Bill Text: MN HF1485 | 2011-2012 | 87th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: New National Football League stadium provided for in Minnesota; Minnesota Stadium Authority established; and Metropolitan Sports Facilities Commission abolished; local tax revenue use, electronic pull-tab games, electronic linked bingo games, and sports-themed tipboard games provided for; conditional imposition of taxes and revenue collection provided for; lawful gambling tax rates modified; bonds issued; and money appropriated.

Spectrum: Slight Partisan Bill (Republican 9-3)

Status: (Engrossed - Dead) 2012-05-08 - Laid on table [HF1485 Detail]

Download: Minnesota-2011-HF1485-Engrossed.html

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A bill for an act

relating to gambling; modifying certain rates of tax on lawful gambling;
providing for electronic linked bingo games, electronic pull-tab games, and
sports-themed tipboard games; making clarifying, conforming, and technical
changes; appropriating money;amending Minnesota Statutes 2010, sections
297E.01, subdivisions 7, 8, 9; 297E.02, subdivisions 1, 3, 6, 7, 10, 11, by
adding a subdivision; 297E.13, subdivision 5; 349.12, subdivisions 3b, 3c, 5,
6a, 12a, 18, 25b, 25c, 25d, 29, 31, 32, 34, 35, by adding subdivisions; 349.13;
349.151, subdivisions 4b, 4c, by adding subdivisions; 349.155, subdivisions 3, 4;
349.161, subdivisions 1, 5; 349.162, subdivision 5; 349.163, subdivisions 1, 5, 6;
349.1635, subdivisions 2, 3, by adding a subdivision; 349.165, subdivision 2;
349.17, subdivisions 6, 7, 8, by adding a subdivision; 349.1711, subdivisions 1,
2; 349.1721; 349.18, subdivision 1; 349.19, subdivisions 2, 3, 5, 10; 349.211,
subdivisions 1a, 2c; repealing Minnesota Statutes 2010, section 297E.02,
subdivision 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2010, section 297E.01, subdivision 7, is amended to read:
    Subd. 7. Gambling product. "Gambling product" means bingo hard cards, bingo
paper sheets, or linked bingo paper sheets, or electronic linked bingo games; pull-tabs;
electronic pull-tab games; tipboards; paddle tickets and paddle ticket cards; raffle tickets;
or any other ticket, card, board, placard, device, or token that represents a chance, for
which consideration is paid, to win a prize.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 2. Minnesota Statutes 2010, section 297E.01, subdivision 8, is amended to read:
    Subd. 8. Gross receipts. "Gross receipts" means all receipts derived from lawful
gambling activity including, but not limited to, the following items:
(1) gross sales of bingo hard cards and, paper sheets, linked bingo paper sheets, and
electronic linked bingo games before reduction for prizes, expenses, shortages, free plays,
or any other charges or offsets;
(2) the ideal gross of pull-tab, electronic pull-tab games, and tipboard deals or games
less the value of unsold and defective tickets and before reduction for prizes, expenses,
shortages, free plays, or any other charges or offsets;
(3) gross sales of raffle tickets and paddle tickets before reduction for prizes,
expenses, shortages, free plays, or any other charges or offsets;
(4) admission, commission, cover, or other charges imposed on participants in
lawful gambling activity as a condition for or cost of participation; and
(5) interest, dividends, annuities, profit from transactions, or other income derived
from the accumulation or use of gambling proceeds.
Gross receipts does not include proceeds from rental under section 349.18,
subdivision 3 .
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 3. Minnesota Statutes 2010, section 297E.01, subdivision 9, is amended to read:
    Subd. 9. Ideal gross. "Ideal gross" means the total amount of receipts that would be
received if every individual ticket in the pull-tab, electronic pull-tab games or tipboard
deal, paddle wheel game, and raffle ticket was sold at its face value. In the calculation of
ideal gross and prizes, a free play ticket pull-tab or electronic pull-tab shall be valued at
face value. "Ideal gross" also means the total amount of receipts that would be received
if every bingo paper sheet, linked bingo paper sheet, and electronic linked bingo games
were sold at face value.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 4. Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read:
    Subdivision 1. Imposition. A tax is imposed on all lawful gambling other than (1)
paper or electronic pull-tab deals or games; (2) tipboard deals or games; and (3) electronic
linked bingo; and (4) items listed in section 297E.01, subdivision 8, clauses (4) and (5), at
the rate of 8.5 percent on the gross receipts as defined in section 297E.01, subdivision 8,
less prizes actually paid. The tax imposed by this subdivision is in lieu of the tax imposed
by section 297A.62 and all local taxes and license fees except a fee authorized under
section 349.16, subdivision 8, or a tax authorized under subdivision 5.
The tax imposed under this subdivision is payable by the organization or party
conducting, directly or indirectly, the gambling.
EFFECTIVE DATE.This section is effective for games reported as played after
June 30, 2012.

    Sec. 5. Minnesota Statutes 2010, section 297E.02, subdivision 3, is amended to read:
    Subd. 3. Collection; disposition. (a) Taxes imposed by this section other than in
subdivision 4 are due and payable to the commissioner when the gambling tax return
is required to be filed. Taxes imposed by subdivision 4 are due and payable to the
commissioner on or before the last business day of the month following the month in
which the taxable sale was made. Distributors must file their monthly sales figures with
the commissioner on a form prescribed by the commissioner. Returns covering the taxes
imposed under this section must be filed with the commissioner on or before the 20th day
of the month following the close of the previous calendar month. The commissioner
may require that the returns be filed via magnetic media or electronic data transfer. The
proceeds, along with the revenue received from all license fees and other fees under
sections 349.11 to 349.191, 349.211, and 349.213, must be paid to the commissioner of
management and budget for deposit in the general fund.
(b) The sales tax imposed by chapter 297A on the sale of pull-tabs and tipboards by
the distributor is imposed on the retail sales price. The retail sale of pull-tabs or tipboards
by the organization is exempt from taxes imposed by chapter 297A and is exempt from all
local taxes and license fees except a fee authorized under section 349.16, subdivision 8.
(c) One-half of one percent of the revenue deposited in the general fund under
paragraph (a), is appropriated to the commissioner of human services for the compulsive
gambling treatment program established under section 245.98. One-half of one percent
of the revenue deposited in the general fund under paragraph (a), is appropriated to the
Gambling Control Board for a grant to the state affiliate recognized by the National
Council on Problem Gambling to increase public awareness of problem gambling,
education and training for individuals and organizations providing effective treatment
services to problem gamblers and their families, and research relating to problem
gambling. Money appropriated by this paragraph must supplement and must not replace
existing state funding for these programs.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 6. Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read:
    Subd. 6. Combined net receipts tax. In addition to the taxes imposed under
subdivisions 1 and 4, a tax is imposed on the combined receipts of the organization. As
used in this section, "combined net receipts" is the sum of the organization's gross receipts
from lawful gambling less gross receipts directly derived from the conduct of bingo,
raffles, and paddle wheels, as defined in section 297E.01, subdivision 8, and less the
net prizes actually paid, other than prizes actually paid for bingo, raffles, and paddle
wheels, for the fiscal year. The combined net receipts of an organization are subject to a
tax computed according to the following schedule:

