Bill Text: MN HF1352 | 2011-2012 | 87th Legislature | Introduced
Bill Title: State Lottery authorized to establish gaming machines, gaming machine revenue tax imposed, powers and duties provided to the director, and a Minnesota future fund and an industry improvement fund established.
Sponsorship: Partisan Bill (Republican 18)
Status: (Introduced - Dead) 2011-04-05 - Author added Woodard [HF1352 Detail]
Download: Minnesota-2011-HF1352-Introduced.html
1.2relating to gambling; authorizing the director of the State Lottery to establish
1.3gaming machines; imposing a tax on gaming machine revenue; providing powers
1.4and duties to the director; establishing a Minnesota future fund and an industry
1.5improvement fund;amending Minnesota Statutes 2010, sections 240.13, by
1.6adding a subdivision; 299L.07, subdivisions 2, 2a; 340A.410, subdivision
1.75; 349A.01, subdivision 10, by adding subdivisions; 349A.10, subdivision
1.83; 349A.13; 541.20; 541.21; 609.75, subdivision 3; 609.761, subdivision 2;
1.9proposing coding for new law in Minnesota Statutes, chapters 116J; 297A; 349A;
1.10repealing Minnesota Statutes 2010, section 240.30, subdivision 8.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 Section 1. [297A.651] LOTTERY GAMING MACHINES; IN-LIEU TAX.
1.15Adjusted gross revenue from the operation of gaming machines authorized under
1.16chapter 349A is exempt from the tax imposed under section 297A.62. The State Lottery
1.17must, on or before the 20th day of each month, transmit to the commissioner an amount
1.18equal to the adjusted gross revenue from the operation of gaming machines, as defined in
1.19section 349A.01, for the previous month multiplied by: (1) 25 percent of annual adjusted
1.20gross revenue generated by the licensee up to $125,000,000; (2) 30 percent of annual
1.21adjusted gross revenue generated by the licensee between $125,000,000 and $200,000,000;
1.22and (3) 40 percent of annual adjusted gross revenue generated by the licensee in excess of
1.23$200,000,000. The commissioner shall deposit the money transmitted under this section
1.24in the state treasury in the Minnesota future fund, under section 116J.8725.
1.25 Sec. 2. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
2.1 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
2.2(1) may be sold by a person who is not licensed under this section, if the person (i) is
2.3not engaged in the trade or business of selling gambling devices, and (ii) does not sell
2.4more than one gambling device in any calendar year;
2.5(2) may be sold by the governing body of a federally recognized Indian tribe
2.6described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
2.7section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
2.8a distributor licensed under this section, and (iii) the licensed distributor notifies the
2.9commissioner of the purchase, in the same manner as is required when the licensed
2.10distributor ships a gambling device into Minnesota;
2.11(3) may be possessed by a person not licensed under this section if the person holds
2.12a permit issued under section299L.08 ; and
2.13(4) may be possessed by a state agency, with the written authorization of the director,
2.14for display or evaluation purposes only and not for the conduct of gambling.; and
2.15(5) may be possessed by the State Lottery as authorized under chapter 349A.
2.16 Sec. 3. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
2.17 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
2.18offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
2.19licensed under this section or to the State Lottery as authorized under chapter 349A.
2.20(b) A distributor licensed under this section may sell, offer to sell, market, rent,
2.21lease, or otherwise provide, in whole or in part, a gambling device only to:
2.22(1) the governing body of a federally recognized Indian tribe that is authorized
2.23to operate the gambling device under a tribal state compact under the Indian Gaming
2.24Regulatory Act, Public Law 100-497, and future amendments to it;
2.25(2) a person for use in the person's dwelling for display or amusement purposes in a
2.26manner that does not afford players an opportunity to obtain anything of value;
2.27(3) another distributor licensed under this section;or
2.28(4) a person in another state who is authorized under the laws of that state to possess
2.29the gambling device.; or
2.30(5) the State Lottery as authorized under chapter 349A.
2.31 Sec. 4. Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:
2.32 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
2.33subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
3.1or operate, or permit the keeping, possession, or operation on the licensed premises of dice
3.2or any gambling device as defined in section349.30 , or permit gambling therein.
3.3(b) Gambling equipment may be kept or operated and raffles conducted on licensed
3.4premises and adjoining rooms when the use of the gambling equipment is authorized by
3.5(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
3.6Act, Public Law 100-497, or (3) a tribal-state compact authorized under section3.9221 .
3.7(c) Lottery tickets may be purchased and sold within the licensed premises as
3.8authorized by the director of the lottery under chapter 349A.
3.9(d) Dice may be kept and used on licensed premises and adjoining rooms as
3.10authorized by section609.761, subdivision 4 .
3.11(e) Gambling devices may be operated on the premises of a licensed racetrack
3.12as authorized by chapter 349A.
3.13 Sec. 5. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.14to read:
3.15 Subd. 1a. Adjusted gross gaming machine revenue. "Adjusted gross gaming
3.16machine revenue" means the sum of all money received by the lottery for gaming machine
3.17plays, less the amount paid out in prizes for gaming machine games.
3.18 Sec. 6. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.19to read:
3.20 Subd. 6a. Gaming machine. "Gaming machine" means any machine in which a
3.21coin token or other currency is deposited to play a game that uses a video display and
3.22microprocessors.
