Bill Text: MN SF308 | 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:
Status: (Introduced - Dead) 2011-02-14 - Referred to State Government Innovation and Veterans [SF308 Detail]
Download: Minnesota-2011-SF308-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 33 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 state treasury 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 as authorized under chapter 349A.
4.33 Sec. 6. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
5.1 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
5.2offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
5.3licensed under this section or to the State Lottery as authorized under chapter 349A.
5.4(b) A distributor licensed under this section may sell, offer to sell, market, rent,
5.5lease, or otherwise provide, in whole or in part, a gambling device only to:
5.6(1) the governing body of a federally recognized Indian tribe that is authorized
5.7to operate the gambling device under a tribal state compact under the Indian Gaming
5.8Regulatory Act, Public Law 100-497, and future amendments to it;
5.9(2) a person for use in the person's dwelling for display or amusement purposes in a
5.10manner that does not afford players an opportunity to obtain anything of value;
5.11(3) another distributor licensed under this section;or
5.12(4) a person in another state who is authorized under the laws of that state to possess
5.13the gambling device; or
5.14(5) the State Lottery as authorized under chapter 349A.
5.15 Sec. 7. Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:
5.16 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
5.17subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
5.18or operate, or permit the keeping, possession, or operation on the licensed premises of dice
5.19or any gambling device as defined in section349.30 , or permit gambling therein.
5.20(b) Gambling equipment may be kept or operated and raffles conducted on licensed
5.21premises and adjoining rooms when the use of the gambling equipment is authorized by
5.22(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
5.23Act, Public Law 100-497, or (3) a tribal-state compact authorized under section3.9221 .
5.24(c) Lottery tickets may be purchased and sold within the licensed premises as
5.25authorized by the director of the lottery under chapter 349A.
5.26(d) Dice may be kept and used on licensed premises and adjoining rooms as
5.27authorized by section609.761, subdivision 4 .
5.28(e) 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 or allowable
7.5expenses as authorized by the membership of the organization at a monthly meeting of
7.6the organization's membership.
7.7 Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
7.8to read:
7.9 Subd. 9a. Lottery game. "Lottery game" means any game operated by the lottery
7.10where the prize is determined primarily by chance.
7.11 Sec. 10. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
7.12 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
7.13contract to provide lottery products, computer hardware and software used to monitor sales
7.14of lottery tickets and sales on a video lottery terminal,and lottery tickets, video lottery
7.15terminals, and maintenance of video lottery terminals."Lottery procurement contract"
7.16does not include a contract to provide an annuity or prize payment agreement or materials,
7.17supplies, equipment, or services common to the ordinary operation of a state agency.
7.18 Sec. 11. Minnesota Statutes 2010, section 349A.01, subdivision 11, is amended to read:
7.19 Subd. 11. Lottery retailer. "Lottery retailer" means a person with whom the
7.20director has contracted to sell lottery tickets to the public. A lottery retailer includes a
7.21person with whom the director has contracted to place a video lottery terminal within its
7.22premises where video lottery terminal plays are sold.
7.23 Sec. 12. Minnesota Statutes 2010, section 349A.01, subdivision 12, is amended to read:
7.24 Subd. 12. Lottery ticket or ticket. "Lottery ticket" or "ticket" means any tangible
7.25evidence issued by the lottery to prove participation in a lottery game other than a video
7.26lottery game.
7.27 Sec. 13. Minnesota Statutes 2010, section 349A.01, is amended by adding a
7.28subdivision to read:
7.29 Subd. 14. Net terminal income. "Net terminal income" means the sum of all
7.30money spent for video lottery terminal plays less the value of video lottery credit receipts.
8.1 Sec. 14. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.2subdivision to read:
8.3 Subd. 15. Video lottery credit. "Video lottery credit" means the basic unit of
8.4play for a video lottery terminal.
8.5 Sec. 15. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.6subdivision to read:
8.7 Subd. 16. Video lottery credit receipt. "Video lottery credit receipt" means a
8.8receipt generated by a video lottery terminal that provides evidence of cash payment due a
8.9player from play on a video lottery terminal.
8.10 Sec. 16. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.11subdivision to read:
8.12 Subd. 17. Video lottery game. "Video lottery game" means an electronically
8.13simulated game authorized by the director that is displayed and played on a video lottery
8.14terminal for consideration and with prizes awarded for designated results. Video lottery
8.15game includes video poker games, keno, and video pull-tabs.
8.16 Sec. 17. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.17subdivision to read:
8.18 Subd. 18. Video lottery terminal. "Video lottery terminal" means any machine,
8.19system, or device which upon payment of consideration permits the play of a video
8.20lottery game.
8.21 Sec. 18. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.22subdivision to read:
8.23 Subd. 19. Video lottery terminal play. "Video lottery terminal play" means an
8.24electronic record that proves participation in a video lottery game.
8.25 Sec. 19. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.26subdivision to read:
8.27 Subd. 20. Win percentage. "Win percentage" means the portion of the money
8.28wagered by players on a video lottery terminal that is available for the payment of prizes
8.29to winning players.
9.1 Sec. 20. Minnesota Statutes 2010, section 349A.04, is amended to read:
9.2349A.04 LOTTERY GAME PROCEDURES.
9.3The director may adopt game procedures governing the following elements of the
9.4lottery:
9.5(1) lottery games;
9.6(2) ticket prices;
9.7(3) number and size of prizes;
9.8(4) methods of selecting winning tickets;and
9.9(5) frequency and method of drawings;
9.10(6) video lottery terminals; and
9.11(7) cost of video lottery plays.
9.12The adoption of lottery game procedures is not subject to chapter 14.
9.13 Sec. 21. Minnesota Statutes 2010, section 349A.06, subdivision 1, is amended to read:
9.14 Subdivision 1. Contracts. The director shall sell tickets and operate video lottery
9.15terminals for the lottery through lottery retailers with whom the director contracts.
9.16Contracts under this section are not subject to the provisions of sections 16C.03, 16C.05,
9.1716C.06, 16C.08, 16C.09, and 16C.10, and are valid for a period of one year. The director
9.18may permit a retailer to sell tickets and operate video lottery terminals at more than one
9.19business location under a contract entered into under this section.
9.20 Sec. 22. Minnesota Statutes 2010, section 349A.06, subdivision 5, is amended to read:
9.21 Subd. 5. Restrictions on lottery retailers. (a) A lottery retailer may sell lottery
9.22tickets or have a video lottery terminal placed only on the premises described in the
9.23contract.
9.24 (b) A lottery retailer must prominently display a certificate issued by the director
9.25on the premises where lottery tickets will be sold or where video lottery terminals are
9.26operated.
9.27 (c) A lottery retailer must keep a complete set of books of account, correspondence,
9.28and all other records necessary to show fully the retailer's lottery transactions, and make
9.29them available for inspection by employees of the lottery at all times during business
9.30hours. The director may require a lottery retailer to furnish information as the director
9.31deems necessary to carry out the purposes of this chapter, and may require an audit to be
9.32made of the books of account and records. The director may select an auditor to perform
9.33the audit and may require the retailer to pay the cost of the audit. The auditor has the same
10.1right of access to the books of account, correspondence, and other records as is given to
10.2employees of the lottery.