		If the combined net receipts for the fiscal year are:		The tax is:
		Not over $500,000$87,500		zero6.89 percent
		Over $500,000$87,500, but not over $700,000 $122,500		1.7$6,029 plus 13.78 percent of the amount over $500,000$87,500, but not over $700,000$122,500
		Over $700,000$122,500, but not over $900,000 $157,500		$3,400$10,852 plus 3.420.67 percent of the amount over $700,000 $122,500, but not over $900,000 $157,500
		Over $900,000$157,500		$10,200$18,086 plus 5.127.56 percent of the amount over $900,000 $157,500

EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 7. Minnesota Statutes 2010, section 297E.02, is amended by adding a subdivision
to read:
    Subd. 6a. Unaccounted games. If a licensed distributor cannot account for a
pull-tab game, an electronic pull-tab game, a tipboard deal, paddletickets, an electronic
linked bingo game, bingo paper sheets, or linked bingo paper sheets, the distributor must
report the sheets or games to the commissioner as lost and remit a tax of six percent
on the ideal gross of the sheets or games.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 8. Minnesota Statutes 2010, section 297E.02, subdivision 7, is amended to read:
    Subd. 7. Untaxed gambling product. (a) In addition to penalties or criminal
sanctions imposed by this chapter, a person, organization, or business entity possessing or
selling a pull-tab, electronic pull-tab game or tipboard upon which the tax imposed by
subdivision 4 this chapter has not been paid is liable for a tax of six percent of the ideal
gross of each pull-tab, electronic pull-tab game, or tipboard. The tax on a partial deal
must be assessed as if it were a full deal.
(b) In addition to penalties and criminal sanctions imposed by this chapter, a person
not licensed by the board who conducts bingo, linked bingo, electronic linked bingo,
raffles, or paddle wheel games is liable for a tax of six percent of the gross receipts
from that activity.
(c) The tax must be assessed by the commissioner. An assessment must be
considered a jeopardy assessment or jeopardy collection as provided in section 270C.36.
The commissioner shall assess the tax based on personal knowledge or information
available to the commissioner. The commissioner shall mail to the taxpayer at the
taxpayer's last known address, or serve in person, a written notice of the amount of tax,
demand its immediate payment, and, if payment is not immediately made, collect the tax
by any method described in chapter 270C, except that the commissioner need not await the
expiration of the times specified in chapter 270C. The tax assessed by the commissioner
is presumed to be valid and correctly determined and assessed. The burden is upon the
taxpayer to show its incorrectness or invalidity. The tax imposed under this subdivision
does not apply to gambling that is exempt from taxation under subdivision 2.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 9. Minnesota Statutes 2010, section 297E.02, subdivision 10, is amended to read:
    Subd. 10. Refunds; appropriation. A person who has, under this chapter, paid
to the commissioner an amount of tax for a period in excess of the amount legally due
for that period, may file with the commissioner a claim for a refund of the excess. The
amount necessary to pay the refunds under this subdivision and subdivision 4, paragraph
(d), is appropriated from the general fund to the commissioner.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 10. Minnesota Statutes 2010, section 297E.02, subdivision 11, is amended to read:
    Subd. 11. Unplayed or Defective pull-tabs or tipboards gambling products. If a
deal of pull-tabs or tipboards registered with the board or bar coded in accordance with this
chapter and chapter 349 and upon which the tax imposed by subdivision 4 has been paid is
returned unplayed to the distributor, the commissioner shall allow a refund of the tax paid.
If a defective deal registered with the board or bar coded in accordance with this
chapter and chapter 349 and upon which the taxes have been paid is returned to the
manufacturer, the distributor shall submit to the commissioner of revenue certification
from the manufacturer that the deal was returned and in what respect it was defective.
The certification must be on a form prescribed by the commissioner and must contain
additional information the commissioner requires.
The commissioner may require that no refund under this subdivision be made
unless the that all defective and returned pull-tabs or, tipboards have been, paddle tickets,
paper bingo sheets, and linked bingo paper sheets be set aside for inspection by the
commissioner's employee.
Reductions in previously paid taxes authorized by this subdivision must be made
when and in the manner prescribed by the commissioner.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 11. Minnesota Statutes 2010, section 297E.13, subdivision 5, is amended to read:
    Subd. 5. Untaxed gambling equipment. It is a gross misdemeanor for a person to
possess gambling equipment for resale in this state that has not been stamped or bar-coded
in accordance with this chapter and chapter 349 and upon which the taxes imposed by
chapter 297A or section 297E.02, subdivision 4, have not been paid. The director of
alcohol and gambling enforcement or the commissioner or the designated inspectors
and employees of the director or commissioner may seize in the name of the state of
Minnesota any unregistered or untaxed gambling equipment.
EFFECTIVE DATE.This section is effective for actions occurring after June
30, 2012.

    Sec. 12. Minnesota Statutes 2010, section 349.12, subdivision 3b, is amended to read:
    Subd. 3b. Bar operation. "Bar operation" means a method of selling and redeeming
disposable gambling equipment by an employee of the lessor within a leased premises
which is licensed for the on-sale of alcoholic beverages where such sales and redemptions
are made by an employee of the lessor from a common area where food and beverages
are also sold.

    Sec. 13. Minnesota Statutes 2010, section 349.12, subdivision 3c, is amended to read:
    Subd. 3c. Bar bingo. "Bar bingo" is a bingo occasion conducted at a permitted
premises in an area where intoxicating liquor or 3.2 percent malt beverages are sold and
where the licensed organization conducts another form of lawful gambling. Bar bingo
does not include bingo games linked to other permitted premises.

    Sec. 14. Minnesota Statutes 2010, section 349.12, subdivision 5, is amended to read:
    Subd. 5. Bingo occasion. "Bingo occasion" means a single gathering or session at
which a series of one or more successive bingo games is played. There is no limit on the
number of games conducted during a bingo occasion but. A bingo occasion must not last
longer than eight consecutive hours., except that linked bingo games played on electronic
bingo devices may be played during regular business hours of the permitted premises,
and all play during this period is considered a bingo occasion for reporting purposes. For
permitted premises where the primary business is bingo, regular business hours shall be
defined as the hours between 8:00 a.m. and 2:00 a.m.