3.23 Sec. 7. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.24to read:
3.25 Subd. 6b. Gaming machine game. "Gaming machine game" means a game
3.26operated by a gaming machine as authorized by the director.
3.27 Sec. 8. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.28to read:
3.29 Subd. 6c. Gaming machine play. "Gaming machine play" means an electronic
3.30record that proves participation in a gaming machine game.
3.31 Sec. 9. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
4.1 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
4.2contract to provide lottery products, gaming machines, maintenance of gaming machines,
4.3computer hardware and software used to monitor sales of lottery tickets and gaming
4.4machine plays, and lottery tickets. "Lottery procurement contract" does not include
4.5a contract to provide an annuity or prize payment agreement or materials, supplies,
4.6equipment, or services common to the ordinary operation of a state agency.
4.7 Sec. 10. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
4.8 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
4.9account in the lottery fund. The director shall pay all costs of operating the lottery,
4.10including payroll costs or amounts transferred to the state treasury for payroll costs, but
4.11not including lottery prizes, from the lottery operating account. The director shall credit to
4.12the lottery operations account amounts sufficient to pay the operating costs of the lottery.
4.13(b) Except as provided in paragraph (e), the director may not credit in any fiscal
4.14year thereafter amounts to the lottery operations account which when totaled exceed
4.15nine percent of gross revenue to the lottery fund in that fiscal year. In computing total
4.16amounts credited to the lottery operations account under this paragraph the director shall
4.17disregard amounts transferred to or retained by lottery retailers as sales commissions or
4.18other compensation and amounts transferred or retained by a racetrack under a location
4.19contract under section 349A.17.
4.20(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4
4.21percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
4.22placement of advertising.
4.23(d) Except as the director determines, the lottery is not subject to chapter 16A
4.24relating to budgeting, payroll, and the purchase of goods and services.
4.25(e) In addition to the amounts credited to the lottery operations account under
4.26paragraph (b), the director is authorized, if necessary, to meet the current obligations of
4.27the lottery and to credit up to 25 percent of an amount equal to the average annual amount
4.28which was authorized to be credited to the lottery operations account for the previous three
4.29fiscal years but was not needed to meet the obligations of the lottery.
4.30 Sec. 11. Minnesota Statutes 2010, section 349A.13, is amended to read:
4.31349A.13 RESTRICTIONS.
4.32Nothing in this chapter:
5.1(1) authorizes the director to conduct a lottery game or contest the winner or winners
5.2of which are determined by the result of a sporting event other than a horse race conducted
5.3under chapter 240;
5.4(2) authorizes the director to install or operate a lottery device operated by coin or
5.5currency which when operated determines the winner of a game, except as authorized
5.6under section 349A.17; and
5.7(3) authorizes the director to sell pull-tabs as defined under section349.12,
5.8subdivision 32 .
5.9 Sec. 12. [349A.17] GAMING MACHINES.
5.10 Subdivision 1. Location contract. (a) The director may enter into a contract with
5.11a person to provide locations for gaming machines. Contracts entered into under this
5.12section are not subject to chapter 16C. The director may only enter a contract under this
5.13subdivision with a person who holds a class A license under chapter 240. The gaming
5.14machines may only be placed at the racetrack for which the class A license under chapter
5.15240 was issued. Contracts entered into under this section are void if the racetrack: (1)
5.16has not hosted at least 75 days of live racing, authorized by the Minnesota Racing
5.17Commission, during the previous year, or (2) has not been approved, unless approval is
5.18pending, for at least 75 days of live racing during the present year.
5.19(b) Contracts entered into must provide for compensation to the racetrack in an
5.20amount equal to at least the following percentages of adjusted gross gaming machine
5.21revenue generated at the track: (1) 60 percent of the first $125,000,000 of annual revenue;
5.22(2) 55 percent of annual revenue between $125,000,000 and $200,000,000; and (3) 45
5.23percent of annual revenue in excess of $200,000,000.
5.24(c) From the compensation received by the racetrack under this section, the racetrack
5.25shall annually remit an amount equal to one percent of the adjusted gross gaming machine
5.26revenue to both the city and the county where the racetrack is located.
5.27 Subd. 2. Operation. (a) All gaming machines that are placed at a racetrack under
5.28subdivision 1 must be operated and controlled by the director.
5.29(b) Gaming machines must be owned or leased by the director, however, the financial
5.30responsibility for all other activities related to the gaming facility including, but not
5.31limited to, advertising, marketing, facility expenses, staffing, security, and surveillance,
5.32shall be borne by the holder of the location contract.
5.33(c) Gaming machines must be maintained by the lottery, or by a vendor that is under
5.34the control and direction of the director.
6.1(d) The director must have a central communications system that monitors activities
6.2on each gaming machine. The central communications system must be located at a
6.3lottery office.
6.4(e) The director must supervise the general security arrangements associated
6.5with and relating to the operation of the gaming machines and implement procedures
6.6as deemed appropriate.
6.7(f) Advertising and promotional material produced by the racetrack relating to
6.8gaming machines located at the facility must be approved by the director.
6.9(g) The director may implement such other controls as are deemed necessary for the
6.10operation of gaming machines under this section.