10.3 (d) A contract issued under this section may not be transferred or assigned.
10.4 (e) The director shall require that lottery tickets may be sold by retailers only for
10.5cash.
10.6 (f) A lottery retailer must prominently post at the point of sale of lottery tickets
10.7and the area where video lottery terminals are located, in a manner approved by the
10.8commissioner of human services, the toll-free telephone number established by the
10.9commissioner of human services in connection with the compulsive gambling program
10.10established under section 245.98.
10.11 Sec. 23. Minnesota Statutes 2010, section 349A.06, is amended by adding a
10.12subdivision to read:
10.13 Subd. 5a. Restrictions on lottery retailers; video lottery terminals. (a) The
10.14director may only enter into a lottery retailer contract for games operated by a video lottery
10.15terminal with a retailer that has a license to sell alcoholic beverages for consumption
10.16on the premises where sold. This does not include a retailer who has only a temporary
10.17on-sale license.
10.18 (b) The director may not contract with a retailer for games operated by a video
10.19lottery terminal unless the retailer has an organization licensed under chapter 349
10.20authorized and conducting lawful gambling on the premises.
10.21 (c) A lottery retailer authorized to sell games operated by a video lottery terminal
10.22may not cancel or refuse to renew a lease with an organization licensed under chapter 349
10.23authorized and conducting lawful gambling on its premises for three years following
10.24the effective date of this act, unless the organization has failed to comply with its lease
10.25with the retailer.
10.26 (d) A lottery retailer may have up to five video lottery terminals on the retailer's
10.27premises, as determined by the director.
10.28 (e) A lottery retailer that is authorized to operate a video lottery terminal may not
10.29make reference to the establishment being a "casino," or use the word "casino" in its name
10.30or in any of its advertisements.
10.31 (f) The director, or any employee of the director, may inspect any video lottery
10.32terminal at any time during the hours when alcoholic beverages may be sold at on-sale
10.33under section 340A.504, subdivisions 1, 2, and 3, without notice, to ensure compliance
10.34with this chapter and any rules adopted by the director.
11.1 Sec. 24. Minnesota Statutes 2010, section 349A.06, is amended by adding a
11.2subdivision to read:
11.3 Subd. 6a. Retention by retailers; video lottery terminals. A lottery retailer who
11.4has a contract for placement of video lottery terminals may retain 31 percent of the net
11.5terminal income from the terminals located within its premises as commission. The lottery
11.6retailer receiving commission under this subdivision shall transmit to an organization
11.7licensed under chapter 349, and conducting lawful gambling on the premises of the
11.8retailer, 29 percent of the lottery retailer's commission received under this subdivision.
11.9If more than one organization conducts lawful gambling on the premises, the payment
11.10must be reasonably allocated between the organizations, pro rata based on their respective
11.11gross receipts.
11.12 Sec. 25. Minnesota Statutes 2010, section 349A.06, subdivision 8, is amended to read:
11.13 Subd. 8. Proceeds of sales. All proceeds from the sale of lottery tickets or proceeds
11.14from the sale of video lottery terminal plays received by a lottery retailer constitute a trust
11.15fund until paid to the director. The lottery retailer is personally liable for all proceeds.
11.16 Sec. 26. Minnesota Statutes 2010, section 349A.06, subdivision 10, is amended to read:
11.17 Subd. 10. Local licenses. No political subdivision may require a local license to
11.18operate as a lottery retailer, restrict or regulate the placement of a video lottery terminal,
11.19or impose a tax or fee on the business of operating as a lottery retailer.
11.20 Sec. 27. [349A.071] VIDEO LOTTERY TERMINALS.
11.21 Subdivision 1. Operation. (a) All video lottery terminals must be operated and
11.22controlled by the director.
11.23(b) Video lottery terminals must be owned or leased by the director.
11.24(c) Video lottery terminals must be maintained by the lottery, or by a vendor: (1)
11.25that is under the control and direction of the director; and (2) whose principal place of
11.26business is in Minnesota.
11.27(d) The director must have a central communications system that monitors activities
11.28and provides auditing program information on each video lottery terminal.
11.29(e) The director must approve the general security arrangements associated with and
11.30relating to the operation of the video lottery terminal.
11.31(f) Video lottery terminals must maintain on nonresettable meters, a permanent
11.32record, capable of being printed out, of all transactions by the terminal and all entries
11.33into the terminal.
12.1(g) The director may implement other controls as are deemed necessary to ensure
12.2and maintain the integrity of video lottery terminals operated under this section.
12.3 Subd. 2. Testing and examination of machines. The director shall examine
12.4prototypes of video lottery terminals and require that the manufacturer of the terminal
12.5pay the cost of the examination. The director may contract for the examination of
12.6video lottery terminals. The director may require working models of a video lottery
12.7terminal transported to the locations the director designates for testing, examination,
12.8and analysis. The manufacturer shall pay all costs of any testing, examination, analysis,
12.9and transportation of the terminal model.
12.10 Subd. 3. Deactivation of terminal. The director may deactivate a video lottery
12.11terminal without notice if the lottery retailer has violated any provision of this chapter,
12.12rule, or provision of its contract with the director.
12.13 Sec. 28. Minnesota Statutes 2010, section 349A.08, subdivision 1, is amended to read:
12.14 Subdivision 1. Agreement by players. A person who buys a lottery ticket or plays a
12.15video lottery game agrees to be bound by the rules and game procedures applicable tothe
12.16that particular lottery gamefor which the ticket is purchased. The player acknowledges
12.17that the determination of whether a ticket or video lottery credit receipt isa valid winning
12.18ticket is subject to under the rules of and game procedures adopted by the director, claims
12.19procedures established by the director for that game, and any confidential or public
12.20validation tests established by the director for that game.
12.21 Sec. 29. Minnesota Statutes 2010, section 349A.08, subdivision 5, is amended to read:
12.22 Subd. 5. Payment; unclaimed prizes. (a) Except as provided in this subdivision, a
12.23prize in the state lottery must be claimed by the winner within one year of the date of the
12.24drawing at which the prize was awarded or the last day sales were authorized for a game
12.25where a prize was determined in a manner other than by means of a drawing. If a valid
12.26claim is not made for a prize payable directly by the lottery by the end of this period, the
12.27prize money is considered unclaimed and the winner of the prize shall have no further
12.28claim to the prize.
12.29 (b) A video lottery credit receipt from a video lottery terminal must be presented
12.30for payment within 60 days of the date the video lottery credit receipt was printed. If a
12.31valid claim for a video lottery credit receipt is not made by the end of this period, the
12.32video lottery credit receipt is considered unclaimed and the player shall have no further
12.33claim to the amount due from the video lottery credit receipt.