    Sec. 15. Minnesota Statutes 2010, section 349.12, subdivision 6a, is amended to read:
    Subd. 6a. Booth operation. "Booth operation" means a method of selling and
redeeming disposable gambling equipment by an employee of a licensed organization in
a premises the organization leases or owns where such sales and redemptions are made
within a separate enclosure that is distinct from areas where food and beverages are sold.

    Sec. 16. Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read:
    Subd. 12a. Electronic bingo device. "Electronic bingo device" means an a
handheld and portable electronic device that:
(a) is used by a bingo player to:
(1) monitor bingo paper sheets or a facsimile of a bingo paper sheet when purchased
and played at the time and place of an organization's bingo occasion and which (1)
provides a means for bingo players to, or to play an electronic bingo game that is linked
with other permitted premises;
(2) activate numbers announced by a bingo caller; (2) compares or displayed, and
to compare the numbers entered by the player to the bingo faces previously stored in
the memory of the device; and
(3) identifies identify a winning bingo pattern. or game requirement; and
(4) play against other bingo players;
(b) limits the play of bingo faces to 36 faces per game;
(c) requires coded entry to activate play but does not allow the use of a coin,
currency, or tokens to be inserted to activate play;
(d) may only be used for play against other bingo players in a bingo game;
(e) has no additional function as an amusement or gambling device;
(f) has the capability to ensure adequate levels of security and internal controls; and
(g) has the capability to permit the board to electronically monitor the operation of
the device and the internal accounting systems.
Electronic bingo device does not mean any device into which coin, currency, or tokens are
inserted to activate play.

    Sec. 17. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:
    Subd. 12b. Electronic pull-tab device. "Electronic pull-tab device" means a
handheld and portable electronic device that:
(a) is used to play one or more electronic pull-tab games;
(b) requires coded entry to activate play but does not allow the use of coin, currency,
or tokens to be inserted to activate play;
(c) requires that a player must activate or open each electronic pull-tab ticket and
each individual line, row, or column of each electronic pull-tab ticket;
(d) maintains information pertaining to accumulated win credits that may be applied
to games in play or redeemed upon termination of play;
(e) has no spinning symbols or other representations that mimic a video slot machine;
(f) has no additional function as a gambling device;
(g) may incorporate an amusement game feature as part of the pull-tab game but
may not require additional consideration for that feature or award any prize, or other
benefit for that feature;
(h) may have auditory or visual enhancements to promote or provide information
about the game being played, provided the component does not affect the outcome of
a game or display the results of a game;
(i) maintains, on nonresettable meters, a printable, permanent record of all
transactions involving each device and electronic pull-tab games played on the device; and
(j) is not a pull-tab dispensing device as defined under subdivision 32a.

    Sec. 18. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:
    Subd. 12c. Electronic pull-tab game. "Electronic pull-tab game" means a pull-tab
game containing:
(a) facsimiles of pull-tab tickets that are played on an electronic pull-tab device;
(b) a predetermined, finite number of winning and losing tickets, not to exceed
7,500 tickets;
(c) the same price for each ticket in the game;
(d) a price paid by the player of not less than 25 cents per ticket;
(e) tickets that are in conformance with applicable board rules for pull-tabs;
(f) winning tickets that comply with prize limits under section 349.211;
(g) a unique serial number that may not be regenerated;
(h) an electronic flare that displays the game name, form number, predetermined,
finite number of tickets in the game, and prize tier; and
(i) no spinning symbols or other representations that mimic a video slot machine.

    Sec. 19. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:
    Subd. 12d. Electronic pull-tab game system. "Electronic pull-tab game system"
means the equipment leased from a licensed distributor and used by a licensed organization
to conduct, manage, and record electronic pull-tab games, and to report and transmit the
game results as prescribed by the board and the Department of Revenue. The system must
provide security and access levels sufficient so that internal control objectives are met as
prescribed by the board. The system must contain a point of sale station.

    Sec. 20. Minnesota Statutes 2010, section 349.12, subdivision 18, is amended to read:
    Subd. 18. Gambling equipment. "Gambling equipment" means: gambling
equipment that is either disposable or permanent gambling equipment.
(a) Disposable gambling equipment includes the following:
(1) bingo hard cards or paper sheets, including linked bingo paper sheets, devices for
selecting bingo numbers, electronic bingo devices,;
(2) paper and electronic pull-tabs,;
(3) jar tickets, paddle wheels, paddle wheel tables,;
(4) paddle tickets, and paddle ticket cards,;
(5) tipboards, and tipboard tickets,; and
(6) promotional tickets that mimic a pull-tab or tipboard, pull-tab dispensing devices,
and programmable electronic devices that have no effect on the outcome of a game and
are used to provide a visual or auditory enhancement of a game.
(b) Permanent gambling equipment includes the following:
(1) devices for selecting bingo numbers;
(2) electronic bingo devices;
(3) electronic pull-tab devices;
(4) pull-tab dispensing devices;
(5) programmable electronic devices that have no effect on the outcome of a game
and are used to provide a visual or auditory enhancement of a game;
(6) paddle wheels; and
(7) paddle wheel tables.

    Sec. 21. Minnesota Statutes 2010, section 349.12, subdivision 25b, is amended to read:
    Subd. 25b. Linked bingo game provider. "Linked bingo game provider" means
any person who provides the means to link bingo prizes in a linked bingo game, who
provides linked bingo paper sheets to the participating organizations games, who provides
linked bingo prize management, and who provides the linked bingo game system.

    Sec. 22. Minnesota Statutes 2010, section 349.12, subdivision 25c, is amended to read:
    Subd. 25c. Linked bingo game system. "Linked bingo game system" means the
equipment used by the linked bingo provider to conduct, transmit, and track a linked
bingo game. The system must be approved by the board before its use in this state and
it must have dial-up or other the capability to permit the board to electronically monitor
its operation remotely. For linked electronic bingo games, the system includes electronic
bingo devices.

    Sec. 23. Minnesota Statutes 2010, section 349.12, subdivision 25d, is amended to read:
    Subd. 25d. Linked bingo prize pool. "Linked bingo prize pool" means the total
of all prize money that each participating organization has contributed to a linked bingo
game prize and includes any portion of the prize pool that is carried over from one
occasion game to another in a progressive linked bingo game.

