Bill Text: MN SF1684 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Racino establishment and revenue allocation
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2012-02-02 - Referred to Education [SF1684 Detail]
Download: Minnesota-2011-SF1684-Introduced.html
1.2relating to gambling; authorizing the director of the State Lottery to establish
1.3gaming machines at a licensed racetrack; imposing a fee on gaming machine
1.4revenue; providing powers and duties to the director; dedicating money for
1.5education;amending Minnesota Statutes 2010, sections 240.03; 240.13, by
1.6adding a subdivision; 240.28, subdivision 2; 299L.07, subdivisions 2, 2a;
1.7340A.410, subdivision 5; 349A.01, subdivision 10, by adding subdivisions;
1.8349A.10, subdivision 3; 349A.13; 541.20; 541.21; 609.75, subdivision 3;
1.9609.761, subdivision 2; proposing coding for new law in Minnesota Statutes,
1.10chapters 297A; 349A; repealing Minnesota Statutes 2010, section 240.30,
1.11subdivision 8.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 2010, section 240.03, is amended to read:
1.16240.03 COMMISSION POWERS AND DUTIES.
1.17The commission has the following powers and duties:
1.18(1) to regulate horse racing in Minnesota to ensure that it is conducted in the public
1.19interest;
1.20(2) to issue licenses as provided in this chapter;
1.21(3) to enforce all laws and rules governing horse racing;
1.22(4) to collect and distribute all taxes provided for in this chapter;
1.23(5) to conduct necessary investigations and inquiries and compel the submission of
1.24information, documents, and records it deems necessary to carry out its duties;
1.25(6) to supervise the conduct of pari-mutuel betting on horse racing;
1.26(7) to employ and supervise personnel under this chapter;
2.1(8) to determine the number of racing days to be held in the state and at each
2.2licensed racetrack;
2.3(9) to take all necessary steps to ensure the integrity of racing in Minnesota;and
2.4(10) to impose fees on the racing and card playing industries sufficient to recover the
2.5operating costs of the commission with the approval of the legislature according to section
2.616A.1283
. Notwithstanding section
16A.1283 , when the legislature is not in session, the
2.7commissioner of management and budget may grant interim approval for any new fees
2.8or adjustments to existing fees that are not statutorily specified, until such time as the
2.9legislature reconvenes and acts upon the new fees or adjustments. As part of its biennial
2.10budget request, the commission must propose changes to its fees that will be sufficient to
2.11recover the operating costs of the commission.; and
2.12(11) to take all necessary steps to ensure the security of all activities in a class A
2.13licensed racetrack. The duties and responsibilities of the commission include but are not
2.14limited to licensing employees of a class A licensee and vendors to the class A licensee
2.15involved in the conduct of gaming machines authorized by a location contract with the
2.16director of the State Lottery under section 349A.17 and overall surveillance and security
2.17of all conduct on all facilities of a licensed racetrack. The commission shall require that
2.18a class A licensed racetrack reimburse it for the commission's actual costs, including
2.19personnel costs, for conducting activities provided in this clause and amounts received
2.20must be deposited as provided in section 240.155, subdivision 1. The commission shall
2.21review procedures of the class A licensee to ensure compliance with section 240.13,
2.22subdivision 5a. Activities relating to the conduct of gaming machines are deemed to be
2.23relevant to the integrity of horse racing activities in Minnesota for purposes of sections
2.24240.03, 240.06, subdivision 5, 240.08, and 240.27, subdivision 1.
2.25 Sec. 2. Minnesota Statutes 2010, section 240.13, is amended by adding a subdivision
2.26to read:
2.27 Subd. 5a. Equine industry improvement fund. (a) To compensate the horse
2.28racing industry for the presence of lottery gaming machines at class A racing facilities,
2.29the commission shall establish and maintain an equine industry improvement fund into
2.30which the commission shall deposit the funds received pursuant to section 349A.17,
2.31subdivision 1. The commission shall determine the percentages of the purse supplement
2.32portion of the fund to be designated for supplementing the purses of each breed racing
2.33live at a class A facility housing lottery gaming machines. The primary purpose of
2.34the purse supplement allocation determination shall be the elevation of each breed's
2.35national ranking, on the basis of average purse per race, to the highest national ranking
3.1possible. The commission shall also attempt to maximize the economic impact of horse
3.2racing in the state, particularly in rural areas, and to reflect the preferences of breeders,
3.3owners, and horse racing fans. The commission shall allocate 75 percent of the fund
3.4for purse supplements. The commission shall routinely transfer money allocated for
3.5purse supplements to licensees conducting live racing at a facility hosting lottery gaming
3.6machines and direct the licensee to use the money to supplement the purses for each
3.7breed racing. Purse supplements required under this subdivision are in addition to purse
3.8payments otherwise established by law or contract. The location contract holder and the
3.9organization representing the majority of horsepersons racing at the location contract
3.10holder's racetrack may, by written contract, agree to use a portion of the transferred funds
3.11for racing-related purposes other than purse supplementation.
3.12(b) The commission shall allocate 20 percent of the fund for breeder's fund purposes
3.13and shall transmit that amount to the breeder's fund for the benefit of each breed racing
3.14at a class A licensed facility hosting lottery gaming machines. Amounts transferred for
3.15each breed shall be in the same proportions established, under this subdivision, for purse
3.16supplements. Amounts transferred to a breeder's fund shall be used for the purposes
3.17of section 240.18, subdivisions 2, paragraph (d), and 3, paragraph (b), subject to the
3.18proportionality requirement in section 240.18, subdivision 1.
3.19(c) Five percent of the fund shall be placed in an equine industry enhancement fund
3.20established by the commission. The commission shall award grants from this account
3.21designed to support and improve the nonracing equine industry including, but not limited
3.22to, construction of facilities and trails, production of shows, and issues related to retired
3.23horses.
3.24 Sec. 3. Minnesota Statutes 2010, section 240.28, subdivision 2, is amended to read:
3.25 Subd. 2. Betting. No member or employee of the commission may bet or cause a
3.26bet to be made on a race at a licensed racetrack while serving on or being employed by
3.27the commission. No person appointed or approved by the director as a steward may bet
3.28or cause a bet to be made at a licensed racetrack during a racing meeting at which the
3.29person is serving as a steward. The commission shall by rule prescribe such restrictions on
3.30betting by its licensees as it deems necessary to protect the integrity of racing. For the
3.31purposes of this subdivision, a play on a gaming machine authorized by the director of the
3.32State Lottery at a licensed racetrack is deemed to be a bet.
