Bill Text: MN SF702 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Lawful gambling tax rates modification; linked bingo and electronic pull-tabs authorization
Sponsorship: Bipartisan Bill
Status: (Introduced - Dead) 2012-04-03 - Withdrawn and returned to author [SF702 Detail]
Download: Minnesota-2011-SF702-Engrossed.html
1.2relating to gambling; modifying certain rates of tax on lawful gambling;
1.3providing for linked bingo and electronic pull-tabs; making clarifying,
1.4conforming, and technical changes;amending Minnesota Statutes 2010, sections
1.5297E.02, subdivisions 1, 4, 6; 349.12, subdivisions 5, 12a, 25b, 25c, 25d, 29,
1.632, 32a; 349.13; 349.151, subdivisions 4b, 4c, by adding a subdivision; 349.155,
1.7subdivisions 3, 4; 349.161, subdivision 1; 349.163, subdivisions 1, 6; 349.1635,
1.8subdivision 2, by adding a subdivision; 349.165, subdivision 2; 349.17,
1.9subdivisions 6, 7, 8; 349.1721, by adding subdivisions; 349.18, subdivision 1;
1.10349.211, subdivision 1a; proposing coding for new law in Minnesota Statutes,
1.11chapter 349.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.13 Section 1. Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read:
1.14 Subdivision 1. Imposition. A tax is imposed on all lawful gambling other than
1.15(1) pull-tab deals or games; (2) tipboard deals or games; and (3) items listed in section
1.16297E.01, subdivision 8
, clauses (4) and (5), at the rate of 8.5 5.0 percent on the gross
1.17receipts as defined in section297E.01, subdivision 8 , less prizes actually paid. The tax
1.18imposed by this subdivision is in lieu of the tax imposed by section297A.62 and all
1.19local taxes and license fees except a fee authorized under section349.16, subdivision 8 ,
1.20or a tax authorized under subdivision 5.
1.21The tax imposed under this subdivision is payable by the organization or party
1.22conducting, directly or indirectly, the gambling.
1.23 Sec. 2. Minnesota Statutes 2010, section 297E.02, subdivision 4, is amended to read:
1.24 Subd. 4. Pull-tab and tipboard tax. (a) A tax is imposed on the sale of each deal of
1.25pull-tabs and tipboards sold by a distributor. The rate of the tax is1.7 1.0 percent of the
1.26ideal gross of the pull-tab or tipboard deal. The sales tax imposed by chapter 297A on the
2.1sale of the pull-tabs and tipboards by the distributor is imposed on the retail sales price
2.2less the tax imposed by this subdivision. The retail sale of pull-tabs or tipboards by the
2.3organization is exempt from taxes imposed by chapter 297A and is exempt from all local
2.4taxes and license fees except a fee authorized under section349.16, subdivision 8 .
2.5(b) The liability for the tax imposed by this section is incurred when the pull-tabs
2.6and tipboards are delivered by the distributor to the customer or to a common or contract
2.7carrier for delivery to the customer, or when received by the customer's authorized
2.8representative at the distributor's place of business, regardless of the distributor's method
2.9of accounting or the terms of the sale.
2.10The tax imposed by this subdivision is imposed on all sales of pull-tabs and
2.11tipboards, except the following:
2.12(1) sales to the governing body of an Indian tribal organization for use on an Indian
2.13reservation;
2.14(2) sales to distributors licensed under the laws of another state or of a province of
2.15Canada, as long as all statutory and regulatory requirements are met in the other state or
2.16province;
2.17(3) sales of promotional tickets as defined in section349.12 ; and
2.18(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards
2.19under the exemption from licensing in section349.166, subdivision 2 . A distributor shall
2.20require an organization conducting exempt gambling to show proof of its exempt status
2.21before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor
2.22shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and
2.23tipboards that are exempt from tax under this subdivision.
2.24(c) A distributor having a liability of $10,000 or more during a fiscal year ending
2.25June 30 must remit all liabilities in the subsequent calendar year by electronic means.
2.26(d) Any customer who purchases deals of pull-tabs or tipboards from a distributor
2.27may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision
2.28for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on
2.29a form prescribed by the commissioner by March 20 of the year following the calendar
2.30year for which the refund is claimed. The refund must be filed as part of the customer's
2.31February monthly return. The refund or credit is equal to1.7 1.0 percent of the face
2.32value of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be
2.331.75 1.35 percent of the face value of the unsold pull-tab or tipboard tickets for claims for
2.34a refund or credit of taxes filed on the February2001 2012 monthly return. The refund
2.35claimed will be applied as a credit against tax owing under this chapter on the February
2.36monthly return. If the refund claimed exceeds the tax owing on the February monthly
3.1return, that amount will be refunded. The amount refunded will bear interest pursuant
3.2to section270C.405 from 90 days after the claim is filed.
3.3 Sec. 3. Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read:
3.4 Subd. 6. Combined receipts tax. In addition to the taxes imposed under
3.5subdivisions 1 and 4, a tax is imposed on the combined receipts of the organization. As
3.6used in this section, "combined receipts" is the sum of the organization's gross receipts
3.7from lawful gambling less gross receipts directly derived from the conduct of bingo,
3.8raffles, and paddle wheels, as defined in section297E.01, subdivision 8 , for the fiscal year.
3.9The combined receipts of an organization are subject to a tax computed according to
3.10the following schedule:
3.26The tax imposed under this subdivision is payable by the organization or party
3.27conducting, directly or indirectly, the gambling on a site-by-site basis.
3.28 Sec. 4. Minnesota Statutes 2010, section 349.12, subdivision 5, is amended to read:
3.29 Subd. 5. Bingo occasion. "Bingo occasion" means a single gathering or session at
3.30which a series of one or more successive bingo games is played. There is no limit on the
3.31number of games conducted during a bingo occasionbut. A bingo occasion must not last
3.32longer than eight consecutive hours, except that linked bingo games played on electronic
3.33bingo devices may be played during regular business hours of the permitted premises and
3.34all play during this period is considered a bingo occasion for reporting purposes.
3.35 Sec. 5. Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read:
3.36 Subd. 12a. Electronic bingo device. "Electronic bingo device" means an electronic
3.37bingo device used by a bingo player to (1) monitor bingo paper sheets or a facsimile of
4.1a bingo paper sheet when purchased at the time and place of an organization's bingo
4.2occasionand which (1) provides a means for bingo players to, (2) activate numbers
4.3announcedby a bingo caller; (2) compares or displayed and compare the numbers entered
4.4by the player to the bingo faces previously stored in the memory of the device;, and (3)
4.5identifies identify a winning bingo pattern or game requirement.
4.6Electronic bingo device does not mean any device into which coin, currency, or tokens are
4.7inserted to activate play but does allow for activation by coded data entry.
4.8 Sec. 6. Minnesota Statutes 2010, section 349.12, subdivision 25b, is amended to read:
4.9 Subd. 25b. Linked bingo game provider. "Linked bingo game provider" means
4.10any person who provides the means to link bingoprizes in a linked bingo game, who
4.11provides linked bingo paper sheets to the participating organizations games, who provides
4.12linked bingo prize management, and who provides the linked bingo game system.
4.13 Sec. 7. Minnesota Statutes 2010, section 349.12, subdivision 25c, is amended to read:
4.14 Subd. 25c. Linked bingo game system. "Linked bingo game system" means the
4.15equipment used by the linked bingo provider to conduct, transmit, and track a linked
4.16bingo game. The system must be approved by the board before its use in this state and it
4.17must havedial-up or other the capability to permit the board to electronically monitor its
4.18operation remotely.
4.19 Sec. 8. Minnesota Statutes 2010, section 349.12, subdivision 25d, is amended to read:
4.20 Subd. 25d. Linked bingo prize pool. "Linked bingo prize pool" means the total
4.21of all prize money that each participating organization has contributed to a linked bingo
4.22game prize and includes any portion of the prize pool that is carried over from one
4.23occasion game to another in a progressive linked bingo game.
4.24 Sec. 9. Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read:
4.25 Subd. 29. Paddle wheel. "Paddle wheel" means a wheel marked off into sections
4.26containing one or more numbers, and which, after being turned or spun manually or
4.27electronically, uses a pointer or marker to indicate winning chances.
4.28 Sec. 10. Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read:
4.29 Subd. 32. Pull-tab. "Pull-tab" means a single folded or banded paper ticketor, a
4.30multi-ply card with perforated break-open tabs, or a facsimile of a paper pull-tab when
4.31used in conjunction with a pull-tab dispensing device, the face of which is initially covered
5.1to conceal one or more numbers or symbols, where one or more of each set of tickets,or
5.2cards, or facsimiles has been designated in advance as a winner.