    Sec. 24. Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read:
    Subd. 29. Paddle wheel. "Paddle wheel" means a vertical wheel marked off into
sections containing one or more numbers, and which, after being turned or spun, uses a
pointer or marker to indicate winning chances, and may only be used to determine a
winning number or numbers matching a winning paddle ticket purchased by a player. A
paddle wheel may be an electronic device that simulates a paddle wheel.

    Sec. 25. Minnesota Statutes 2010, section 349.12, subdivision 31, is amended to read:
    Subd. 31. Promotional ticket. A paper pull-tab ticket or paper tipboard ticket
created and printed by a licensed manufacturer with the words "no purchase necessary" and
"for promotional use only" and for which no consideration is given is a promotional ticket.

    Sec. 26. Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read:
    Subd. 32. Pull-tab. "Pull-tab" means a single folded or banded paper ticket or a,
multi-ply card with perforated break-open tabs, or a facsimile of a paper pull-tab ticket
used in conjunction with an electronic pull-tab device, the face of which is initially
covered to conceal one or more numbers or symbols, and where one or more of each set of
tickets or, cards, or facsimiles has been designated in advance as a winner.

    Sec. 27. Minnesota Statutes 2010, section 349.12, subdivision 34, is amended to read:
    Subd. 34. Tipboard. "Tipboard" means a board, placard or other device containing
a seal that conceals the winning number or symbol, and that serves as the game flare for a
tipboard game. A sports-themed tipboard is a board, placard, or other device that contains a
grid of predesignated numbers for which the winning numbers are determined in whole or
in part by the numerical outcome of one or more professional sporting events, serves as the
game flare for player registration, but is not required to contain a seal. For a sports-themed
tipboard, the winning numbers must be determined solely by the numerical outcome.

    Sec. 28. Minnesota Statutes 2010, section 349.12, subdivision 35, is amended to read:
    Subd. 35. Tipboard ticket. "Tipboard ticket" is a single folded or banded ticket,
or multi-ply card, the face of which is initially covered or otherwise hidden from view
to conceal a number, symbol, or set of symbols, some of which have been designated in
advance and at random as prize winners. For a sports-themed tipboard, the tipboard ticket
contains a set of numbers used to determine the winner based on the numerical outcome
of a professional sporting event.

    Sec. 29. Minnesota Statutes 2010, section 349.13, is amended to read:
349.13 LAWFUL GAMBLING.
Lawful gambling is not a lottery or gambling within the meaning of sections 609.75
to 609.76 if it is conducted under this chapter. A pull-tab dispensing device, electronic
bingo device, and electronic pull-tab device permitted under this chapter and by board
rule is not a gambling device within the meaning of sections 609.75 to 609.76 and chapter
299L. An electronic game device allowed under this chapter may not be a slot machine.
Electronic game devices, including but not limited to electronic bingo devices, electronic
paddle wheels, and electronic pull-tab devices authorized under this chapter, may only
be used in the conduct of lawful gambling permitted under this chapter and board rule
and may not display or simulate any other form of gambling or entertainment, except
as otherwise allowed under this chapter.

    Sec. 30. Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read:
    Subd. 4b. Pull-tab sales from dispensing devices. (a) The board may by rule
authorize but not require the use of pull-tab dispensing devices.
(b) Rules adopted under paragraph (a):
(1) must limit the number of pull-tab dispensing devices on any permitted premises
to three; and
(2) must limit the use of pull-tab dispensing devices to a permitted premises which is
(i) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt beverages;
or (ii) a premises where bingo is conducted and admission is restricted to persons 18
years or older.
(c) Notwithstanding rules adopted under paragraph (b), pull-tab dispensing devices
may be used in establishments licensed for the off-sale of intoxicating liquor, other than
drugstores and general food stores licensed under section 340A.405, subdivision 1.

    Sec. 31. Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read:
    Subd. 4c. Electronic bingo devices. (a) The board may by rule authorize but not
require the use of electronic bingo devices.
(b) Rules adopted under paragraph (a):
(1) must limit the number of bingo faces that can be played using an electronic
bingo device to 36;
(2) must require that an electronic bingo device be used with corresponding bingo
paper sheets or a facsimile, printed at the point of sale, as approved by the board;
(3) must require that the electronic bingo device site system have dial-up capability
to permit the board to remotely monitor the operation of the device and the internal
accounting systems; and
(4) must prohibit the price of a face played on an electronic bingo device from being
less than the price of a face on a bingo paper sheet sold at the same occasion.
(b) The board, or the director if authorized by the board, may require the deactivation
of an electronic bingo device for violation of a law or rule and to implement any other
controls deemed necessary to ensure and maintain the integrity of electronic bingo devices
and the electronic bingo games played on the devices.

    Sec. 32. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
to read:
    Subd. 4d. Electronic pull-tab devices and electronic pull-tab game system. (a)
The board may adopt rules it deems necessary to ensure the integrity of electronic pull-tab
devices, the electronic pull-tab games played on the devices, and the electronic pull-tab
game system necessary to operate them.
(b) The board may not require an organization to use electronic pull-tab devices.
(c) Before authorizing the lease or sale of electronic pull-tab devices and the
electronic pull-tab game system, the board shall examine electronic pull-tab devices
allowed under section 349.12, subdivision 12b. The board may contract for the
examination of the game system and electronic pull-tab devices and may require a working
model to be transported to locations the board designates for testing, examination, and
analysis. The manufacturer must pay all costs of any testing, examination, analysis, and
transportation of the model. The system must be approved by the board before its use in
the state and must have the capability to permit the board to electronically monitor its
operation and internal accounting systems.
(d) The board may require a manufacturer to submit a certificate from an independent
testing laboratory approved by the board to perform testing services, stating that the
equipment has been tested, analyzed, and meets the standards required in this chapter
and any applicable board rules.
(e) The board, or the director if authorized by the board, may require the deactivation
of an electronic pull-tab device for violation of a law or rule and to implement any other
controls deemed necessary to ensure and maintain the integrity of electronic pull-tab
devices and the electronic pull-tab games played on the devices.

    Sec. 33. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
to read:
    Subd. 4e. Sports-themed tipboard rules. The board may adopt rules for the
conduct of tipboards for which the winning numbers are determined in whole or in part
by the numerical outcome of one or more professional sporting events. The rules must
provide for operation procedures, internal control standards, posted information, records,
and reports. The rules must provide for the award of prizes, method of payout, wagers,
determination of winners, and the specifications of these tipboards.

