Bill Text: MN SF1255 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Video lottery terminals establishment; lottery terminal revenue tax imposition; state lottery director duties modifications; technical and conforming changes; gambling taxes modifications
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-04-26 - Referred to State Government Innovation and Veterans [SF1255 Detail]
Download: Minnesota-2011-SF1255-Introduced.html
1.2relating to State Lottery; authorizing director of the State Lottery to establish
1.3video lottery terminals; providing duties and powers to director of the State
1.4Lottery; providing for use of video lottery revenues; modifying certain lawful
1.5gambling taxes; making clarifying, conforming, and technical changes;
1.6amending Minnesota Statutes 2010, sections 297A.94; 297E.02, subdivision 1;
1.7299L.02, subdivision 1; 299L.07, subdivisions 2, 2a; 340A.410, subdivision 5;
1.8349.15, subdivision 1; 349A.01, subdivisions 10, 11, 12, by adding subdivisions;
1.9349A.04; 349A.06, subdivisions 1, 5, 8, 10, by adding subdivisions; 349A.08,
1.10subdivisions 1, 5, 8; 349A.09, subdivision 1; 349A.10, subdivisions 2, 3, 4, 6;
1.11349A.11, subdivision 1; 349A.12, subdivisions 1, 2; 349A.13; 541.20; 541.21;
1.12609.651, subdivision 1; 609.75, subdivisions 3, 4; 609.761, subdivision 2;
1.13proposing coding for new law in Minnesota Statutes, chapters 297A; 349A;
1.14repealing Minnesota Statutes 2010, sections 297E.01, subdivision 7; 297E.02,
1.15subdivisions 4, 6, 7.
1.16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.17 Section 1. [297A.652] LOTTERY GAMING MACHINES; IN-LIEU TAX.
1.18 Net terminal income from the operation of video lottery terminals authorized under
1.19section 349A.071 is exempt from the tax imposed under section 297A.62. The State
1.20Lottery must on or before the 20th day of each month transmit to the commissioner an
1.21amount equal to the net terminal income from the operation of video lottery terminals
1.22as defined in section 349A.01, for the previous month multiplied by .. percent. The
1.23commissioner shall deposit the money transmitted under this section in the state treasury
1.24to be credited as provided in section 297A.94.
1.25 Sec. 2. Minnesota Statutes 2010, section 297A.94, is amended to read:
1.26297A.94 DEPOSIT OF REVENUES.
2.1(a) Except as provided in this section, the commissioner shall deposit the revenues,
2.2including interest and penalties, derived from the taxes imposed by this chapter in the state
2.3treasury and credit them to the general fund.
2.4(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
2.5account in the special revenue fund if:
2.6(1) the taxes are derived from sales and use of property and services purchased for
2.7the construction and operation of an agricultural resource project; and
2.8(2) the purchase was made on or after the date on which a conditional commitment
2.9was made for a loan guaranty for the project under section41A.04, subdivision 3 .
2.10The commissioner of management and budget shall certify to the commissioner the date
2.11on which the project received the conditional commitment. The amount deposited in
2.12the loan guaranty account must be reduced by any refunds and by the costs incurred by
2.13the Department of Revenue to administer and enforce the assessment and collection of
2.14the taxes.
2.15(c) The commissioner shall deposit the revenues, including interest and penalties,
2.16derived from the taxes imposed on sales and purchases included in section297A.61,
2.17subdivision 3 , paragraph (g), clauses (1) and (4), in the state treasury, and credit them
2.18as follows:
2.19(1) first to the general obligation special tax bond debt service account in each fiscal
2.20year the amount required by section16A.661, subdivision 3 , paragraph (b); and
2.21(2) after the requirements of clause (1) have been met, the balance to the general
2.22fund.
2.23(d) The commissioner shall deposit the revenues, including interest and penalties,
2.24collected under section297A.64, subdivision 5 , in the state treasury and credit them to the
2.25general fund. By July 15 of each year the commissioner shall transfer to the highway user
2.26tax distribution fund an amount equal to the excess fees collected under section297A.64,
2.27subdivision 5 , for the previous calendar year.
2.28(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
2.29for fiscal year 2004 and thereafter,72.43 percent of the revenues, including interest and
2.30penalties, transmitted to the commissioner under section297A.65 , must be deposited by
2.31the commissioner in the state treasury as follows:
2.32(1) 50 percent of the receipts must be deposited in the heritage enhancement account
2.33in the game and fish fund, and may be spent only on activities that improve, enhance, or
2.34protect fish and wildlife resources, including conservation, restoration, and enhancement
2.35of land, water, and other natural resources of the state;
3.1(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
3.2may be spent only for state parks and trails;
3.3(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
3.4may be spent only on metropolitan park and trail grants;
3.5(4) three percent of the receipts must be deposited in the natural resources fund, and
3.6may be spent only on local trail grants; and
3.7(5) two percent of the receipts must be deposited in the natural resources fund,
3.8and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
3.9Conservatory, and the Duluth Zoo.
3.10(f) Revenues transmitted to the commissioner under section 297A.652 must be
3.11deposited by the commissioner in the general fund.
3.12(f) (g) The revenue dedicated under paragraph paragraphs (e) and (f) may not be
3.13used as a substitute for traditional sources of funding for the purposes specified, but the
3.14dedicated revenue shall supplement traditional sources of funding for those purposes. Land
3.15acquired with money deposited in the game and fish fund under paragraph (e) must be open
3.16to public hunting and fishing during the open season, except that in aquatic management
3.17areas or on lands where angling easements have been acquired, fishing may be prohibited
3.18during certain times of the year and hunting may be prohibited. At least 87 percent of the
3.19money deposited in the game and fish fund for improvement, enhancement, or protection
3.20of fish and wildlife resources under paragraph (e) must be allocated for field operations.
3.21(g) (h) The revenues deposited under paragraphs (a) to (f) (g) do not include
3.22the revenues, including interest and penalties, generated by the sales tax imposed
3.23under section297A.62, subdivision 1a , which must be deposited as provided under the
3.24Minnesota Constitution, article XI, section 15.
3.25 Sec. 3. Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read:
3.26 Subdivision 1. Imposition. A tax is imposed on all lawful gamblingother than
3.27(1) pull-tab deals or games; (2) tipboard deals or games; and (3) items listed in section
3.28297E.01, subdivision 8, clauses (4) and (5), at the rate of 8.5 percent on the gross receipts
3.29as defined in section297E.01, subdivision 8 , less prizes actually paid. The tax imposed
3.30by this subdivision is in lieu of the tax imposed by section297A.62 and all local taxes
3.31and license fees except a fee authorized under section349.16, subdivision 8 , or a tax
3.32authorized under subdivision 5.
3.33The tax imposed under this subdivision is payable by the organization or party
3.34conducting, directly or indirectly, the gambling.
3.35EFFECTIVE DATE.This section is effective July 1, 2011.
4.1 Sec. 4. Minnesota Statutes 2010, section 299L.02, subdivision 1, is amended to read:
4.2 Subdivision 1. Lottery. (a) The director shall when required under chapter 349A or
4.3when requested by the director of the lottery conduct background checks on employees of
4.4the State Lottery, lottery retailers, and bidders of lottery procurement contracts.
4.5 (b) The director shall, when so requested by the director of the State Lottery or when
4.6the director believes it to be reasonable and necessary, conduct investigations of lottery
4.7retailers, applicants for lottery retailer contracts, suppliers of goods or services to the State
4.8Lottery, and persons bidding on contracts for goods or services with the State Lottery.
4.9 (c) The director shall conduct an annual security audit of the State Lottery, or arrange
4.10for such an audit by an outside agency or person, firm, or corporation. The director shall
4.11report to the director of the lottery on the results of the audit.
4.12 (d) The director shall deposit in a separate account in the state treasury all money
4.13received from the director of the State Lottery for charges for investigations and
4.14background checks relating to the owning and operating of video lottery terminals under
4.15chapter 349A. Money in the account is appropriated to the director for the purpose of
4.16carrying out the director's powers and duties under this subdivision.
4.17 Sec. 5. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
4.18 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
4.19(1) may be sold by a person who is not licensed under this section, if the person (i) is
4.20not engaged in the trade or business of selling gambling devices, and (ii) does not sell
4.21more than one gambling device in any calendar year;
4.22(2) may be sold by the governing body of a federally recognized Indian tribe
4.23described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
4.24section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
4.25a distributor licensed under this section, and (iii) the licensed distributor notifies the
4.26commissioner of the purchase, in the same manner as is required when the licensed
4.27distributor ships a gambling device into Minnesota;
4.28(3) may be possessed by a person not licensed under this section if the person holds
4.29a permit issued under section299L.08 ; and
4.30(4) may be possessed by a state agency, with the written authorization of the director,
4.31for display or evaluation purposes only and not for the conduct of gambling; and
4.32(5) may be possessed by the State Lottery or a person who has entered into a video
4.33lottery terminal contract with the director of the lottery as authorized under chapter 349A.
4.34 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) a person with whom the lottery director has contracted under section 349A.06.
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) Gambling devices may be operated and gambling permitted as authorized by
5.29chapter 349A.
5.30 Sec. 8. Minnesota Statutes 2010, section 349.15, subdivision 1, is amended to read:
5.31 Subdivision 1. Expenditure restrictions, requirements, and civil penalties.
5.32 (a) Gross profits from lawful gambling may be expended only for lawful purposes or
5.33allowable expenses as authorized by the membership of the conducting organization at a
5.34monthly meeting of the organization's membership.