6.11 Subd. 3. Specifications. Gaming machines must:
6.12(1) maintain on nonresettable meters a permanent record, capable of being printed
6.13out, of all transactions by the machine and all entries into the machine; and
6.14(2) be capable of being linked electronically to a central communications system to
6.15provide auditing program information as required by the director.
6.16 Subd. 4. Games. The director shall specify the games that may be placed on
6.17a gaming machine as provided in section 349A.04. Gaming machines may conduct
6.18pari-mutuel wagering and display horse races under specifications provided by the director.
6.19 Subd. 5. Examination of machines. The director shall examine prototypes of
6.20gaming machines and require that the manufacturer of the machine pay the cost of the
6.21examination. The director may contract for the examination of gaming machines.
6.22 Subd. 6. Testing of machines. The director may require working models of a
6.23gaming machine to be transported to the locations the director designates for testing,
6.24examination, and analysis. The manufacturer shall pay all costs for testing, examination,
6.25analysis, and transportation of the machine model.
6.26 Subd. 7. Prizes. A person who plays a gaming machine agrees to be bound by the
6.27rules and game procedures applicable to that particular gaming machine game. The player
6.28acknowledges that the determination of whether the player has won a prize is subject to
6.29the rules and game procedures adopted by the director, claim procedures established by
6.30the director for the game, and any confidential or public validation tests established by
6.31the director for the game. A person under 18 years of age may not claim a prize from the
6.32operation of a gaming machine. A prize claimed from the play of a gaming machine game
6.33is not subject to section 349A.08, subdivision 8.
6.34 Subd. 8. Prohibitions. (a) A person under the age of 18 years may not play a
6.35game on a gaming machine.
7.1(b) The director or any employee of the lottery, or a member of the immediate family
7.2residing in the same household, may not play a game on a gaming machine or receive a
7.3prize from the operation of a gaming machine.
7.4 Subd. 9. Compulsive gambling notice. The director shall prominently post, in the
7.5area where the gaming machines are located, the toll-free telephone number established
7.6by the commissioner of human services in connection with the compulsive gambling
7.7program established under section 245.98. The director and the location provider shall
7.8establish a responsible gambling plan in consultation with the National Council on
7.9Problem Gambling or the Minnesota affiliate. By January 15 of each year, the director
7.10shall submit a report to the legislature, of not more than five pages in length, setting forth
7.11the status of the responsible gambling plan.
7.12 Subd. 10. Local licenses. Except as provided in subdivision 1, no political
7.13subdivision may require a license to operate a gaming machine, restrict or regulate the
7.14placement of gaming machines, or impose a tax or fee on the business of operating
7.15gaming machines.
7.16 Sec. 13. Minnesota Statutes 2010, section 541.20, is amended to read:
7.17541.20 RECOVERY OF MONEY LOST.
7.18Every person who, by playing at cards, dice, or other game, or by betting on the
7.19hands or sides of such as are gambling, shall lose to any person so playing or betting
7.20any sum of money or any goods, and pays or delivers the same, or any part thereof, to
7.21the winner, may sue for and recover such money by a civil action, before any court
7.22of competent jurisdiction. For purposes of this section, gambling shall not include
7.23pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
7.24or sale of tickets in the state lottery, purchase of gaming machine plays as authorized under
7.25chapter 349A, or gambling authorized under chapters 349 and 349A.
7.26 Sec. 14. Minnesota Statutes 2010, section 541.21, is amended to read:
7.27541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
7.28Every note, bill, bond, mortgage, or other security or conveyance in which the whole
7.29or any part of the consideration shall be for any money or goods won by gambling or
7.30playing at cards, dice, or any other game whatever, or by betting on the sides or hands
7.31of any person gambling, or for reimbursing or repaying any money knowingly lent or
7.32advanced at the time and place of such gambling or betting, or lent and advanced for any
7.33gambling or betting to any persons so gambling or betting, shall be void and of no effect
7.34as between the parties to the same, and as to all persons except such as hold or claim
8.1under them in good faith, without notice of the illegality of the consideration of such
8.2contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
8.3wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
8.4in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
8.5conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
8.6section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
8.7 Sec. 15. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
8.8 Subd. 3. What are not bets. The following are not bets:
8.9(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
8.10harm or loss sustained, even though the loss depends upon chance;
8.11(2) a contract for the purchase or sale at a future date of securities or other
8.12commodities;
8.13(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
8.14contest for the determination of skill, speed, strength, endurance, or quality or to the bona
8.15fide owners of animals or other property entered in such a contest;
8.16(4) the game of bingo when conducted in compliance with sections349.11 to
349.23 ;
8.17(5) a private social bet not part of or incidental to organized, commercialized, or
8.18systematic gambling;
8.19(6) the operation of equipment or the conduct of a raffle under sections349.11 to
8.20349.22
, by an organization licensed by the Gambling Control Board or an organization
8.21exempt from licensing under section349.166 ;
8.22(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
8.23240; and
8.24(8) the purchase and sale of state lottery tickets and plays on a gaming machine
8.25under chapter 349A.
8.26 Sec. 16. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
8.27 Subd. 2. State lottery. Sections609.755 and
609.76 do not prohibit the operation of
8.28the state lottery or the sale, possession, or purchase of tickets for the state lottery under
8.29chapter 349A, or the manufacture, possession, sale, or operation of a gaming machine
8.30under chapter 349A.