    Sec. 34. Minnesota Statutes 2010, section 349.155, subdivision 3, is amended to read:
    Subd. 3. Mandatory disqualifications. (a) In the case of licenses for manufacturers,
distributors, distributor salespersons, linked bingo game providers, and gambling
managers, the board may not issue or renew a license under this chapter, and shall revoke
a license under this chapter, if the applicant or licensee, or a director, officer, partner,
governor, or person in a supervisory or management position of the applicant or licensee:
    (1) has ever been convicted of a felony or a crime involving gambling;
    (2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use
of a firearm, or (iii) making terroristic threats;
    (3) is or has ever been connected with or engaged in an illegal business;
    (4) owes $500 or more in delinquent taxes as defined in section 270C.72;
    (5) had a sales and use tax permit revoked by the commissioner of revenue within
the past two years; or
    (6) after demand, has not filed tax returns required by the commissioner of revenue.
The board may deny or refuse to renew a license under this chapter, and may revoke a
license under this chapter, if any of the conditions in this paragraph are applicable to
an affiliate or direct or indirect holder of more than a five percent financial interest in
the applicant or licensee.
    (b) In the case of licenses for organizations, the board may not issue a license under
this chapter, and shall revoke a license under this chapter, if the organization, or an officer
or member of the governing body of the organization:
    (1) has been convicted of a felony or gross misdemeanor involving theft or fraud; or
    (2) has ever been convicted of a crime involving gambling; or.
    (3) has had a license issued by the board or director permanently revoked for
violation of law or board rule.

    Sec. 35. Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read:
    Subd. 4. License revocation, suspension, denial; censure. (a) The board may by
order (i) deny, suspend, revoke, or refuse to renew a license or premises permit, or (ii)
censure a licensee or applicant, if it finds that the order is in the public interest and that the
applicant or licensee, or a director, officer, partner, governor, person in a supervisory or
management position of the applicant or licensee, an employee eligible to make sales on
behalf of the applicant or licensee, or direct or indirect holder of more than a five percent
financial interest in the applicant or licensee:
    (1) has violated or failed to comply with any provision of this chapter or chapter
297E or 299L, or any rule adopted or order issued thereunder;
    (2) has filed an application for a license that is incomplete in any material respect, or
contains a statement that, in light of the circumstances under which it was made, is false,
misleading, fraudulent, or a misrepresentation;
    (3) has made a false statement in a document or report required to be submitted to
the board or the commissioner of revenue, or has made a false statement to the board, the
compliance review group, or the director;
    (4) has been convicted of a crime in another jurisdiction that would be a felony if
committed in Minnesota;
    (5) is permanently or temporarily enjoined by any gambling regulatory agency from
engaging in or continuing any conduct or practice involving any aspect of gambling;
    (6) has had a gambling-related license revoked or suspended, or has paid or been
required to pay a monetary penalty of $2,500 or more, by a gambling regulator in another
state or jurisdiction;
    (7) has been the subject of any of the following actions by the director of alcohol
and gambling enforcement or commissioner of public safety: (i) had a license under
chapter 299L denied, suspended, or revoked, (ii) been censured, reprimanded, has paid or
been required to pay a monetary penalty or fine, or (iii) has been the subject of any other
discipline by the director or commissioner;
    (8) has engaged in conduct that is contrary to the public health, welfare, or safety, or
to the integrity of gambling; or
    (9) based on past activities or criminal record poses a threat to the public interest or
to the effective regulation and control of gambling, or creates or enhances the dangers of
unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling
or the carrying on of the business and financial arrangements incidental to the conduct of
gambling.
    (b) The revocation or suspension of an organization's license may not exceed a
period of ten years, including any revocation or suspension imposed by the board prior to
the effective date of this paragraph, except that:
    (1) any prohibition placed by the board on who may be involved in the conduct,
oversight, or management of the revoked organization's lawful gambling activity is
permanent; and
    (2) a revocation or suspension will remain in effect until any taxes, fees, and fines
that are delinquent have been paid by the organization to the satisfaction of the board.

    Sec. 36. Minnesota Statutes 2010, section 349.161, subdivision 1, is amended to read:
    Subdivision 1. Prohibited acts; licenses required. (a) No person may:
    (1) sell, offer for sale, or furnish gambling equipment for use within the state other
than for lawful gambling exempt or excluded from licensing, except to an organization
licensed for lawful gambling;
    (2) sell, offer for sale, or furnish gambling equipment for use within the state without
having obtained a distributor license or a distributor salesperson license under this section
except that an organization authorized to conduct bingo by the board may loan bingo
hard cards and devices for selecting bingo numbers to another organization authorized to
conduct bingo and a linked bingo game provider may provide electronic bingo devices for
linked electronic bingo games;
    (3) sell, offer for sale, or furnish gambling equipment for use within the state that is
not purchased or obtained from a manufacturer or distributor licensed under this chapter; or
    (4) sell, offer for sale, or furnish gambling equipment for use within the state that
has the same serial number as another item of gambling equipment of the same type sold
or offered for sale or furnished for use in the state by that distributor.
    (b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling
equipment for use within the state without being employed by a licensed distributor or
owning a distributor license.
(c) No distributor or distributor salesperson may also be licensed as a linked bingo
game provider under section 349.1635.

    Sec. 37. Minnesota Statutes 2010, section 349.161, subdivision 5, is amended to read:
    Subd. 5. Prohibition. (a) No distributor, distributor salesperson, or other employee
of a distributor, may also be a wholesale distributor of alcoholic beverages or an employee
of a wholesale distributor of alcoholic beverages.
    (b) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor, may: (1) be involved in the conduct of lawful gambling
by an organization; (2) keep or assist in the keeping of an organization's financial records,
accounts, and inventories; or (3) prepare or assist in the preparation of tax forms and other
reporting forms required to be submitted to the state by an organization.
    (c) No distributor, distributor salesperson, or any representative, agent, affiliate,
or other employee of a distributor may provide a lessor of gambling premises any
compensation, gift, gratuity, premium, or other thing of value.
    (d) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may provide an employee or agent of the organization
any compensation, gift, gratuity, premium, or other thing of value greater than $25 per
organization in a calendar year.
    (e) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may participate in any gambling activity at any gambling
site or premises where gambling equipment purchased or leased from that distributor or
distributor salesperson is being used in the conduct of lawful gambling.
    (f) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may alter or modify any gambling equipment, except to
add a "last ticket sold" prize sticker for a paper pull-tab game.
    (g) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may: (1) recruit a person to become a gambling manager
of an organization or identify to an organization a person as a candidate to become
gambling manager for the organization; or (2) identify for an organization a potential
gambling location.
    (h) No distributor or distributor salesperson may purchase or lease gambling
equipment for resale or lease to a person for use within the state from any person not
licensed as a manufacturer under section 349.163, except for gambling equipment
returned from an organization licensed under section 349.16, or exempt or excluded from
licensing under section 349.166.
    (i) No distributor or distributor salesperson may sell gambling equipment, except
gambling equipment identified as a promotional ticket, to any person for use in Minnesota
other than (i) a licensed organization or organization excluded or exempt from licensing,
or (ii) the governing body of an Indian tribe.
    (j) No distributor or distributor salesperson may sell or otherwise provide a paper
pull-tab or tipboard deal with the symbol required by section 349.163, subdivision 5,
paragraph (d), visible on the flare to any person other than in Minnesota to a licensed
organization or organization exempt from licensing.