6.1(b)Provided that Except as provided in paragraph (c), no more than 70 percent of
6.2the gross profit from bingo, and no more than 60 percent of the gross profit from other
6.3forms of lawful gambling, may be expended biennially during the term of the license for
6.4allowable expenses related to lawful gambling, except that for the period of July 1, 2008,
6.5to June 30, 2009, no more than 75 percent of the gross profit from bingo, and no more than
6.665 percent of the gross profit from other forms of lawful gambling, may be expended for
6.7allowable expenses related to lawful gambling. This provision expires June 30, 2009.
6.8(c) For each 12-month period beginning July 1, 2009, a licensed organization will
6.9be evaluated by the board to determine a rating based on the percentage of annual lawful
6.10purpose expenditures when compared to available gross profits for the same period. The
6.11rating will be used to determine the organization's profitability percent and is not a rating
6.12of the organization's lawful gambling operation. An organization will be evaluated
6.13according to the following criteria:
6.14(1) an organization that expends 50 percent or more of gross profits on lawful
6.15purposes will receive a five-star rating;
6.16(2) an organization that expends 40 percent or more but less than 50 percent of gross
6.17profits on lawful purposes will receive a four-star rating;
6.18(3) an organization that expends 30 percent or more but less than 40 percent of gross
6.19profits on lawful purposes will receive a three-star rating;
6.20(4) an organization that expends 20 percent or more but less than 30 percent of gross
6.21profits on lawful purposes will receive a two-star rating; and
6.22(5) an organization that expends less than 20 percent of gross profits on lawful
6.23purposes will receive a one-star rating.
6.24(d) An organization that fails to expend a minimum of 30 percent annually of gross
6.25profits on lawful purposes is automatically on probation effective July 1 for a period of
6.26one year. The organization must increase its rating to a minimum of 30 percent or be
6.27subject to sanctions by the board. If an organization fails to meet the minimum after a
6.28one-year probation, the board may suspend the organization's license or impose a civil
6.29penalty as follows:
6.30(1) in determining any suspension or penalty for a violation of this paragraph, the
6.31board must consider any unique factors or extraordinary circumstances that caused the
6.32organization to not meet the minimum rate of profitability. Unique factors or extraordinary
6.33circumstances include, but are not limited to, the purchase of capital assets necessary to
6.34conduct lawful gambling; road or other construction causing impaired access to the lawful
6.35gambling premises; and flood, tornado, or other catastrophe that had a direct impact on the
6.36continuing lawful gambling operation; and
7.1(2) notwithstanding section349.151, subdivision 4 , paragraph (a), clause (10), the
7.2board may impose a civil penalty under this subdivision up to $10,000.
7.3(e) Money received by an organization from net video lottery terminal income under
7.4section 349A.06, subdivision 6a, may be expended only for lawful purposes.
7.5 Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
7.6to read:
7.7 Subd. 9a. Lottery game. "Lottery game" means any game operated by the lottery
7.8where the prize is determined primarily by chance.
7.9 Sec. 10. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
7.10 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
7.11contract to provide lottery products, computer hardware and software used to monitor sales
7.12of lottery tickets and sales on a video lottery terminal,and lottery tickets, video lottery
7.13terminals, and maintenance of video lottery terminals."Lottery procurement contract"
7.14does not include a contract to provide an annuity or prize payment agreement or materials,
7.15supplies, equipment, or services common to the ordinary operation of a state agency.
7.16 Sec. 11. Minnesota Statutes 2010, section 349A.01, subdivision 11, is amended to read:
7.17 Subd. 11. Lottery retailer. "Lottery retailer" means a person with whom the
7.18director has contracted to sell lottery tickets to the public. A lottery retailer includes a
7.19person with whom the director has contracted to perform the functions necessary to allow
7.20the sale of lottery plays through a video lottery terminal within the retailer's premises.
7.21 Sec. 12. Minnesota Statutes 2010, section 349A.01, subdivision 12, is amended to read:
7.22 Subd. 12. Lottery ticket or ticket. "Lottery ticket" or "ticket" means any tangible
7.23evidence issued by the lottery to prove participation in a lottery game other than a video
7.24lottery game.
7.25 Sec. 13. Minnesota Statutes 2010, section 349A.01, is amended by adding a
7.26subdivision to read:
7.27 Subd. 14. Net terminal income. "Net terminal income" means the sum of all
7.28money spent for video lottery terminal plays less the value of video lottery credit receipts.
7.29 Sec. 14. Minnesota Statutes 2010, section 349A.01, is amended by adding a
7.30subdivision to read:
8.1 Subd. 15. Video lottery credit. "Video lottery credit" means the basic unit of
8.2play for a video lottery terminal.
8.3 Sec. 15. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.4subdivision to read:
8.5 Subd. 16. Video lottery credit receipt. "Video lottery credit receipt" means a
8.6receipt generated by a video lottery terminal that provides evidence of cash payment due a
8.7player from play on a video lottery terminal.
8.8 Sec. 16. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.9subdivision to read:
8.10 Subd. 17. Video lottery game. "Video lottery game" means an electronically
8.11simulated game authorized by the director that is displayed and played on a video lottery
8.12terminal for consideration and with prizes awarded for designated results. Video lottery
8.13game includes video poker games, keno, and video pull-tabs.
8.14 Sec. 17. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.15subdivision to read:
8.16 Subd. 18. Video lottery terminal. "Video lottery terminal" means any machine,
8.17system, or device which upon payment of consideration permits the play of a video
8.18lottery game.
8.19 Sec. 18. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.20subdivision to read:
8.21 Subd. 19. Video lottery terminal play. "Video lottery terminal play" means an
8.22electronic record that proves participation in a video lottery game.
8.23 Sec. 19. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.24subdivision to read:
8.25 Subd. 20. Win percentage. "Win percentage" means the portion of the money
8.26wagered by players on a video lottery terminal that is available for the payment of prizes
8.27to winning players.
8.28 Sec. 20. Minnesota Statutes 2010, section 349A.04, is amended to read:
8.29349A.04 LOTTERY GAME PROCEDURES.
9.1The director may adopt game procedures governing the following elements of the
9.2lottery:
9.3(1) lottery games;
9.4(2) ticket prices;
9.5(3) number and size of prizes;
9.6(4) methods of selecting winning tickets;and
9.7(5) frequency and method of drawings;
9.8(6) video lottery terminals; and
9.9(7) cost of video lottery plays.
9.10The adoption of lottery game procedures is not subject to chapter 14.
9.11 Sec. 21. Minnesota Statutes 2010, section 349A.06, subdivision 1, is amended to read:
9.12 Subdivision 1. Contracts. The director shall sell tickets and operate video lottery
9.13terminals for the lottery through lottery retailers with whom the director contracts.
9.14Contracts under this section are not subject to the provisions of sections 16C.03, 16C.05,
9.1516C.06, 16C.08, 16C.09, and 16C.10, and are valid for a period of one year. The director
9.16may permit a retailer to sell tickets and provide video lottery terminals at more than one
9.17business location under a contract entered into under this section.
9.18 Sec. 22. Minnesota Statutes 2010, section 349A.06, subdivision 5, is amended to read:
9.19 Subd. 5. Restrictions on lottery retailers. (a) A lottery retailer may sell lottery
9.20tickets or have a video lottery terminal only on the premises described in the contract.
9.21 (b) A lottery retailer must prominently display a certificate issued by the director
9.22on the premises where lottery tickets will be sold or where video lottery terminals are
9.23operated.
9.24 (c) A lottery retailer must keep a complete set of books of account, correspondence,
9.25and all other records necessary to show fully the retailer's lottery transactions, and make
9.26them available for inspection by employees of the lottery at all times during business
9.27hours. The director may require a lottery retailer to furnish information as the director
9.28deems necessary to carry out the purposes of this chapter, and may require an audit to be
9.29made of the books of account and records. The director may select an auditor to perform
9.30the audit and may require the retailer to pay the cost of the audit. The auditor has the same
9.31right of access to the books of account, correspondence, and other records as is given to
9.32employees of the lottery.
9.33 (d) A contract issued under this section may not be transferred or assigned.
10.1 (e) The director shall require that lottery tickets may be sold by retailers only for
10.2cash.
10.3 (f) A lottery retailer must prominently post at the point of sale of lottery tickets
10.4and the area where video lottery terminals are located, in a manner approved by the
10.5commissioner of human services, the toll-free telephone number established by the
10.6commissioner of human services in connection with the compulsive gambling program
10.7established under section 245.98.
10.8 Sec. 23. Minnesota Statutes 2010, section 349A.06, is amended by adding a
10.9subdivision to read:
10.10 Subd. 5a. Restrictions on lottery retailers; video lottery terminals. (a) The
10.11director may only enter into a lottery retailer contract for games operated by a video lottery
10.12terminal with a retailer that has a license to sell alcoholic beverages for consumption on
10.13the premises where sold. This does not include a retailer who has only a temporary on-sale
10.14license or a retailer of 3.2 percent malt liquor whose total gross receipts from the premises
10.15were less than 50 percent attributable to the sale of 3.2 percent malt liquor.
10.16 (b) The director may not contract with a retailer for games operated by a video
10.17lottery terminal unless the retailer has an organization licensed under chapter 349
10.18authorized and conducting lawful gambling on the premises.
10.19 (c) A lottery retailer authorized to sell games through a video lottery terminal may
10.20not cancel or refuse to renew a lease with an organization licensed under chapter 349
10.21authorized and conducting lawful gambling on its premises for three years following
10.22the effective date of this act, unless the organization has failed to comply with its lease
10.23with the retailer.
10.24 (d) A lottery retailer may have up to five video lottery terminals on the retailer's
10.25premises, as determined by the director.