13.1 (c) A prize won by a person who purchased the winning ticket or played a video
13.2lottery game in violation of section 349A.12, subdivision 1, or won by a person ineligible
13.3to be awarded a prize under subdivision 7 must be treated as an unclaimed prize under this
13.4section. The director must transfer all unclaimed prize money at the end of each fiscal
13.5year from the lottery cash flow account to the general fund.
13.6 Sec. 30. Minnesota Statutes 2010, section 349A.08, subdivision 8, is amended to read:
13.7 Subd. 8. Withholding of delinquent state taxes or other debts. The director
13.8shall report the name, address, and Social Security number of each winner of a lottery
13.9prize of $600 or more, or a video lottery prize of $1,200 or more, to the Department of
13.10Revenue to determine whether the person who has won the prize is delinquent in payment
13.11of state taxes or owes a debt as defined in section 270A.03, subdivision 5. If the person
13.12is delinquent in payment of state taxes or owes a debt as defined in section 270A.03,
13.13subdivision 5, the director shall withhold the delinquent amount from the person's prize
13.14for remittance to the Department of Revenue for payment of the delinquent taxes or
13.15distribution to a claimant agency in accordance with chapter 270A. Section 270A.10
13.16applies to the priority of claims.
13.17 Sec. 31. Minnesota Statutes 2010, section 349A.09, subdivision 1, is amended to read:
13.18 Subdivision 1. Odds; required information. (a) The director shall include on each
13.19brochure, pamphlet, booklet, or other similar material the director publishes to promote
13.20or explain any lottery game, a prominent and clear statement of the approximate odds of
13.21winning each prize offered in that lottery game.
13.22 (b) Except for the operation of a video lottery terminal, each lottery retailer must
13.23post prominently at or near the point of ticket sale a notice or notices printed and provided
13.24by the director of the approximate odds of winning each prize in each game for which
13.25the lottery retailer sells tickets.
13.26 (c) The approximate odds of winning a prize from a video lottery terminal must be
13.27displayed on the face or screen of the video lottery terminal.
13.28 Sec. 32. Minnesota Statutes 2010, section 349A.10, subdivision 2, is amended to read:
13.29 Subd. 2.Deposit in Prize fund. (a) The director shall establish a lottery prize
13.30fund outside the state treasury. The fund consists of all money deposited in it under this
13.31subdivision and all interest earned thereon.
14.1(b) The director shall deposit in the lottery prize fund, from gross receipts from the
14.2sale of lottery tickets, an amount sufficient to pay lottery prizes from the lottery prize
14.3fund according to the following provisions:
14.4(1) for games which require online terminal connections, the prizes paid in any fiscal
14.5year must be at least 45 percent of gross receipts from those games in that fiscal year;
14.6(2) for games which do not require online terminal connections, the prizes paid in any
14.7fiscal year must be at leastthe following percentages of gross receipts from those games:
14.8(i) 50 percent through fiscal year 1991;
14.9(ii) 55 percent from July 1, 1991, to June 30, 1992; and
14.10(iii) 60 percent thereafter of gross receipts from those games in that fiscal year.
14.11(c) For lottery games played on a video lottery terminal, the win percentage in any
14.12fiscal year will be the win percentage established by the game procedures adopted for the
14.13game, but shall be at least 80 percent but not more than 95 percent.
14.14 Sec. 33. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
14.15 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
14.16account in the lottery fund. The director shall pay all costs of operating the lottery,
14.17including payroll costs or amounts transferred to the state treasury for payroll costs, but
14.18not including lottery prizes, from the lottery operating account. The director shall credit to
14.19the lottery operations account amounts sufficient to pay the operating costs of the lottery.
14.20(b) Except as provided in paragraph (e), the director may not credit in any fiscal year
14.21thereafter amounts to the lottery operations account which when totaled exceed nine
14.22percent of gross revenue, exclusive of net terminal income, and 12 percent of net terminal
14.23income to the lottery fund in that fiscal year. In computing total amounts credited to
14.24the lottery operations account under this paragraph the director shall disregard amounts
14.25transferred to or retained by lottery retailers as sales commissions or other compensation.
14.26(c) The director of the lottery may not expendafter July 1, 1991, more than 2-3/4
14.27percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
14.28placement of advertising.
14.29(d) Except as the director determines, the lottery is not subject to chapter 16A
14.30relating to budgeting, payroll, and the purchase of goods and services.
14.31(e) In addition to the amounts credited to the lottery operations account under
14.32paragraph (b), the director is authorized, if necessary, to meet the current obligations of
14.33the lottery and to credit up to 25 percent of an amount equal to the average annual amount
14.34which was authorized to be credited to the lottery operations account for the previous three
14.35fiscal years but was not needed to meet the obligations of the lottery.
15.1 Sec. 34. Minnesota Statutes 2010, section 349A.10, subdivision 4, is amended to read:
15.2 Subd. 4. Deposit of receipts. (a) The director may require lottery retailers to:
15.3 (1) deposit in a separate account to the credit of the lottery fund, in banks designated
15.4by the director, all money received by the lottery retailer from the sale of lottery tickets
15.5and video lottery terminal plays, less money retained as the lottery retailer's commission
15.6and for payment of prizes;
15.7 (2) file with the director reports of the lottery retailer's receipts and transactions in
15.8ticket sales and video lottery terminal plays in a form that the director prescribes; and
15.9 (3) allow money deposited by the lottery retailer from the sale of lottery tickets and
15.10video lottery terminal plays to be transferred to the lottery through electronic fund transfer.
15.11 (b) The director may make arrangements for any person, including a financial
15.12institution, to perform functions, activities, or services in connection with the receipt and
15.13distribution of lottery revenues.
15.14 (c) A lottery retailer who fails to pay any money due to the director within the time
15.15prescribed by the director shall pay interest on the amount owed at the rate determined by
15.16rule.
15.17 Sec. 35. Minnesota Statutes 2010, section 349A.10, subdivision 6, is amended to read:
15.18 Subd. 6. Budget; plans. The director shall prepare and submit a biennial budget
15.19plan to the commissioner of management and budget. The governor shall recommend
15.20the maximum amount available for the lottery in the budget the governor submits to
15.21the legislature under section16A.11 . The maximum amount available to the lottery for
15.22operating expenses and capital expenditures shall be determined by law. Operating
15.23expenses shall not include expenses that are a direct function of lottery sales, which
15.24include the cost of lottery prizes, amounts paid to lottery retailers as sales commissions
15.25or other compensation, amounts paid to produce and deliver scratch lottery games,and
15.26amounts paid to an outside vendor to operate and maintain an online gaming system,
15.27amounts paid to an outside vendor to operate and maintain a central system for video
15.28lottery terminals, and amounts paid to acquire and maintain video lottery terminals. In
15.29addition, the director shall appear at least once each fiscal year before the senate and house
15.30of representatives committees having jurisdiction over gambling policy to present and
15.31explain the lottery's plans for future games and the related advertising and promotions
15.32and spending plans for the next fiscal year.