    Sec. 38. Minnesota Statutes 2010, section 349.162, subdivision 5, is amended to read:
    Subd. 5. Sales from facilities. (a) All gambling equipment purchased or possessed
by a licensed distributor for resale or lease to any person for use in Minnesota must, prior
to the equipment's resale or lease, be unloaded into a storage facility located in Minnesota
which the distributor owns or leases; and which has been registered, in advance and in
writing, with the Division of Alcohol and Gambling Enforcement as a storage facility of
the distributor. All unregistered gambling equipment and all unaffixed registration stamps
owned by, or in the possession of, a licensed distributor in the state of Minnesota shall be
stored at a storage facility which has been registered with the Division of Alcohol and
Gambling Enforcement. No gambling equipment may be moved from the facility unless
the gambling equipment has been first registered with the board or the Department of
Revenue. A distributor must notify the board of the method that it will use to sell and
transfer electronic pull-tab games to licensed organizations, and must receive approval of
the board before implementing or making changes to the approved method.
(b) Notwithstanding section 349.163, subdivisions 5, 6, and 8, a licensed
manufacturer may ship into Minnesota approved or unapproved gambling equipment if the
licensed manufacturer ships the gambling equipment to a Minnesota storage facility that
is: (1) owned or leased by the licensed manufacturer; and (2) registered, in advance and
in writing, with the Division of Alcohol and Gambling Enforcement as a manufacturer's
storage facility. No gambling equipment may be shipped into Minnesota to the
manufacturer's registered storage facility unless the shipment of the gambling equipment
is reported to the Department of Revenue in a manner prescribed by the department.
No gambling equipment may be moved from the storage facility unless the gambling
equipment is sold to a licensed distributor and is otherwise in conformity with this chapter,
is shipped to an out-of-state site and the shipment is reported to the Department of
Revenue in a manner prescribed by the department, or is otherwise sold and shipped as
permitted by board rule. A manufacturer must notify the board of the method that it will
use to sell and transfer electronic pull-tab games to licensed distributors, and must receive
approval of the board before implementing or making changes to the approved method.
(c) All storage facilities owned, leased, used, or operated by a licensed distributor
or manufacturer may be entered upon and inspected by the employees of the Division of
Alcohol and Gambling Enforcement, the Division of Alcohol and Gambling Enforcement
director's authorized representatives, employees of the Gambling Control Board or its
authorized representatives, employees of the Department of Revenue, or authorized
representatives of the director of the Division of Special Taxes of the Department of
Revenue during reasonable and regular business hours. Obstruction of, or failure to
permit, entry and inspection is cause for revocation or suspension of a manufacturer's or
distributor's licenses and permits issued under this chapter.
(d) Unregistered gambling equipment found at any location in Minnesota other than
the manufacturing plant of a licensed manufacturer or a registered storage facility are
contraband under section 349.2125. This paragraph does not apply:
(1) to unregistered gambling equipment being transported in interstate commerce
between locations outside this state, if the interstate shipment is verified by a bill of lading
or other valid shipping document; and
(2) to gambling equipment registered with the Department of Revenue for
distribution to the tribal casinos.

    Sec. 39. Minnesota Statutes 2010, section 349.163, subdivision 1, is amended to read:
    Subdivision 1. License required. No manufacturer of gambling equipment may
sell any gambling equipment to any person for use or resale within the state, unless the
manufacturer has a current and valid license issued by the board under this section and has
satisfied other criteria prescribed by the board by rule. A manufacturer licensed under this
section may also be licensed as a linked bingo game provider under section 349.1635.
A manufacturer licensed under this section may not also be directly or indirectly
licensed as a distributor under section 349.161.

    Sec. 40. Minnesota Statutes 2010, section 349.163, subdivision 5, is amended to read:
    Subd. 5. Paper pull-tab and tipboard flares. (a) A manufacturer may not ship or
cause to be shipped into this state or sell for use or resale in this state any deal of paper
pull-tabs or tipboards that does not have its own individual flare as required for that deal
by this subdivision and rule of the board. A person other than a manufacturer may not
manufacture, alter, modify, or otherwise change a flare for a deal of paper pull-tabs or
tipboards except as allowed by this chapter or board rules.
(b) The flare of each paper pull-tab and tipboard game must have affixed to
or imprinted at the bottom a bar code that provides all information required by the
commissioner of revenue under section 297E.04, subdivision 2.
The serial number included in the bar code must be the same as the serial number
of the tickets included in the deal. A manufacturer who manufactures a deal of paper
pull-tabs must affix to the outside of the box containing that game the same bar code that
is affixed to or imprinted at the bottom of a flare for that deal.
(c) No person may alter the bar code that appears on the outside of a box containing
a deal of paper pull-tabs and tipboards. Possession of a box containing a deal of paper
pull-tabs and tipboards that has a bar code different from the bar code of the deal inside
the box is prima facie evidence that the possessor has altered the bar code on the box.
(d) The flare of each deal of paper pull-tabs and tipboards sold by a manufacturer for
use or resale in Minnesota must have imprinted on it a symbol that is at least one inch high
and one inch wide consisting of an outline of the geographic boundaries of Minnesota
with the letters "MN" inside the outline. The flare must be placed inside the wrapping of
the deal which the flare describes.
(e) Each paper pull-tab and tipboard flare must bear the following statement printed
in letters large enough to be clearly legible:
"Pull-tab (or tipboard) purchasers -- This pull-tab (or tipboard) game is not legal in
Minnesota unless:
-- an outline of Minnesota with letters "MN" inside it is imprinted on this sheet, and
-- the serial number imprinted on the bar code at the bottom of this sheet is the same
as the serial number on the pull-tab (or tipboard) ticket you have purchased."
(f) The flare of each paper pull-tab and tipboard game must have the serial number
of the game imprinted on the bar code at the bottom of the flare in numerals at least
one-half inch high.