5.3 Sec. 11. Minnesota Statutes 2010, section 349.12, subdivision 32a, is amended to read:
5.4 Subd. 32a. Pull-tab dispensing device. "Pull-tab dispensing device" means a
5.5mechanical or electronic device that dispenses paper pull-tabsand has no additional
5.6function as an amusement or gambling device or displays facsimiles of paper pull-tabs. A
5.7pull-tab dispensing device may have as a component an auditory or visual enhancement to
5.8promote or provide information about a game being dispensed or displayed, provided the
5.9component does not affect the outcome of a game or display the results of a gameor an
5.10individual ticket. A pull-tab dispensing device that displays facsimiles of paper pull-tabs
5.11is not allowed to accept any coin, currency, or tokens, but does allow for activation by
5.12coded data entry.
5.13 Sec. 12. Minnesota Statutes 2010, section 349.13, is amended to read:
5.14349.13 LAWFUL GAMBLING.
5.15Lawful gambling is not a lottery or gambling within the meaning of sections609.75
5.16to609.76 if it is conducted under this chapter. A pull-tab dispensing device permitted by
5.17board rule is not a gambling device within the meaning of sections609.75 to
609.76 and
5.18chapter 299L. Electronic game devices authorized under this chapter may be used only
5.19in the conduct of lawful gambling permitted under this chapter and may not display or
5.20simulate any other form of gambling or entertainment.
5.21 Sec. 13. Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read:
5.22 Subd. 4b. Pull-tab sales from dispensing devices.(a) The board may by rule
5.23authorize but not require the use of pull-tab dispensing devices.
5.24(b) Rules adopted under paragraph (a):
5.25(1) must limit the number of pull-tab dispensing devices on any permitted premises
5.26to three; and
5.27(2) must limit the use of pull-tab dispensing devices to a permitted premises which is
5.28(i) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt beverages;
5.29or (ii) a premises where bingo is conducted and admission is restricted to persons 18
5.30years or older.
5.31(c) Notwithstanding rules adopted under paragraph (b), pull-tab dispensing devices
5.32may be used in establishments licensed for the off-sale of intoxicating liquor, other than
5.33drugstores and general food stores licensed under section
340A.405, subdivision 1.
6.1 Sec. 14. Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read:
6.2 Subd. 4c. Electronic bingo. (a) The board may by rule authorize but not require the
6.3use of electronic bingo devices.
6.4(b) Rules adopted under paragraph (a):
6.5(1) must limit the number of bingo faces that can be played using an electronic
6.6bingo device to 36;
6.7(2) must require that an electronic bingo device be used withcorresponding bingo
6.8paper sheets or a facsimile, printed at the point of sale, of a bingo paper sheet as approved
6.9by the board;
6.10(3) must require that the electronic bingo device site system havedial-up the
6.11capability to permit the board to remotely monitor the operation of the device and the
6.12internal accounting systems; and
6.13(4) must prohibit the price of a face played on an electronic bingo device from
6.14being less than the price of a face on a bingo paper sheet sold for the same game at the
6.15same occasion.
6.16 Sec. 15. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
6.17to read:
6.18 Subd. 4d. Electronic game devices. Notwithstanding other rulemaking
6.19requirements under chapter 349, the adoption of rules by the board for manufacturing
6.20standards of electronic game devices, for games played on electronic game devices, and
6.21for operating procedures, record keeping, and reports for games played on electronic game
6.22devices may be promulgated under the provisions of section 14.389.
6.23 Sec. 16. Minnesota Statutes 2010, section 349.155, subdivision 3, is amended to read:
6.24 Subd. 3. Mandatory disqualifications. (a) In the case of licenses for manufacturers,
6.25distributors, distributor salespersons, linked bingo game providers, and gambling
6.26managers, the board may not issue or renew a license under this chapter, and shall revoke
6.27a license under this chapter, if the applicant or licensee, or a director, officer, partner,
6.28governor, or person in a supervisory or management position of the applicant or licensee:
6.29(1) has ever been convicted of a felony or a crime involving gambling;
6.30(2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use
6.31of a firearm, or (iii) making terroristic threats;
6.32(3) is or has ever been connected with or engaged in an illegal business;
6.33(4) owes $500 or more in delinquent taxes as defined in section270C.72 ;
7.1(5) had a sales and use tax permit revoked by the commissioner of revenue within
7.2the past two years; or
7.3(6) after demand, has not filed tax returns required by the commissioner of revenue.
7.4The board may deny or refuse to renew a license under this chapter, and may revoke a
7.5license under this chapter, if any of the conditions in this paragraph are applicable to
7.6an affiliate or direct or indirect holder of more than a five percent financial interest in
7.7the applicant or licensee.
7.8(b) In the case of licenses for organizations, the board may not issue a license under
7.9this chapter, and shall revoke a license under this chapter, if the organization, or an officer
7.10or member of the governing body of the organization:
7.11(1) has been convicted of a felony or gross misdemeanor involving theft or fraud; or
7.12(2) has ever been convicted of a crime involving gambling; or.
7.13(3) has had a license issued by the board or director permanently revoked for
7.14violation of law or board rule.
7.15 Sec. 17. Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read:
7.16 Subd. 4. License revocation, suspension, denial; censure. (a) The board may by
7.17order (i) deny, suspend, revoke, or refuse to renew a license or premises permit, or (ii)
7.18censure a licensee or applicant, if it finds that the order is in the public interest and that the
7.19applicant or licensee, or a director, officer, partner, governor, person in a supervisory or
7.20management position of the applicant or licensee, an employee eligible to make sales on
7.21behalf of the applicant or licensee, or direct or indirect holder of more than a five percent
7.22financial interest in the applicant or licensee:
7.23(1) has violated or failed to comply with any provision of this chapter or chapter
7.24297E or 299L, or any rule adopted or order issued thereunder;
7.25(2) has filed an application for a license that is incomplete in any material respect, or
7.26contains a statement that, in light of the circumstances under which it was made, is false,
7.27misleading, fraudulent, or a misrepresentation;
7.28(3) has made a false statement in a document or report required to be submitted to
7.29the board or the commissioner of revenue, or has made a false statement to the board, the
7.30compliance review group, or the director;
7.31(4) has been convicted of a crime in another jurisdiction that would be a felony if
7.32committed in Minnesota;
7.33(5) is permanently or temporarily enjoined by any gambling regulatory agency from
7.34engaging in or continuing any conduct or practice involving any aspect of gambling;
8.1(6) has had a gambling-related license revoked or suspended, or has paid or been
8.2required to pay a monetary penalty of $2,500 or more, by a gambling regulator in another
8.3state or jurisdiction;
8.4(7) has been the subject of any of the following actions by the director of alcohol
8.5and gambling enforcement or commissioner of public safety: (i) had a license under
8.6chapter 299L denied, suspended, or revoked, (ii) been censured, reprimanded, has paid or
8.7been required to pay a monetary penalty or fine, or (iii) has been the subject of any other
8.8discipline by the director or commissioner;
8.9(8) has engaged in conduct that is contrary to the public health, welfare, or safety, or
8.10to the integrity of gambling; or
8.11(9) based on past activities or criminal record poses a threat to the public interest or
8.12to the effective regulation and control of gambling, or creates or enhances the dangers of
8.13unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling
8.14or the carrying on of the business and financial arrangements incidental to the conduct of
8.15gambling.
8.16(b) The revocation or suspension of an organization license may not exceed a period
8.17of ten years, including any revocation or suspension imposed by the board prior to the
8.18effective date of this paragraph, except that:
8.19(1) any prohibition placed by the board on who may be involved in the conduct,
8.20oversight, or management of the revoked organization's lawful gambling activity is
8.21permanent; and
8.22(2) a revocation or suspension will remain in effect until the payment of any taxes,
8.23fees, and fines that are delinquent have been paid by the organization to the satisfaction of
8.24the board.
8.25 Sec. 18. Minnesota Statutes 2010, section 349.161, subdivision 1, is amended to read:
8.26 Subdivision 1. Prohibited acts; licenses required. (a) No person may:
8.27 (1) sell, offer for sale, or furnish gambling equipment for use within the state other
8.28than for lawful gambling exempt or excluded from licensing, except to an organization
8.29licensed for lawful gambling;
8.30 (2) sell, offer for sale, or furnish gambling equipment for use within the state
8.31without having obtained a distributor license or a distributor salesperson license under
8.32this section except that an organization authorized to conduct bingo by the board may
8.33loan bingo hard cards and devices for selecting bingo numbers to another organization
8.34authorized to conduct bingo;
9.1 (3) sell, offer for sale, or furnish gambling equipment for use within the state that is
9.2not purchased or obtained from a manufacturer or distributor licensed under this chapter; or
9.3 (4) sell, offer for sale, or furnish gambling equipment for use within the state that
9.4has the same serial number as another item of gambling equipment of the same type sold
9.5or offered for sale or furnished for use in the state by that distributor.