15.33 Sec. 36. Minnesota Statutes 2010, section 349A.11, subdivision 1, is amended to read:
16.1 Subdivision 1. Lottery ticket; retailer. The director, an employee of the lottery,
16.2a member of the immediate family of the director or employee residing in the same
16.3household may not:
16.4 (1) purchase a lottery ticket or play a game on a video lottery terminal; or
16.5 (2) have any personal pecuniary interest in any vendor holding a lottery procurement
16.6contract, or in any lottery retailer; or
16.7 (3) receive any gift, gratuity, or other thing of value, excluding food or beverage,
16.8from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in
16.9excess of $100 in any calendar year.
16.10 Sec. 37. Minnesota Statutes 2010, section 349A.12, subdivision 1, is amended to read:
16.11 Subdivision 1. Purchase by minors. A person under the age of 18 years may not
16.12buy or redeem for a prize a ticket in the state lottery and a person under the age of 21 years
16.13may not play a game or redeem a video lottery credit receipt from a video lottery terminal.
16.14 Sec. 38. Minnesota Statutes 2010, section 349A.12, subdivision 2, is amended to read:
16.15 Subd. 2. Sale to minors. A lottery retailer may not sell and a lottery retailer or other
16.16person may not furnish or redeem for a prize a ticket in the state lottery to any person
16.17under the age of 18 years, or allow a person under the age of 21 years to play a game or
16.18redeem a video lottery credit receipt from a video lottery terminal. It is an affirmative
16.19defense to a charge under this subdivision for the lottery retailer or other person to prove
16.20by a preponderance of the evidence that the lottery retailer or other person reasonably and
16.21in good faith relied upon representation of proof of age described in section 340A.503,
16.22subdivision 6, in making the sale or furnishing or redeeming the ticket or allowing the
16.23play of a video lottery game or redeem a video lottery credit receipt from a video lottery
16.24terminal.
16.25 Sec. 39. Minnesota Statutes 2010, section 349A.13, is amended to read:
16.26349A.13 RESTRICTIONS.
16.27 Nothing in this chapter:
16.28 (1) authorizes the director to conduct a lottery game or contest the winner or winners
16.29of which are determined by the result of a sporting event other than a horse race conducted
16.30under chapter 240; or
16.31 (2)authorizes the director to install or operate a lottery device operated by coin or
16.32currency which when operated determines the winner of a game; and
17.1(3) authorizes the director to sell pull-tabs as defined under section 349.12,
17.2subdivision 32.
17.3 Sec. 40. Minnesota Statutes 2010, section 541.20, is amended to read:
17.4541.20 RECOVERY OF MONEY LOST.
17.5Every person who, by playing at cards, dice, or other game, or by betting on the
17.6hands or sides of such as are gambling, shall lose to any person so playing or betting
17.7any sum of money or any goods, and pays or delivers the same, or any part thereof, to
17.8the winner, may sue for and recover such money by a civil action, before any court
17.9of competent jurisdiction. For purposes of this section, gambling shall not include
17.10pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
17.11or sale of tickets in the state lottery, purchase of video lottery plays as authorized under
17.12chapter 349A, or gambling authorized under chapters 349 and 349A.
17.13 Sec. 41. Minnesota Statutes 2010, section 541.21, is amended to read:
17.14541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
17.15Every note, bill, bond, mortgage, or other security or conveyance in which the whole
17.16or any part of the consideration shall be for any money or goods won by gambling or
17.17playing at cards, dice, or any other game whatever, or by betting on the sides or hands
17.18of any person gambling, or for reimbursing or repaying any money knowingly lent or
17.19advanced at the time and place of such gambling or betting, or lent and advanced for any
17.20gambling or betting to any persons so gambling or betting, shall be void and of no effect
17.21as between the parties to the same, and as to all persons except such as hold or claim
17.22under them in good faith, without notice of the illegality of the consideration of such
17.23contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
17.24wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
17.25in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
17.26conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
17.27section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
17.28 Sec. 42. Minnesota Statutes 2010, section 609.651, subdivision 1, is amended to read:
17.29 Subdivision 1.Felony Fraud. A person is guilty of a felony and may be sentenced
17.30under subdivision 4 if the person does any of the following with intent to defraud the
17.31State Lottery:
17.32 (1) alters or counterfeits a state lottery ticket or a video lottery credit receipt from a
17.33State Lottery video lottery terminal;
18.1 (2) knowingly presents an altered or counterfeited state lottery ticket or video lottery
18.2credit receipt from a State Lottery video lottery terminal for payment;
18.3 (3) knowingly transfers an altered or counterfeited state lottery ticket or video lottery
18.4credit receipt from a State Lottery video lottery terminal to another person;or
18.5 (4) tampers with or manipulates the outcome, prize payable, or operation of a State
18.6Lottery video lottery terminal; or
18.7 (5) otherwise claims a lottery prize by means of fraud, deceit, or misrepresentation.
18.8 Sec. 43. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
18.9 Subd. 3. What are not bets. The following are not bets:
18.10(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
18.11harm or loss sustained, even though the loss depends upon chance;
18.12(2) a contract for the purchase or sale at a future date of securities or other
18.13commodities;
18.14(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
18.15contest for the determination of skill, speed, strength, endurance, or quality or to the bona
18.16fide owners of animals or other property entered in such a contest;
18.17(4) the game of bingo when conducted in compliance with sections349.11 to
349.23 ;
18.18(5) a private social bet not part of or incidental to organized, commercialized, or
18.19systematic gambling;
18.20(6) the operation of equipment or the conduct of a raffle under sections349.11 to
18.21349.22
, by an organization licensed by the Gambling Control Board or an organization
18.22exempt from licensing under section349.166 ;
18.23(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
18.24240; and
18.25(8) the purchase and sale of state lottery tickets and plays on a video lottery terminal
18.26under chapter 349A.
18.27 Sec. 44. Minnesota Statutes 2010, section 609.75, subdivision 4, is amended to read:
18.28 Subd. 4. Gambling device. A gambling device is a contrivance the purpose of which
18.29is that for a consideration a player is afforded an opportunity to obtain something of value,
18.30other than free plays, automatically from the machine or otherwise, the award of which
18.31is determined principally by chance, whether or not the contrivance is actually played.
18.32"Gambling device" also includes a video game of chance, as defined in subdivision 8, but
18.33does not include a video lottery terminal operated by the State Lottery under chapter 349A.
19.1 Sec. 45. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
19.2 Subd. 2. State lottery. Sections 609.755 and 609.76 do not prohibit the operation
19.3of the state lotteryor; the sale, possession, or purchase of tickets for the state lottery; or
19.4the manufacture, possession, or operation of a video lottery terminal for the state lottery
19.5under chapter 349A.