3.33 Sec. 4. [297A.651] LOTTERY GAMING MACHINES; IN-LIEU FEE.
4.1Adjusted gross revenue from the operation of gaming machines authorized under
4.2chapter 349A is exempt from the tax imposed under section 297A.62 and chapter 297E
4.3and any other tax, license, permit, or assessment for conducting a gambling activity that is
4.4not imposed by this section. The State Lottery must, on or before the 20th day of each
4.5month, transmit to the commissioner an amount equal to the adjusted gross gaming
4.6machine revenue from the operation of gaming machines, as defined in section 349A.01,
4.7for the previous month multiplied by: (1) 25 percent of annual adjusted gross gaming
4.8machine revenue generated by each person that has a location contract under section
4.9349A.17, subdivision 1, up to $125,000,000; (2) 30 percent of annual adjusted gross
4.10gaming machine revenue generated by each person that has a location contract under
4.11section 349A.17, subdivision 1, between $125,000,000 and $200,000,000; and (3) 40
4.12percent of annual adjusted gross gaming machine revenue generated by each person that
4.13has a location contract under section 349A.17, subdivision 1, in excess of $200,000,000.
4.14The commissioner shall deposit the money transmitted under this section in the state
4.15treasury as provided in article 2.
4.16 Sec. 5. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
4.17 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
4.18(1) may be sold by a person who is not licensed under this section, if the person (i) is
4.19not engaged in the trade or business of selling gambling devices, and (ii) does not sell
4.20more than one gambling device in any calendar year;
4.21(2) may be sold by the governing body of a federally recognized Indian tribe
4.22described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
4.23section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
4.24a distributor licensed under this section, and (iii) the licensed distributor notifies the
4.25commissioner of the purchase, in the same manner as is required when the licensed
4.26distributor ships a gambling device into Minnesota;
4.27(3) may be possessed by a person not licensed under this section if the person holds
4.28a permit issued under section299L.08 ; and
4.29(4) may be possessed by a state agency, with the written authorization of the director,
4.30for display or evaluation purposes only and not for the conduct of gambling.; and
4.31(5) may be possessed by the State Lottery or a person who has entered into a location
4.32contract with the State Lottery as authorized under chapter 349A.
4.33 Sec. 6. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
5.1 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
5.2offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
5.3licensed under this section or to the State Lottery as authorized under chapter 349A.
5.4(b) A distributor licensed under this section may sell, offer to sell, market, rent,
5.5lease, or otherwise provide, in whole or in part, a gambling device only to:
5.6(1) the governing body of a federally recognized Indian tribe that is authorized
5.7to operate the gambling device under a tribal state compact under the Indian Gaming
5.8Regulatory Act, Public Law 100-497, and future amendments to it;
5.9(2) a person for use in the person's dwelling for display or amusement purposes in a
5.10manner that does not afford players an opportunity to obtain anything of value;
5.11(3) another distributor licensed under this section;or
5.12(4) a person in another state who is authorized under the laws of that state to possess
5.13the gambling device.; or
5.14(5) the State Lottery as authorized under chapter 349A.
5.15 Sec. 7. Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:
5.16 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
5.17subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
5.18or operate, or permit the keeping, possession, or operation on the licensed premises of dice
5.19or any gambling device as defined in section349.30 , or permit gambling therein.
5.20(b) Gambling equipment may be kept or operated and raffles conducted on licensed
5.21premises and adjoining rooms when the use of the gambling equipment is authorized by
5.22(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
5.23Act, Public Law 100-497, or (3) a tribal-state compact authorized under section3.9221 .
5.24(c) Lottery tickets may be purchased and sold within the licensed premises as
5.25authorized by the director of the lottery under chapter 349A.
5.26(d) Dice may be kept and used on licensed premises and adjoining rooms as
5.27authorized by section609.761, subdivision 4 .
5.28(e) This subdivision does not apply to a licensed racetrack holding a location
5.29contract as authorized by chapter 349A.
5.30 Sec. 8. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
5.31to read:
5.32 Subd. 1a. Adjusted gross gaming machine revenue. "Adjusted gross gaming
5.33machine revenue" means the sum of all money received by the lottery for gaming machine
6.1plays, other than promotional plays, less the amount paid out in prizes for gaming machine
6.2games.
6.3 Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
6.4to read:
6.5 Subd. 6a. Gaming machine. "Gaming machine" means any electronic device
6.6which, upon insertion of money, coin, token, voucher, electronic card, or other
6.7consideration, allows the play of a game, authorized by the director, the outcome of which
6.8is determined entirely or partly by chance. A gaming machine may award a player a prize
6.9in the form of money, tokens, prize slips, or other authorized consideration.
6.10 Sec. 10. Minnesota Statutes 2010, section 349A.01, is amended by adding a
6.11subdivision to read:
6.12 Subd. 6b. Gaming machine game. "Gaming machine game" means a game
6.13operated by a gaming machine as authorized by the director.
6.14 Sec. 11. Minnesota Statutes 2010, section 349A.01, is amended by adding a
6.15subdivision to read:
6.16 Subd. 6c. Gaming machine play. "Gaming machine play" means an electronic
6.17record that proves participation in a gaming machine game.
6.18 Sec. 12. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
6.19 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
6.20contract to provide lottery products, gaming machines, maintenance of gaming machines,
6.21computer hardware and software used to monitor sales of lottery tickets and gaming
6.22machine plays, and lottery tickets. "Lottery procurement contract" does not include
6.23a contract to provide an annuity or prize payment agreement or materials, supplies,
6.24equipment, or services common to the ordinary operation of a state agency.
6.25 Sec. 13. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
6.26 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
6.27account in the lottery fund. The director shall pay all costs of operating the lottery,
6.28including payroll costs or amounts transferred to the state treasury for payroll costs, but
6.29not including lottery prizes, from the lottery operating account. The director shall credit to
6.30the lottery operations account amounts sufficient to pay the operating costs of the lottery.
7.1(b) Except as provided in paragraph (e), the director may not credit in any fiscal
7.2year thereafter amounts to the lottery operations account which when totaled exceed
7.3nine percent of gross revenue to the lottery fund in that fiscal year. In computing total
7.4amounts credited to the lottery operations account under this paragraph the director shall
7.5disregard amounts transferred to or retained by lottery retailers as sales commissions or
7.6other compensation and amounts transferred or retained by a racetrack under a location
7.7contract under section 349A.17.