    Sec. 41. Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read:
    Subd. 6. Samples of gambling equipment. (a) The board shall require each
licensed manufacturer to submit to the board one or more samples of each item of gambling
equipment the manufacturer manufactures manufactured for use or resale in this state.
For purposes of this subdivision, a manufacturer is also required to submit the applicable
version of any software necessary to operate electronic devices and related systems.
(b) The board shall inspect and test all the equipment, including software and
software upgrades, it deems necessary to determine the equipment's compliance with
law and board rules. Samples required under this subdivision must be approved by the
board before the equipment being sampled is shipped into or sold for use or resale in this
state. The board shall impose a fee of $25 for each item of gambling equipment that the
manufacturer submits for approval or for which the manufacturer requests approval. The
board shall impose a fee of $100 for each sample of gambling equipment that it tests.
(c) The board may require samples of gambling equipment to be tested by an
independent testing laboratory prior to submission to the board for approval. All costs
of testing by an independent testing laboratory must be borne by the manufacturer. An
independent testing laboratory used by a manufacturer to test samples of gambling
equipment must be approved by the board before the equipment is submitted to the
laboratory for testing.
(d) The board may request the assistance of the commissioner of public safety and
the director of the State Lottery in performing the tests.

    Sec. 42. Minnesota Statutes 2010, section 349.1635, subdivision 2, is amended to read:
    Subd. 2. License application. The board may issue a license to a linked bingo game
provider or to a manufacturer licensed under section 349.163 who meets the qualifications
of this chapter and the rules promulgated by the board. The application shall be on a form
prescribed by the board. The license is valid for two years and the fee for a linked bingo
game provider license is $5,000 per year.

    Sec. 43. Minnesota Statutes 2010, section 349.1635, subdivision 3, is amended to read:
    Subd. 3. Attachments to application. An applicant for a linked bingo game
provider license must attach to its application:
(1) evidence of a bond in the principal amount of $100,000 payable to the state of
Minnesota conditioned on the payment of all linked bingo prizes and any other money due
and payable under this chapter;
(2) detailed plans and specifications for the operation of the linked bingo game and
the linked bingo system, along with a proposed fee schedule for the cost of providing
services and equipment to licensed organizations which may not exceed 15 percent of
gross profits, unless a higher percentage, not to exceed 20 percent, is authorized by the
board. The fee schedule must incorporate costs paid to distributors for services provided
under subdivision 5; and
(3) any other information required by the board by rule.

    Sec. 44. Minnesota Statutes 2010, section 349.1635, is amended by adding a
subdivision to read:
    Subd. 5. Linked bingo game services requirements. (a) A linked bingo game
provider must contract with licensed distributors for linked bingo game services including,
but not limited to, the solicitation of agreements with licensed organizations, and
installation, repair, or maintenance of the linked bingo game system.
(b) A distributor may not charge a fee to licensed organizations for services
authorized and rendered under paragraph (a).
(c) A linked bingo game provider may not contract with any distributor on an
exclusive basis.
(d) A linked bingo game provider may refuse to contract with a licensed distributor
if the linked bingo game provider demonstrates that the licensed distributor is not capable
of performing the services under the contract.

    Sec. 45. Minnesota Statutes 2010, section 349.165, subdivision 2, is amended to read:
    Subd. 2. Contents of application. An application for a premises permit must
contain:
    (1) the name and address of the applying organization;
    (2) a description of the site for which the permit is sought, including its address and,
where applicable, its placement within another premises or establishment;
    (3) if the site is leased, the name and address of the lessor and information about the
lease the board requires, including all rents and other charges for the use of the site. The
lease term is concurrent with the term of the premises permit. The lease must contain a
30-day termination clause. No lease is required for the conduct of a raffle; and
    (4) other information the board deems necessary to carry out its purposes.
    An organization holding a premises permit must notify the board in writing within
ten days whenever any material change is made in the above information.

    Sec. 46. Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read:
    Subd. 6. Conduct of bingo. The price of a face played on an electronic bingo
device may not be less than the price of a face on a bingo paper sheet sold for the same
game at the same occasion. A game of bingo begins with the first letter and number called
or displayed. Each player must cover, mark, or activate the numbers when bingo numbers
are randomly selected, and announced, and or displayed to the players, either manually
or with a flashboard and monitor. The game is won when a player, using bingo paper,
bingo hard card, or a facsimile of a bingo paper sheet, has completed, as described in the
bingo program, a previously designated pattern or previously determined requirements
of the game and declared bingo. The game is completed when a winning card, sheet, or
facsimile is verified and a prize awarded pursuant to subdivision 3.

    Sec. 47. Minnesota Statutes 2010, section 349.17, subdivision 7, is amended to read:
    Subd. 7. Bar bingo. An organization may conduct bar bingo subject to the
following restrictions:
    (1) the bingo is conducted at a site the organization owns or leases and which has a
license for the sale of intoxicating beverages on the premises under chapter 340A; and
    (2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper
sheets purchased from a licensed distributor or licensed linked bingo game provider; and.
    (3) no rent may be paid for a bar bingo occasion.

    Sec. 48. Minnesota Statutes 2010, section 349.17, subdivision 8, is amended to read:
    Subd. 8. Linked bingo games. (a) A licensed organization may conduct or
participate in not more than two linked bingo games per occasion, one of which may be a,
including progressive game games in which a portion of the prize is carried over from
one occasion game to another until won by a player achieving a valid bingo within a
predetermined amount of bingo numbers called based upon a predetermined and posted
win determination.
    (b) Each participating licensed organization shall contribute to each prize awarded in
a linked bingo game in an amount not to exceed $300. Linked bingo games may only be
conducted by licensed organizations who have a valid agreement with the linked bingo
game provider.
    (c) An electronic bingo device as defined in section 349.12, subdivision 12a, may
be used for a linked bingo game.
    (d) The board may adopt rules to:
    (1) specify the manner in which a linked bingo game must be played and how the
linked bingo prizes must be awarded;
    (2) specify the records to be maintained by a linked bingo game provider;
    (3) require the submission of periodic reports by the linked bingo game provider and
specify the content of the reports;
    (4) establish the qualifications required to be licensed as a linked bingo game
provider; and
    (5) any other matter involving the operation of a linked bingo game.