19.6 Sec. 46. LOTTERY BUDGET; VIDEO LOTTERY TERMINALS.
19.7The director of the State Lottery shall submit a budget for the operation of video
19.8lottery terminals as authorized under Minnesota Statutes, section 349A.071, to the
19.9commissioner of management and budget. Notwithstanding Minnesota Statutes, section
19.10349A.10, subdivision 6, the director of the State Lottery may expend amounts necessary to
19.11operate video lottery terminals. Amounts expended by the director of the State Lottery for
19.12the conduct of video lottery terminals in fiscal year 2011 are not subject to the maximum
19.13amount set in law for the operation of the lottery.
19.14 Sec. 47. REPEALER.
19.15Minnesota Statutes 2010, sections 297E.01, subdivision 7; and 297E.02, subdivisions
19.164, 6, and 7, are repealed.
19.17 Sec. 48. EFFECTIVE DATE.
19.18 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 33 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 state treasury 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 as authorized under chapter 349A.
4.33 Sec. 6. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
5.1 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
5.2offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
5.3licensed under this section or to the State Lottery as authorized under chapter 349A.
5.4(b) A distributor licensed under this section may sell, offer to sell, market, rent,
5.5lease, or otherwise provide, in whole or in part, a gambling device only to:
5.6(1) the governing body of a federally recognized Indian tribe that is authorized
5.7to operate the gambling device under a tribal state compact under the Indian Gaming
5.8Regulatory Act, Public Law 100-497, and future amendments to it;
5.9(2) a person for use in the person's dwelling for display or amusement purposes in a
5.10manner that does not afford players an opportunity to obtain anything of value;
5.11(3) another distributor licensed under this section;
5.12(4) a person in another state who is authorized under the laws of that state to possess
5.13the gambling device; or
5.14(5) the State Lottery as authorized under chapter 349A.
5.15 Sec. 7. Minnesota Statutes 2010, section 340A.410, subdivision 5, is amended to read:
5.16 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
5.17subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
5.18or operate, or permit the keeping, possession, or operation on the licensed premises of dice
5.19or any gambling device as defined in 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 or allowable
7.5expenses as authorized by the membership of the organization at a monthly meeting of
7.6the organization's membership.
7.7 Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
7.8to read:
7.9 Subd. 9a. Lottery game. "Lottery game" means any game operated by the lottery
7.10where the prize is determined primarily by chance.
7.11 Sec. 10. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
7.12 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
7.13contract to provide lottery products, computer hardware and software used to monitor sales
7.14of lottery tickets and sales on a video lottery terminal,
7.15terminals, and maintenance of video lottery terminals.
7.16does not include a contract to provide an annuity or prize payment agreement or materials,
7.17supplies, equipment, or services common to the ordinary operation of a state agency.
7.18 Sec. 11. Minnesota Statutes 2010, section 349A.01, subdivision 11, is amended to read:
7.19 Subd. 11. Lottery retailer. "Lottery retailer" means a person with whom the
7.20director has contracted to sell lottery tickets to the public. A lottery retailer includes a
7.21person with whom the director has contracted to place a video lottery terminal within its
7.22premises where video lottery terminal plays are sold.
7.23 Sec. 12. Minnesota Statutes 2010, section 349A.01, subdivision 12, is amended to read:
7.24 Subd. 12. Lottery ticket or ticket. "Lottery ticket" or "ticket" means any tangible
7.25evidence issued by the lottery to prove participation in a lottery game other than a video
7.26lottery game.
7.27 Sec. 13. Minnesota Statutes 2010, section 349A.01, is amended by adding a
7.28subdivision to read:
7.29 Subd. 14. Net terminal income. "Net terminal income" means the sum of all
7.30money spent for video lottery terminal plays less the value of video lottery credit receipts.
8.1 Sec. 14. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.2subdivision to read:
8.3 Subd. 15. Video lottery credit. "Video lottery credit" means the basic unit of
8.4play for a video lottery terminal.
8.5 Sec. 15. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.6subdivision to read:
8.7 Subd. 16. Video lottery credit receipt. "Video lottery credit receipt" means a
8.8receipt generated by a video lottery terminal that provides evidence of cash payment due a
8.9player from play on a video lottery terminal.
8.10 Sec. 16. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.11subdivision to read:
8.12 Subd. 17. Video lottery game. "Video lottery game" means an electronically
8.13simulated game authorized by the director that is displayed and played on a video lottery
8.14terminal for consideration and with prizes awarded for designated results. Video lottery
8.15game includes video poker games, keno, and video pull-tabs.
8.16 Sec. 17. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.17subdivision to read:
8.18 Subd. 18. Video lottery terminal. "Video lottery terminal" means any machine,
8.19system, or device which upon payment of consideration permits the play of a video
8.20lottery game.
8.21 Sec. 18. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.22subdivision to read:
8.23 Subd. 19. Video lottery terminal play. "Video lottery terminal play" means an
8.24electronic record that proves participation in a video lottery game.
8.25 Sec. 19. Minnesota Statutes 2010, section 349A.01, is amended by adding a
8.26subdivision to read:
8.27 Subd. 20. Win percentage. "Win percentage" means the portion of the money
8.28wagered by players on a video lottery terminal that is available for the payment of prizes
8.29to winning players.
9.1 Sec. 20. Minnesota Statutes 2010, section 349A.04, is amended to read:
9.2349A.04 LOTTERY GAME PROCEDURES.
9.3The director may adopt game procedures governing the following elements of the
9.4lottery:
9.5(1) lottery games;
9.6(2) ticket prices;
9.7(3) number and size of prizes;
9.8(4) methods of selecting winning tickets;
9.9(5) frequency and method of drawings;
9.10(6) video lottery terminals; and
9.11(7) cost of video lottery plays.
9.12The adoption of lottery game procedures is not subject to chapter 14.
9.13 Sec. 21. Minnesota Statutes 2010, section 349A.06, subdivision 1, is amended to read:
9.14 Subdivision 1. Contracts. The director shall sell tickets and operate video lottery
9.15terminals for the lottery through lottery retailers with whom the director contracts.
9.16Contracts under this section are not subject to the provisions of sections 16C.03, 16C.05,
9.1716C.06, 16C.08, 16C.09, and 16C.10, and are valid for a period of one year. The director
9.18may permit a retailer to sell tickets and operate video lottery terminals at more than one
9.19business location under a contract entered into under this section.
9.20 Sec. 22. Minnesota Statutes 2010, section 349A.06, subdivision 5, is amended to read:
9.21 Subd. 5. Restrictions on lottery retailers. (a) A lottery retailer may sell lottery
9.22tickets or have a video lottery terminal placed only on the premises described in the
9.23contract.
9.24 (b) A lottery retailer must prominently display a certificate issued by the director
9.25on the premises where lottery tickets will be sold or where video lottery terminals are
9.26operated.
9.27 (c) A lottery retailer must keep a complete set of books of account, correspondence,
9.28and all other records necessary to show fully the retailer's lottery transactions, and make
9.29them available for inspection by employees of the lottery at all times during business
9.30hours. The director may require a lottery retailer to furnish information as the director
9.31deems necessary to carry out the purposes of this chapter, and may require an audit to be
9.32made of the books of account and records. The director may select an auditor to perform
9.33the audit and may require the retailer to pay the cost of the audit. The auditor has the same
10.1right of access to the books of account, correspondence, and other records as is given to
10.2employees of the lottery.