8.31 Sec. 17. SEVERABILITY; SAVINGS.
8.32If any provision of this act is found to be invalid because it is in conflict with a
8.33provision of the Minnesota Constitution or the Constitution of the United States, or for any
9.1other reason, all other provisions of this act shall remain valid and any rights, remedies,
9.2and privileges that have been otherwise accrued by this act, shall remain in effect and may
9.3be proceeded with and concluded under this act.
9.4 Sec. 18. EFFECTIVE DATE.
9.5This article is effective the day following final enactment.
9.8 Section 1. [116J.8725] MINNESOTA FUTURE FUND.
9.9The Minnesota future fund is created as a special account in the state treasury. The
9.10fund consists of money deposited in the fund under section 297A.651. Appropriations
9.11from the fund may be made on an annual or biennial basis and are dedicated for the
9.12following purposes, with specific allocations within each purpose at the discretion of the
9.13commissioner of employment and economic development.
9.14(a) Fifty-five percent of the fund is dedicated and may be appropriated for job
9.15creation and retention programs, including gap and incentive financing, incumbent and
9.16new job training, tax incentives for job creation, loan guarantee funds, and regional and
9.17local revolving loan funds in greater Minnesota and the Twin Cities metropolitan region.
9.18(b) Twenty-five percent of the fund is dedicated and may be appropriated for
9.19growing new technology businesses, including data center technology facilities and the
9.20Science and Technology Authority.
9.21(c) Ten percent of the fund is dedicated and may be appropriated for investments
9.22that will provide foundations for future growth, including the redevelopment grant
9.23program, the regional economic development partnership in the Twin Cities metropolitan
9.24region, new entrepreneurial initiatives, and support for the working capital needs of small
9.25contractors facing performance bond requirements.
9.26(d) Ten percent of the fund is dedicated and may be appropriated for partnership
9.27grants to organizations providing economic development services across the state. The
9.28Department of Employment and Economic Development must establish criteria and accept
9.29applications from organizations seeking to provide these services, which at a minimum
9.30shall include: (1) services to minority and women entrepreneurs, (2) those developing
9.31inventions, (3) development of the biosciences sector, (4) assistance to manufacturers to
9.32increase their profitability and competitiveness, (5) strengthening commercialization ties
9.33between the University of Minnesota and the Mayo Clinic, and (6) other purposes which
9.34the commissioner may deem critical to the state's economic development.
10.1(e) From each purpose allocated from the Minnesota future fund, two percent is
10.2dedicated and may be appropriated to the Department of Employment and Economic
10.3Development for general fund expenditures related to administration of these purposes.
10.4 Sec. 2. Minnesota Statutes 2010, section 240.13, is amended by adding a subdivision
10.5to read:
10.6 Subd. 5a. Industry improvement fund. (a) To mitigate the cost to the horse racing
10.7industry resulting from the dilution of pari-mutuel consumption at a racetrack having a
10.8location contract with the director of the lottery, any person, licensed under this chapter,
10.9who enters into a location contract with the director of the lottery, must contribute, on
10.10a quarterly basis, an amount of money equal to 14 percent of the amount the licensee
10.11receives or retains pursuant to the location contract. This contribution is required of the
10.12licensee regardless of any financial consequences resulting from the location contract.
10.13This contribution shall be made to the commission which shall deposit it into a horse
10.14racing industry improvement fund to be maintained by the commission. Within the
10.15horse racing industry improvement fund the commission shall establish a purse fund
10.16account for each breed racing in the state. The commission shall allocate 80 percent of the
10.17contributions received from the licensee to the purse fund account to be used for purses
10.18for live races conducted at class A licensed facilities. Sixteen percent of the contributions
10.19received from a licensee shall be allocated to the breeder's fund to be used for each breed
10.20racing at a class A licensed facility in amounts determined by the commission. Amounts
10.21transferred by the commission to a breeder's fund shall be used for the purposes of section
10.22240.18, subdivisions 2, paragraph (d); and 3, paragraph (b), subject to the proportionality
10.23requirement in section 240.18, subdivision 1. The commission shall routinely transfer
10.24the money in the purse fund accounts to the licensees conducting racing for each breed
10.25and direct the licensee to augment the purses for that breed with the funds received from
10.26the commission. Purse augmentations required under this subdivision are in addition to
10.27purse payments otherwise established by law or contract. The location contract holder and
10.28the organization representing the majority of horsepersons racing at the location contract
10.29holder's racetrack may, by written contract, agree to use a portion of the transferred
10.30funds for racing related purposes other than purse augmentation. The commission shall
10.31determine the percentages of the purse fund account to be designated for the augmentation
10.32of the purses of each breed racing at a class A facility. The determination shall be based
10.33on consumer preference and a goal of maximizing the economic impact of horse racing
10.34in Minnesota.
11.1(b) If more than one breed of horse races at a class A facility during any year, the
11.2owners and trainers of the various breeds, through the organization representing each
11.3breed, may agree to revise the percentages designated by the commission. The agreement
11.4must be in writing, adopted by each organization, and be filed with the commission.
