1.1                          A bill for an act 
  1.2             relating to gambling; allowing a class B licensee of a 
  1.3             class A racetrack conducting horse racing to conduct 
  1.4             card club activities; amending Minnesota Statutes 
  1.5             1998, sections 240.01, by adding subdivisions; 240.03; 
  1.6             240.15, subdivision 1; 240.23; 541.20; 541.21; and 
  1.7             609.761, by adding a subdivision; proposing coding for 
  1.8             new law in Minnesota Statutes, chapter 240. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 240.01, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 24.  [CARD CLUB.] "Card club" means a facility or 
  1.13  portion of a facility where the commission has authorized a 
  1.14  licensee to conduct card playing. 
  1.15     Sec. 2.  Minnesota Statutes 1998, section 240.01, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 25.  [CARD PLAYING.] "Card playing" means an activity 
  1.18  wherein individuals compete and wager with each other utilizing 
  1.19  a 52-unit system comprised of a series of numbers, numbered 2 
  1.20  through 10, and the letters J, Q, K, and A, combined with four 
  1.21  symbols commonly known as hearts, diamonds, spades, and clubs, 
  1.22  wherein each individual unit constitutes the display of one of 
  1.23  the 52 possible combinations.  The symbol commonly known as a 
  1.24  joker may be incorporated into the system. 
  1.25     Sec. 3.  Minnesota Statutes 1998, section 240.01, is 
  1.26  amended by adding a subdivision to read: 
  1.27     Subd. 26.  [UNBANKED.] "Unbanked" means a wagering system 
  2.1   or game where the individual participants compete against each 
  2.2   other and not against the sponsor or house.  In an unbanked 
  2.3   system or game, the sponsor or house may deduct a percentage 
  2.4   from the accumulated wagers and impose other charges for hosting 
  2.5   the activity, but it shall not have an interest in the outcome 
  2.6   of any game.  The sponsor or house may add additional prizes, 
  2.7   awards, or money to any game for promotional purposes. 
  2.8      Sec. 4.  Minnesota Statutes 1998, section 240.03, is 
  2.9   amended to read: 
  2.10     240.03 [COMMISSION POWERS AND DUTIES.] 
  2.11     The commission has the following powers and duties:  
  2.12     (1) to regulate horse racing in Minnesota to ensure that it 
  2.13  is conducted in the public interest; 
  2.14     (2) to issue licenses as provided in this chapter; 
  2.15     (3) to enforce all laws and rules governing horse racing; 
  2.16     (4) to collect and distribute all taxes provided for in 
  2.17  this chapter; 
  2.18     (5) to conduct necessary investigations and inquiries and 
  2.19  compel the submission of information, documents, and records it 
  2.20  deems necessary to carry out its duties; 
  2.21     (6) to supervise the conduct of pari-mutuel betting on 
  2.22  horse racing; 
  2.23     (7) to employ and supervise personnel under this chapter; 
  2.24     (8) to determine the number of racing days to be held in 
  2.25  the state and at each licensed racetrack; ~~and~~ 
  2.26     (9) to take all necessary steps to ensure the integrity of 
  2.27  racing in Minnesota; and 
  2.28     (10) to regulate card playing activities authorized by 
  2.29  section 240.30.  
  2.30     Sec. 5.  Minnesota Statutes 1998, section 240.15, 
  2.31  subdivision 1, is amended to read: 
  2.32     Subdivision 1.  [TAXES IMPOSED.] (a) There is imposed a tax 
  2.33  at the rate of six percent of the amount in excess of 
  2.34  $12,000,000 annually withheld from all pari-mutuel pools by the 
  2.35  licensee, including breakage and amounts withheld under section 
  2.36  240.13, subdivision 4, and amounts deducted by the licensee from 
  3.1   accumulated wagers in card playing activities conducted pursuant 
  3.2   to section 240.30.  For the purpose of this subdivision, 
  3.3   "annually" is the period from July 1 to June 30 of the next year.
  3.4      In addition to the above tax, the licensee must designate 
  3.5   and pay to the commission a tax of one percent of the total 
  3.6   amount bet on each racing day, for deposit in the Minnesota 
  3.7   breeders fund.  
  3.8      The taxes imposed by this clause must be paid from the 
  3.9   amounts permitted to be withheld by a licensee under section 
  3.10  240.13, subdivision 4.  
  3.11     (b) The commission may impose an admissions tax of not more 
  3.12  than ten cents on each paid admission at a licensed racetrack on 
  3.13  a racing day if:  
  3.14     (1) the tax is requested by a local unit of government 
  3.15  within whose borders the track is located; 
  3.16     (2) a public hearing is held on the request; and 
  3.17     (3) the commission finds that the local unit of government 
  3.18  requesting the tax is in need of its revenue to meet 
  3.19  extraordinary expenses caused by the racetrack. 
  3.20     Sec. 6.  Minnesota Statutes 1998, section 240.23, is 
  3.21  amended to read: 
  3.22     240.23 [RULEMAKING AUTHORITY.] 