9.6 (b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling
9.7equipment for use within the state without being employed by a licensed distributor or
9.8owning a distributor license.
9.9(c) No distributor or distributor salesperson may also be licensed as a linked bingo
9.10game provider under section 349.1635.
9.11 Sec. 19. Minnesota Statutes 2010, section 349.163, subdivision 1, is amended to read:
9.12 Subdivision 1. License required. No manufacturer of gambling equipment may
9.13sell any gambling equipment to any person for use or resale within the state, unless the
9.14manufacturer has a current and valid license issued by the board under this section and has
9.15satisfied other criteria prescribed by the board by rule. A manufacturer licensed under this
9.16section may also be licensed as a linked bingo game provider under section 349.1635.
9.17A manufacturer licensed under this section may not also be directly or indirectly
9.18licensed as a distributor under section349.161 .
9.19 Sec. 20. Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read:
9.20 Subd. 6. Samples of gambling equipment. The board shall require each licensed
9.21manufacturer to submit to the board one or more samples of each item of gambling
9.22equipment the manufacturer manufactures for use or resale in this state. For purposes of
9.23this subdivision, a manufacturer is also required to submit the applicable version of any
9.24software necessary to operate electronic devices and related systems. The board shall
9.25inspect and test all the equipment, including software and software upgrades, it deems
9.26necessary to determine the equipment's compliance with law and board rules. Samples
9.27required under this subdivision must be approved by the board before the equipment being
9.28sampled is shipped into or sold for use or resale in this state. The board shall impose a fee
9.29of $25 for each item of gambling equipment that the manufacturer submits for approval
9.30or for which the manufacturer requests approval. The board shall impose a fee of $100
9.31for each sample of gambling equipment that it tests. The board may require samples of
9.32gambling equipment to be tested by an independent testing laboratory prior to submission
9.33to the board for approval. All costs of testing by an independent testing laboratory must be
9.34borne by the manufacturer. An independent testing laboratory used by a manufacturer to
10.1test samples of gambling equipment must be approved by the board before the equipment
10.2is submitted to the laboratory for testing. The board may request the assistance of the
10.3commissioner of public safety and the director of the State Lottery in performing the tests.
10.4 Sec. 21. Minnesota Statutes 2010, section 349.1635, subdivision 2, is amended to read:
10.5 Subd. 2. License application. The board may issue a license to a linked bingo game
10.6provider or to a manufacturer licensed under section 349.163 who meets the qualifications
10.7of this chapter and the rules promulgated by the board. The application shall be on a form
10.8prescribed by the board. The license is valid for two years and the fee for a linked bingo
10.9game provider license is $5,000 per year.
10.10 Sec. 22. Minnesota Statutes 2010, section 349.1635, is amended by adding a
10.11subdivision to read:
10.12 Subd. 5. Linked bingo game services requirements. A linked bingo game
10.13provider shall contract with licensed distributors for linked bingo game services including,
10.14but not limited to, the solicitation of agreements with licensed organizations, and
10.15installation, repair, or maintenance of the linked bingo game system. No linked bingo
10.16game provider may contract with any distributor on an exclusive basis. A linked bingo
10.17game provider may refuse to contract with a licensed distributor if the linked bingo
10.18game provider demonstrates that the licensed distributor is not capable of performing
10.19the services under the contract.
10.20 Sec. 23. Minnesota Statutes 2010, section 349.165, subdivision 2, is amended to read:
10.21 Subd. 2. Contents of application. An application for a premises permit must
10.22contain:
10.23(1) the name and address of the applying organization;
10.24(2) a description of the site for which the permit is sought, including its address and,
10.25where applicable, its placement within another premises or establishment;
10.26(3) if the site is leased, the name and address of the lessor and information about the
10.27lease the board requires, including all rents and other charges for the use of the site. The
10.28lease term is concurrent with the term of the premises permit. The lease must contain a
10.2930-day termination clause. No lease is required for the conduct of a raffle; and
10.30(4) other information the board deems necessary to carry out its purposes.
10.31An organization holding a premises permit must notify the board in writing within
10.32ten days whenever any material change is made in the above information.
11.1 Sec. 24. Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read:
11.2 Subd. 6. Conduct of bingo. A game of bingo begins with the first letter and number
11.3called or displayed. Each player must cover, mark, or activate the numbers when bingo
11.4numbers are randomly selected, and announced, and or displayed to the players, either
11.5manually or with a flashboard and monitor. The game is won when a player, using
11.6bingo paper, bingo hard card, or a facsimile of a bingo paper sheet, has completed, as
11.7described in the bingo program, a previously designated pattern or previously determined
11.8requirements of the game and declared bingo. The game is completed when a winning
11.9card, sheet, or facsimile is verified and a prize awarded pursuant to subdivision 3.
11.10 Sec. 25. Minnesota Statutes 2010, section 349.17, subdivision 7, is amended to read:
11.11 Subd. 7. Bar bingo. An organization may conduct bar bingo subject to the
11.12following restrictions:
11.13 (1) the bingo is conducted at a site the organization owns or leases and which has a
11.14license for the sale of intoxicating beverages on the premises under chapter 340A;
11.15 (2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper
11.16sheets purchased from a licensed distributor or licensed linked bingo game provider; and
11.17 (3) no rent may be paid for a bar bingo occasion, except as allowed in section
11.18349.185.
11.19 Sec. 26. Minnesota Statutes 2010, section 349.17, subdivision 8, is amended to read:
11.20 Subd. 8. Linked bingo games. (a) A licensed organization may conduct or
11.21participate innot more than two linked bingo games per occasion, one of which may be a
11.22including progressivegame games in which a portion of the prize is carried over from one
11.23occasion game to another until won by a player achieving a bingo within a predetermined
11.24amount of bingo numbers called.
11.25 (b)Each participating licensed organization shall contribute to each prize awarded in
11.26a linked bingo game in an amount not to exceed $300 Linked bingo games may only be
11.27conducted by licensed organizations who have a valid agreement with the linked bingo
11.28game provider.
11.29 (c) An electronic bingo device as defined in section349.12, subdivision 12a , may
11.30be used for a linked bingo game.
11.31 (d) Linked bingo games played on an electronic bingo device may be located only at
11.32a permitted premises where the organization conducts another form of lawful gambling
11.33and the premises is:
12.1 (1) a licensed premises for the on-sale or off-sale of intoxicating liquor or 3.2 percent
12.2malt beverages, except for a general foods store or drug store permitted to sell alcoholic
12.3beverages under section 340A.405, subdivision 1; or
12.4 (2) where bingo is conducted as the primary business, the premises has a seating
12.5capacity of at least 100, and admission is restricted to persons 18 years or older.
12.6 (e) For linked bingo games played on an electronic bingo device:
12.7(1) no more than six electronic bingo devices may be in play at a permitted premises
12.8with 200 seats or less;
12.9(2) no more than 12 electronic bingo devices may be in play at a permitted premises
12.10with 201 seats or more; and
12.11 (3) for premises where the primary business is bingo, the number of electronic bingo
12.12devices that may be in play will be determined by the board.
12.13Seating capacity is determined as specified under local fire code.
12.14 (f) Prior to a bingo occasion for linked bingo games played on an electronic bingo
12.15device, the linked bingo game provider, on behalf of the participating organizations, must
12.16provide to the board a bingo program in a format prescribed by the board.
12.17(d) (g) The board may adopt rules to:
12.18 (1) specify the manner in which a linked bingo game must be played and how the
12.19linked bingo prizes must be awarded;
12.20 (2) specify the records to be maintained by a linked bingo game provider;
12.21 (3) require the submission of periodic reports by the linked bingo game provider and
12.22specify the content of the reports;
12.23 (4) establish the qualifications required to be licensed as a linked bingo game
12.24provider; and
12.25 (5) any other matter involving the operation of a linked bingo game.
12.26 Sec. 27. Minnesota Statutes 2010, section 349.1721, is amended by adding a
12.27subdivision to read:
12.28 Subd. 3. Pull-tab dispensing devices restrictions and requirements. (a) The
12.29number of paper pull-tab dispensing devices located on any permitted premises is limited
12.30to three.