11.5No agreement shall be valid for more than one year. Four percent of the contributions
11.6received from the licensee shall be placed in an equine industry enhancement fund
11.7established by the commission. The commission shall award grants from this account
11.8designed to support and improve the racing and nonracing equine industry including,
11.9but not limited to, construction of facilities and trails, production of shows, and issues
11.10related to retired horses.
11.11 Sec. 3. REPEALER.
11.12Minnesota Statutes 2010, section 240.30, subdivision 8, is repealed.
11.13 Sec. 4. EFFECTIVE DATE.
11.14This article is effective the day following final enactment.
1.3gaming machines; imposing a tax on gaming machine revenue; providing powers
1.4and duties to the director; establishing a Minnesota future fund and an industry
1.5improvement fund;amending Minnesota Statutes 2010, sections 240.13, by
1.6adding a subdivision; 299L.07, subdivisions 2, 2a; 340A.410, subdivision
1.75; 349A.01, subdivision 10, by adding subdivisions; 349A.10, subdivision
1.83; 349A.13; 541.20; 541.21; 609.75, subdivision 3; 609.761, subdivision 2;
1.9proposing coding for new law in Minnesota Statutes, chapters 116J; 297A; 349A;
1.10repealing Minnesota Statutes 2010, section 240.30, subdivision 8.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 Section 1. [297A.651] LOTTERY GAMING MACHINES; IN-LIEU TAX.
1.15Adjusted gross revenue from the operation of gaming machines authorized under
1.16chapter 349A is exempt from the tax imposed under section 297A.62. The State Lottery
1.17must, on or before the 20th day of each month, transmit to the commissioner an amount
1.18equal to the adjusted gross revenue from the operation of gaming machines, as defined in
1.19section 349A.01, for the previous month multiplied by: (1) 25 percent of annual adjusted
1.20gross revenue generated by the licensee up to $125,000,000; (2) 30 percent of annual
1.21adjusted gross revenue generated by the licensee between $125,000,000 and $200,000,000;
1.22and (3) 40 percent of annual adjusted gross revenue generated by the licensee in excess of
1.23$200,000,000. The commissioner shall deposit the money transmitted under this section
1.24in the state treasury in the Minnesota future fund, under section 116J.8725.
1.25 Sec. 2. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
2.1 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
2.2(1) may be sold by a person who is not licensed under this section, if the person (i) is
2.3not engaged in the trade or business of selling gambling devices, and (ii) does not sell
2.4more than one gambling device in any calendar year;
2.5(2) may be sold by the governing body of a federally recognized Indian tribe
2.6described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
2.7section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
2.8a distributor licensed under this section, and (iii) the licensed distributor notifies the
2.9commissioner of the purchase, in the same manner as is required when the licensed
2.10distributor ships a gambling device into Minnesota;
2.11(3) may be possessed by a person not licensed under this section if the person holds
2.12a permit issued under section
2.13(4) may be possessed by a state agency, with the written authorization of the director,
2.14for display or evaluation purposes only and not for the conduct of gambling
2.15(5) may be possessed by the State Lottery as authorized under chapter 349A.
2.16 Sec. 3. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
2.17 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
2.18offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
2.19licensed under this section or to the State Lottery as authorized under chapter 349A.
2.20(b) A distributor licensed under this section may sell, offer to sell, market, rent,
2.21lease, or otherwise provide, in whole or in part, a gambling device only to:
2.22(1) the governing body of a federally recognized Indian tribe that is authorized
2.23to operate the gambling device under a tribal state compact under the Indian Gaming
2.24Regulatory Act, Public Law 100-497, and future amendments to it;
2.25(2) a person for use in the person's dwelling for display or amusement purposes in a
2.26manner that does not afford players an opportunity to obtain anything of value;
2.27(3) another distributor licensed under this section;
2.28(4) a person in another state who is authorized under the laws of that state to possess
2.29the gambling device
2.30(5) the State Lottery as authorized under chapter 349A.
2.31 Sec. 4. Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:
2.32 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
2.33subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
3.1or operate, or permit the keeping, possession, or operation on the licensed premises of dice
3.2or any gambling device as defined in section
3.3(b) Gambling equipment may be kept or operated and raffles conducted on licensed
3.4premises and adjoining rooms when the use of the gambling equipment is authorized by
3.5(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
3.6Act, Public Law 100-497, or (3) a tribal-state compact authorized under section
3.7(c) Lottery tickets may be purchased and sold within the licensed premises as
3.8authorized by the director of the lottery under chapter 349A.
3.9(d) Dice may be kept and used on licensed premises and adjoining rooms as
3.10authorized by section
3.11(e) Gambling devices may be operated on the premises of a licensed racetrack
3.12as authorized by chapter 349A.
3.13 Sec. 5. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.14to read:
3.15 Subd. 1a. Adjusted gross gaming machine revenue. "Adjusted gross gaming
3.16machine revenue" means the sum of all money received by the lottery for gaming machine
3.17plays, less the amount paid out in prizes for gaming machine games.
3.18 Sec. 6. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.19to read:
3.20 Subd. 6a. Gaming machine. "Gaming machine" means any machine in which a
3.21coin token or other currency is deposited to play a game that uses a video display and
3.22microprocessors.
3.23 Sec. 7. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.24to read:
3.25 Subd. 6b. Gaming machine game. "Gaming machine game" means a game
3.26operated by a gaming machine as authorized by the director.