10.3 (d) A contract issued under this section may not be transferred or assigned.
10.4 (e) The director shall require that lottery tickets may be sold by retailers only for
10.5cash.
10.6 (f) A lottery retailer must prominently post at the point of sale of lottery tickets
10.7and the area where video lottery terminals are located, in a manner approved by the
10.8commissioner of human services, the toll-free telephone number established by the
10.9commissioner of human services in connection with the compulsive gambling program
10.10established under section 245.98.
10.11 Sec. 23. Minnesota Statutes 2010, section 349A.06, is amended by adding a
10.12subdivision to read:
10.13 Subd. 5a. Restrictions on lottery retailers; video lottery terminals. (a) The
10.14director may only enter into a lottery retailer contract for games operated by a video lottery
10.15terminal with a retailer that has a license to sell alcoholic beverages for consumption
10.16on the premises where sold. This does not include a retailer who has only a temporary
10.17on-sale license.
10.18 (b) The director may not contract with a retailer for games operated by a video
10.19lottery terminal unless the retailer has an organization licensed under chapter 349
10.20authorized and conducting lawful gambling on the premises.
10.21 (c) A lottery retailer authorized to sell games operated by a video lottery terminal
10.22may not cancel or refuse to renew a lease with an organization licensed under chapter 349
10.23authorized and conducting lawful gambling on its premises for three years following
10.24the effective date of this act, unless the organization has failed to comply with its lease
10.25with the retailer.
10.26 (d) A lottery retailer may have up to five video lottery terminals on the retailer's
10.27premises, as determined by the director.
10.28 (e) A lottery retailer that is authorized to operate a video lottery terminal may not
10.29make reference to the establishment being a "casino," or use the word "casino" in its name
10.30or in any of its advertisements.
10.31 (f) The director, or any employee of the director, may inspect any video lottery
10.32terminal at any time during the hours when alcoholic beverages may be sold at on-sale
10.33under section 340A.504, subdivisions 1, 2, and 3, without notice, to ensure compliance
10.34with this chapter and any rules adopted by the director.
11.1 Sec. 24. Minnesota Statutes 2010, section 349A.06, is amended by adding a
11.2subdivision to read:
11.3 Subd. 6a. Retention by retailers; video lottery terminals. A lottery retailer who
11.4has a contract for placement of video lottery terminals may retain 31 percent of the net
11.5terminal income from the terminals located within its premises as commission. The lottery
11.6retailer receiving commission under this subdivision shall transmit to an organization
11.7licensed under chapter 349, and conducting lawful gambling on the premises of the
11.8retailer, 29 percent of the lottery retailer's commission received under this subdivision.
11.9If more than one organization conducts lawful gambling on the premises, the payment
11.10must be reasonably allocated between the organizations, pro rata based on their respective
11.11gross receipts.
11.12 Sec. 25. Minnesota Statutes 2010, section 349A.06, subdivision 8, is amended to read:
11.13 Subd. 8. Proceeds of sales. All proceeds from the sale of lottery tickets or proceeds
11.14from the sale of video lottery terminal plays received by a lottery retailer constitute a trust
11.15fund until paid to the director. The lottery retailer is personally liable for all proceeds.
11.16 Sec. 26. Minnesota Statutes 2010, section 349A.06, subdivision 10, is amended to read:
11.17 Subd. 10. Local licenses. No political subdivision may require a local license to
11.18operate as a lottery retailer, restrict or regulate the placement of a video lottery terminal,
11.19or impose a tax or fee on the business of operating as a lottery retailer.
11.20 Sec. 27. [349A.071] VIDEO LOTTERY TERMINALS.
11.21 Subdivision 1. Operation. (a) All video lottery terminals must be operated and
11.22controlled by the director.
11.23(b) Video lottery terminals must be owned or leased by the director.
11.24(c) Video lottery terminals must be maintained by the lottery, or by a vendor: (1)
11.25that is under the control and direction of the director; and (2) whose principal place of
11.26business is in Minnesota.
11.27(d) The director must have a central communications system that monitors activities
11.28and provides auditing program information on each video lottery terminal.
11.29(e) The director must approve the general security arrangements associated with and
11.30relating to the operation of the video lottery terminal.
11.31(f) Video lottery terminals must maintain on nonresettable meters, a permanent
11.32record, capable of being printed out, of all transactions by the terminal and all entries
11.33into the terminal.
12.1(g) The director may implement other controls as are deemed necessary to ensure
12.2and maintain the integrity of video lottery terminals operated under this section.
12.3 Subd. 2. Testing and examination of machines. The director shall examine
12.4prototypes of video lottery terminals and require that the manufacturer of the terminal
12.5pay the cost of the examination. The director may contract for the examination of
12.6video lottery terminals. The director may require working models of a video lottery
12.7terminal transported to the locations the director designates for testing, examination,
12.8and analysis. The manufacturer shall pay all costs of any testing, examination, analysis,
12.9and transportation of the terminal model.
12.10 Subd. 3. Deactivation of terminal. The director may deactivate a video lottery
12.11terminal without notice if the lottery retailer has violated any provision of this chapter,
12.12rule, or provision of its contract with the director.
12.13 Sec. 28. Minnesota Statutes 2010, section 349A.08, subdivision 1, is amended to read:
12.14 Subdivision 1. Agreement by players. A person who buys a lottery ticket or plays a
12.15video lottery game agrees to be bound by the rules and game procedures applicable to
12.16that particular lottery game
12.17that the determination of whether a ticket or video lottery credit receipt is
12.18
12.19procedures established by the director for that game, and any confidential or public
12.20validation tests established by the director for that game.
12.21 Sec. 29. Minnesota Statutes 2010, section 349A.08, subdivision 5, is amended to read:
12.22 Subd. 5. Payment; unclaimed prizes. (a) Except as provided in this subdivision, a
12.23prize in the state lottery must be claimed by the winner within one year of the date of the
12.24drawing at which the prize was awarded or the last day sales were authorized for a game
12.25where a prize was determined in a manner other than by means of a drawing. If a valid
12.26claim is not made for a prize payable directly by the lottery by the end of this period, the
12.27prize money is considered unclaimed and the winner of the prize shall have no further
12.28claim to the prize.
12.29 (b) A video lottery credit receipt from a video lottery terminal must be presented
12.30for payment within 60 days of the date the video lottery credit receipt was printed. If a
12.31valid claim for a video lottery credit receipt is not made by the end of this period, the
12.32video lottery credit receipt is considered unclaimed and the player shall have no further
12.33claim to the amount due from the video lottery credit receipt.
13.1 (c) A prize won by a person who purchased the winning ticket or played a video
13.2lottery game in violation of section 349A.12, subdivision 1, or won by a person ineligible
13.3to be awarded a prize under subdivision 7 must be treated as an unclaimed prize under this
13.4section. The director must transfer all unclaimed prize money at the end of each fiscal
13.5year from the lottery cash flow account to the general fund.