10.26 (e) A lottery retailer that is authorized to sell lottery plays through a video lottery
10.27terminal may not make reference to the establishment being a "casino," or use the word
10.28"casino" in its name or in any of its advertisements.
10.29 (f) The director, or any employee of the director, may inspect any video lottery
10.30terminal at any time during the hours when alcoholic beverages may be sold at on-sale
10.31under section 340A.504, subdivisions 1, 2, and 3, without notice, to ensure compliance
10.32with this chapter and any rules adopted by the director.
10.33(g) A lottery retailer may purchase or lease a video lottery terminal only from a
10.34distributor licensed pursuant to section 299L.07 and approved by the lottery director. The
10.35lottery director shall not approve any distributor who has not been in the business of
11.1distributing gaming, amusement, or entertainment machines to liquor establishments in
11.2Minnesota for more than five years.
11.3(h) A distributor may purchase or lease a video lottery terminal only from a
11.4manufacturer licensed pursuant to section 299L.07.
11.5(i) A lottery retailer may not operate as a distributor or manufacturer.
11.6(j) A distributor may not operate as a manufacturer or lottery retailer.
11.7(k) A manufacturer may not operate as a distributor or lottery retailer.
11.8 Sec. 24. Minnesota Statutes 2010, section 349A.06, is amended by adding a
11.9subdivision to read:
11.10 Subd. 6a. Retention by retailers; video lottery terminals. A lottery retailer who
11.11has a contract for performing the functions necessary to allow the sale of lottery plays
11.12through video lottery terminals may retain .. percent of the net terminal income from
11.13the terminals located within its premises as commission. The lottery retailer receiving
11.14commission under this subdivision shall transmit to an organization licensed under
11.15chapter 349, and conducting lawful gambling on the premises of the retailer, .. percent
11.16of the lottery retailer's commission received under this subdivision. If more than one
11.17organization conducts lawful gambling on the premises, the payment must be reasonably
11.18allocated between the organizations, pro rata based on their respective gross receipts.
11.19 Sec. 25. Minnesota Statutes 2010, section 349A.06, subdivision 8, is amended to read:
11.20 Subd. 8. Proceeds of sales. All proceeds from the sale of lottery tickets or proceeds
11.21from the sale of video lottery terminal plays received by a lottery retailer constitute a trust
11.22fund until paid to the director. The lottery retailer is personally liable for all proceeds.
11.23 Sec. 26. Minnesota Statutes 2010, section 349A.06, subdivision 10, is amended to read:
11.24 Subd. 10. Local licenses. No political subdivision may require a local license to
11.25operate as a lottery retailer, restrict or regulate the placement of a video lottery terminal,
11.26or impose a tax or fee on the business of operating as a lottery retailer.
11.27 Sec. 27. [349A.071] VIDEO LOTTERY TERMINALS.
11.28 Subdivision 1. Operation. (a) All video lottery terminals must be operated and
11.29controlled by the director.
11.30(b) Video lottery terminals must be owned or leased by a lottery retailer under
11.31contract to the director.
12.1(c) Video lottery terminals must be maintained by the lottery, or by a vendor that is
12.2licensed pursuant to section 299L.07 and approved by the director.
12.3(d) The director must have a central communications system that monitors activities
12.4and provides auditing program information on each video lottery terminal.
12.5(e) The director must approve the general security arrangements associated with and
12.6relating to the operation of the video lottery terminal.
12.7(f) Video lottery terminals must maintain on nonresettable meters, a permanent
12.8record, capable of being printed out, of all transactions by the terminal and all entries
12.9into the terminal.
12.10(g) The director may implement other controls as are deemed necessary to ensure
12.11and maintain the integrity of video lottery terminals operated under this section.
12.12 Subd. 2. Testing and examination of machines. The director shall examine
12.13prototypes of video lottery terminals and require that the manufacturer of the terminal
12.14pay the cost of the examination. The director may contract for the examination of
12.15video lottery terminals. The director may require working models of a video lottery
12.16terminal transported to the locations the director designates for testing, examination,
12.17and analysis. The manufacturer shall pay all costs of any testing, examination, analysis,
12.18and transportation of the terminal model.
12.19 Subd. 3. Deactivation of terminal. The director may deactivate a video lottery
12.20terminal without notice if the lottery retailer has violated any provision of this chapter,
12.21rule, or provision of its contract with the director.
12.22 Sec. 28. Minnesota Statutes 2010, section 349A.08, subdivision 1, is amended to read:
12.23 Subdivision 1. Agreement by players. A person who buys a lottery ticket or plays a
12.24video lottery game agrees to be bound by the rules and game procedures applicable tothe
12.25that particular lottery gamefor which the ticket is purchased. The player acknowledges
12.26that the determination of whether a ticket or video lottery credit receipt isa valid winning
12.27ticket is subject to under the rules of and game procedures adopted by the director, claims
12.28procedures established by the director for that game, and any confidential or public
12.29validation tests established by the director for that game.
12.30 Sec. 29. Minnesota Statutes 2010, section 349A.08, subdivision 5, is amended to read:
12.31 Subd. 5. Payment; unclaimed prizes. (a) Except as provided in this subdivision, a
12.32prize in the state lottery must be claimed by the winner within one year of the date of the
12.33drawing at which the prize was awarded or the last day sales were authorized for a game
12.34where a prize was determined in a manner other than by means of a drawing. If a valid
13.1claim is not made for a prize payable directly by the lottery by the end of this period, the
13.2prize money is considered unclaimed and the winner of the prize shall have no further
13.3claim to the prize.
13.4 (b) A video lottery credit receipt from a video lottery terminal must be presented
13.5for payment within 60 days of the date the video lottery credit receipt was printed. If a
13.6valid claim for a video lottery credit receipt is not made by the end of this period, the
13.7video lottery credit receipt is considered unclaimed and the player shall have no further
13.8claim to the amount due from the video lottery credit receipt.
13.9 (c) A prize won by a person who purchased the winning ticket or played a video
13.10lottery game in violation of section 349A.12, subdivision 1, or won by a person ineligible
13.11to be awarded a prize under subdivision 7 must be treated as an unclaimed prize under this
13.12section. The director must transfer all unclaimed prize money at the end of each fiscal
13.13year from the lottery cash flow account to the general fund.
13.14 Sec. 30. Minnesota Statutes 2010, section 349A.08, subdivision 8, is amended to read:
13.15 Subd. 8. Withholding of delinquent state taxes or other debts. The director
13.16shall report the name, address, and Social Security number of each winner of a lottery
13.17prize of $600 or more, or a video lottery prize of $1,200 or more, to the Department of
13.18Revenue to determine whether the person who has won the prize is delinquent in payment
13.19of state taxes or owes a debt as defined in section 270A.03, subdivision 5. If the person
13.20is delinquent in payment of state taxes or owes a debt as defined in section 270A.03,
13.21subdivision 5, the director shall withhold the delinquent amount from the person's prize
13.22for remittance to the Department of Revenue for payment of the delinquent taxes or
13.23distribution to a claimant agency in accordance with chapter 270A. Section 270A.10
13.24applies to the priority of claims.
13.25 Sec. 31. Minnesota Statutes 2010, section 349A.09, subdivision 1, is amended to read:
13.26 Subdivision 1. Odds; required information. (a) The director shall include on each
13.27brochure, pamphlet, booklet, or other similar material the director publishes to promote
13.28or explain any lottery game, a prominent and clear statement of the approximate odds of
13.29winning each prize offered in that lottery game.
13.30 (b) Except for the operation of a video lottery terminal, each lottery retailer must
13.31post prominently at or near the point of ticket sale a notice or notices printed and provided
13.32by the director of the approximate odds of winning each prize in each game for which
13.33the lottery retailer sells tickets.
14.1 (c) The approximate odds of winning a prize from a video lottery terminal must be
14.2displayed on the face or screen of the video lottery terminal.
14.3 Sec. 32. Minnesota Statutes 2010, section 349A.10, subdivision 2, is amended to read:
14.4 Subd. 2.Deposit in Prize fund. (a) The director shall establish a lottery prize
14.5fund outside the state treasury. The fund consists of all money deposited in it under this
14.6subdivision and all interest earned thereon.
14.7(b) The director shall deposit in the lottery prize fund, from gross receipts from the
14.8sale of lottery tickets, an amount sufficient to pay lottery prizes from the lottery prize
14.9fund according to the following provisions:
14.10(1) for games which require online terminal connections, the prizes paid in any fiscal
14.11year must be at least 45 percent of gross receipts from those games in that fiscal year;
14.12(2) for games which do not require online terminal connections, the prizes paid in any
14.13fiscal year must be at leastthe following percentages of gross receipts from those games:
14.14(i) 50 percent through fiscal year 1991;
14.15(ii) 55 percent from July 1, 1991, to June 30, 1992; and
14.16(iii) 60 percent thereafter of gross receipts from those games in that fiscal year.
14.17(c) For lottery games played on a video lottery terminal, the win percentage in any
14.18fiscal year will be the win percentage established by the game procedures adopted for the
14.19game, but shall be at least 80 percent but not more than 95 percent.
14.20 Sec. 33. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
14.21 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
14.22account in the lottery fund. The director shall pay all costs of operating the lottery,
14.23including payroll costs or amounts transferred to the state treasury for payroll costs, but
14.24not including lottery prizes, from the lottery operating account. The director shall credit to
14.25the lottery operations account amounts sufficient to pay the operating costs of the lottery.