7.8(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4
7.9percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
7.10placement of advertising.
7.11(d) Except as the director determines, the lottery is not subject to chapter 16A
7.12relating to budgeting, payroll, and the purchase of goods and services.
7.13(e) In addition to the amounts credited to the lottery operations account under
7.14paragraph (b), the director is authorized, if necessary, to meet the current obligations of
7.15the lottery and to credit up to 25 percent of an amount equal to the average annual amount
7.16which was authorized to be credited to the lottery operations account for the previous three
7.17fiscal years but was not needed to meet the obligations of the lottery.
7.18 Sec. 14. Minnesota Statutes 2010, section 349A.13, is amended to read:
7.19349A.13 RESTRICTIONS.
7.20Nothing in this chapter:
7.21(1) authorizes the director to conduct a lottery game or contest the winner or winners
7.22of which are determined by the result of a sporting event other than a horse race conducted
7.23under chapter 240;
7.24(2) authorizes the director to install or operate a lottery device operated by coin or
7.25currency which when operated determines the winner of a game, except as authorized
7.26under section 349A.17; and
7.27(3) authorizes the director to sell pull-tabs as defined under section349.12,
7.28subdivision 32 .
7.29 Sec. 15. [349A.17] GAMING MACHINES.
7.30 Subdivision 1. Location contract. (a) The director may enter into a contract with
7.31a person to provide locations for gaming machines. Contracts entered into under this
7.32section are not subject to chapter 16C. The director may only enter a contract under this
7.33subdivision with a person who holds a class A license under chapter 240. The gaming
7.34machines may only be placed at the racetrack for which the class A license under chapter
8.1240 was issued. Contracts entered into under this section are void if the racetrack: (1)
8.2has not hosted at least 75 days of live racing, authorized by the Minnesota Racing
8.3Commission, during the previous year, or (2) has not been approved, unless approval is
8.4pending, for at least 75 days of live racing during the present year.
8.5(b) The director may cancel, suspend, or refuse to renew the location contract
8.6if the person:
8.7(1) fails to account for proceeds from the gaming machines;
8.8(2) fails to remit funds to the director in accordance with the location contract;
8.9(3) violates a law, rule, or order of the director;
8.10(4) fails to comply with a material term of the location contract; or
8.11(5) has acted in a manner prejudicial to the public confidence in the integrity of the
8.12operation of the gaming machines.
8.13The cancellation, suspension, or refusal to renew the location contract is a contested
8.14case under sections 14.57 to 14.69.
8.15(c) Contracts entered into under this section must provide for compensation to the
8.16racetrack and its horsepersons in recognition of goods, services, and facilities provided
8.17expenses, risk factors, and losses. Compensation shall be in an amount equal to at least the
8.18following percentages of adjusted gross gaming machine revenue generated at the track:
8.19(1) of the first $125,000,000 of annual adjusted gross gaming machine revenue,
8.2051.6 percent to the licensee and 8.4 percent to the Minnesota Racing Commission to be
8.21deposited in the equine industry improvement fund established under section 240.13,
8.22subdivision 5a;
8.23(2) of annual adjusted gross gaming machine revenue between $125,000,000 and
8.24$200,000,000, 47.3 percent to the licensee and 7.7 percent to the Minnesota Racing
8.25Commission to be deposited in the equine industry improvement fund established under
8.26section 240.13, subdivision 5a; and
8.27(3) of annual adjusted gross gaming machine revenue in excess of $200,000,000,
8.2838.7 percent to the licensee and 6.3 percent to the Minnesota Racing Commission to be
8.29deposited in the equine industry improvement fund established under section 240.13,
8.30subdivision 5a.
8.31(d) From the compensation received by the racetrack under this section, the racetrack
8.32shall annually remit an amount equal to one percent of the adjusted gross gaming machine
8.33revenue to the city and one percent of the adjusted gross gaming machine revenue to the
8.34county in which the racetrack is located.
8.35 Subd. 2. Operation. (a) All gaming machines that are placed at a racetrack under
8.36subdivision 1 must be operated and controlled by the director.
9.1(b) Gaming machines must be owned or leased by the director, however, the financial
9.2responsibility for all other activities related to the gaming facility including, but not
9.3limited to, advertising, marketing, facility expenses, staffing, security, and surveillance,
9.4shall be borne by the holder of the location contract.
9.5(c) Gaming machines must be maintained by the lottery, or by a vendor that is under
9.6the control and direction of the director.
9.7(d) The director must have a central communications system that monitors activities
9.8on each gaming machine. The central communications system must be located at a
9.9lottery office.
9.10(e) The director must approve and oversee the general security arrangements
9.11associated with and relating to the operation of the gaming machines and implement
9.12procedures as deemed appropriate.
9.13(f) Advertising and promotional material produced by the racetrack relating to
9.14gaming machines located at the facility must be approved by the director.
9.15(g) The director may implement such other controls as are deemed necessary for the
9.16operation of gaming machines under this section.
9.17 Subd. 3. Specifications. Gaming machines must be capable of being linked
9.18electronically to a central communications system to provide auditing program information
9.19as required by the director.
9.20 Subd. 4. Games. The director shall specify the games that may be placed on
9.21a gaming machine as provided in section 349A.04. Gaming machines may conduct
9.22pari-mutuel wagering and display horse races under specifications provided by the director.
9.23 Subd. 5. Examination of machines. The director shall examine prototypes of
9.24gaming machines and require that the manufacturer of the machine pay the cost of the
9.25examination. The director may contract for the examination of gaming machines.
9.26 Subd. 6. Testing of machines. The director may require working models of a
9.27gaming machine to be transported to the locations the director designates for testing,
9.28examination, and analysis. The manufacturer shall pay all costs for testing, examination,
9.29analysis, and transportation of the machine model.
9.30 Subd. 7. Prizes. A person who plays a gaming machine agrees to be bound by the
9.31rules and game procedures applicable to that particular gaming machine game. The player
9.32acknowledges that the determination of whether the player has won a prize is subject to
9.33the rules and game procedures adopted by the director, claim procedures established by
9.34the director for the game, and any confidential or public validation tests established by
9.35the director for the game. A person under 18 years of age may not claim a prize from the
10.1operation of a gaming machine. A prize claimed from the play of a gaming machine game
10.2is not subject to section 349A.08, subdivision 8.