13.6 Sec. 30. Minnesota Statutes 2010, section 349A.08, subdivision 8, is amended to read:
13.7 Subd. 8. Withholding of delinquent state taxes or other debts. The director
13.8shall report the name, address, and Social Security number of each winner of a lottery
13.9prize of $600 or more, or a video lottery prize of $1,200 or more, to the Department of
13.10Revenue to determine whether the person who has won the prize is delinquent in payment
13.11of state taxes or owes a debt as defined in section 270A.03, subdivision 5. If the person
13.12is delinquent in payment of state taxes or owes a debt as defined in section 270A.03,
13.13subdivision 5, the director shall withhold the delinquent amount from the person's prize
13.14for remittance to the Department of Revenue for payment of the delinquent taxes or
13.15distribution to a claimant agency in accordance with chapter 270A. Section 270A.10
13.16applies to the priority of claims.
13.17 Sec. 31. Minnesota Statutes 2010, section 349A.09, subdivision 1, is amended to read:
13.18 Subdivision 1. Odds; required information. (a) The director shall include on each
13.19brochure, pamphlet, booklet, or other similar material the director publishes to promote
13.20or explain any lottery game, a prominent and clear statement of the approximate odds of
13.21winning each prize offered in that lottery game.
13.22 (b) Except for the operation of a video lottery terminal, each lottery retailer must
13.23post prominently at or near the point of ticket sale a notice or notices printed and provided
13.24by the director of the approximate odds of winning each prize in each game for which
13.25the lottery retailer sells tickets.
13.26 (c) The approximate odds of winning a prize from a video lottery terminal must be
13.27displayed on the face or screen of the video lottery terminal.
13.28 Sec. 32. Minnesota Statutes 2010, section 349A.10, subdivision 2, is amended to read:
13.29 Subd. 2.
13.30fund outside the state treasury. The fund consists of all money deposited in it under this
13.31subdivision and all interest earned thereon.
14.1(b) The director shall deposit in the lottery prize fund, from gross receipts from the
14.2sale of lottery tickets, an amount sufficient to pay lottery prizes from the lottery prize
14.3fund according to the following provisions:
14.4(1) for games which require online terminal connections, the prizes paid in any fiscal
14.5year must be at least 45 percent of gross receipts from those games in that fiscal year;
14.6(2) for games which do not require online terminal connections, the prizes paid in any
14.7fiscal year must be at least
14.8
14.9
14.10
14.11(c) For lottery games played on a video lottery terminal, the win percentage in any
14.12fiscal year will be the win percentage established by the game procedures adopted for the
14.13game, but shall be at least 80 percent but not more than 95 percent.
14.14 Sec. 33. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
14.15 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
14.16account in the lottery fund. The director shall pay all costs of operating the lottery,
14.17including payroll costs or amounts transferred to the state treasury for payroll costs, but
14.18not including lottery prizes, from the lottery operating account. The director shall credit to
14.19the lottery operations account amounts sufficient to pay the operating costs of the lottery.
14.20(b) Except as provided in paragraph (e), the director may not credit in any fiscal year
14.21
14.22percent of gross revenue, exclusive of net terminal income, and 12 percent of net terminal
14.23income to the lottery fund in that fiscal year. In computing total amounts credited to
14.24the lottery operations account under this paragraph the director shall disregard amounts
14.25transferred to or retained by lottery retailers as sales commissions or other compensation.
14.26(c) The director of the lottery may not expend
14.27percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
14.28placement of advertising.
14.29(d) Except as the director determines, the lottery is not subject to chapter 16A
14.30relating to budgeting, payroll, and the purchase of goods and services.
14.31(e) In addition to the amounts credited to the lottery operations account under
14.32paragraph (b), the director is authorized, if necessary, to meet the current obligations of
14.33the lottery and to credit up to 25 percent of an amount equal to the average annual amount
14.34which was authorized to be credited to the lottery operations account for the previous three
14.35fiscal years but was not needed to meet the obligations of the lottery.
15.1 Sec. 34. Minnesota Statutes 2010, section 349A.10, subdivision 4, is amended to read:
15.2 Subd. 4. Deposit of receipts. (a) The director may require lottery retailers to:
15.3 (1) deposit in a separate account to the credit of the lottery fund, in banks designated
15.4by the director, all money received by the lottery retailer from the sale of lottery tickets
15.5and video lottery terminal plays, less money retained as the lottery retailer's commission
15.6and for payment of prizes;
15.7 (2) file with the director reports of the lottery retailer's receipts and transactions in
15.8ticket sales and video lottery terminal plays in a form that the director prescribes; and
15.9 (3) allow money deposited by the lottery retailer from the sale of lottery tickets and
15.10video lottery terminal plays to be transferred to the lottery through electronic fund transfer.
15.11 (b) The director may make arrangements for any person, including a financial
15.12institution, to perform functions, activities, or services in connection with the receipt and
15.13distribution of lottery revenues.
15.14 (c) A lottery retailer who fails to pay any money due to the director within the time
15.15prescribed by the director shall pay interest on the amount owed at the rate determined by
15.16rule.
15.17 Sec. 35. Minnesota Statutes 2010, section 349A.10, subdivision 6, is amended to read:
15.18 Subd. 6. Budget; plans. The director shall prepare and submit a biennial budget
15.19plan to the commissioner of management and budget. The governor shall recommend
15.20the maximum amount available for the lottery in the budget the governor submits to
15.21the legislature under section
15.22operating expenses and capital expenditures shall be determined by law. Operating
15.23expenses shall not include expenses that are a direct function of lottery sales, which
15.24include the cost of lottery prizes, amounts paid to lottery retailers as sales commissions
15.25or other compensation, amounts paid to produce and deliver scratch lottery games,
15.26amounts paid to an outside vendor to operate and maintain an online gaming system,
15.27amounts paid to an outside vendor to operate and maintain a central system for video
15.28lottery terminals, and amounts paid to acquire and maintain video lottery terminals. In
15.29addition, the director shall appear at least once each fiscal year before the senate and house
15.30of representatives committees having jurisdiction over gambling policy to present and
15.31explain the lottery's plans for future games and the related advertising and promotions
15.32and spending plans for the next fiscal year.
15.33 Sec. 36. Minnesota Statutes 2010, section 349A.11, subdivision 1, is amended to read:
16.1 Subdivision 1. Lottery ticket; retailer. The director, an employee of the lottery,
16.2a member of the immediate family of the director or employee residing in the same
16.3household may not:
16.4 (1) purchase a lottery ticket or play a game on a video lottery terminal; or
16.5 (2) have any personal pecuniary interest in any vendor holding a lottery procurement
16.6contract, or in any lottery retailer; or
16.7 (3) receive any gift, gratuity, or other thing of value, excluding food or beverage,
16.8from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in
16.9excess of $100 in any calendar year.