14.26(b) Except as provided in paragraph (e), the director may not credit in any fiscal year
14.27thereafter amounts to the lottery operations account which when totaled exceed nine
14.28percent of gross revenue, exclusive of net terminal income, and 12 percent of net terminal
14.29income to the lottery fund in that fiscal year. In computing total amounts credited to
14.30the lottery operations account under this paragraph the director shall disregard amounts
14.31transferred to or retained by lottery retailers as sales commissions or other compensation.
14.32(c) The director of the lottery may not expendafter July 1, 1991, more than 2-3/4
14.33percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
14.34placement of advertising.
15.1(d) Except as the director determines, the lottery is not subject to chapter 16A
15.2relating to budgeting, payroll, and the purchase of goods and services.
15.3(e) In addition to the amounts credited to the lottery operations account under
15.4paragraph (b), the director is authorized, if necessary, to meet the current obligations of
15.5the lottery and to credit up to 25 percent of an amount equal to the average annual amount
15.6which was authorized to be credited to the lottery operations account for the previous three
15.7fiscal years but was not needed to meet the obligations of the lottery.
15.8 Sec. 34. Minnesota Statutes 2010, section 349A.10, subdivision 4, is amended to read:
15.9 Subd. 4. Deposit of receipts. (a) The director may require lottery retailers to:
15.10 (1) deposit in a separate account to the credit of the lottery fund, in banks designated
15.11by the director, all money received by the lottery retailer from the sale of lottery tickets
15.12and video lottery terminal plays, less money retained as the lottery retailer's commission
15.13and for payment of prizes;
15.14 (2) file with the director reports of the lottery retailer's receipts and transactions in
15.15ticket sales and video lottery terminal plays in a form that the director prescribes; and
15.16 (3) allow money deposited by the lottery retailer from the sale of lottery tickets and
15.17video lottery terminal plays to be transferred to the lottery through electronic fund transfer.
15.18 (b) The director may make arrangements for any person, including a financial
15.19institution, to perform functions, activities, or services in connection with the receipt and
15.20distribution of lottery revenues.
15.21 (c) A lottery retailer who fails to pay any money due to the director within the time
15.22prescribed by the director shall pay interest on the amount owed at the rate determined by
15.23rule.
15.24 Sec. 35. Minnesota Statutes 2010, section 349A.10, subdivision 6, is amended to read:
15.25 Subd. 6. Budget; plans. The director shall prepare and submit a biennial budget
15.26plan to the commissioner of management and budget. The governor shall recommend
15.27the maximum amount available for the lottery in the budget the governor submits to
15.28the legislature under section16A.11 . The maximum amount available to the lottery for
15.29operating expenses and capital expenditures shall be determined by law. Operating
15.30expenses shall not include expenses that are a direct function of lottery sales, which
15.31include the cost of lottery prizes, amounts paid to lottery retailers as sales commissions
15.32or other compensation, amounts paid to produce and deliver scratch lottery games,and
15.33amounts paid to an outside vendor to operate and maintain an online gaming system,
15.34amounts paid to an outside vendor to operate and maintain a central system for video
16.1lottery terminals. In addition, the director shall appear at least once each fiscal year before
16.2the senate and house of representatives committees having jurisdiction over gambling
16.3policy to present and explain the lottery's plans for future games and the related advertising
16.4and promotions and spending plans for the next fiscal year.
16.5 Sec. 36. Minnesota Statutes 2010, section 349A.11, subdivision 1, is amended to read:
16.6 Subdivision 1. Lottery ticket; retailer. The director, an employee of the lottery,
16.7a member of the immediate family of the director or employee residing in the same
16.8household may not:
16.9 (1) purchase a lottery ticket or play a game on a video lottery terminal; or
16.10 (2) have any personal pecuniary interest in any vendor holding a lottery procurement
16.11contract, or in any lottery retailer; or
16.12 (3) receive any gift, gratuity, or other thing of value, excluding food or beverage,
16.13from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in
16.14excess of $100 in any calendar year.
16.15 Sec. 37. Minnesota Statutes 2010, section 349A.12, subdivision 1, is amended to read:
16.16 Subdivision 1. Purchase by minors. A person under the age of 18 years may not
16.17buy or redeem for a prize a ticket in the state lottery and a person under the age of 21 years
16.18may not play a game or redeem a video lottery credit receipt from a video lottery terminal.
16.19 Sec. 38. Minnesota Statutes 2010, section 349A.12, subdivision 2, is amended to read:
16.20 Subd. 2. Sale to minors. A lottery retailer may not sell and a lottery retailer or other
16.21person may not furnish or redeem for a prize a ticket in the state lottery to any person
16.22under the age of 18 years, or allow a person under the age of 21 years to play a game or
16.23redeem a video lottery credit receipt from a video lottery terminal. It is an affirmative
16.24defense to a charge under this subdivision for the lottery retailer or other person to prove
16.25by a preponderance of the evidence that the lottery retailer or other person reasonably and
16.26in good faith relied upon representation of proof of age described in section 340A.503,
16.27subdivision 6, in making the sale or furnishing or redeeming the ticket or allowing the
16.28play of a video lottery game or redeem a video lottery credit receipt from a video lottery
16.29terminal.
16.30 Sec. 39. Minnesota Statutes 2010, section 349A.13, is amended to read:
16.31349A.13 RESTRICTIONS.
16.32 Nothing in this chapter:
17.1 (1) authorizes the director to conduct a lottery game or contest the winner or winners
17.2of which are determined by the result of a sporting event other than a horse race conducted
17.3under chapter 240; or
17.4 (2)authorizes the director to install or operate a lottery device operated by coin or
17.5currency which when operated determines the winner of a game; and
17.6(3) authorizes the director to sell pull-tabs as defined under section 349.12,
17.7subdivision 32.
17.8 Sec. 40. Minnesota Statutes 2010, section 541.20, is amended to read:
17.9541.20 RECOVERY OF MONEY LOST.
17.10Every person who, by playing at cards, dice, or other game, or by betting on the
17.11hands or sides of such as are gambling, shall lose to any person so playing or betting
17.12any sum of money or any goods, and pays or delivers the same, or any part thereof, to
17.13the winner, may sue for and recover such money by a civil action, before any court
17.14of competent jurisdiction. For purposes of this section, gambling shall not include
17.15pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
17.16or sale of tickets in the state lottery, purchase of video lottery plays as authorized under
17.17chapter 349A, or gambling authorized under chapters 349 and 349A.
17.18 Sec. 41. Minnesota Statutes 2010, section 541.21, is amended to read:
17.19541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
17.20Every note, bill, bond, mortgage, or other security or conveyance in which the whole
17.21or any part of the consideration shall be for any money or goods won by gambling or
17.22playing at cards, dice, or any other game whatever, or by betting on the sides or hands
17.23of any person gambling, or for reimbursing or repaying any money knowingly lent or
17.24advanced at the time and place of such gambling or betting, or lent and advanced for any
17.25gambling or betting to any persons so gambling or betting, shall be void and of no effect
17.26as between the parties to the same, and as to all persons except such as hold or claim
17.27under them in good faith, without notice of the illegality of the consideration of such
17.28contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
17.29wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
17.30in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
17.31conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
17.32section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
17.33 Sec. 42. Minnesota Statutes 2010, section 609.651, subdivision 1, is amended to read:
18.1 Subdivision 1.Felony Fraud. A person is guilty of a felony and may be sentenced
18.2under subdivision 4 if the person does any of the following with intent to defraud the
18.3State Lottery:
18.4 (1) alters or counterfeits a state lottery ticket or a video lottery credit receipt from a
18.5State Lottery video lottery terminal;
18.6 (2) knowingly presents an altered or counterfeited state lottery ticket or video lottery
18.7credit receipt from a State Lottery video lottery terminal for payment;
18.8 (3) knowingly transfers an altered or counterfeited state lottery ticket or video lottery
18.9credit receipt from a State Lottery video lottery terminal to another person;or
18.10 (4) tampers with or manipulates the outcome, prize payable, or operation of a State
18.11Lottery video lottery terminal; or
18.12 (5) otherwise claims a lottery prize by means of fraud, deceit, or misrepresentation.
18.13 Sec. 43. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
18.14 Subd. 3. What are not bets. The following are not bets:
18.15(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
18.16harm or loss sustained, even though the loss depends upon chance;
18.17(2) a contract for the purchase or sale at a future date of securities or other
18.18commodities;
18.19(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
18.20contest for the determination of skill, speed, strength, endurance, or quality or to the bona
18.21fide owners of animals or other property entered in such a contest;
18.22(4) the game of bingo when conducted in compliance with sections349.11 to
349.23 ;
18.23(5) a private social bet not part of or incidental to organized, commercialized, or
18.24systematic gambling;
18.25(6) the operation of equipment or the conduct of a raffle under sections349.11 to
18.26349.22
, by an organization licensed by the Gambling Control Board or an organization
18.27exempt from licensing under section349.166 ;
18.28(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
18.29240; and
18.30(8) the purchase and sale of state lottery tickets and plays on a video lottery terminal
18.31under chapter 349A.
18.32 Sec. 44. Minnesota Statutes 2010, section 609.75, subdivision 4, is amended to read:
18.33 Subd. 4. Gambling device. A gambling device is a contrivance the purpose of which
18.34is that for a consideration a player is afforded an opportunity to obtain something of value,
19.1other than free plays, automatically from the machine or otherwise, the award of which
19.2is determined principally by chance, whether or not the contrivance is actually played.
19.3"Gambling device" also includes a video game of chance, as defined in subdivision 8, but
19.4does not include a video lottery terminal operated by the State Lottery under chapter 349A.
