 
  8.19  Investigation for the conducting of a national criminal history 
  8.20  check; and (3) charge a fee therefor. 
  8.21     Sec. 8.  [349C.08] (MINIMUM AGE.] 
  8.22     Subdivision 1.  [PERSONS PROHIBITED FROM PARTICIPATING.] No 
  8.23  person under the age of 18 may participate in any gambling 
  8.24  conducted at a casino established under this section. 
  8.25     Subd. 2.  [CASINOS; PROHIBITIONS.] No employee of, or 
  8.26  holder of a management contract with, a casino established under 
  8.27  this section may permit a person under the age of 18 to 
  8.28  participate in any gambling conducted at a casino established 
  8.29  under this section. 
  8.30     Subd. 3.  [PENALTY; DEFENSE.] A violation of subdivision 1 
  8.31  is a misdemeanor.  A violation of subdivision 2 is a gross 
  8.32  misdemeanor.  It is an affirmative defense to a charge under 
  8.33  subdivision 2 for the person accused of the violation to prove 
  8.34  by a preponderance of the evidence that the person reasonably 
  8.35  and in good faith relied upon representation of proof of age 
  8.36  described in section 340A.503, subdivision 6, in permitting the 
  9.1   person under age 18 to participate in gambling in violation of 
  9.2   subdivision 2. 
  9.3      Sec. 9.  [349C.09] [PAYMENTS TO STATE.] 
  9.4      Subdivision 1.  [DETERMINATION.] The commissioner shall 
  9.5   establish by rule a procedure for determining the commissioner's 
  9.6   actual costs in carrying out the commissioner's responsibilities 
  9.7   under this chapter.  Within 15 days after the last day of a 
  9.8   fiscal year, the commissioner shall notify each county 
  9.9   establishing a casino under this section of the amount that the 
  9.10  commissioner determines, using the procedure provided for in 
  9.11  this subdivision, is the county's responsibility for its share 
  9.12  of those costs.  Each county so notified must remit the amount 
  9.13  determined by the commissioner within 15 days of receipt of the 
  9.14  notice. 
  9.15     Subd. 2.  [DISPOSITION OF FUNDS.] All amounts received by 
  9.16  the commissioner under subdivision 1 shall be deposited in a 
  9.17  separate account in the state treasury.  Money in the account is 
  9.18  appropriated to the commissioner for the purpose of carrying out 
  9.19  the commissioner's responsibilities under this chapter. 
  9.20     Sec. 10.  [349C.10] [USE OF NET PROFITS.] 
  9.21     A county establishing a casino under this chapter may use 
  9.22  the net profits from the casino solely for the purpose of 
  9.23  providing property tax relief to owners of real property in the 
  9.24  county. 
  9.25     Sec. 11.  [349C.11] [SUSPENSION OF OPERATION.] 
  9.26     Subdivision 1.  [COMMISSIONER'S ORDER.] The commissioner 
  9.27  may order a casino established under this section to suspend all 
  9.28  gambling at the casino if the commissioner determines that the 
  9.29  casino, an employee acting within the scope of the employee's 
  9.30  employment, or a holder of a contract to provide management 
  9.31  services to the casino has committed a violation of law or rule 
  9.32  that the commissioner determines adversely affects the integrity 
  9.33  of gambling. 
  9.34     Subd. 2.  [DURATION OF SUSPENSION.] (a) Except as provided 
  9.35  in paragraph (b), a suspension under this section may not exceed 
  9.36  30 days. 
 10.1      (b) If a suspension under this section is for a continuing 
 10.2   violation, the commissioner may include in the suspension order 
 10.3   an order that the casino named in the order cease the violation 
 10.4   or, if the violation is committed by an employee or holder of a 
 10.5   management contract, to take actions to ensure that the 
 10.6   violation cease.  The commissioner may continue the suspension 
 10.7   until the commissioner determines that the violation has ceased. 