  3.23     The commission has the authority, in addition to all other 
  3.24  rulemaking authority granted elsewhere in this chapter to 
  3.25  promulgate rules governing:  
  3.26     (a) the conduct of horse races held at licensed racetracks 
  3.27  in Minnesota, including but not limited to the rules of racing, 
  3.28  standards of entry, operation of claiming races, filing and 
  3.29  handling of objections, carrying of weights, and declaration of 
  3.30  official results; 
  3.31     (b) wire communications between the premises of a licensed 
  3.32  racetrack and any place outside the premises; 
  3.33     (c) information on horse races which is sold on the 
  3.34  premises of a licensed racetrack; 
  3.35     (d) liability insurance which it may require of all class 
  3.36  A, class B, and class D licensees; 
  4.1      (e) the auditing of the books and records of a licensee by 
  4.2   an auditor employed or appointed by the commission; 
  4.3      (f) emergency action plans maintained by licensed 
  4.4   racetracks and their periodic review; 
  4.5      (g) safety, security, and sanitation of stabling facilities 
  4.6   at licensed racetracks; 
  4.7      (h) entry fees and other funds received by a licensee in 
  4.8   the course of conducting racing which the commission determines 
  4.9   must be placed in escrow accounts; 
  4.10     (i) affirmative action in employment and contracting by 
  4.11  class A, class B, and class D licensees; ~~and~~ 
  4.12     (j) any other aspect of horse racing or pari-mutuel betting 
  4.13  which in its opinion affects the integrity of racing or the 
  4.14  public health, welfare, or safety; and 
  4.15     (k) card playing activities authorized by section 240.30.  
  4.16     Rules of the commission are subject to chapter 14, the 
  4.17  Administrative Procedure Act. 
  4.18     Sec. 7.  [240.30] [CARD CLUBS.] 
  4.19     Subdivision 1.  [AUTHORIZATION.] The commission may 
  4.20  authorize a class B operator of a class A racetrack to operate a 
  4.21  card club and offer card playing services to patrons. 
  4.22     Subd. 2.  [SUPERVISION.] The authorized licensee is 
  4.23  responsible for conducting and supervising the card games and 
  4.24  for providing all necessary equipment, services, and personnel. 
  4.25     Subd. 3.  [TYPE OF WAGERING.] All card club wagering 
  4.26  activities must be conducted in an unbanked format. 
  4.27     Subd. 4.  [CHARGES.] The authorized licensee shall be 
  4.28  allowed to charge patrons for card playing services by deducting 
  4.29  and retaining money from wagers, by charging a fee based on 
  4.30  playing time, or by any other means authorized by the commission.
  4.31     Subd. 5.  [LIMITATION.] The commission shall not allow a 
  4.32  licensee to operate a card club unless the licensee has 
  4.33  conducted at least 50 days of live racing at a class A facility 
  4.34  within the past 12 months or during the preceding calendar year. 
  4.35     Sec. 8.  Minnesota Statutes 1998, section 541.20, is 
  4.36  amended to read: 
  5.1      541.20 [RECOVERY OF MONEY LOST.] 
  5.2      Every person who, by playing at cards, dice, or other game, 
  5.3   or by betting on the hands or sides of such as are gambling, 
  5.4   shall lose to any person so playing or betting any sum of money 
  5.5   or any goods, and pays or delivers the same, or any part 
  5.6   thereof, to the winner, may sue for and recover such money by a 
  5.7   civil action, before any court of competent jurisdiction.  For 
  5.8   purposes of this section, gambling shall not include pari-mutuel 
  5.9   wagering conducted under a license issued pursuant to chapter 
  5.10  240, card playing activity authorized by section 240.30, 
  5.11  purchase or sale of tickets in the state lottery, or gambling 
  5.12  authorized under chapters 349 and 349A. 
  5.13     Sec. 9.  Minnesota Statutes 1998, section 541.21, is 
  5.14  amended to read: 
  5.15     541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 
  5.16     Every note, bill, bond, mortgage, or other security or 
  5.17  conveyance in which the whole or any part of the consideration 
  5.18  shall be for any money or goods won by gambling or playing at 
  5.19  cards, dice, or any other game whatever, or by betting on the 
  5.20  sides or hands of any person gambling, or for reimbursing or 
  5.21  repaying any money knowingly lent or advanced at the time and 
  5.22  place of such gambling or betting, or lent and advanced for any 
  5.23  gambling or betting to any persons so gambling or betting, shall 
  5.24  be void and of no effect as between the parties to the same, and 
  5.25  as to all persons except such as hold or claim under them in 
  5.26  good faith, without notice of the illegality of the 
  5.27  consideration of such contract or conveyance.  The provisions of 
  5.28  this section shall not apply to:  (1) pari-mutuel wagering 
  5.29  conducted under a license issued pursuant to chapter 240; 
  5.30  (2) card playing activity authorized by section 240.30; (3) 
  5.31  purchase of tickets in the state lottery under chapter 
  5.32  349A; ~~(3)~~ (4) gaming activities conducted pursuant to the Indian 
  5.33  Gaming Regulatory Act, 25 U.S.C. 2701 et seq.; or ~~(4)~~ (5) lawful 
  5.34  gambling activities permitted under chapter 349. 
  5.35     Sec. 10.  Minnesota Statutes 1998, section 609.761, is 
  5.36  amended by adding a subdivision to read: 
  6.1      Subd. 4.  [CARD CLUBS.] Sections 609.75 to 609.762 shall 
  6.2   not apply to card club activities conducted pursuant to section 
  6.3   240.30. 
  6.4      Sec. 11.  [EFFECTIVE DATE.] 
  6.5      Sections 1 to 10 are effective the day following final 
  6.6   enactment.