12.31(b) The number of pull-tab dispensing devices that use facsimiles of paper pull-tabs
12.32is limited to:
12.33(1) no more than six devices in play at any permitted premises with 200 seats or less;
12.34(2) no more than 12 devices in play at any permitted premises with 201 seats
12.35or more; and
13.1(3) for premises where the primary business is bingo, the number of devices that
13.2may be in play will be determined by the board.
13.3Seating capacity is determined as specified under the local fire code.
13.4(c) The use of any pull-tab dispensing device must be at a permitted premises
13.5which is:
13.6(1) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt
13.7beverages; or
13.8(2) a premises where bingo is conducted as the primary business and admission
13.9is restricted to persons 18 years or older.
13.10(d) Pull-tab dispensing devices may be used in establishments licensed for the
13.11off-sale of intoxicating liquor, other than drugstores and general food stores licensed under
13.12section 340A.405, subdivision 1.
13.13(e) An organization may use pull-tab dispensing devices that use facsimiles of paper
13.14pull-tabs if the organization conducts another form of lawful gambling at the permitted
13.15premises.
13.16(f) Pull-tab dispensing devices that use facsimiles of paper pull-tabs must have the
13.17capability to:
13.18(1) allow the board to electronically monitor the operation of the electronic pull-tab
13.19devices and the internal accounting systems;
13.20(2) maintain a printable, permanent record of all transactions involving the device;
13.21and
13.22(3) allow the board to require the deactivation of a device for violation of a law or
13.23rule and to implement any other controls deemed by the board necessary to ensure and
13.24maintain the integrity of games operated under this subdivision.
13.25(g) The board shall examine prototypes of pull-tab dispensing devices that use
13.26facsimiles of paper pull-tabs. The board may contract for the examination of the devices
13.27and may require working models of the devices to be transported to locations the board
13.28designates for testing, examination, and analysis. The manufacturer shall pay all costs of
13.29any testing, examination, analysis, and transportation of the model.
13.30 Sec. 28. Minnesota Statutes 2010, section 349.1721, is amended by adding a
13.31subdivision to read:
13.32 Subd. 4. Electronic facsimile of paper pull-tabs. (a) Tickets and deals must be in
13.33conformance with board rules for pull-tabs.
13.34(b) Deals must contain:
13.35(1) a finite number of tickets in each electronic deal;
14.1(2) a predetermined number of winning and losing tickets;
14.2(3) serialized tracking for each deal;
14.3(4) no regeneration of a serialized deal; and
14.4(5) no spinning symbols which mimic a video slot machine.
14.5(c) All deals in play must not be transferred electronically or otherwise to any other
14.6location by the licensed organization.
14.7(d) Deals must not be shared or commingled with any other deals or locations.
14.8 Sec. 29. Minnesota Statutes 2010, section 349.1721, is amended by adding a
14.9subdivision to read:
14.10 Subd. 5. Multiple chance games. The board may permit pull-tab games in which
14.11the holders of certain predesignated winning tickets, with a prize value not to exceed $75
14.12each, have the option of turning in the winning tickets for the chance to win a prize of
14.13greater value.
14.14 Sec. 30. Minnesota Statutes 2010, section 349.18, subdivision 1, is amended to read:
14.15 Subdivision 1. Lease or ownership required; rent limitations. (a) An organization
14.16may conduct lawful gambling only on premises it owns or leases. Leases must be on a
14.17form prescribed by the board. The term of the lease is concurrent with the premises permit.
14.18Leases approved by the board must specify that the board may authorize an organization
14.19to withhold rent from a lessor for a period of up to 90 days if the board determines that
14.20illegal gambling occurred on the premises or that the lessor or its employees participated
14.21in the illegal gambling or knew of the gambling and did not take prompt action to stop the
14.22gambling. The lease must authorize the continued tenancy of the organization without
14.23the payment of rent during the time period determined by the board under this paragraph.
14.24Copies of all leases must be made available to employees of the board and the Division of
14.25Alcohol and Gambling Enforcement on request.
14.26 (b) Rent paid by an organization for leased premises for the conduct of pull-tabs,
14.27tipboards, and paddle wheels is subject to the following limits:
14.28 (1) for booth operations, including booth operations where a paper pull-tab
14.29dispensing device is located, booth operations where a bar operation is also conducted,
14.30and booth operations where both a paper pull-tab dispensing device is located and a bar
14.31operation is also conducted, themaximum rent is: monthly rent is not more than ten
14.32percent of gross profits for that month;
14.33(i) in any month where the organization's gross profit at those premises does not
14.34exceed $4,000, up to $400; and
15.1(ii) in any month where the organization's gross profit at those premises exceeds
15.2$4,000, up to $400 plus not more than ten percent of the gross profit for that month in
15.3excess of $4,000;
15.4 (2) for bar operations,including bar operations where a pull-tab dispensing device is
15.5located but not including bar operations subject to clause (1), and for locations where only
15.6a pull-tab dispensing device is located the monthly rent is subject to the following:
15.7(i) in any month where the organization's gross profit at those premises does not
15.8exceed $1,000, up to $200; and
15.9(ii) in any month where the organization's gross profit at those premises exceeds
15.10$1,000, up to $200 plus not more than 20 percent of the gross profit for that month
15.11in excess of $1,000;
15.12(i) not more than 20 percent of the monthly gross profits from the sale of paper
15.13pull-tabs or tipboards; and
15.14(ii) not more than 17 percent of the monthly gross profits from sales of electronic
15.15linked bingo games and electronic facsimiles of paper pull-tabs;
15.16 (3) a lease not governed by clauses (1) and (2) must be approved by the board
15.17before becoming effective;
15.18 (4) total rent paid to a lessor from all organizations from leases governed by clause
15.19(1) may not exceed $1,750 per month.
15.20 (c) Rent paid by an organization for leased premises for the conduct of bingo is
15.21subject to either of the following limits at the option of the parties to the lease:
15.22 (1) not more than ten percent of the monthly gross profit from all lawful gambling
15.23activities held during bingo occasions excluding bar bingo or at a rate based on a cost per
15.24square foot not to exceed 110 percent of a comparable cost per square foot for leased space
15.25as approved by the director; and
15.26 (2) no rent may be paid for bar bingo except as allowed in section 349.185.
15.27 (d) Amounts paid as rent under leases are all-inclusive. No other services or expenses
15.28provided or contracted by the lessor may be paid by the organization, including, but not
15.29limited to, trash removal, janitorial and cleaning services, snow removal, lawn services,
15.30electricity, heat, security, security monitoring, storage, other utilities or services, and, in
15.31the case of bar operations, cash shortages, unless approved by the director. The lessor shall
15.32be responsible for the cost of any communications network or service that is required to
15.33conduct electronic gaming. Any other expenditure made by an organization that is related
15.34to a leased premises must be approved by the director. An organization may not provide
15.35any compensation or thing of value to a lessor or the lessor's employees from any fund
15.36source other than its gambling account. Rent payments may not be made to an individual.
16.1 (e) Notwithstanding paragraph (b), an organization may pay a lessor for food or
16.2beverages or meeting room rental if the charge made is comparable to similar charges
16.3made to other individuals or groups.
16.4 (f) No entity other than the licensed organization may conduct any activity within
16.5a booth operation on a leased premises.
16.6(g) The rent provisions under this subdivision shall be monitored by the board and
16.7shall be reported to the legislature as part of the board's annual report.
16.8 Sec. 31. [349.185] GROSS PROFIT ALLOCATION; LINKED BINGO ON
16.9ELECTRONIC BINGO DEVICES.
16.10(a) The allocation of gross profits from the operation of linked bingo on electronic
16.11bingo devices is as provided in this section. The licensed organization shall receive:
16.12(1) a minimum of 50 percent of gross profits to be used exclusively for lawful
16.13purpose expenditures as defined under section 349.12, subdivision 25; and
16.14(2) no more than 13 percent each fiscal year for allowable expenses as defined
16.15under section 349.12, subdivision 3a, and does not include the expenses allocated under
16.16paragraph (b) or (c).
16.17(b) A linked bingo game provider shall receive no more than 20 percent of gross
16.18profits.
16.19(c) Where the primary business is not bingo and the premises is leased and linked
16.20bingo is played on electronic bingo devices, the lessor is subject to the limits in section
16.21349.18. The licensed organization shall be responsible for the overall conduct of linked
16.22bingo games but the lessor shall provide staffing to operate the linked bingo games at the
16.23premises in order to receive the percentage of profit allocation and the lessor is responsible
16.24for cash shortages.
16.25(d) Where the primary business is bingo and the linked bingo is played on electronic
16.26bingo devices, the lessor is subject to the rent limitations under section 349.18, subdivision
16.271, paragraph (c), clause (1), and the licensed organization will receive the value identified
16.28under paragraph (c).