 10.8      Subd. 3.  [APPEAL; CONTESTED CASE.] A county receiving a 
 10.9   suspension order under this section may appeal the suspension to 
 10.10  the commissioner within ten days of receiving notice of the 
 10.11  suspension.  An appeal under this subdivision is a contested 
 10.12  case under sections 14.57 to 14.69 of the administrative 
 10.13  procedure act. 
 10.14     Subd. 4.  [COURTS TO NOTIFY.] If a county officer, 
 10.15  employee, or management licensee has been convicted in any court 
 10.16  of violating a law or rule relating to gambling, the court must 
 10.17  notify the commissioner within ten days of the conviction. 
 10.18                             ARTICLE 2 
 10.19                       CONFORMING AMENDMENTS
 10.20     Section 1.  Minnesota Statutes 1994, section 297A.25, is 
 10.21  amended by adding a subdivision to read: 
 10.22     Subd. 62.  [PROCEEDS FROM CASINO GAMBLING.] The gross 
 10.23  receipts from gambling conducted at a casino established under 
 10.24  chapter 349C are exempt. 
 10.25     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 10.26  299L.07, subdivision 2a, is amended to read: 
 10.27     Subd. 2a.  [RESTRICTIONS.] (a) A manufacturer licensed 
 10.28  under this section may sell, offer to sell, lease, or rent, in 
 10.29  whole or in part, a gambling device only to a distributor 
 10.30  licensed under this section. 
 10.31     (b) A distributor licensed under this section may sell, 
 10.32  offer to sell, market, rent, lease, or otherwise provide, in 
 10.33  whole or in part, a gambling device only to: 
 10.34     (1) the governing body of a federally recognized Indian 
 10.35  tribe that is authorized to operate the gambling device under a 
 10.36  tribal state compact under the Indian Gaming Regulatory Act, 
 11.1   Public Law Number 100-497, and future amendments to it; 
 11.2      (2) a person for use in the person's dwelling for display 
 11.3   or amusement purposes in a manner that does not afford players 
 11.4   an opportunity to obtain anything of value; or 
 11.5      (3) a casino established under chapter 349C. 
 11.6      Sec. 3.  Minnesota Statutes 1994, section 541.21, is 
 11.7   amended to read: 
 11.8      541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 
 11.9      Every note, bill, bond, mortgage, or other security or 
 11.10  conveyance in which the whole or any part of the consideration 
 11.11  shall be for any money or goods won by gambling or playing at 
 11.12  cards, dice, or any other game whatever, or by betting on the 
 11.13  sides or hands of any person gambling, or for reimbursing or 
 11.14  repaying any money knowingly lent or advanced at the time and 
 11.15  place of such gambling or betting, or lent and advanced for any 
 11.16  gambling or betting to any persons so gambling or betting, shall 
 11.17  be void and of no effect as between the parties to the same, and 
 11.18  as to all persons except such as hold or claim under them in 
 11.19  good faith, without notice of the illegality of the 
 11.20  consideration of such contract or conveyance.  The provisions of 
 11.21  this section shall not apply to:  (1) pari-mutuel wagering 
 11.22  conducted under a license issued pursuant to chapter 240; (2) 
 11.23  purchase of tickets in the state lottery under chapter 349A; (3) 
 11.24  gaming activities conducted pursuant to the Indian Gaming 
 11.25  Regulatory Act, 25 U.S.C. 2701 et seq.; or (4) lawful gambling 
 11.26  activities permitted under chapter 349; or (5) gambling 
 11.27  conducted at a casino established under chapter 349C. 
 11.28     Sec. 4.  Minnesota Statutes 1994, section 609.761, is 
 11.29  amended by adding a subdivision to read: 
 11.30     Subd. 3.  [CASINOS.] Sections 609.755 and 609.76 do not 
 11.31  prohibit the operation of a casino established under chapter 
 11.32  349C or participation in any gambling authorized by law and 
 11.33  conducted at such a casino.