19.5 Sec. 45. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
19.6 Subd. 2. State lottery. Sections 609.755 and 609.76 do not prohibit the operation
19.7of the state lotteryor; the sale, possession, or purchase of tickets for the state lottery; or
19.8the manufacture, possession, or operation of a video lottery terminal for the state lottery
19.9under chapter 349A.
19.10 Sec. 46. LOTTERY BUDGET; VIDEO LOTTERY TERMINALS.
19.11The director of the State Lottery shall submit a budget for the operation of video
19.12lottery terminals as authorized under Minnesota Statutes, section 349A.071, to the
19.13commissioner of management and budget. Notwithstanding Minnesota Statutes, section
19.14349A.10, subdivision 6, the director of the State Lottery may expend amounts necessary to
19.15operate video lottery terminals. Amounts expended by the director of the State Lottery for
19.16the conduct of video lottery terminals in fiscal year 2012 are not subject to the maximum
19.17amount set in law for the operation of the lottery.
19.18 Sec. 47. REPEALER.
19.19Minnesota Statutes 2010, sections 297E.01, subdivision 7; and 297E.02, subdivisions
19.204, 6, and 7, are repealed.
19.21 Sec. 48. EFFECTIVE DATE.
19.22 Except as otherwise provided, this act is effective the day following final enactment.
1.3video lottery terminals; providing duties and powers to director of the State
1.4Lottery; providing for use of video lottery revenues; modifying certain lawful
1.5gambling taxes; making clarifying, conforming, and technical changes;
1.6amending Minnesota Statutes 2010, sections 297A.94; 297E.02, subdivision 1;
1.7299L.02, subdivision 1; 299L.07, subdivisions 2, 2a; 340A.410, subdivision 5;
1.8349.15, subdivision 1; 349A.01, subdivisions 10, 11, 12, by adding subdivisions;
1.9349A.04; 349A.06, subdivisions 1, 5, 8, 10, by adding subdivisions; 349A.08,
1.10subdivisions 1, 5, 8; 349A.09, subdivision 1; 349A.10, subdivisions 2, 3, 4, 6;
1.11349A.11, subdivision 1; 349A.12, subdivisions 1, 2; 349A.13; 541.20; 541.21;
1.12609.651, subdivision 1; 609.75, subdivisions 3, 4; 609.761, subdivision 2;
1.13proposing coding for new law in Minnesota Statutes, chapters 297A; 349A;
1.14repealing Minnesota Statutes 2010, sections 297E.01, subdivision 7; 297E.02,
1.15subdivisions 4, 6, 7.
1.16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.17 Section 1. [297A.652] LOTTERY GAMING MACHINES; IN-LIEU TAX.
1.18 Net terminal income from the operation of video lottery terminals authorized under
1.19section 349A.071 is exempt from the tax imposed under section 297A.62. The State
1.20Lottery must on or before the 20th day of each month transmit to the commissioner an
1.21amount equal to the net terminal income from the operation of video lottery terminals
1.22as defined in section 349A.01, for the previous month multiplied by .. percent. The
1.23commissioner shall deposit the money transmitted under this section in the state treasury
1.24to be credited as provided in section 297A.94.
1.25 Sec. 2. Minnesota Statutes 2010, section 297A.94, is amended to read:
1.26297A.94 DEPOSIT OF REVENUES.
2.1(a) Except as provided in this section, the commissioner shall deposit the revenues,
2.2including interest and penalties, derived from the taxes imposed by this chapter in the state
2.3treasury and credit them to the general fund.
2.4(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
2.5account in the special revenue fund if:
2.6(1) the taxes are derived from sales and use of property and services purchased for
2.7the construction and operation of an agricultural resource project; and
2.8(2) the purchase was made on or after the date on which a conditional commitment
2.9was made for a loan guaranty for the project under section
2.10The commissioner of management and budget shall certify to the commissioner the date
2.11on which the project received the conditional commitment. The amount deposited in
2.12the loan guaranty account must be reduced by any refunds and by the costs incurred by
2.13the Department of Revenue to administer and enforce the assessment and collection of
2.14the taxes.
2.15(c) The commissioner shall deposit the revenues, including interest and penalties,
2.16derived from the taxes imposed on sales and purchases included in section
2.17subdivision 3
2.18as follows:
2.19(1) first to the general obligation special tax bond debt service account in each fiscal
2.20year the amount required by section
2.21(2) after the requirements of clause (1) have been met, the balance to the general
2.22fund.
2.23(d) The commissioner shall deposit the revenues, including interest and penalties,
2.24collected under section
2.25general fund. By July 15 of each year the commissioner shall transfer to the highway user
2.26tax distribution fund an amount equal to the excess fees collected under section
2.27subdivision 5
2.28(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
2.29for fiscal year 2004 and thereafter,
2.30penalties, transmitted to the commissioner under section
2.31the commissioner in the state treasury as follows:
2.32(1) 50 percent of the receipts must be deposited in the heritage enhancement account
2.33in the game and fish fund, and may be spent only on activities that improve, enhance, or
2.34protect fish and wildlife resources, including conservation, restoration, and enhancement
2.35of land, water, and other natural resources of the state;
3.1(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
3.2may be spent only for state parks and trails;
3.3(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
3.4may be spent only on metropolitan park and trail grants;
3.5(4) three percent of the receipts must be deposited in the natural resources fund, and
3.6may be spent only on local trail grants; and
3.7(5) two percent of the receipts must be deposited in the natural resources fund,
3.8and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
3.9Conservatory, and the Duluth Zoo.
3.10(f) Revenues transmitted to the commissioner under section 297A.652 must be
3.11deposited by the commissioner in the general fund.
3.12
3.13used as a substitute for traditional sources of funding for the purposes specified, but the
3.14dedicated revenue shall supplement traditional sources of funding for those purposes. Land
3.15acquired with money deposited in the game and fish fund under paragraph (e) must be open
3.16to public hunting and fishing during the open season, except that in aquatic management
3.17areas or on lands where angling easements have been acquired, fishing may be prohibited
3.18during certain times of the year and hunting may be prohibited. At least 87 percent of the
3.19money deposited in the game and fish fund for improvement, enhancement, or protection
3.20of fish and wildlife resources under paragraph (e) must be allocated for field operations.
3.21
3.22the revenues, including interest and penalties, generated by the sales tax imposed
3.23under section
3.24Minnesota Constitution, article XI, section 15.
3.25 Sec. 3. Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read:
3.26 Subdivision 1. Imposition. A tax is imposed on all lawful gambling
3.27
3.28
3.29as defined in section
3.30by this subdivision is in lieu of the tax imposed by section
3.31and license fees except a fee authorized under section
3.32authorized under subdivision 5.
3.33The tax imposed under this subdivision is payable by the organization or party
3.34conducting, directly or indirectly, the gambling.
3.35EFFECTIVE DATE.This section is effective July 1, 2011.
4.1 Sec. 4. Minnesota Statutes 2010, section 299L.02, subdivision 1, is amended to read:
4.2 Subdivision 1. Lottery. (a) The director shall when required under chapter 349A or
4.3when requested by the director of the lottery conduct background checks on employees of
4.4the State Lottery, lottery retailers, and bidders of lottery procurement contracts.
4.5 (b) The director shall, when so requested by the director of the State Lottery or when
4.6the director believes it to be reasonable and necessary, conduct investigations of lottery
4.7retailers, applicants for lottery retailer contracts, suppliers of goods or services to the State
4.8Lottery, and persons bidding on contracts for goods or services with the State Lottery.
4.9 (c) The director shall conduct an annual security audit of the State Lottery, or arrange
4.10for such an audit by an outside agency or person, firm, or corporation. The director shall
4.11report to the director of the lottery on the results of the audit.
4.12 (d) The director shall deposit in a separate account in the state treasury all money
4.13received from the director of the State Lottery for charges for investigations and
4.14background checks relating to the owning and operating of video lottery terminals under
4.15chapter 349A. Money in the account is appropriated to the director for the purpose of
4.16carrying out the director's powers and duties under this subdivision.
4.17 Sec. 5. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
4.18 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
4.19(1) may be sold by a person who is not licensed under this section, if the person (i) is
4.20not engaged in the trade or business of selling gambling devices, and (ii) does not sell
4.21more than one gambling device in any calendar year;
4.22(2) may be sold by the governing body of a federally recognized Indian tribe
4.23described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
4.24section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
4.25a distributor licensed under this section, and (iii) the licensed distributor notifies the
4.26commissioner of the purchase, in the same manner as is required when the licensed
4.27distributor ships a gambling device into Minnesota;
4.28(3) may be possessed by a person not licensed under this section if the person holds
4.29a permit issued under section
4.30(4) may be possessed by a state agency, with the written authorization of the director,
4.31for display or evaluation purposes only and not for the conduct of gambling; and
4.32(5) may be possessed by the State Lottery or a person who has entered into a video
4.33lottery terminal contract with the director of the lottery as authorized under chapter 349A.
4.34 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; or
5.14(5) a person with whom the lottery director has contracted under section 349A.06.
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) Gambling devices may be operated and gambling permitted as authorized by
5.29chapter 349A.
5.30 Sec. 8. Minnesota Statutes 2010, section 349.15, subdivision 1, is amended to read:
5.31 Subdivision 1. Expenditure restrictions, requirements, and civil penalties.
5.32 (a) Gross profits from lawful gambling may be expended only for lawful purposes or
5.33allowable expenses as authorized by the membership of the conducting organization at a
5.34monthly meeting of the organization's membership.