16.29(e) The allocation of gross profits under this subdivision shall be monitored by the
16.30board and shall be reported to the legislature as part of the board's annual report.
16.31 Sec. 32. Minnesota Statutes 2010, section 349.211, subdivision 1a, is amended to read:
16.32 Subd. 1a. Linked bingo prizes. Prizes for a linked bingo game shall be limited
16.33as follows:
17.1(1)no organization may contribute more than $300 per linked bingo game to a
17.2linked bingo prize pool for linked bingo games played without electronic bingo devices,
17.3an organization may not contribute to a linked bingo game prize pool more than $300
17.4per linked bingo game per site;
17.5(2) for linked bingo games played with electronic bingo devices, an organization
17.6may not contribute more than 85 percent of the gross receipts per permitted premises to
17.7a linked bingo game prize pool;
17.8(2) (3) no organization may award more than $200 for a linked bingo game
17.9consolation prize. For purposes of this subdivision, a linked bingo game consolation
17.10prize is a prize awarded by an organization after a prize from the linked bingo prize pool
17.11has been won;and
17.12(3) (4) for a progressive linked bingo game, if no player declares a valid bingo
17.13within the for a progressive prize or prizes based on a predetermined amount of bingo
17.14numbers called and posted win determination, a portion of the prize is gross receipts
17.15may be carried over to anotheroccasion game until the accumulated progressive prize
17.16is won. The portion of the prize that is not carried over must be awarded to the first
17.17player or players who declares a valid bingo as additional numbers are called. If a valid
17.18bingo is declared within the predetermined amount of bingo numbers called, the entire
17.19prize pool for that game is awarded to the winner. The annual limit for progressive bingo
17.20game prizes contained in subdivision 2 must be reduced by the amount an organization
17.21contributes to progressive linked bingo games during the same calendar year.; and
17.22(5) for linked bingo games played on electronic bingo devices, linked bingo prizes
17.23in excess of $599 shall be paid by the linked bingo game provider to the player within
17.24three business days. Winners of linked bingo prizes in excess of $599 will be given a
17.25receipt or claim voucher as proof of a win.
1.3providing for linked bingo and electronic pull-tabs; making clarifying,
1.4conforming, and technical changes;amending Minnesota Statutes 2010, sections
1.5297E.02, subdivisions 1, 4, 6; 349.12, subdivisions 5, 12a, 25b, 25c, 25d, 29,
1.632, 32a; 349.13; 349.151, subdivisions 4b, 4c, by adding a subdivision; 349.155,
1.7subdivisions 3, 4; 349.161, subdivision 1; 349.163, subdivisions 1, 6; 349.1635,
1.8subdivision 2, by adding a subdivision; 349.165, subdivision 2; 349.17,
1.9subdivisions 6, 7, 8; 349.1721, by adding subdivisions; 349.18, subdivision 1;
1.10349.211, subdivision 1a; proposing coding for new law in Minnesota Statutes,
1.11chapter 349.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.13 Section 1. Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read:
1.14 Subdivision 1. Imposition. A tax is imposed on all lawful gambling other than
1.15(1) pull-tab deals or games; (2) tipboard deals or games; and (3) items listed in section
1.17receipts as defined in section
1.18imposed by this subdivision is in lieu of the tax imposed by section
1.19local taxes and license fees except a fee authorized under section
1.20or a tax authorized under subdivision 5.
1.21The tax imposed under this subdivision is payable by the organization or party
1.22conducting, directly or indirectly, the gambling.
1.23 Sec. 2. Minnesota Statutes 2010, section 297E.02, subdivision 4, is amended to read:
1.24 Subd. 4. Pull-tab and tipboard tax. (a) A tax is imposed on the sale of each deal of
1.25pull-tabs and tipboards sold by a distributor. The rate of the tax is
1.26ideal gross of the pull-tab or tipboard deal. The sales tax imposed by chapter 297A on the
2.1sale of the pull-tabs and tipboards by the distributor is imposed on the retail sales price
2.2less the tax imposed by this subdivision. The retail sale of pull-tabs or tipboards by the
2.3organization is exempt from taxes imposed by chapter 297A and is exempt from all local
2.4taxes and license fees except a fee authorized under section
2.5(b) The liability for the tax imposed by this section is incurred when the pull-tabs
2.6and tipboards are delivered by the distributor to the customer or to a common or contract
2.7carrier for delivery to the customer, or when received by the customer's authorized
2.8representative at the distributor's place of business, regardless of the distributor's method
2.9of accounting or the terms of the sale.
2.10The tax imposed by this subdivision is imposed on all sales of pull-tabs and
2.11tipboards, except the following:
2.12(1) sales to the governing body of an Indian tribal organization for use on an Indian
2.13reservation;
2.14(2) sales to distributors licensed under the laws of another state or of a province of
2.15Canada, as long as all statutory and regulatory requirements are met in the other state or
2.16province;
2.17(3) sales of promotional tickets as defined in section
2.18(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards
2.19under the exemption from licensing in section
2.20require an organization conducting exempt gambling to show proof of its exempt status
2.21before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor
2.22shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and
2.23tipboards that are exempt from tax under this subdivision.
2.24(c) A distributor having a liability of $10,000 or more during a fiscal year ending
2.25June 30 must remit all liabilities in the subsequent calendar year by electronic means.
2.26(d) Any customer who purchases deals of pull-tabs or tipboards from a distributor
2.27may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision
2.28for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on
2.29a form prescribed by the commissioner by March 20 of the year following the calendar
2.30year for which the refund is claimed. The refund must be filed as part of the customer's
2.31February monthly return. The refund or credit is equal to
2.32value of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be
2.33
2.34a refund or credit of taxes filed on the February
2.35claimed will be applied as a credit against tax owing under this chapter on the February
2.36monthly return. If the refund claimed exceeds the tax owing on the February monthly
3.1return, that amount will be refunded. The amount refunded will bear interest pursuant
3.2to section
3.3 Sec. 3. Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read:
3.4 Subd. 6. Combined receipts tax. In addition to the taxes imposed under
3.5subdivisions 1 and 4, a tax is imposed on the combined receipts of the organization. As
3.6used in this section, "combined receipts" is the sum of the organization's gross receipts
3.7from lawful gambling less gross receipts directly derived from the conduct of bingo,
3.8raffles, and paddle wheels, as defined in section
3.9The combined receipts of an organization are subject to a tax computed according to
3.10the following schedule:
3.26The tax imposed under this subdivision is payable by the organization or party
3.27conducting, directly or indirectly, the gambling on a site-by-site basis.
3.28 Sec. 4. Minnesota Statutes 2010, section 349.12, subdivision 5, is amended to read:
3.29 Subd. 5. Bingo occasion. "Bingo occasion" means a single gathering or session at
3.30which a series of one or more successive bingo games is played. There is no limit on the
3.31number of games conducted during a bingo occasion
3.32longer than eight consecutive hours, except that linked bingo games played on electronic
3.33bingo devices may be played during regular business hours of the permitted premises and
3.34all play during this period is considered a bingo occasion for reporting purposes.
3.35 Sec. 5. Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read:
3.36 Subd. 12a. Electronic bingo device. "Electronic bingo device" means an electronic
3.37bingo device used by a bingo player to (1) monitor bingo paper sheets or a facsimile of
4.1a bingo paper sheet when purchased at the time and place of an organization's bingo
4.2occasion
4.3announced
4.4
4.5
4.6Electronic bingo device does not mean any device into which coin, currency, or tokens are
4.7inserted to activate play but does allow for activation by coded data entry.
4.8 Sec. 6. Minnesota Statutes 2010, section 349.12, subdivision 25b, is amended to read:
4.9 Subd. 25b. Linked bingo game provider. "Linked bingo game provider" means
4.10any person who provides the means to link bingo
4.11
4.12linked bingo prize management, and who provides the linked bingo game system.
4.13 Sec. 7. Minnesota Statutes 2010, section 349.12, subdivision 25c, is amended to read:
4.14 Subd. 25c. Linked bingo game system. "Linked bingo game system" means the
4.15equipment used by the linked bingo provider to conduct, transmit, and track a linked
4.16bingo game. The system must be approved by the board before its use in this state and it
4.17must have
4.18operation remotely.
4.19 Sec. 8. Minnesota Statutes 2010, section 349.12, subdivision 25d, is amended to read:
4.20 Subd. 25d. Linked bingo prize pool. "Linked bingo prize pool" means the total
4.21of all prize money that each participating organization has contributed to a linked bingo
4.22game prize and includes any portion of the prize pool that is carried over from one
4.23
4.24 Sec. 9. Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read:
4.25 Subd. 29. Paddle wheel. "Paddle wheel" means a wheel marked off into sections
4.26containing one or more numbers, and which, after being turned or spun manually or
4.27electronically, uses a pointer or marker to indicate winning chances.