10.3 Subd. 8. Prohibitions. (a) A person under the age of 18 years may not play a
10.4game on a gaming machine.
10.5(b) The director or any employee of the lottery, or a member of the immediate family
10.6residing in the same household, may not play a game on a gaming machine or receive a
10.7prize from the operation of a gaming machine.
10.8 Subd. 9. Compulsive gambling notice. The director shall prominently post, in the
10.9area where the gaming machines are located, the toll-free telephone number established
10.10by the commissioner of human services in connection with the compulsive gambling
10.11program established under section 245.98. The director and the location provider shall
10.12establish a responsible gambling plan in consultation with the National Council on
10.13Problem Gambling or the Minnesota affiliate. By January 15 of each year, the director
10.14shall submit a report to the legislature, of not more than five pages in length, setting forth
10.15the status of the responsible gambling plan.
10.16 Subd. 10. Local licenses. Except as provided in subdivision 1, paragraph (d),
10.17no political subdivision may require a license to operate a gaming machine, restrict or
10.18regulate the placement of gaming machines, or impose a tax or fee on the business of
10.19operating gaming machines.
10.20 Sec. 16. Minnesota Statutes 2010, section 541.20, is amended to read:
10.21541.20 RECOVERY OF MONEY LOST.
10.22Every person who, by playing at cards, dice, or other game, or by betting on the
10.23hands or sides of such as are gambling, shall lose to any person so playing or betting
10.24any sum of money or any goods, and pays or delivers the same, or any part thereof, to
10.25the winner, may sue for and recover such money by a civil action, before any court
10.26of competent jurisdiction. For purposes of this section, gambling shall not include
10.27pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
10.28or sale of tickets in the state lottery, purchase of gaming machine plays as authorized under
10.29chapter 349A, or gambling authorized under chapters 349 and 349A.
10.30 Sec. 17. Minnesota Statutes 2010, section 541.21, is amended to read:
10.31541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
10.32Every note, bill, bond, mortgage, or other security or conveyance in which the whole
10.33or any part of the consideration shall be for any money or goods won by gambling or
10.34playing at cards, dice, or any other game whatever, or by betting on the sides or hands
11.1of any person gambling, or for reimbursing or repaying any money knowingly lent or
11.2advanced at the time and place of such gambling or betting, or lent and advanced for any
11.3gambling or betting to any persons so gambling or betting, shall be void and of no effect
11.4as between the parties to the same, and as to all persons except such as hold or claim
11.5under them in good faith, without notice of the illegality of the consideration of such
11.6contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
11.7wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
11.8in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
11.9conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
11.10section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
11.11 Sec. 18. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
11.12 Subd. 3. What are not bets. The following are not bets:
11.13(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
11.14harm or loss sustained, even though the loss depends upon chance;
11.15(2) a contract for the purchase or sale at a future date of securities or other
11.16commodities;
11.17(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
11.18contest for the determination of skill, speed, strength, endurance, or quality or to the bona
11.19fide owners of animals or other property entered in such a contest;
11.20(4) the game of bingo when conducted in compliance with sections349.11 to
349.23 ;
11.21(5) a private social bet not part of or incidental to organized, commercialized, or
11.22systematic gambling;
11.23(6) the operation of equipment or the conduct of a raffle under sections349.11 to
11.24349.22
, by an organization licensed by the Gambling Control Board or an organization
11.25exempt from licensing under section349.166 ;
11.26(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
11.27240; and
11.28(8) the purchase and sale of state lottery tickets and activities conducted at a
11.29licensed racetrack pursuant to a gaming machine location contract as authorized under
11.30chapter 349A.
11.31 Sec. 19. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
11.32 Subd. 2. State lottery. Sections609.755 and
609.76 do not prohibit the operation of
11.33the state lottery or the sale, possession, or purchase of tickets for the state lottery under
12.1chapter 349A, or the manufacture, possession, sale, or operation of a gaming machine
12.2under chapter 349A.
12.3 Sec. 20. LOTTERY BUDGET.
12.4The director of the State Lottery shall submit a budget for the operation and control
12.5of gaming machines to the commissioner of management and budget. Notwithstanding
12.6Minnesota Statutes, section 349A.10, subdivision 6, the director of the State Lottery
12.7may expend amounts necessary to operate and control the gaming machines. Amounts
12.8expended by the director of the State Lottery for the operation and control of the gaming
12.9machines in fiscal years 2013 and 2014 are not subject to the maximum amount set in law
12.10for the operation of the lottery.
12.11 Sec. 21. REPEALER.
12.12Minnesota Statutes 2010, section 240.30, subdivision 8, is repealed.
12.15 Section 1. RACINO REVENUE.
12.16 Subdivision 1. Allocation. One percent of the revenue transmitted to the
12.17commissioner under Minnesota Statutes, section 297A.651, must be deposited in a
12.18compulsive gambling treatment and education account in the special revenue fund. The
12.19remainder of the revenue must be deposited in a special account in the state treasury as
12.20provided in subdivision 3.
12.21 Subd. 2. Compulsive gambling; appropriations. One-half of the money in
12.22the compulsive gambling treatment and education account is annually appropriated to
12.23the commissioner of human services for the compulsive gambling treatment program
12.24established under Minnesota Statutes, section 245.98. One-half of the money in the
12.25compulsive gambling treatment and education account is annually appropriated to the
12.26Gambling Control Board for a grant to the state affiliate recognized by the National Council
12.27on Problem Gambling to increase public awareness of problem gambling, education
12.28and training for individuals and organizations providing effective treatment services to
12.29problem gamblers and their families, and research relating to problem gambling.
12.30 Subd. 3. Education. A special account is established in the state treasury, consisting
12.31of money deposited under Minnesota Statutes, section 297A.651, and any interest earned
12.32thereon. Money in this account may not be spent unless appropriated by law and is
12.33dedicated:
13.1(1) to increase the aid payment schedule for school district aids and credits payments
13.2in section 127A.45, to not more than 90 percent rounded to the nearest tenth of a percent
13.3without exceeding the amount available and with any remaining funds deposited in the
13.4budget reserve; and
13.5(2) to restore all or a portion of the net aid reduction under section 127A.441, and to
13.6reduce the property tax revenue recognition shift under section 123B.75, subdivision 5,
13.7paragraph (a).