6.1(b)
6.2the gross profit from bingo, and no more than 60 percent of the gross profit from other
6.3forms of lawful gambling, may be expended biennially during the term of the license for
6.4allowable expenses related to lawful gambling, except that for the period of July 1, 2008,
6.5to June 30, 2009, no more than 75 percent of the gross profit from bingo, and no more than
6.665 percent of the gross profit from other forms of lawful gambling, may be expended for
6.7allowable expenses related to lawful gambling. This provision expires June 30, 2009.
6.8(c) For each 12-month period beginning July 1, 2009, a licensed organization will
6.9be evaluated by the board to determine a rating based on the percentage of annual lawful
6.10purpose expenditures when compared to available gross profits for the same period. The
6.11rating will be used to determine the organization's profitability percent and is not a rating
6.12of the organization's lawful gambling operation. An organization will be evaluated
6.13according to the following criteria:
6.14(1) an organization that expends 50 percent or more of gross profits on lawful
6.15purposes will receive a five-star rating;
6.16(2) an organization that expends 40 percent or more but less than 50 percent of gross
6.17profits on lawful purposes will receive a four-star rating;
6.18(3) an organization that expends 30 percent or more but less than 40 percent of gross
6.19profits on lawful purposes will receive a three-star rating;
6.20(4) an organization that expends 20 percent or more but less than 30 percent of gross
6.21profits on lawful purposes will receive a two-star rating; and
6.22(5) an organization that expends less than 20 percent of gross profits on lawful
6.23purposes will receive a one-star rating.
6.24(d) An organization that fails to expend a minimum of 30 percent annually of gross
6.25profits on lawful purposes is automatically on probation effective July 1 for a period of
6.26one year. The organization must increase its rating to a minimum of 30 percent or be
6.27subject to sanctions by the board. If an organization fails to meet the minimum after a
6.28one-year probation, the board may suspend the organization's license or impose a civil
6.29penalty as follows:
6.30(1) in determining any suspension or penalty for a violation of this paragraph, the
6.31board must consider any unique factors or extraordinary circumstances that caused the
6.32organization to not meet the minimum rate of profitability. Unique factors or extraordinary
6.33circumstances include, but are not limited to, the purchase of capital assets necessary to
6.34conduct lawful gambling; road or other construction causing impaired access to the lawful
6.35gambling premises; and flood, tornado, or other catastrophe that had a direct impact on the
6.36continuing lawful gambling operation; and
7.1(2) notwithstanding section
7.2board may impose a civil penalty under this subdivision up to $10,000.
7.3(e) Money received by an organization from net video lottery terminal income under
7.4section 349A.06, subdivision 6a, may be expended only for lawful purposes.
7.5 Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
7.6to read:
7.7 Subd. 9a. Lottery game. "Lottery game" means any game operated by the lottery
7.8where the prize is determined primarily by chance.
7.9 Sec. 10. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
7.10 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
7.11contract to provide lottery products, computer hardware and software used to monitor sales
7.12of lottery tickets and sales on a video lottery terminal,
7.13terminals, and maintenance of video lottery terminals.
7.14does not include a contract to provide an annuity or prize payment agreement or materials,
7.15supplies, equipment, or services common to the ordinary operation of a state agency.
7.16 Sec. 11. Minnesota Statutes 2010, section 349A.01, subdivision 11, is amended to read:
7.17 Subd. 11. Lottery retailer. "Lottery retailer" means a person with whom the
7.18director has contracted to sell lottery tickets to the public. A lottery retailer includes a
7.19person with whom the director has contracted to perform the functions necessary to allow
7.20the sale of lottery plays through a video lottery terminal within the retailer's premises.
7.21 Sec. 12. Minnesota Statutes 2010, section 349A.01, subdivision 12, is amended to read:
7.22 Subd. 12. Lottery ticket or ticket. "Lottery ticket" or "ticket" means any tangible
7.23evidence issued by the lottery to prove participation in a lottery game other than a video
7.24lottery game.
7.25 Sec. 13. Minnesota Statutes 2010, section 349A.01, is amended by adding a
7.26subdivision to read:
7.27 Subd. 14. Net terminal income. "Net terminal income" means the sum of all
7.28money spent for video lottery terminal plays less the value of video lottery credit receipts.
7.29 Sec. 14. Minnesota Statutes 2010, section 349A.01, is amended by adding a
7.30subdivision to read:
8.1 Subd. 15. Video lottery credit. "Video lottery credit" means the basic unit of
8.2play for a video lottery terminal.
8.3 Sec. 15. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.4subdivision to read:
8.5 Subd. 16. Video lottery credit receipt. "Video lottery credit receipt" means a
8.6receipt generated by a video lottery terminal that provides evidence of cash payment due a
8.7player from play on a video lottery terminal.
8.8 Sec. 16. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.9subdivision to read:
8.10 Subd. 17. Video lottery game. "Video lottery game" means an electronically
8.11simulated game authorized by the director that is displayed and played on a video lottery
8.12terminal for consideration and with prizes awarded for designated results. Video lottery
8.13game includes video poker games, keno, and video pull-tabs.
8.14 Sec. 17. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.15subdivision to read:
8.16 Subd. 18. Video lottery terminal. "Video lottery terminal" means any machine,
8.17system, or device which upon payment of consideration permits the play of a video
8.18lottery game.
8.19 Sec. 18. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.20subdivision to read:
8.21 Subd. 19. Video lottery terminal play. "Video lottery terminal play" means an
8.22electronic record that proves participation in a video lottery game.
8.23 Sec. 19. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.24subdivision to read:
8.25 Subd. 20. Win percentage. "Win percentage" means the portion of the money
8.26wagered by players on a video lottery terminal that is available for the payment of prizes
8.27to winning players.
8.28 Sec. 20. Minnesota Statutes 2010, section 349A.04, is amended to read:
8.29349A.04 LOTTERY GAME PROCEDURES.
9.1The director may adopt game procedures governing the following elements of the
9.2lottery:
9.3(1) lottery games;
9.4(2) ticket prices;
9.5(3) number and size of prizes;
9.6(4) methods of selecting winning tickets;
9.7(5) frequency and method of drawings;
9.8(6) video lottery terminals; and
9.9(7) cost of video lottery plays.
9.10The adoption of lottery game procedures is not subject to chapter 14.
9.11 Sec. 21. Minnesota Statutes 2010, section 349A.06, subdivision 1, is amended to read:
9.12 Subdivision 1. Contracts. The director shall sell tickets and operate video lottery
9.13terminals for the lottery through lottery retailers with whom the director contracts.
9.14Contracts under this section are not subject to the provisions of sections 16C.03, 16C.05,
9.1516C.06, 16C.08, 16C.09, and 16C.10, and are valid for a period of one year. The director
9.16may permit a retailer to sell tickets and provide video lottery terminals at more than one
9.17business location under a contract entered into under this section.
9.18 Sec. 22. Minnesota Statutes 2010, section 349A.06, subdivision 5, is amended to read:
9.19 Subd. 5. Restrictions on lottery retailers. (a) A lottery retailer may sell lottery
9.20tickets or have a video lottery terminal only on the premises described in the contract.
9.21 (b) A lottery retailer must prominently display a certificate issued by the director
9.22on the premises where lottery tickets will be sold or where video lottery terminals are
9.23operated.
9.24 (c) A lottery retailer must keep a complete set of books of account, correspondence,
9.25and all other records necessary to show fully the retailer's lottery transactions, and make
9.26them available for inspection by employees of the lottery at all times during business
9.27hours. The director may require a lottery retailer to furnish information as the director
9.28deems necessary to carry out the purposes of this chapter, and may require an audit to be
9.29made of the books of account and records. The director may select an auditor to perform
9.30the audit and may require the retailer to pay the cost of the audit. The auditor has the same
9.31right of access to the books of account, correspondence, and other records as is given to
9.32employees of the lottery.
9.33 (d) A contract issued under this section may not be transferred or assigned.
10.1 (e) The director shall require that lottery tickets may be sold by retailers only for
10.2cash.
10.3 (f) A lottery retailer must prominently post at the point of sale of lottery tickets
10.4and the area where video lottery terminals are located, in a manner approved by the
10.5commissioner of human services, the toll-free telephone number established by the
10.6commissioner of human services in connection with the compulsive gambling program
10.7established under section 245.98.
10.8 Sec. 23. Minnesota Statutes 2010, section 349A.06, is amended by adding a
10.9subdivision to read:
10.10 Subd. 5a. Restrictions on lottery retailers; video lottery terminals. (a) The
10.11director may only enter into a lottery retailer contract for games operated by a video lottery
10.12terminal with a retailer that has a license to sell alcoholic beverages for consumption on
10.13the premises where sold. This does not include a retailer who has only a temporary on-sale
10.14license or a retailer of 3.2 percent malt liquor whose total gross receipts from the premises
10.15were less than 50 percent attributable to the sale of 3.2 percent malt liquor.
10.16 (b) The director may not contract with a retailer for games operated by a video
10.17lottery terminal unless the retailer has an organization licensed under chapter 349
10.18authorized and conducting lawful gambling on the premises.
10.19 (c) A lottery retailer authorized to sell games through a video lottery terminal may
10.20not cancel or refuse to renew a lease with an organization licensed under chapter 349
10.21authorized and conducting lawful gambling on its premises for three years following
10.22the effective date of this act, unless the organization has failed to comply with its lease
10.23with the retailer.
10.24 (d) A lottery retailer may have up to five video lottery terminals on the retailer's
10.25premises, as determined by the director.
10.26 (e) A lottery retailer that is authorized to sell lottery plays through a video lottery
10.27terminal may not make reference to the establishment being a "casino," or use the word
10.28"casino" in its name or in any of its advertisements.