4.28 Sec. 10. Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read:
4.29 Subd. 32. Pull-tab. "Pull-tab" means a single folded or banded paper ticket
4.30multi-ply card with perforated break-open tabs, or a facsimile of a paper pull-tab when
4.31used in conjunction with a pull-tab dispensing device, the face of which is initially covered
5.1to conceal one or more numbers or symbols, where one or more of each set of tickets,
5.2cards, or facsimiles has been designated in advance as a winner.
5.3 Sec. 11. Minnesota Statutes 2010, section 349.12, subdivision 32a, is amended to read:
5.4 Subd. 32a. Pull-tab dispensing device. "Pull-tab dispensing device" means a
5.5mechanical or electronic device that dispenses paper pull-tabs
5.6
5.7pull-tab dispensing device may have as a component an auditory or visual enhancement to
5.8promote or provide information about a game being dispensed or displayed, provided the
5.9component does not affect the outcome of a game or display the results of a game
5.10
5.11is not allowed to accept any coin, currency, or tokens, but does allow for activation by
5.12coded data entry.
5.13 Sec. 12. Minnesota Statutes 2010, section 349.13, is amended to read:
5.14349.13 LAWFUL GAMBLING.
5.15Lawful gambling is not a lottery or gambling within the meaning of sections
5.16to
5.17board rule is not a gambling device within the meaning of sections
5.18chapter 299L. Electronic game devices authorized under this chapter may be used only
5.19in the conduct of lawful gambling permitted under this chapter and may not display or
5.20simulate any other form of gambling or entertainment.
5.21 Sec. 13. Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read:
5.22 Subd. 4b. Pull-tab sales from dispensing devices.
5.23authorize but not require the use of pull-tab dispensing devices.
5.24
5.25
5.26
5.27
5.28
5.29
5.30
5.31
5.32
5.33
6.1 Sec. 14. Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read:
6.2 Subd. 4c. Electronic bingo. (a) The board may by rule authorize but not require the
6.3use of electronic bingo devices.
6.4(b) Rules adopted under paragraph (a):
6.5(1) must limit the number of bingo faces that can be played using an electronic
6.6bingo device to 36;
6.7(2) must require that an electronic bingo device be used with
6.8
6.9by the board;
6.10(3) must require that the electronic bingo device site system have
6.11capability to permit the board to remotely monitor the operation of the device and the
6.12internal accounting systems; and
6.13(4) must prohibit the price of a face played on an electronic bingo device from
6.14being less than the price of a face on a bingo paper sheet sold for the same game at the
6.15same occasion.
6.16 Sec. 15. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
6.17to read:
6.18 Subd. 4d. Electronic game devices. Notwithstanding other rulemaking
6.19requirements under chapter 349, the adoption of rules by the board for manufacturing
6.20standards of electronic game devices, for games played on electronic game devices, and
6.21for operating procedures, record keeping, and reports for games played on electronic game
6.22devices may be promulgated under the provisions of section 14.389.
6.23 Sec. 16. Minnesota Statutes 2010, section 349.155, subdivision 3, is amended to read:
6.24 Subd. 3. Mandatory disqualifications. (a) In the case of licenses for manufacturers,
6.25distributors, distributor salespersons, linked bingo game providers, and gambling
6.26managers, the board may not issue or renew a license under this chapter, and shall revoke
6.27a license under this chapter, if the applicant or licensee, or a director, officer, partner,
6.28governor, or person in a supervisory or management position of the applicant or licensee:
6.29(1) has ever been convicted of a felony or a crime involving gambling;
6.30(2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use
6.31of a firearm, or (iii) making terroristic threats;
6.32(3) is or has ever been connected with or engaged in an illegal business;
6.33(4) owes $500 or more in delinquent taxes as defined in section
7.1(5) had a sales and use tax permit revoked by the commissioner of revenue within
7.2the past two years; or
7.3(6) after demand, has not filed tax returns required by the commissioner of revenue.
7.4The board may deny or refuse to renew a license under this chapter, and may revoke a
7.5license under this chapter, if any of the conditions in this paragraph are applicable to
7.6an affiliate or direct or indirect holder of more than a five percent financial interest in
7.7the applicant or licensee.
7.8(b) In the case of licenses for organizations, the board may not issue a license under
7.9this chapter, and shall revoke a license under this chapter, if the organization, or an officer
7.10or member of the governing body of the organization:
7.11(1) has been convicted of a felony or gross misdemeanor involving theft or fraud; or
7.12(2) has ever been convicted of a crime involving gambling
7.13
7.14
7.15 Sec. 17. Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read:
7.16 Subd. 4. License revocation, suspension, denial; censure. (a) The board may by
7.17order (i) deny, suspend, revoke, or refuse to renew a license or premises permit, or (ii)
7.18censure a licensee or applicant, if it finds that the order is in the public interest and that the
7.19applicant or licensee, or a director, officer, partner, governor, person in a supervisory or
7.20management position of the applicant or licensee, an employee eligible to make sales on
7.21behalf of the applicant or licensee, or direct or indirect holder of more than a five percent
7.22financial interest in the applicant or licensee:
7.23(1) has violated or failed to comply with any provision of this chapter or chapter
7.24297E or 299L, or any rule adopted or order issued thereunder;
7.25(2) has filed an application for a license that is incomplete in any material respect, or
7.26contains a statement that, in light of the circumstances under which it was made, is false,
7.27misleading, fraudulent, or a misrepresentation;
7.28(3) has made a false statement in a document or report required to be submitted to
7.29the board or the commissioner of revenue, or has made a false statement to the board, the
7.30compliance review group, or the director;
7.31(4) has been convicted of a crime in another jurisdiction that would be a felony if
7.32committed in Minnesota;
7.33(5) is permanently or temporarily enjoined by any gambling regulatory agency from
7.34engaging in or continuing any conduct or practice involving any aspect of gambling;
8.1(6) has had a gambling-related license revoked or suspended, or has paid or been
8.2required to pay a monetary penalty of $2,500 or more, by a gambling regulator in another
8.3state or jurisdiction;
8.4(7) has been the subject of any of the following actions by the director of alcohol
8.5and gambling enforcement or commissioner of public safety: (i) had a license under
8.6chapter 299L denied, suspended, or revoked, (ii) been censured, reprimanded, has paid or
8.7been required to pay a monetary penalty or fine, or (iii) has been the subject of any other
8.8discipline by the director or commissioner;
8.9(8) has engaged in conduct that is contrary to the public health, welfare, or safety, or
8.10to the integrity of gambling; or
8.11(9) based on past activities or criminal record poses a threat to the public interest or
8.12to the effective regulation and control of gambling, or creates or enhances the dangers of
8.13unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling
8.14or the carrying on of the business and financial arrangements incidental to the conduct of
8.15gambling.
8.16(b) The revocation or suspension of an organization license may not exceed a period
8.17of ten years, including any revocation or suspension imposed by the board prior to the
8.18effective date of this paragraph, except that:
8.19(1) any prohibition placed by the board on who may be involved in the conduct,
8.20oversight, or management of the revoked organization's lawful gambling activity is
8.21permanent; and
8.22(2) a revocation or suspension will remain in effect until the payment of any taxes,
8.23fees, and fines that are delinquent have been paid by the organization to the satisfaction of
8.24the board.
8.25 Sec. 18. Minnesota Statutes 2010, section 349.161, subdivision 1, is amended to read:
8.26 Subdivision 1. Prohibited acts; licenses required. (a) No person may:
8.27 (1) sell, offer for sale, or furnish gambling equipment for use within the state other
8.28than for lawful gambling exempt or excluded from licensing, except to an organization
8.29licensed for lawful gambling;
8.30 (2) sell, offer for sale, or furnish gambling equipment for use within the state
8.31without having obtained a distributor license or a distributor salesperson license under
8.32this section except that an organization authorized to conduct bingo by the board may
8.33loan bingo hard cards and devices for selecting bingo numbers to another organization
8.34authorized to conduct bingo;
9.1 (3) sell, offer for sale, or furnish gambling equipment for use within the state that is
9.2not purchased or obtained from a manufacturer or distributor licensed under this chapter; or
9.3 (4) sell, offer for sale, or furnish gambling equipment for use within the state that
9.4has the same serial number as another item of gambling equipment of the same type sold
9.5or offered for sale or furnished for use in the state by that distributor.