13.10 Section 1. SEVERABILITY; SAVINGS.
13.11If any provision of this act is found to be invalid because it is in conflict with a
13.12provision of the Minnesota Constitution or the Constitution of the United States, or for any
13.13other reason, all other provisions of this act shall remain valid and any rights, remedies,
13.14and privileges that have been otherwise accrued by this act, shall remain in effect and may
13.15be proceeded with and concluded under this act.
13.16 Sec. 2. EFFECTIVE DATE.
13.17This act is effective the day following final enactment.
1.3gaming machines at a licensed racetrack; imposing a fee on gaming machine
1.4revenue; providing powers and duties to the director; dedicating money for
1.5education;amending Minnesota Statutes 2010, sections 240.03; 240.13, by
1.6adding a subdivision; 240.28, subdivision 2; 299L.07, subdivisions 2, 2a;
1.7340A.410, subdivision 5; 349A.01, subdivision 10, by adding subdivisions;
1.8349A.10, subdivision 3; 349A.13; 541.20; 541.21; 609.75, subdivision 3;
1.9609.761, subdivision 2; proposing coding for new law in Minnesota Statutes,
1.10chapters 297A; 349A; repealing Minnesota Statutes 2010, section 240.30,
1.11subdivision 8.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 2010, section 240.03, is amended to read:
1.16240.03 COMMISSION POWERS AND DUTIES.
1.17The commission has the following powers and duties:
1.18(1) to regulate horse racing in Minnesota to ensure that it is conducted in the public
1.19interest;
1.20(2) to issue licenses as provided in this chapter;
1.21(3) to enforce all laws and rules governing horse racing;
1.22(4) to collect and distribute all taxes provided for in this chapter;
1.23(5) to conduct necessary investigations and inquiries and compel the submission of
1.24information, documents, and records it deems necessary to carry out its duties;
1.25(6) to supervise the conduct of pari-mutuel betting on horse racing;
1.26(7) to employ and supervise personnel under this chapter;
2.1(8) to determine the number of racing days to be held in the state and at each
2.2licensed racetrack;
2.3(9) to take all necessary steps to ensure the integrity of racing in Minnesota;
2.4(10) to impose fees on the racing and card playing industries sufficient to recover the
2.5operating costs of the commission with the approval of the legislature according to section
2.7commissioner of management and budget may grant interim approval for any new fees
2.8or adjustments to existing fees that are not statutorily specified, until such time as the
2.9legislature reconvenes and acts upon the new fees or adjustments. As part of its biennial
2.10budget request, the commission must propose changes to its fees that will be sufficient to
2.11recover the operating costs of the commission
2.12(11) to take all necessary steps to ensure the security of all activities in a class A
2.13licensed racetrack. The duties and responsibilities of the commission include but are not
2.14limited to licensing employees of a class A licensee and vendors to the class A licensee
2.15involved in the conduct of gaming machines authorized by a location contract with the
2.16director of the State Lottery under section 349A.17 and overall surveillance and security
2.17of all conduct on all facilities of a licensed racetrack. The commission shall require that
2.18a class A licensed racetrack reimburse it for the commission's actual costs, including
2.19personnel costs, for conducting activities provided in this clause and amounts received
2.20must be deposited as provided in section 240.155, subdivision 1. The commission shall
2.21review procedures of the class A licensee to ensure compliance with section 240.13,
2.22subdivision 5a. Activities relating to the conduct of gaming machines are deemed to be
2.23relevant to the integrity of horse racing activities in Minnesota for purposes of sections
2.24240.03, 240.06, subdivision 5, 240.08, and 240.27, subdivision 1.
2.25 Sec. 2. Minnesota Statutes 2010, section 240.13, is amended by adding a subdivision
2.26to read:
2.27 Subd. 5a. Equine industry improvement fund. (a) To compensate the horse
2.28racing industry for the presence of lottery gaming machines at class A racing facilities,
2.29the commission shall establish and maintain an equine industry improvement fund into
2.30which the commission shall deposit the funds received pursuant to section 349A.17,
2.31subdivision 1. The commission shall determine the percentages of the purse supplement
2.32portion of the fund to be designated for supplementing the purses of each breed racing
2.33live at a class A facility housing lottery gaming machines. The primary purpose of
2.34the purse supplement allocation determination shall be the elevation of each breed's
2.35national ranking, on the basis of average purse per race, to the highest national ranking
3.1possible. The commission shall also attempt to maximize the economic impact of horse
3.2racing in the state, particularly in rural areas, and to reflect the preferences of breeders,
3.3owners, and horse racing fans. The commission shall allocate 75 percent of the fund
3.4for purse supplements. The commission shall routinely transfer money allocated for
3.5purse supplements to licensees conducting live racing at a facility hosting lottery gaming
3.6machines and direct the licensee to use the money to supplement the purses for each
3.7breed racing. Purse supplements required under this subdivision are in addition to purse
3.8payments otherwise established by law or contract. The location contract holder and the
3.9organization representing the majority of horsepersons racing at the location contract
3.10holder's racetrack may, by written contract, agree to use a portion of the transferred funds
3.11for racing-related purposes other than purse supplementation.
3.12(b) The commission shall allocate 20 percent of the fund for breeder's fund purposes
3.13and shall transmit that amount to the breeder's fund for the benefit of each breed racing
3.14at a class A licensed facility hosting lottery gaming machines. Amounts transferred for
3.15each breed shall be in the same proportions established, under this subdivision, for purse
3.16supplements. Amounts transferred to a breeder's fund shall be used for the purposes
3.17of section 240.18, subdivisions 2, paragraph (d), and 3, paragraph (b), subject to the
3.18proportionality requirement in section 240.18, subdivision 1.
3.19(c) Five percent of the fund shall be placed in an equine industry enhancement fund
3.20established by the commission. The commission shall award grants from this account
3.21designed to support and improve the nonracing equine industry including, but not limited
3.22to, construction of facilities and trails, production of shows, and issues related to retired
3.23horses.
3.24 Sec. 3. Minnesota Statutes 2010, section 240.28, subdivision 2, is amended to read:
3.25 Subd. 2. Betting. No member or employee of the commission may bet or cause a
3.26bet to be made on a race at a licensed racetrack while serving on or being employed by
3.27the commission. No person appointed or approved by the director as a steward may bet
3.28or cause a bet to be made at a licensed racetrack during a racing meeting at which the
3.29person is serving as a steward. The commission shall by rule prescribe such restrictions on
3.30betting by its licensees as it deems necessary to protect the integrity of racing. For the
3.31purposes of this subdivision, a play on a gaming machine authorized by the director of the
3.32State Lottery at a licensed racetrack is deemed to be a bet.