10.29 (f) The director, or any employee of the director, may inspect any video lottery
10.30terminal at any time during the hours when alcoholic beverages may be sold at on-sale
10.31under section 340A.504, subdivisions 1, 2, and 3, without notice, to ensure compliance
10.32with this chapter and any rules adopted by the director.
10.33(g) A lottery retailer may purchase or lease a video lottery terminal only from a
10.34distributor licensed pursuant to section 299L.07 and approved by the lottery director. The
10.35lottery director shall not approve any distributor who has not been in the business of
11.1distributing gaming, amusement, or entertainment machines to liquor establishments in
11.2Minnesota for more than five years.
11.3(h) A distributor may purchase or lease a video lottery terminal only from a
11.4manufacturer licensed pursuant to section 299L.07.
11.5(i) A lottery retailer may not operate as a distributor or manufacturer.
11.6(j) A distributor may not operate as a manufacturer or lottery retailer.
11.7(k) A manufacturer may not operate as a distributor or lottery retailer.
11.8 Sec. 24. Minnesota Statutes 2010, section 349A.06, is amended by adding a
11.9subdivision to read:
11.10 Subd. 6a. Retention by retailers; video lottery terminals. A lottery retailer who
11.11has a contract for performing the functions necessary to allow the sale of lottery plays
11.12through video lottery terminals may retain .. percent of the net terminal income from
11.13the terminals located within its premises as commission. The lottery retailer receiving
11.14commission under this subdivision shall transmit to an organization licensed under
11.15chapter 349, and conducting lawful gambling on the premises of the retailer, .. percent
11.16of the lottery retailer's commission received under this subdivision. If more than one
11.17organization conducts lawful gambling on the premises, the payment must be reasonably
11.18allocated between the organizations, pro rata based on their respective gross receipts.
11.19 Sec. 25. Minnesota Statutes 2010, section 349A.06, subdivision 8, is amended to read:
11.20 Subd. 8. Proceeds of sales. All proceeds from the sale of lottery tickets or proceeds
11.21from the sale of video lottery terminal plays received by a lottery retailer constitute a trust
11.22fund until paid to the director. The lottery retailer is personally liable for all proceeds.
11.23 Sec. 26. Minnesota Statutes 2010, section 349A.06, subdivision 10, is amended to read:
11.24 Subd. 10. Local licenses. No political subdivision may require a local license to
11.25operate as a lottery retailer, restrict or regulate the placement of a video lottery terminal,
11.26or impose a tax or fee on the business of operating as a lottery retailer.
11.27 Sec. 27. [349A.071] VIDEO LOTTERY TERMINALS.
11.28 Subdivision 1. Operation. (a) All video lottery terminals must be operated and
11.29controlled by the director.
11.30(b) Video lottery terminals must be owned or leased by a lottery retailer under
11.31contract to the director.
12.1(c) Video lottery terminals must be maintained by the lottery, or by a vendor that is
12.2licensed pursuant to section 299L.07 and approved by the director.
12.3(d) The director must have a central communications system that monitors activities
12.4and provides auditing program information on each video lottery terminal.
12.5(e) The director must approve the general security arrangements associated with and
12.6relating to the operation of the video lottery terminal.
12.7(f) Video lottery terminals must maintain on nonresettable meters, a permanent
12.8record, capable of being printed out, of all transactions by the terminal and all entries
12.9into the terminal.
12.10(g) The director may implement other controls as are deemed necessary to ensure
12.11and maintain the integrity of video lottery terminals operated under this section.
12.12 Subd. 2. Testing and examination of machines. The director shall examine
12.13prototypes of video lottery terminals and require that the manufacturer of the terminal
12.14pay the cost of the examination. The director may contract for the examination of
12.15video lottery terminals. The director may require working models of a video lottery
12.16terminal transported to the locations the director designates for testing, examination,
12.17and analysis. The manufacturer shall pay all costs of any testing, examination, analysis,
12.18and transportation of the terminal model.
12.19 Subd. 3. Deactivation of terminal. The director may deactivate a video lottery
12.20terminal without notice if the lottery retailer has violated any provision of this chapter,
12.21rule, or provision of its contract with the director.
12.22 Sec. 28. Minnesota Statutes 2010, section 349A.08, subdivision 1, is amended to read:
12.23 Subdivision 1. Agreement by players. A person who buys a lottery ticket or plays a
12.24video lottery game agrees to be bound by the rules and game procedures applicable to
12.25that particular lottery game
12.26that the determination of whether a ticket or video lottery credit receipt is
12.27
12.28procedures established by the director for that game, and any confidential or public
12.29validation tests established by the director for that game.
12.30 Sec. 29. Minnesota Statutes 2010, section 349A.08, subdivision 5, is amended to read:
12.31 Subd. 5. Payment; unclaimed prizes. (a) Except as provided in this subdivision, a
12.32prize in the state lottery must be claimed by the winner within one year of the date of the
12.33drawing at which the prize was awarded or the last day sales were authorized for a game
12.34where a prize was determined in a manner other than by means of a drawing. If a valid
13.1claim is not made for a prize payable directly by the lottery by the end of this period, the
13.2prize money is considered unclaimed and the winner of the prize shall have no further
13.3claim to the prize.
13.4 (b) A video lottery credit receipt from a video lottery terminal must be presented
13.5for payment within 60 days of the date the video lottery credit receipt was printed. If a
13.6valid claim for a video lottery credit receipt is not made by the end of this period, the
13.7video lottery credit receipt is considered unclaimed and the player shall have no further
13.8claim to the amount due from the video lottery credit receipt.
13.9 (c) A prize won by a person who purchased the winning ticket or played a video
13.10lottery game in violation of section 349A.12, subdivision 1, or won by a person ineligible
13.11to be awarded a prize under subdivision 7 must be treated as an unclaimed prize under this
13.12section. The director must transfer all unclaimed prize money at the end of each fiscal
13.13year from the lottery cash flow account to the general fund.
13.14 Sec. 30. Minnesota Statutes 2010, section 349A.08, subdivision 8, is amended to read:
13.15 Subd. 8. Withholding of delinquent state taxes or other debts. The director
13.16shall report the name, address, and Social Security number of each winner of a lottery
13.17prize of $600 or more, or a video lottery prize of $1,200 or more, to the Department of
13.18Revenue to determine whether the person who has won the prize is delinquent in payment
13.19of state taxes or owes a debt as defined in section 270A.03, subdivision 5. If the person
13.20is delinquent in payment of state taxes or owes a debt as defined in section 270A.03,
13.21subdivision 5, the director shall withhold the delinquent amount from the person's prize
13.22for remittance to the Department of Revenue for payment of the delinquent taxes or
13.23distribution to a claimant agency in accordance with chapter 270A. Section 270A.10
13.24applies to the priority of claims.
13.25 Sec. 31. Minnesota Statutes 2010, section 349A.09, subdivision 1, is amended to read:
13.26 Subdivision 1. Odds; required information. (a) The director shall include on each
13.27brochure, pamphlet, booklet, or other similar material the director publishes to promote
13.28or explain any lottery game, a prominent and clear statement of the approximate odds of
13.29winning each prize offered in that lottery game.
13.30 (b) Except for the operation of a video lottery terminal, each lottery retailer must
13.31post prominently at or near the point of ticket sale a notice or notices printed and provided
13.32by the director of the approximate odds of winning each prize in each game for which
13.33the lottery retailer sells tickets.
14.1 (c) The approximate odds of winning a prize from a video lottery terminal must be
14.2displayed on the face or screen of the video lottery terminal.
14.3 Sec. 32. Minnesota Statutes 2010, section 349A.10, subdivision 2, is amended to read:
14.4 Subd. 2.
14.5fund outside the state treasury. The fund consists of all money deposited in it under this
14.6subdivision and all interest earned thereon.
14.7(b) The director shall deposit in the lottery prize fund, from gross receipts from the
14.8sale of lottery tickets, an amount sufficient to pay lottery prizes from the lottery prize
14.9fund according to the following provisions:
14.10(1) for games which require online terminal connections, the prizes paid in any fiscal
14.11year must be at least 45 percent of gross receipts from those games in that fiscal year;
14.12(2) for games which do not require online terminal connections, the prizes paid in any
14.13fiscal year must be at least
14.14
14.15
14.16
14.17(c) For lottery games played on a video lottery terminal, the win percentage in any
14.18fiscal year will be the win percentage established by the game procedures adopted for the
14.19game, but shall be at least 80 percent but not more than 95 percent.
14.20 Sec. 33. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
14.21 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
14.22account in the lottery fund. The director shall pay all costs of operating the lottery,
14.23including payroll costs or amounts transferred to the state treasury for payroll costs, but
14.24not including lottery prizes, from the lottery operating account. The director shall credit to
14.25the lottery operations account amounts sufficient to pay the operating costs of the lottery.
14.26(b) Except as provided in paragraph (e), the director may not credit in any fiscal year
14.27
14.28percent of gross revenue, exclusive of net terminal income, and 12 percent of net terminal
14.29income to the lottery fund in that fiscal year. In computing total amounts credited to
14.30the lottery operations account under this paragraph the director shall disregard amounts
14.31transferred to or retained by lottery retailers as sales commissions or other compensation.
14.32(c) The director of the lottery may not expend
14.33percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
14.34placement of advertising.
15.1(d) Except as the director determines, the lottery is not subject to chapter 16A
15.2relating to budgeting, payroll, and the purchase of goods and services.