3.27 Sec. 8. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
3.28to read:
3.29 Subd. 6c. Gaming machine play. "Gaming machine play" means an electronic
3.30record that proves participation in a gaming machine game.
3.31 Sec. 9. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
4.1 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
4.2contract to provide lottery products, gaming machines, maintenance of gaming machines,
4.3computer hardware and software used to monitor sales of lottery tickets and gaming
4.4machine plays, and lottery tickets. "Lottery procurement contract" does not include
4.5a contract to provide an annuity or prize payment agreement or materials, supplies,
4.6equipment, or services common to the ordinary operation of a state agency.
4.7 Sec. 10. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
4.8 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
4.9account in the lottery fund. The director shall pay all costs of operating the lottery,
4.10including payroll costs or amounts transferred to the state treasury for payroll costs, but
4.11not including lottery prizes, from the lottery operating account. The director shall credit to
4.12the lottery operations account amounts sufficient to pay the operating costs of the lottery.
4.13(b) Except as provided in paragraph (e), the director may not credit in any fiscal
4.14year thereafter amounts to the lottery operations account which when totaled exceed
4.15nine percent of gross revenue to the lottery fund in that fiscal year. In computing total
4.16amounts credited to the lottery operations account under this paragraph the director shall
4.17disregard amounts transferred to or retained by lottery retailers as sales commissions or
4.18other compensation and amounts transferred or retained by a racetrack under a location
4.19contract under section 349A.17.
4.20(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4
4.21percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
4.22placement of advertising.
4.23(d) Except as the director determines, the lottery is not subject to chapter 16A
4.24relating to budgeting, payroll, and the purchase of goods and services.
4.25(e) In addition to the amounts credited to the lottery operations account under
4.26paragraph (b), the director is authorized, if necessary, to meet the current obligations of
4.27the lottery and to credit up to 25 percent of an amount equal to the average annual amount
4.28which was authorized to be credited to the lottery operations account for the previous three
4.29fiscal years but was not needed to meet the obligations of the lottery.
4.30 Sec. 11. Minnesota Statutes 2010, section 349A.13, is amended to read:
4.31349A.13 RESTRICTIONS.
4.32Nothing in this chapter:
5.1(1) authorizes the director to conduct a lottery game or contest the winner or winners
5.2of which are determined by the result of a sporting event other than a horse race conducted
5.3under chapter 240;
5.4(2) authorizes the director to install or operate a lottery device operated by coin or
5.5currency which when operated determines the winner of a game, except as authorized
5.6under section 349A.17; and
5.7(3) authorizes the director to sell pull-tabs as defined under section
5.8subdivision 32
5.9 Sec. 12. [349A.17] GAMING MACHINES.
5.10 Subdivision 1. Location contract. (a) The director may enter into a contract with
5.11a person to provide locations for gaming machines. Contracts entered into under this
5.12section are not subject to chapter 16C. The director may only enter a contract under this
5.13subdivision with a person who holds a class A license under chapter 240. The gaming
5.14machines may only be placed at the racetrack for which the class A license under chapter
5.15240 was issued. Contracts entered into under this section are void if the racetrack: (1)
5.16has not hosted at least 75 days of live racing, authorized by the Minnesota Racing
5.17Commission, during the previous year, or (2) has not been approved, unless approval is
5.18pending, for at least 75 days of live racing during the present year.
5.19(b) Contracts entered into must provide for compensation to the racetrack in an
5.20amount equal to at least the following percentages of adjusted gross gaming machine
5.21revenue generated at the track: (1) 60 percent of the first $125,000,000 of annual revenue;
5.22(2) 55 percent of annual revenue between $125,000,000 and $200,000,000; and (3) 45
5.23percent of annual revenue in excess of $200,000,000.
5.24(c) From the compensation received by the racetrack under this section, the racetrack
5.25shall annually remit an amount equal to one percent of the adjusted gross gaming machine
5.26revenue to both the city and the county where the racetrack is located.
5.27 Subd. 2. Operation. (a) All gaming machines that are placed at a racetrack under
5.28subdivision 1 must be operated and controlled by the director.
5.29(b) Gaming machines must be owned or leased by the director, however, the financial
5.30responsibility for all other activities related to the gaming facility including, but not
5.31limited to, advertising, marketing, facility expenses, staffing, security, and surveillance,
5.32shall be borne by the holder of the location contract.
5.33(c) Gaming machines must be maintained by the lottery, or by a vendor that is under
5.34the control and direction of the director.
6.1(d) The director must have a central communications system that monitors activities
6.2on each gaming machine. The central communications system must be located at a
6.3lottery office.
6.4(e) The director must supervise the general security arrangements associated
6.5with and relating to the operation of the gaming machines and implement procedures
6.6as deemed appropriate.
6.7(f) Advertising and promotional material produced by the racetrack relating to
6.8gaming machines located at the facility must be approved by the director.
6.9(g) The director may implement such other controls as are deemed necessary for the
6.10operation of gaming machines under this section.
6.11 Subd. 3. Specifications. Gaming machines must:
6.12(1) maintain on nonresettable meters a permanent record, capable of being printed
6.13out, of all transactions by the machine and all entries into the machine; and
6.14(2) be capable of being linked electronically to a central communications system to
6.15provide auditing program information as required by the director.