3.33 Sec. 4. [297A.651] LOTTERY GAMING MACHINES; IN-LIEU FEE.
4.1Adjusted gross revenue from the operation of gaming machines authorized under
4.2chapter 349A is exempt from the tax imposed under section 297A.62 and chapter 297E
4.3and any other tax, license, permit, or assessment for conducting a gambling activity that is
4.4not imposed by this section. The State Lottery must, on or before the 20th day of each
4.5month, transmit to the commissioner an amount equal to the adjusted gross gaming
4.6machine revenue from the operation of gaming machines, as defined in section 349A.01,
4.7for the previous month multiplied by: (1) 25 percent of annual adjusted gross gaming
4.8machine revenue generated by each person that has a location contract under section
4.9349A.17, subdivision 1, up to $125,000,000; (2) 30 percent of annual adjusted gross
4.10gaming machine revenue generated by each person that has a location contract under
4.11section 349A.17, subdivision 1, between $125,000,000 and $200,000,000; and (3) 40
4.12percent of annual adjusted gross gaming machine revenue generated by each person that
4.13has a location contract under section 349A.17, subdivision 1, in excess of $200,000,000.
4.14The commissioner shall deposit the money transmitted under this section in the state
4.15treasury as provided in article 2.
4.16 Sec. 5. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
4.17 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
4.18(1) may be sold by a person who is not licensed under this section, if the person (i) is
4.19not engaged in the trade or business of selling gambling devices, and (ii) does not sell
4.20more than one gambling device in any calendar year;
4.21(2) may be sold by the governing body of a federally recognized Indian tribe
4.22described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
4.23section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
4.24a distributor licensed under this section, and (iii) the licensed distributor notifies the
4.25commissioner of the purchase, in the same manner as is required when the licensed
4.26distributor ships a gambling device into Minnesota;
4.27(3) may be possessed by a person not licensed under this section if the person holds
4.28a permit issued under section
4.29(4) may be possessed by a state agency, with the written authorization of the director,
4.30for display or evaluation purposes only and not for the conduct of gambling
4.31(5) may be possessed by the State Lottery or a person who has entered into a location
4.32contract with the State Lottery as authorized under chapter 349A.
4.33 Sec. 6. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
5.1 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
5.2offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
5.3licensed under this section or to the State Lottery as authorized under chapter 349A.
5.4(b) A distributor licensed under this section may sell, offer to sell, market, rent,
5.5lease, or otherwise provide, in whole or in part, a gambling device only to:
5.6(1) the governing body of a federally recognized Indian tribe that is authorized
5.7to operate the gambling device under a tribal state compact under the Indian Gaming
5.8Regulatory Act, Public Law 100-497, and future amendments to it;
5.9(2) a person for use in the person's dwelling for display or amusement purposes in a
5.10manner that does not afford players an opportunity to obtain anything of value;
5.11(3) another distributor licensed under this section;
5.12(4) a person in another state who is authorized under the laws of that state to possess
5.13the gambling device
5.14(5) the State Lottery as authorized under chapter 349A.
5.15 Sec. 7. Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:
5.16 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
5.17subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
5.18or operate, or permit the keeping, possession, or operation on the licensed premises of dice
5.19or any gambling device as defined in section
5.20(b) Gambling equipment may be kept or operated and raffles conducted on licensed
5.21premises and adjoining rooms when the use of the gambling equipment is authorized by
5.22(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
5.23Act, Public Law 100-497, or (3) a tribal-state compact authorized under section
5.24(c) Lottery tickets may be purchased and sold within the licensed premises as
5.25authorized by the director of the lottery under chapter 349A.
5.26(d) Dice may be kept and used on licensed premises and adjoining rooms as
5.27authorized by section
5.28(e) This subdivision does not apply to a licensed racetrack holding a location
5.29contract as authorized by chapter 349A.
5.30 Sec. 8. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
5.31to read:
5.32 Subd. 1a. Adjusted gross gaming machine revenue. "Adjusted gross gaming
5.33machine revenue" means the sum of all money received by the lottery for gaming machine
6.1plays, other than promotional plays, less the amount paid out in prizes for gaming machine
6.2games.
6.3 Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
6.4to read:
6.5 Subd. 6a. Gaming machine. "Gaming machine" means any electronic device
6.6which, upon insertion of money, coin, token, voucher, electronic card, or other
6.7consideration, allows the play of a game, authorized by the director, the outcome of which
6.8is determined entirely or partly by chance. A gaming machine may award a player a prize
6.9in the form of money, tokens, prize slips, or other authorized consideration.
6.10 Sec. 10. Minnesota Statutes 2010, section 349A.01, is amended by adding a
6.11subdivision to read:
6.12 Subd. 6b. Gaming machine game. "Gaming machine game" means a game
6.13operated by a gaming machine as authorized by the director.
6.14 Sec. 11. Minnesota Statutes 2010, section 349A.01, is amended by adding a
6.15subdivision to read:
6.16 Subd. 6c. Gaming machine play. "Gaming machine play" means an electronic
6.17record that proves participation in a gaming machine game.
6.18 Sec. 12. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
6.19 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
6.20contract to provide lottery products, gaming machines, maintenance of gaming machines,
6.21computer hardware and software used to monitor sales of lottery tickets and gaming
6.22machine plays, and lottery tickets. "Lottery procurement contract" does not include
6.23a contract to provide an annuity or prize payment agreement or materials, supplies,
6.24equipment, or services common to the ordinary operation of a state agency.
6.25 Sec. 13. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
6.26 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
6.27account in the lottery fund. The director shall pay all costs of operating the lottery,
6.28including payroll costs or amounts transferred to the state treasury for payroll costs, but
6.29not including lottery prizes, from the lottery operating account. The director shall credit to
6.30the lottery operations account amounts sufficient to pay the operating costs of the lottery.
7.1(b) Except as provided in paragraph (e), the director may not credit in any fiscal
7.2year thereafter amounts to the lottery operations account which when totaled exceed
7.3nine percent of gross revenue to the lottery fund in that fiscal year. In computing total
7.4amounts credited to the lottery operations account under this paragraph the director shall
7.5disregard amounts transferred to or retained by lottery retailers as sales commissions or
7.6other compensation and amounts transferred or retained by a racetrack under a location
7.7contract under section 349A.17.
7.8(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4
7.9percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
7.10placement of advertising.