16.10 Sec. 37. Minnesota Statutes 2010, section 349A.12, subdivision 1, is amended to read:
16.11 Subdivision 1. Purchase by minors. A person under the age of 18 years may not
16.12buy or redeem for a prize a ticket in the state lottery and a person under the age of 21 years
16.13may not play a game or redeem a video lottery credit receipt from a video lottery terminal.
16.14 Sec. 38. Minnesota Statutes 2010, section 349A.12, subdivision 2, is amended to read:
16.15 Subd. 2. Sale to minors. A lottery retailer may not sell and a lottery retailer or other
16.16person may not furnish or redeem for a prize a ticket in the state lottery to any person
16.17under the age of 18 years, or allow a person under the age of 21 years to play a game or
16.18redeem a video lottery credit receipt from a video lottery terminal. It is an affirmative
16.19defense to a charge under this subdivision for the lottery retailer or other person to prove
16.20by a preponderance of the evidence that the lottery retailer or other person reasonably and
16.21in good faith relied upon representation of proof of age described in section 340A.503,
16.22subdivision 6, in making the sale or furnishing or redeeming the ticket or allowing the
16.23play of a video lottery game or redeem a video lottery credit receipt from a video lottery
16.24terminal.
16.25 Sec. 39. Minnesota Statutes 2010, section 349A.13, is amended to read:
16.26349A.13 RESTRICTIONS.
16.27 Nothing in this chapter:
16.28 (1) authorizes the director to conduct a lottery game or contest the winner or winners
16.29of which are determined by the result of a sporting event other than a horse race conducted
16.30under chapter 240; or
16.31 (2)
16.32
17.1
17.2subdivision 32.
17.3 Sec. 40. Minnesota Statutes 2010, section 541.20, is amended to read:
17.4541.20 RECOVERY OF MONEY LOST.
17.5Every person who, by playing at cards, dice, or other game, or by betting on the
17.6hands or sides of such as are gambling, shall lose to any person so playing or betting
17.7any sum of money or any goods, and pays or delivers the same, or any part thereof, to
17.8the winner, may sue for and recover such money by a civil action, before any court
17.9of competent jurisdiction. For purposes of this section, gambling shall not include
17.10pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
17.11or sale of tickets in the state lottery, purchase of video lottery plays as authorized under
17.12chapter 349A, or gambling authorized under chapters 349 and 349A.
17.13 Sec. 41. Minnesota Statutes 2010, section 541.21, is amended to read:
17.14541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
17.15Every note, bill, bond, mortgage, or other security or conveyance in which the whole
17.16or any part of the consideration shall be for any money or goods won by gambling or
17.17playing at cards, dice, or any other game whatever, or by betting on the sides or hands
17.18of any person gambling, or for reimbursing or repaying any money knowingly lent or
17.19advanced at the time and place of such gambling or betting, or lent and advanced for any
17.20gambling or betting to any persons so gambling or betting, shall be void and of no effect
17.21as between the parties to the same, and as to all persons except such as hold or claim
17.22under them in good faith, without notice of the illegality of the consideration of such
17.23contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
17.24wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
17.25in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
17.26conducted pursuant to the Indian Gaming Regulatory Act, United States Code, title 25,
17.27section 2701 et seq.; or (4) lawful gambling activities permitted under chapter 349.
17.28 Sec. 42. Minnesota Statutes 2010, section 609.651, subdivision 1, is amended to read:
17.29 Subdivision 1.
17.30under subdivision 4 if the person does any of the following with intent to defraud the
17.31State Lottery:
17.32 (1) alters or counterfeits a state lottery ticket or a video lottery credit receipt from a
17.33State Lottery video lottery terminal;
18.1 (2) knowingly presents an altered or counterfeited state lottery ticket or video lottery
18.2credit receipt from a State Lottery video lottery terminal for payment;
18.3 (3) knowingly transfers an altered or counterfeited state lottery ticket or video lottery
18.4credit receipt from a State Lottery video lottery terminal to another person;
18.5 (4) tampers with or manipulates the outcome, prize payable, or operation of a State
18.6Lottery video lottery terminal; or
18.7 (5) otherwise claims a lottery prize by means of fraud, deceit, or misrepresentation.
18.8 Sec. 43. Minnesota Statutes 2010, section 609.75, subdivision 3, is amended to read:
18.9 Subd. 3. What are not bets. The following are not bets:
18.10(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
18.11harm or loss sustained, even though the loss depends upon chance;
18.12(2) a contract for the purchase or sale at a future date of securities or other
18.13commodities;
18.14(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
18.15contest for the determination of skill, speed, strength, endurance, or quality or to the bona
18.16fide owners of animals or other property entered in such a contest;
18.17(4) the game of bingo when conducted in compliance with sections
18.18(5) a private social bet not part of or incidental to organized, commercialized, or
18.19systematic gambling;
18.20(6) the operation of equipment or the conduct of a raffle under sections
18.22exempt from licensing under section
18.23(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
18.24240; and
18.25(8) the purchase and sale of state lottery tickets and plays on a video lottery terminal
18.26under chapter 349A.
18.27 Sec. 44. Minnesota Statutes 2010, section 609.75, subdivision 4, is amended to read:
18.28 Subd. 4. Gambling device. A gambling device is a contrivance the purpose of which
18.29is that for a consideration a player is afforded an opportunity to obtain something of value,
18.30other than free plays, automatically from the machine or otherwise, the award of which
18.31is determined principally by chance, whether or not the contrivance is actually played.
18.32"Gambling device" also includes a video game of chance, as defined in subdivision 8, but
18.33does not include a video lottery terminal operated by the State Lottery under chapter 349A.
19.1 Sec. 45. Minnesota Statutes 2010, section 609.761, subdivision 2, is amended to read:
19.2 Subd. 2. State lottery. Sections 609.755 and 609.76 do not prohibit the operation
19.3of the state lottery
19.4the manufacture, possession, or operation of a video lottery terminal for the state lottery
19.5under chapter 349A.
19.6 Sec. 46. LOTTERY BUDGET; VIDEO LOTTERY TERMINALS.
19.7The director of the State Lottery shall submit a budget for the operation of video
19.8lottery terminals as authorized under Minnesota Statutes, section 349A.071, to the
19.9commissioner of management and budget. Notwithstanding Minnesota Statutes, section
19.10349A.10, subdivision 6, the director of the State Lottery may expend amounts necessary to
19.11operate video lottery terminals. Amounts expended by the director of the State Lottery for
19.12the conduct of video lottery terminals in fiscal year 2011 are not subject to the maximum
19.13amount set in law for the operation of the lottery.
19.14 Sec. 47. REPEALER.
19.15Minnesota Statutes 2010, sections 297E.01, subdivision 7; and 297E.02, subdivisions
19.164, 6, and 7, are repealed.
19.17 Sec. 48. EFFECTIVE DATE.
19.18 Except as otherwise provided, this act is effective the day following final enactment.