15.3(e) In addition to the amounts credited to the lottery operations account under
15.4paragraph (b), the director is authorized, if necessary, to meet the current obligations of
15.5the lottery and to credit up to 25 percent of an amount equal to the average annual amount
15.6which was authorized to be credited to the lottery operations account for the previous three
15.7fiscal years but was not needed to meet the obligations of the lottery.
15.8 Sec. 34. Minnesota Statutes 2010, section 349A.10, subdivision 4, is amended to read:
15.9 Subd. 4. Deposit of receipts. (a) The director may require lottery retailers to:
15.10 (1) deposit in a separate account to the credit of the lottery fund, in banks designated
15.11by the director, all money received by the lottery retailer from the sale of lottery tickets
15.12and video lottery terminal plays, less money retained as the lottery retailer's commission
15.13and for payment of prizes;
15.14 (2) file with the director reports of the lottery retailer's receipts and transactions in
15.15ticket sales and video lottery terminal plays in a form that the director prescribes; and
15.16 (3) allow money deposited by the lottery retailer from the sale of lottery tickets and
15.17video lottery terminal plays to be transferred to the lottery through electronic fund transfer.
15.18 (b) The director may make arrangements for any person, including a financial
15.19institution, to perform functions, activities, or services in connection with the receipt and
15.20distribution of lottery revenues.
15.21 (c) A lottery retailer who fails to pay any money due to the director within the time
15.22prescribed by the director shall pay interest on the amount owed at the rate determined by
15.23rule.
15.24 Sec. 35. Minnesota Statutes 2010, section 349A.10, subdivision 6, is amended to read:
15.25 Subd. 6. Budget; plans. The director shall prepare and submit a biennial budget
15.26plan to the commissioner of management and budget. The governor shall recommend
15.27the maximum amount available for the lottery in the budget the governor submits to
15.28the legislature under section
15.29operating expenses and capital expenditures shall be determined by law. Operating
15.30expenses shall not include expenses that are a direct function of lottery sales, which
15.31include the cost of lottery prizes, amounts paid to lottery retailers as sales commissions
15.32or other compensation, amounts paid to produce and deliver scratch lottery games,
15.33amounts paid to an outside vendor to operate and maintain an online gaming system,
15.34amounts paid to an outside vendor to operate and maintain a central system for video
16.1lottery terminals. In addition, the director shall appear at least once each fiscal year before
16.2the senate and house of representatives committees having jurisdiction over gambling
16.3policy to present and explain the lottery's plans for future games and the related advertising
16.4and promotions and spending plans for the next fiscal year.
16.5 Sec. 36. Minnesota Statutes 2010, section 349A.11, subdivision 1, is amended to read:
16.6 Subdivision 1. Lottery ticket; retailer. The director, an employee of the lottery,
16.7a member of the immediate family of the director or employee residing in the same
16.8household may not:
16.9 (1) purchase a lottery ticket or play a game on a video lottery terminal; or
16.10 (2) have any personal pecuniary interest in any vendor holding a lottery procurement
16.11contract, or in any lottery retailer; or
16.12 (3) receive any gift, gratuity, or other thing of value, excluding food or beverage,
16.13from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in
16.14excess of $100 in any calendar year.
16.15 Sec. 37. Minnesota Statutes 2010, section 349A.12, subdivision 1, is amended to read:
16.16 Subdivision 1. Purchase by minors. A person under the age of 18 years may not
16.17buy or redeem for a prize a ticket in the state lottery and a person under the age of 21 years
16.18may not play a game or redeem a video lottery credit receipt from a video lottery terminal.
16.19 Sec. 38. Minnesota Statutes 2010, section 349A.12, subdivision 2, is amended to read:
16.20 Subd. 2. Sale to minors. A lottery retailer may not sell and a lottery retailer or other
16.21person may not furnish or redeem for a prize a ticket in the state lottery to any person
16.22under the age of 18 years, or allow a person under the age of 21 years to play a game or
16.23redeem a video lottery credit receipt from a video lottery terminal. It is an affirmative
16.24defense to a charge under this subdivision for the lottery retailer or other person to prove
16.25by a preponderance of the evidence that the lottery retailer or other person reasonably and
16.26in good faith relied upon representation of proof of age described in section 340A.503,
16.27subdivision 6, in making the sale or furnishing or redeeming the ticket or allowing the
16.28play of a video lottery game or redeem a video lottery credit receipt from a video lottery
16.29terminal.
16.30 Sec. 39. Minnesota Statutes 2010, section 349A.13, is amended to read:
16.31349A.13 RESTRICTIONS.
16.32 Nothing in this chapter:
17.1 (1) authorizes the director to conduct a lottery game or contest the winner or winners
17.2of which are determined by the result of a sporting event other than a horse race conducted
17.3under chapter 240; or
17.4 (2)
17.5
17.6
17.7subdivision 32.
17.8 Sec. 40. Minnesota Statutes 2010, section 541.20, is amended to read:
17.9541.20 RECOVERY OF MONEY LOST.
17.10Every person who, by playing at cards, dice, or other game, or by betting on the
17.11hands or sides of such as are gambling, shall lose to any person so playing or betting
17.12any sum of money or any goods, and pays or delivers the same, or any part thereof, to
17.13the winner, may sue for and recover such money by a civil action, before any court
17.14of competent jurisdiction. For purposes of this section, gambling shall not include
17.15pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
17.16or sale of tickets in the state lottery, purchase of video lottery plays as authorized under
17.17chapter 349A, or gambling authorized under chapters 349 and 349A.
17.18 Sec. 41. Minnesota Statutes 2010, section 541.21, is amended to read:
17.19541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
17.20Every note, bill, bond, mortgage, or other security or conveyance in which the whole
17.21or any part of the consideration shall be for any money or goods won by gambling or
17.22playing at cards, dice, or any other game whatever, or by betting on the sides or hands
17.23of any person gambling, or for reimbursing or repaying any money knowingly lent or
17.24advanced at the time and place of such gambling or betting, or lent and advanced for any
17.25gambling or betting to any persons so gambling or betting, shall be void and of no effect
17.26as between the parties to the same, and as to all persons except such as hold or claim
17.27under them in good faith, without notice of the illegality of the consideration of such
17.28contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
17.29wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
17.30in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
17.31conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
17.32section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
17.33 Sec. 42. Minnesota Statutes 2010, section 609.651, subdivision 1, is amended to read:
18.1 Subdivision 1.
18.2under subdivision 4 if the person does any of the following with intent to defraud the
18.3State Lottery:
18.4 (1) alters or counterfeits a state lottery ticket or a video lottery credit receipt from a
18.5State Lottery video lottery terminal;
18.6 (2) knowingly presents an altered or counterfeited state lottery ticket or video lottery
18.7credit receipt from a State Lottery video lottery terminal for payment;
18.8 (3) knowingly transfers an altered or counterfeited state lottery ticket or video lottery
18.9credit receipt from a State Lottery video lottery terminal to another person;
18.10 (4) tampers with or manipulates the outcome, prize payable, or operation of a State
18.11Lottery video lottery terminal; or
18.12 (5) otherwise claims a lottery prize by means of fraud, deceit, or misrepresentation.
18.13 Sec. 43. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
18.14 Subd. 3. What are not bets. The following are not bets:
18.15(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
18.16harm or loss sustained, even though the loss depends upon chance;
18.17(2) a contract for the purchase or sale at a future date of securities or other
18.18commodities;
18.19(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
18.20contest for the determination of skill, speed, strength, endurance, or quality or to the bona
18.21fide owners of animals or other property entered in such a contest;
18.22(4) the game of bingo when conducted in compliance with sections
18.23(5) a private social bet not part of or incidental to organized, commercialized, or
18.24systematic gambling;
18.25(6) the operation of equipment or the conduct of a raffle under sections
18.27exempt from licensing under section
18.28(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
18.29240; and
18.30(8) the purchase and sale of state lottery tickets and plays on a video lottery terminal
18.31under chapter 349A.
18.32 Sec. 44. Minnesota Statutes 2010, section 609.75, subdivision 4, is amended to read:
18.33 Subd. 4. Gambling device. A gambling device is a contrivance the purpose of which
18.34is that for a consideration a player is afforded an opportunity to obtain something of value,
19.1other than free plays, automatically from the machine or otherwise, the award of which
19.2is determined principally by chance, whether or not the contrivance is actually played.
19.3"Gambling device" also includes a video game of chance, as defined in subdivision 8, but
19.4does not include a video lottery terminal operated by the State Lottery under chapter 349A.
19.5 Sec. 45. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
19.6 Subd. 2. State lottery. Sections 609.755 and 609.76 do not prohibit the operation
19.7of the state lottery
19.8the manufacture, possession, or operation of a video lottery terminal for the state lottery
19.9under chapter 349A.
19.10 Sec. 46. LOTTERY BUDGET; VIDEO LOTTERY TERMINALS.
19.11The director of the State Lottery shall submit a budget for the operation of video
19.12lottery terminals as authorized under Minnesota Statutes, section 349A.071, to the
19.13commissioner of management and budget. Notwithstanding Minnesota Statutes, section
19.14349A.10, subdivision 6, the director of the State Lottery may expend amounts necessary to
19.15operate video lottery terminals. Amounts expended by the director of the State Lottery for
19.16the conduct of video lottery terminals in fiscal year 2012 are not subject to the maximum
19.17amount set in law for the operation of the lottery.
19.18 Sec. 47. REPEALER.
19.19Minnesota Statutes 2010, sections 297E.01, subdivision 7; and 297E.02, subdivisions
19.204, 6, and 7, are repealed.
19.21 Sec. 48. EFFECTIVE DATE.
19.22 Except as otherwise provided, this act is effective the day following final enactment.