7.11(d) Except as the director determines, the lottery is not subject to chapter 16A
7.12relating to budgeting, payroll, and the purchase of goods and services.
7.13(e) In addition to the amounts credited to the lottery operations account under
7.14paragraph (b), the director is authorized, if necessary, to meet the current obligations of
7.15the lottery and to credit up to 25 percent of an amount equal to the average annual amount
7.16which was authorized to be credited to the lottery operations account for the previous three
7.17fiscal years but was not needed to meet the obligations of the lottery.
7.18 Sec. 14. Minnesota Statutes 2010, section 349A.13, is amended to read:
7.19349A.13 RESTRICTIONS.
7.20Nothing in this chapter:
7.21(1) authorizes the director to conduct a lottery game or contest the winner or winners
7.22of which are determined by the result of a sporting event other than a horse race conducted
7.23under chapter 240;
7.24(2) authorizes the director to install or operate a lottery device operated by coin or
7.25currency which when operated determines the winner of a game, except as authorized
7.26under section 349A.17; and
7.27(3) authorizes the director to sell pull-tabs as defined under section
7.28subdivision 32
7.29 Sec. 15. [349A.17] GAMING MACHINES.
7.30 Subdivision 1. Location contract. (a) The director may enter into a contract with
7.31a person to provide locations for gaming machines. Contracts entered into under this
7.32section are not subject to chapter 16C. The director may only enter a contract under this
7.33subdivision with a person who holds a class A license under chapter 240. The gaming
7.34machines may only be placed at the racetrack for which the class A license under chapter
8.1240 was issued. Contracts entered into under this section are void if the racetrack: (1)
8.2has not hosted at least 75 days of live racing, authorized by the Minnesota Racing
8.3Commission, during the previous year, or (2) has not been approved, unless approval is
8.4pending, for at least 75 days of live racing during the present year.
8.5(b) The director may cancel, suspend, or refuse to renew the location contract
8.6if the person:
8.7(1) fails to account for proceeds from the gaming machines;
8.8(2) fails to remit funds to the director in accordance with the location contract;
8.9(3) violates a law, rule, or order of the director;
8.10(4) fails to comply with a material term of the location contract; or
8.11(5) has acted in a manner prejudicial to the public confidence in the integrity of the
8.12operation of the gaming machines.
8.13The cancellation, suspension, or refusal to renew the location contract is a contested
8.14case under sections 14.57 to 14.69.
8.15(c) Contracts entered into under this section must provide for compensation to the
8.16racetrack and its horsepersons in recognition of goods, services, and facilities provided
8.17expenses, risk factors, and losses. Compensation shall be in an amount equal to at least the
8.18following percentages of adjusted gross gaming machine revenue generated at the track:
8.19(1) of the first $125,000,000 of annual adjusted gross gaming machine revenue,
8.2051.6 percent to the licensee and 8.4 percent to the Minnesota Racing Commission to be
8.21deposited in the equine industry improvement fund established under section 240.13,
8.22subdivision 5a;
8.23(2) of annual adjusted gross gaming machine revenue between $125,000,000 and
8.24$200,000,000, 47.3 percent to the licensee and 7.7 percent to the Minnesota Racing
8.25Commission to be deposited in the equine industry improvement fund established under
8.26section 240.13, subdivision 5a; and
8.27(3) of annual adjusted gross gaming machine revenue in excess of $200,000,000,
8.2838.7 percent to the licensee and 6.3 percent to the Minnesota Racing Commission to be
8.29deposited in the equine industry improvement fund established under section 240.13,
8.30subdivision 5a.
8.31(d) From the compensation received by the racetrack under this section, the racetrack
8.32shall annually remit an amount equal to one percent of the adjusted gross gaming machine
8.33revenue to the city and one percent of the adjusted gross gaming machine revenue to the
8.34county in which the racetrack is located.
8.35 Subd. 2. Operation. (a) All gaming machines that are placed at a racetrack under
8.36subdivision 1 must be operated and controlled by the director.
9.1(b) Gaming machines must be owned or leased by the director, however, the financial
9.2responsibility for all other activities related to the gaming facility including, but not
9.3limited to, advertising, marketing, facility expenses, staffing, security, and surveillance,
9.4shall be borne by the holder of the location contract.
9.5(c) Gaming machines must be maintained by the lottery, or by a vendor that is under
9.6the control and direction of the director.
9.7(d) The director must have a central communications system that monitors activities
9.8on each gaming machine. The central communications system must be located at a
9.9lottery office.
9.10(e) The director must approve and oversee the general security arrangements
9.11associated with and relating to the operation of the gaming machines and implement
9.12procedures as deemed appropriate.
9.13(f) Advertising and promotional material produced by the racetrack relating to
9.14gaming machines located at the facility must be approved by the director.
9.15(g) The director may implement such other controls as are deemed necessary for the
9.16operation of gaming machines under this section.
9.17 Subd. 3. Specifications. Gaming machines must be capable of being linked
9.18electronically to a central communications system to provide auditing program information
9.19as required by the director.
9.20 Subd. 4. Games. The director shall specify the games that may be placed on
9.21a gaming machine as provided in section 349A.04. Gaming machines may conduct
9.22pari-mutuel wagering and display horse races under specifications provided by the director.
9.23 Subd. 5. Examination of machines. The director shall examine prototypes of
9.24gaming machines and require that the manufacturer of the machine pay the cost of the
9.25examination. The director may contract for the examination of gaming machines.
9.26 Subd. 6. Testing of machines. The director may require working models of a
9.27gaming machine to be transported to the locations the director designates for testing,
9.28examination, and analysis. The manufacturer shall pay all costs for testing, examination,
9.29analysis, and transportation of the machine model.
9.30 Subd. 7. Prizes. A person who plays a gaming machine agrees to be bound by the
9.31rules and game procedures applicable to that particular gaming machine game. The player
9.32acknowledges that the determination of whether the player has won a prize is subject to
9.33the rules and game procedures adopted by the director, claim procedures established by
9.34the director for the game, and any confidential or public validation tests established by
9.35the director for the game. A person under 18 years of age may not claim a prize from the
10.1operation of a gaming machine. A prize claimed from the play of a gaming machine game
10.2is not subject to section 349A.08, subdivision 8.
10.3 Subd. 8. Prohibitions. (a) A person under the age of 18 years may not play a
10.4game on a gaming machine.