6.16 Subd. 4. Games. The director shall specify the games that may be placed on
6.17a gaming machine as provided in section 349A.04. Gaming machines may conduct
6.18pari-mutuel wagering and display horse races under specifications provided by the director.
6.19 Subd. 5. Examination of machines. The director shall examine prototypes of
6.20gaming machines and require that the manufacturer of the machine pay the cost of the
6.21examination. The director may contract for the examination of gaming machines.
6.22 Subd. 6. Testing of machines. The director may require working models of a
6.23gaming machine to be transported to the locations the director designates for testing,
6.24examination, and analysis. The manufacturer shall pay all costs for testing, examination,
6.25analysis, and transportation of the machine model.
6.26 Subd. 7. Prizes. A person who plays a gaming machine agrees to be bound by the
6.27rules and game procedures applicable to that particular gaming machine game. The player
6.28acknowledges that the determination of whether the player has won a prize is subject to
6.29the rules and game procedures adopted by the director, claim procedures established by
6.30the director for the game, and any confidential or public validation tests established by
6.31the director for the game. A person under 18 years of age may not claim a prize from the
6.32operation of a gaming machine. A prize claimed from the play of a gaming machine game
6.33is not subject to section 349A.08, subdivision 8.
6.34 Subd. 8. Prohibitions. (a) A person under the age of 18 years may not play a
6.35game on a gaming machine.
7.1(b) The director or any employee of the lottery, or a member of the immediate family
7.2residing in the same household, may not play a game on a gaming machine or receive a
7.3prize from the operation of a gaming machine.
7.4 Subd. 9. Compulsive gambling notice. The director shall prominently post, in the
7.5area where the gaming machines are located, the toll-free telephone number established
7.6by the commissioner of human services in connection with the compulsive gambling
7.7program established under section 245.98. The director and the location provider shall
7.8establish a responsible gambling plan in consultation with the National Council on
7.9Problem Gambling or the Minnesota affiliate. By January 15 of each year, the director
7.10shall submit a report to the legislature, of not more than five pages in length, setting forth
7.11the status of the responsible gambling plan.
7.12 Subd. 10. Local licenses. Except as provided in subdivision 1, no political
7.13subdivision may require a license to operate a gaming machine, restrict or regulate the
7.14placement of gaming machines, or impose a tax or fee on the business of operating
7.15gaming machines.
7.16 Sec. 13. Minnesota Statutes 2010, section 541.20, is amended to read:
7.17541.20 RECOVERY OF MONEY LOST.
7.18Every person who, by playing at cards, dice, or other game, or by betting on the
7.19hands or sides of such as are gambling, shall lose to any person so playing or betting
7.20any sum of money or any goods, and pays or delivers the same, or any part thereof, to
7.21the winner, may sue for and recover such money by a civil action, before any court
7.22of competent jurisdiction. For purposes of this section, gambling shall not include
7.23pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
7.24or sale of tickets in the state lottery, purchase of gaming machine plays as authorized under
7.25chapter 349A, or gambling authorized under chapters 349 and 349A.
7.26 Sec. 14. Minnesota Statutes 2010, section 541.21, is amended to read:
7.27541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
7.28Every note, bill, bond, mortgage, or other security or conveyance in which the whole
7.29or any part of the consideration shall be for any money or goods won by gambling or
7.30playing at cards, dice, or any other game whatever, or by betting on the sides or hands
7.31of any person gambling, or for reimbursing or repaying any money knowingly lent or
7.32advanced at the time and place of such gambling or betting, or lent and advanced for any
7.33gambling or betting to any persons so gambling or betting, shall be void and of no effect
7.34as between the parties to the same, and as to all persons except such as hold or claim
8.1under them in good faith, without notice of the illegality of the consideration of such
8.2contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
8.3wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
8.4in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
8.5conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
8.6section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
8.7 Sec. 15. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
8.8 Subd. 3. What are not bets. The following are not bets:
8.9(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
8.10harm or loss sustained, even though the loss depends upon chance;
8.11(2) a contract for the purchase or sale at a future date of securities or other
8.12commodities;
8.13(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
8.14contest for the determination of skill, speed, strength, endurance, or quality or to the bona
8.15fide owners of animals or other property entered in such a contest;
8.16(4) the game of bingo when conducted in compliance with sections
8.17(5) a private social bet not part of or incidental to organized, commercialized, or
8.18systematic gambling;
8.19(6) the operation of equipment or the conduct of a raffle under sections
8.21exempt from licensing under section
8.22(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
8.23240; and
8.24(8) the purchase and sale of state lottery tickets and plays on a gaming machine
8.25under chapter 349A.
8.26 Sec. 16. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
8.27 Subd. 2. State lottery. Sections
8.28the state lottery or the sale, possession, or purchase of tickets for the state lottery under
8.29chapter 349A, or the manufacture, possession, sale, or operation of a gaming machine
8.30under chapter 349A.
8.31 Sec. 17. SEVERABILITY; SAVINGS.
8.32If any provision of this act is found to be invalid because it is in conflict with a
8.33provision of the Minnesota Constitution or the Constitution of the United States, or for any
9.1other reason, all other provisions of this act shall remain valid and any rights, remedies,
9.2and privileges that have been otherwise accrued by this act, shall remain in effect and may
9.3be proceeded with and concluded under this act.