9.6 (b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling
9.7equipment for use within the state without being employed by a licensed distributor or
9.8owning a distributor license.
9.9(c) No distributor or distributor salesperson may also be licensed as a linked bingo
9.10game provider under section 349.1635.
9.11 Sec. 19. Minnesota Statutes 2010, section 349.163, subdivision 1, is amended to read:
9.12 Subdivision 1. License required. No manufacturer of gambling equipment may
9.13sell any gambling equipment to any person for use or resale within the state, unless the
9.14manufacturer has a current and valid license issued by the board under this section and has
9.15satisfied other criteria prescribed by the board by rule. A manufacturer licensed under this
9.16section may also be licensed as a linked bingo game provider under section 349.1635.
9.17A manufacturer licensed under this section may not also be directly or indirectly
9.18licensed as a distributor under section
9.19 Sec. 20. Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read:
9.20 Subd. 6. Samples of gambling equipment. The board shall require each licensed
9.21manufacturer to submit to the board one or more samples of each item of gambling
9.22equipment the manufacturer manufactures for use or resale in this state. For purposes of
9.23this subdivision, a manufacturer is also required to submit the applicable version of any
9.24software necessary to operate electronic devices and related systems. The board shall
9.25inspect and test all the equipment, including software and software upgrades, it deems
9.26necessary to determine the equipment's compliance with law and board rules. Samples
9.27required under this subdivision must be approved by the board before the equipment being
9.28sampled is shipped into or sold for use or resale in this state. The board shall impose a fee
9.29of $25 for each item of gambling equipment that the manufacturer submits for approval
9.30or for which the manufacturer requests approval. The board shall impose a fee of $100
9.31for each sample of gambling equipment that it tests. The board may require samples of
9.32gambling equipment to be tested by an independent testing laboratory prior to submission
9.33to the board for approval. All costs of testing by an independent testing laboratory must be
9.34borne by the manufacturer. An independent testing laboratory used by a manufacturer to
10.1test samples of gambling equipment must be approved by the board before the equipment
10.2is submitted to the laboratory for testing. The board may request the assistance of the
10.3commissioner of public safety and the director of the State Lottery in performing the tests.
10.4 Sec. 21. Minnesota Statutes 2010, section 349.1635, subdivision 2, is amended to read:
10.5 Subd. 2. License application. The board may issue a license to a linked bingo game
10.6provider or to a manufacturer licensed under section 349.163 who meets the qualifications
10.7of this chapter and the rules promulgated by the board. The application shall be on a form
10.8prescribed by the board. The license is valid for two years and the fee for a linked bingo
10.9game provider license is $5,000 per year.
10.10 Sec. 22. Minnesota Statutes 2010, section 349.1635, is amended by adding a
10.11subdivision to read:
10.12 Subd. 5. Linked bingo game services requirements. A linked bingo game
10.13provider shall contract with licensed distributors for linked bingo game services including,
10.14but not limited to, the solicitation of agreements with licensed organizations, and
10.15installation, repair, or maintenance of the linked bingo game system. No linked bingo
10.16game provider may contract with any distributor on an exclusive basis. A linked bingo
10.17game provider may refuse to contract with a licensed distributor if the linked bingo
10.18game provider demonstrates that the licensed distributor is not capable of performing
10.19the services under the contract.
10.20 Sec. 23. Minnesota Statutes 2010, section 349.165, subdivision 2, is amended to read:
10.21 Subd. 2. Contents of application. An application for a premises permit must
10.22contain:
10.23(1) the name and address of the applying organization;
10.24(2) a description of the site for which the permit is sought, including its address and,
10.25where applicable, its placement within another premises or establishment;
10.26(3) if the site is leased, the name and address of the lessor and information about the
10.27lease the board requires, including all rents and other charges for the use of the site. The
10.28lease term is concurrent with the term of the premises permit. The lease must contain a
10.29
10.30(4) other information the board deems necessary to carry out its purposes.
10.31An organization holding a premises permit must notify the board in writing within
10.32ten days whenever any material change is made in the above information.
11.1 Sec. 24. Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read:
11.2 Subd. 6. Conduct of bingo. A game of bingo begins with the first letter and number
11.3called or displayed. Each player must cover, mark, or activate the numbers when bingo
11.4numbers are randomly selected
11.5
11.6bingo paper, bingo hard card, or a facsimile of a bingo paper sheet, has completed, as
11.7described in the bingo program, a previously designated pattern or previously determined
11.8requirements of the game and declared bingo. The game is completed when a winning
11.9card, sheet, or facsimile is verified and a prize awarded pursuant to subdivision 3.
11.10 Sec. 25. Minnesota Statutes 2010, section 349.17, subdivision 7, is amended to read:
11.11 Subd. 7. Bar bingo. An organization may conduct bar bingo subject to the
11.12following restrictions:
11.13 (1) the bingo is conducted at a site the organization owns or leases and which has a
11.14license for the sale of intoxicating beverages on the premises under chapter 340A;
11.15 (2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper
11.16sheets purchased from a licensed distributor or licensed linked bingo game provider; and
11.17 (3) no rent may be paid for a bar bingo occasion, except as allowed in section
11.18349.185.
11.19 Sec. 26. Minnesota Statutes 2010, section 349.17, subdivision 8, is amended to read:
11.20 Subd. 8. Linked bingo games. (a) A licensed organization may conduct or
11.21participate in
11.22including progressive
11.23
11.24amount of bingo numbers called.
11.25 (b)
11.26
11.27conducted by licensed organizations who have a valid agreement with the linked bingo
11.28game provider.
11.29 (c) An electronic bingo device as defined in section
11.30be used for a linked bingo game.
11.31 (d) Linked bingo games played on an electronic bingo device may be located only at
11.32a permitted premises where the organization conducts another form of lawful gambling
11.33and the premises is:
12.1 (1) a licensed premises for the on-sale or off-sale of intoxicating liquor or 3.2 percent
12.2malt beverages, except for a general foods store or drug store permitted to sell alcoholic
12.3beverages under section 340A.405, subdivision 1; or
12.4 (2) where bingo is conducted as the primary business, the premises has a seating
12.5capacity of at least 100, and admission is restricted to persons 18 years or older.
12.6 (e) For linked bingo games played on an electronic bingo device:
12.7(1) no more than six electronic bingo devices may be in play at a permitted premises
12.8with 200 seats or less;
12.9(2) no more than 12 electronic bingo devices may be in play at a permitted premises
12.10with 201 seats or more; and
12.11 (3) for premises where the primary business is bingo, the number of electronic bingo
12.12devices that may be in play will be determined by the board.
12.13Seating capacity is determined as specified under local fire code.
12.14 (f) Prior to a bingo occasion for linked bingo games played on an electronic bingo
12.15device, the linked bingo game provider, on behalf of the participating organizations, must
12.16provide to the board a bingo program in a format prescribed by the board.
12.17
12.18 (1) specify the manner in which a linked bingo game must be played and how the
12.19linked bingo prizes must be awarded;
12.20 (2) specify the records to be maintained by a linked bingo game provider;
12.21 (3) require the submission of periodic reports by the linked bingo game provider and
12.22specify the content of the reports;
12.23 (4) establish the qualifications required to be licensed as a linked bingo game
12.24provider; and
12.25 (5) any other matter involving the operation of a linked bingo game.
12.26 Sec. 27. Minnesota Statutes 2010, section 349.1721, is amended by adding a
12.27subdivision to read:
12.28 Subd. 3. Pull-tab dispensing devices restrictions and requirements. (a) The
12.29number of paper pull-tab dispensing devices located on any permitted premises is limited
12.30to three.
12.31(b) The number of pull-tab dispensing devices that use facsimiles of paper pull-tabs
12.32is limited to:
12.33(1) no more than six devices in play at any permitted premises with 200 seats or less;
12.34(2) no more than 12 devices in play at any permitted premises with 201 seats
12.35or more; and
13.1(3) for premises where the primary business is bingo, the number of devices that
13.2may be in play will be determined by the board.
13.3Seating capacity is determined as specified under the local fire code.
13.4(c) The use of any pull-tab dispensing device must be at a permitted premises
13.5which is:
13.6(1) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt
13.7beverages; or
13.8(2) a premises where bingo is conducted as the primary business and admission
13.9is restricted to persons 18 years or older.
13.10(d) Pull-tab dispensing devices may be used in establishments licensed for the
13.11off-sale of intoxicating liquor, other than drugstores and general food stores licensed under
13.12section 340A.405, subdivision 1.
13.13(e) An organization may use pull-tab dispensing devices that use facsimiles of paper
13.14pull-tabs if the organization conducts another form of lawful gambling at the permitted
13.15premises.