10.5(b) The director or any employee of the lottery, or a member of the immediate family
10.6residing in the same household, may not play a game on a gaming machine or receive a
10.7prize from the operation of a gaming machine.
10.8 Subd. 9. Compulsive gambling notice. The director shall prominently post, in the
10.9area where the gaming machines are located, the toll-free telephone number established
10.10by the commissioner of human services in connection with the compulsive gambling
10.11program established under section 245.98. The director and the location provider shall
10.12establish a responsible gambling plan in consultation with the National Council on
10.13Problem Gambling or the Minnesota affiliate. By January 15 of each year, the director
10.14shall submit a report to the legislature, of not more than five pages in length, setting forth
10.15the status of the responsible gambling plan.
10.16 Subd. 10. Local licenses. Except as provided in subdivision 1, paragraph (d),
10.17no political subdivision may require a license to operate a gaming machine, restrict or
10.18regulate the placement of gaming machines, or impose a tax or fee on the business of
10.19operating gaming machines.
10.20 Sec. 16. Minnesota Statutes 2010, section 541.20, is amended to read:
10.21541.20 RECOVERY OF MONEY LOST.
10.22Every person who, by playing at cards, dice, or other game, or by betting on the
10.23hands or sides of such as are gambling, shall lose to any person so playing or betting
10.24any sum of money or any goods, and pays or delivers the same, or any part thereof, to
10.25the winner, may sue for and recover such money by a civil action, before any court
10.26of competent jurisdiction. For purposes of this section, gambling shall not include
10.27pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
10.28or sale of tickets in the state lottery, purchase of gaming machine plays as authorized under
10.29chapter 349A, or gambling authorized under chapters 349 and 349A.
10.30 Sec. 17. Minnesota Statutes 2010, section 541.21, is amended to read:
10.31541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
10.32Every note, bill, bond, mortgage, or other security or conveyance in which the whole
10.33or any part of the consideration shall be for any money or goods won by gambling or
10.34playing at cards, dice, or any other game whatever, or by betting on the sides or hands
11.1of any person gambling, or for reimbursing or repaying any money knowingly lent or
11.2advanced at the time and place of such gambling or betting, or lent and advanced for any
11.3gambling or betting to any persons so gambling or betting, shall be void and of no effect
11.4as between the parties to the same, and as to all persons except such as hold or claim
11.5under them in good faith, without notice of the illegality of the consideration of such
11.6contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
11.7wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
11.8in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
11.9conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
11.10section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
11.11 Sec. 18. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
11.12 Subd. 3. What are not bets. The following are not bets:
11.13(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
11.14harm or loss sustained, even though the loss depends upon chance;
11.15(2) a contract for the purchase or sale at a future date of securities or other
11.16commodities;
11.17(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
11.18contest for the determination of skill, speed, strength, endurance, or quality or to the bona
11.19fide owners of animals or other property entered in such a contest;
11.20(4) the game of bingo when conducted in compliance with sections
11.21(5) a private social bet not part of or incidental to organized, commercialized, or
11.22systematic gambling;
11.23(6) the operation of equipment or the conduct of a raffle under sections
11.25exempt from licensing under section
11.26(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
11.27240; and
11.28(8) the purchase and sale of state lottery tickets and activities conducted at a
11.29licensed racetrack pursuant to a gaming machine location contract as authorized under
11.30chapter 349A.
11.31 Sec. 19. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
11.32 Subd. 2. State lottery. Sections
11.33the state lottery or the sale, possession, or purchase of tickets for the state lottery under
12.1chapter 349A, or the manufacture, possession, sale, or operation of a gaming machine
12.2under chapter 349A.
12.3 Sec. 20. LOTTERY BUDGET.
12.4The director of the State Lottery shall submit a budget for the operation and control
12.5of gaming machines to the commissioner of management and budget. Notwithstanding
12.6Minnesota Statutes, section 349A.10, subdivision 6, the director of the State Lottery
12.7may expend amounts necessary to operate and control the gaming machines. Amounts
12.8expended by the director of the State Lottery for the operation and control of the gaming
12.9machines in fiscal years 2013 and 2014 are not subject to the maximum amount set in law
12.10for the operation of the lottery.
12.11 Sec. 21. REPEALER.
12.12Minnesota Statutes 2010, section 240.30, subdivision 8, is repealed.
12.15 Section 1. RACINO REVENUE.
12.16 Subdivision 1. Allocation. One percent of the revenue transmitted to the
12.17commissioner under Minnesota Statutes, section 297A.651, must be deposited in a
12.18compulsive gambling treatment and education account in the special revenue fund. The
12.19remainder of the revenue must be deposited in a special account in the state treasury as
12.20provided in subdivision 3.
12.21 Subd. 2. Compulsive gambling; appropriations. One-half of the money in
12.22the compulsive gambling treatment and education account is annually appropriated to
12.23the commissioner of human services for the compulsive gambling treatment program
12.24established under Minnesota Statutes, section 245.98. One-half of the money in the
12.25compulsive gambling treatment and education account is annually appropriated to the
12.26Gambling Control Board for a grant to the state affiliate recognized by the National Council
12.27on Problem Gambling to increase public awareness of problem gambling, education
12.28and training for individuals and organizations providing effective treatment services to
12.29problem gamblers and their families, and research relating to problem gambling.
12.30 Subd. 3. Education. A special account is established in the state treasury, consisting
12.31of money deposited under Minnesota Statutes, section 297A.651, and any interest earned
12.32thereon. Money in this account may not be spent unless appropriated by law and is
12.33dedicated:
13.1(1) to increase the aid payment schedule for school district aids and credits payments
13.2in section 127A.45, to not more than 90 percent rounded to the nearest tenth of a percent
13.3without exceeding the amount available and with any remaining funds deposited in the
13.4budget reserve; and
13.5(2) to restore all or a portion of the net aid reduction under section 127A.441, and to
13.6reduce the property tax revenue recognition shift under section 123B.75, subdivision 5,
13.7paragraph (a).
13.10 Section 1. SEVERABILITY; SAVINGS.
13.11If any provision of this act is found to be invalid because it is in conflict with a
13.12provision of the Minnesota Constitution or the Constitution of the United States, or for any
13.13other reason, all other provisions of this act shall remain valid and any rights, remedies,
13.14and privileges that have been otherwise accrued by this act, shall remain in effect and may
13.15be proceeded with and concluded under this act.
13.16 Sec. 2. EFFECTIVE DATE.
13.17This act is effective the day following final enactment.