9.4 Sec. 18. EFFECTIVE DATE.
9.5This article is effective the day following final enactment.
9.8 Section 1. [116J.8725] MINNESOTA FUTURE FUND.
9.9The Minnesota future fund is created as a special account in the state treasury. The
9.10fund consists of money deposited in the fund under section 297A.651. Appropriations
9.11from the fund may be made on an annual or biennial basis and are dedicated for the
9.12following purposes, with specific allocations within each purpose at the discretion of the
9.13commissioner of employment and economic development.
9.14(a) Fifty-five percent of the fund is dedicated and may be appropriated for job
9.15creation and retention programs, including gap and incentive financing, incumbent and
9.16new job training, tax incentives for job creation, loan guarantee funds, and regional and
9.17local revolving loan funds in greater Minnesota and the Twin Cities metropolitan region.
9.18(b) Twenty-five percent of the fund is dedicated and may be appropriated for
9.19growing new technology businesses, including data center technology facilities and the
9.20Science and Technology Authority.
9.21(c) Ten percent of the fund is dedicated and may be appropriated for investments
9.22that will provide foundations for future growth, including the redevelopment grant
9.23program, the regional economic development partnership in the Twin Cities metropolitan
9.24region, new entrepreneurial initiatives, and support for the working capital needs of small
9.25contractors facing performance bond requirements.
9.26(d) Ten percent of the fund is dedicated and may be appropriated for partnership
9.27grants to organizations providing economic development services across the state. The
9.28Department of Employment and Economic Development must establish criteria and accept
9.29applications from organizations seeking to provide these services, which at a minimum
9.30shall include: (1) services to minority and women entrepreneurs, (2) those developing
9.31inventions, (3) development of the biosciences sector, (4) assistance to manufacturers to
9.32increase their profitability and competitiveness, (5) strengthening commercialization ties
9.33between the University of Minnesota and the Mayo Clinic, and (6) other purposes which
9.34the commissioner may deem critical to the state's economic development.
10.1(e) From each purpose allocated from the Minnesota future fund, two percent is
10.2dedicated and may be appropriated to the Department of Employment and Economic
10.3Development for general fund expenditures related to administration of these purposes.
10.4 Sec. 2. Minnesota Statutes 2010, section 240.13, is amended by adding a subdivision
10.5to read:
10.6 Subd. 5a. Industry improvement fund. (a) To mitigate the cost to the horse racing
10.7industry resulting from the dilution of pari-mutuel consumption at a racetrack having a
10.8location contract with the director of the lottery, any person, licensed under this chapter,
10.9who enters into a location contract with the director of the lottery, must contribute, on
10.10a quarterly basis, an amount of money equal to 14 percent of the amount the licensee
10.11receives or retains pursuant to the location contract. This contribution is required of the
10.12licensee regardless of any financial consequences resulting from the location contract.
10.13This contribution shall be made to the commission which shall deposit it into a horse
10.14racing industry improvement fund to be maintained by the commission. Within the
10.15horse racing industry improvement fund the commission shall establish a purse fund
10.16account for each breed racing in the state. The commission shall allocate 80 percent of the
10.17contributions received from the licensee to the purse fund account to be used for purses
10.18for live races conducted at class A licensed facilities. Sixteen percent of the contributions
10.19received from a licensee shall be allocated to the breeder's fund to be used for each breed
10.20racing at a class A licensed facility in amounts determined by the commission. Amounts
10.21transferred by the commission to a breeder's fund shall be used for the purposes of section
10.22240.18, subdivisions 2, paragraph (d); and 3, paragraph (b), subject to the proportionality
10.23requirement in section 240.18, subdivision 1. The commission shall routinely transfer
10.24the money in the purse fund accounts to the licensees conducting racing for each breed
10.25and direct the licensee to augment the purses for that breed with the funds received from
10.26the commission. Purse augmentations required under this subdivision are in addition to
10.27purse payments otherwise established by law or contract. The location contract holder and
10.28the organization representing the majority of horsepersons racing at the location contract
10.29holder's racetrack may, by written contract, agree to use a portion of the transferred
10.30funds for racing related purposes other than purse augmentation. The commission shall
10.31determine the percentages of the purse fund account to be designated for the augmentation
10.32of the purses of each breed racing at a class A facility. The determination shall be based
10.33on consumer preference and a goal of maximizing the economic impact of horse racing
10.34in Minnesota.
11.1(b) If more than one breed of horse races at a class A facility during any year, the
11.2owners and trainers of the various breeds, through the organization representing each
11.3breed, may agree to revise the percentages designated by the commission. The agreement
11.4must be in writing, adopted by each organization, and be filed with the commission.
11.5No agreement shall be valid for more than one year. Four percent of the contributions
11.6received from the licensee shall be placed in an equine industry enhancement fund
11.7established by the commission. The commission shall award grants from this account
11.8designed to support and improve the racing and nonracing equine industry including,
11.9but not limited to, construction of facilities and trails, production of shows, and issues
11.10related to retired horses.
11.11 Sec. 3. REPEALER.
11.12Minnesota Statutes 2010, section 240.30, subdivision 8, is repealed.
11.13 Sec. 4. EFFECTIVE DATE.
11.14This article is effective the day following final enactment.