13.16(f) Pull-tab dispensing devices that use facsimiles of paper pull-tabs must have the
13.17capability to:
13.18(1) allow the board to electronically monitor the operation of the electronic pull-tab
13.19devices and the internal accounting systems;
13.20(2) maintain a printable, permanent record of all transactions involving the device;
13.21and
13.22(3) allow the board to require the deactivation of a device for violation of a law or
13.23rule and to implement any other controls deemed by the board necessary to ensure and
13.24maintain the integrity of games operated under this subdivision.
13.25(g) The board shall examine prototypes of pull-tab dispensing devices that use
13.26facsimiles of paper pull-tabs. The board may contract for the examination of the devices
13.27and may require working models of the devices to be transported to locations the board
13.28designates for testing, examination, and analysis. The manufacturer shall pay all costs of
13.29any testing, examination, analysis, and transportation of the model.
13.30 Sec. 28. Minnesota Statutes 2010, section 349.1721, is amended by adding a
13.31subdivision to read:
13.32 Subd. 4. Electronic facsimile of paper pull-tabs. (a) Tickets and deals must be in
13.33conformance with board rules for pull-tabs.
13.34(b) Deals must contain:
13.35(1) a finite number of tickets in each electronic deal;
14.1(2) a predetermined number of winning and losing tickets;
14.2(3) serialized tracking for each deal;
14.3(4) no regeneration of a serialized deal; and
14.4(5) no spinning symbols which mimic a video slot machine.
14.5(c) All deals in play must not be transferred electronically or otherwise to any other
14.6location by the licensed organization.
14.7(d) Deals must not be shared or commingled with any other deals or locations.
14.8 Sec. 29. Minnesota Statutes 2010, section 349.1721, is amended by adding a
14.9subdivision to read:
14.10 Subd. 5. Multiple chance games. The board may permit pull-tab games in which
14.11the holders of certain predesignated winning tickets, with a prize value not to exceed $75
14.12each, have the option of turning in the winning tickets for the chance to win a prize of
14.13greater value.
14.14 Sec. 30. Minnesota Statutes 2010, section 349.18, subdivision 1, is amended to read:
14.15 Subdivision 1. Lease or ownership required; rent limitations. (a) An organization
14.16may conduct lawful gambling only on premises it owns or leases. Leases must be on a
14.17form prescribed by the board. The term of the lease is concurrent with the premises permit.
14.18Leases approved by the board must specify that the board may authorize an organization
14.19to withhold rent from a lessor for a period of up to 90 days if the board determines that
14.20illegal gambling occurred on the premises or that the lessor or its employees participated
14.21in the illegal gambling or knew of the gambling and did not take prompt action to stop the
14.22gambling. The lease must authorize the continued tenancy of the organization without
14.23the payment of rent during the time period determined by the board under this paragraph.
14.24Copies of all leases must be made available to employees of the board and the Division of
14.25Alcohol and Gambling Enforcement on request.
14.26 (b) Rent paid by an organization for leased premises for the conduct of pull-tabs,
14.27tipboards, and paddle wheels is subject to the following limits:
14.28 (1) for booth operations, including booth operations where a paper pull-tab
14.29dispensing device is located, booth operations where a bar operation is also conducted,
14.30and booth operations where both a paper pull-tab dispensing device is located and a bar
14.31operation is also conducted, the
14.32percent of gross profits for that month;
14.33
14.34
15.1
15.2
15.3
15.4 (2) for bar operations,
15.5
15.6
15.7
15.8
15.9
15.10
15.11
15.12(i) not more than 20 percent of the monthly gross profits from the sale of paper
15.13pull-tabs or tipboards; and
15.14(ii) not more than 17 percent of the monthly gross profits from sales of electronic
15.15linked bingo games and electronic facsimiles of paper pull-tabs;
15.16 (3) a lease not governed by clauses (1) and (2) must be approved by the board
15.17before becoming effective;
15.18 (4) total rent paid to a lessor from all organizations from leases governed by clause
15.19(1) may not exceed $1,750 per month.
15.20 (c) Rent paid by an organization for leased premises for the conduct of bingo is
15.21subject to either of the following limits at the option of the parties to the lease:
15.22 (1) not more than ten percent of the monthly gross profit from all lawful gambling
15.23activities held during bingo occasions excluding bar bingo or at a rate based on a cost per
15.24square foot not to exceed 110 percent of a comparable cost per square foot for leased space
15.25as approved by the director; and
15.26 (2) no rent may be paid for bar bingo except as allowed in section 349.185.
15.27 (d) Amounts paid as rent under leases are all-inclusive. No other services or expenses
15.28provided or contracted by the lessor may be paid by the organization, including, but not
15.29limited to, trash removal, janitorial and cleaning services, snow removal, lawn services,
15.30electricity, heat, security, security monitoring, storage, other utilities or services, and, in
15.31the case of bar operations, cash shortages, unless approved by the director. The lessor shall
15.32be responsible for the cost of any communications network or service that is required to
15.33conduct electronic gaming. Any other expenditure made by an organization that is related
15.34to a leased premises must be approved by the director. An organization may not provide
15.35any compensation or thing of value to a lessor or the lessor's employees from any fund
15.36source other than its gambling account. Rent payments may not be made to an individual.
16.1 (e) Notwithstanding paragraph (b), an organization may pay a lessor for food or
16.2beverages or meeting room rental if the charge made is comparable to similar charges
16.3made to other individuals or groups.
16.4 (f) No entity other than the licensed organization may conduct any activity within
16.5a booth operation on a leased premises.
16.6(g) The rent provisions under this subdivision shall be monitored by the board and
16.7shall be reported to the legislature as part of the board's annual report.
16.8 Sec. 31. [349.185] GROSS PROFIT ALLOCATION; LINKED BINGO ON
16.9ELECTRONIC BINGO DEVICES.
16.10(a) The allocation of gross profits from the operation of linked bingo on electronic
16.11bingo devices is as provided in this section. The licensed organization shall receive:
16.12(1) a minimum of 50 percent of gross profits to be used exclusively for lawful
16.13purpose expenditures as defined under section 349.12, subdivision 25; and
16.14(2) no more than 13 percent each fiscal year for allowable expenses as defined
16.15under section 349.12, subdivision 3a, and does not include the expenses allocated under
16.16paragraph (b) or (c).
16.17(b) A linked bingo game provider shall receive no more than 20 percent of gross
16.18profits.
16.19(c) Where the primary business is not bingo and the premises is leased and linked
16.20bingo is played on electronic bingo devices, the lessor is subject to the limits in section
16.21349.18. The licensed organization shall be responsible for the overall conduct of linked
16.22bingo games but the lessor shall provide staffing to operate the linked bingo games at the
16.23premises in order to receive the percentage of profit allocation and the lessor is responsible
16.24for cash shortages.
16.25(d) Where the primary business is bingo and the linked bingo is played on electronic
16.26bingo devices, the lessor is subject to the rent limitations under section 349.18, subdivision
16.271, paragraph (c), clause (1), and the licensed organization will receive the value identified
16.28under paragraph (c).
16.29(e) The allocation of gross profits under this subdivision shall be monitored by the
16.30board and shall be reported to the legislature as part of the board's annual report.
16.31 Sec. 32. Minnesota Statutes 2010, section 349.211, subdivision 1a, is amended to read:
16.32 Subd. 1a. Linked bingo prizes. Prizes for a linked bingo game shall be limited
16.33as follows:
17.1(1)
17.2
17.3an organization may not contribute to a linked bingo game prize pool more than $300
17.4per linked bingo game per site;
17.5(2) for linked bingo games played with electronic bingo devices, an organization
17.6may not contribute more than 85 percent of the gross receipts per permitted premises to
17.7a linked bingo game prize pool;
17.8
17.9consolation prize. For purposes of this subdivision, a linked bingo game consolation
17.10prize is a prize awarded by an organization after a prize from the linked bingo prize pool
17.11has been won;
17.12
17.13
17.14
17.15may be carried over to another
17.16is won. The portion of the prize that is not carried over must be awarded to the first
17.17player or players who declares a valid bingo as additional numbers are called. If a valid
17.18bingo is declared within the predetermined amount of bingo numbers called, the entire
17.19prize pool for that game is awarded to the winner
17.20
17.21
17.22(5) for linked bingo games played on electronic bingo devices, linked bingo prizes
17.23in excess of $599 shall be paid by the linked bingo game provider to the player within
17.24three business days. Winners of linked bingo prizes in excess of $599 will be given a
17.25receipt or claim voucher as proof of a win.