    Sec. 49. Minnesota Statutes 2010, section 349.17, is amended by adding a subdivision
to read:
    Subd. 9. Linked bingo games played exclusively on electronic bingo devices. In
addition to the requirements of subdivision 8, the following requirements and restrictions
apply when linked bingo games are played exclusively on electronic bingo devices.
(a) The permitted premises must be:
(1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent
malt beverages, except for a general food store or drug store permitted to sell alcoholic
beverages under section 340A.405, subdivision 1; or
(2) a premises where bingo is conducted as the primary business and has a seating
capacity of at least 100.
(b) The number of electronic bingo devices is limited to:
(1) no more than six devices in play for permitted premises with 200 seats or less;
(2) no more than 12 devices in play for permitted premises with 201 seats or more;
and
(3) no more than 50 devices in play for permitted premises where bingo is the
primary business.
Seating capacity is determined as specified under the local fire code.
(c) Prior to a bingo occasion, the linked bingo game provider, on behalf of the
participating organizations, must provide to the board a bingo program in a format
prescribed by the board.
(d) Before participating in the play of a linked bingo game, a player must present
and register a valid picture identification card that includes the player's address and
date of birth.
(e) An organization may remove from play a device that a player has not maintained
in an activated mode for a specified period of time determined by the organization. The
organization must provide the notice in its house rules.

    Sec. 50. Minnesota Statutes 2010, section 349.1711, subdivision 1, is amended to read:
    Subdivision 1. Sale of tickets. (a) Tipboard games must be played using only
tipboard tickets that are either (1) attached to a placard and arranged in columns or rows,
or (2) separate from the placard and contained in a receptacle while the game is in play.
The placard serves as the game flare.
(b) Except for a sports-themed tipboard, the placard must contain a seal that conceals
the winning number or symbol. When a tipboard ticket is purchased and opened from a
game containing more than 32 tickets, each player having a tipboard ticket with one or
more predesignated numbers or symbols must sign the placard at the line indicated by the
number or symbol on the tipboard ticket.

    Sec. 51. Minnesota Statutes 2010, section 349.1711, subdivision 2, is amended to read:
    Subd. 2. Determination of winners. When the predesignated numbers or symbols
have all been purchased, or all of the tipboard tickets for that game have been sold,
the seal must be removed to reveal a number or symbol that determines which of the
predesignated numbers or symbols is the winning number or symbol. A tipboard may also
contain consolation winners, or winning chances that are determined in whole or in part
by the numerical outcome of one or more professional sporting events, that need not be
determined by the use of the seal.

    Sec. 52. Minnesota Statutes 2010, section 349.1721, is amended to read:
349.1721 CONDUCT OF PULL-TABS.
    Subdivision 1. Cumulative or carryover games. The board shall by rule permit
pull-tab games with multiple seals. The board shall also adopt rules for pull-tab games with
cumulative or carryover prizes. The rules shall also apply to electronic pull-tab games.
    Subd. 2. Event games. The board shall by rule permit pull-tab games in which
certain winners are determined by the random selection of one or more bingo numbers
or by another method approved by the board. The rules shall also apply to electronic
pull-tab games.
    Subd. 3. Pull-tab dispensing device location restrictions and requirements.
The following pertain to pull-tab dispensing devices as defined under section 349.12,
subdivision 32a.
(a) The use of any pull-tab dispensing device must be at a permitted premises
which is:
(1) a licensed premises for on-sale of intoxicating liquor or 3.2 percent malt
beverages;
(2) a premises where bingo is conducted as the primary business; or
(3) an establishment licensed for the off-sale of intoxicating liquor, other than drug
stores and general food stores licensed under section 340A.405, subdivision 1.
(b) The number of pull-tab dispensing devices located at any permitted premises
is limited to three.
    Subd. 4. Electronic pull-tab device requirements and restrictions. The following
pertain to the use of electronic pull-tab devices as defined under section 349.12,
subdivision 12b.
(a) The use of any electronic pull-tab device may only be at a permitted premises
that is:
(1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent
malt beverages, except for a general food store or drug store permitted to sell alcoholic
beverages under section 340A.405, subdivision 1; or
(2) a premises where bingo is conducted as the primary business and has a seating
capacity of at least 100; and
(3) where the licensed organization sells paper pull-tabs.
(b) The number of electronic pull-tab devices is limited to:
(1) no more than six devices in play at any permitted premises with 200 seats or less;
(2) no more than 12 devices in play at any permitted premises with 201 seats
or more; and
(3) no more than 50 devices in play at any permitted premises where the primary
business is bingo.
Seating capacity is determined as specified under the local fire code.
(c) The hours of operation for the devices are limited to 8:00 a.m. to 2:00 a.m.
(d) All electronic pull-tab games must be sold and played on the permitted premises
and may not be linked to other permitted premises.
(e) Electronic pull-tab games may not be transferred electronically or otherwise to
any other location by the licensed organization.
(f) Electronic pull-tab games may be commingled if the games are from the same
family of games and manufacturer and contain the same game name, form number, type
of game, ticket count, prize amounts, and prize denominations. Each commingled game
must have a unique serial number.
(g) An organization may remove from play a device that a player has not maintained
in an activated mode for a specified period of time determined by the organization. The
organization must provide the notice in its house rules.
(h) Before participating in the play of an electronic pull-tab game, a player must
present and register a valid picture identification card that includes the player's address
and date of birth.
(i) Each player is limited to the use of one device at a time.
    Subd. 5. Multiple chance games. The board may permit pull-tab games in which
the holders of certain predesignated winning tickets, with a prize value not to exceed $75
each, have the option of turning in the winning tickets for the chance to win a prize of
greater value.

    Sec. 53. Minnesota Statutes 2010, section 349.18, subdivision 1, is amended to read:
    Subdivision 1. Lease or ownership required; rent limitations. (a) An organization
may conduct lawful gambling only on premises it owns or leases. Leases must be on a
form prescribed by the board. The term of the lease is concurrent with the premises permit.
Leases approved by the board must specify that the board may authorize an organization
to withhold rent from a lessor for a period of up to 90 days if the board determines that
illegal gambling occurred on the premises or that the lessor or its employees participated
in the illegal gambling or knew of the gambling and did not take prompt action to stop the
gambling. The lease must authorize the continued tenancy of the organization without
the payment of rent during the time period determined by the board under this paragraph.
Copies of all leases must be made available to employees of the board and the Division of
Alcohol and Gambling Enforcement on request.
    (b) Rent paid by an organization for leased premises for the conduct of pull-tabs,
tipboards, and paddle wheels lawful gambling is subject to the following limits and
restrictions:
    (1) For booth operations, including booth operations where a pull-tab dispensing
device is located, booth operations where a bar operation is also conducted, and booth
operations where both a pull-tab dispensing device is located and a bar operation is also
conducted, the maximum rent is: monthly rent may not exceed ten percent of gross profits
for that month. Total rent paid to a lessor from all organizations from leases governed by
this clause may not exceed $1,750 per month.
    (i) in any month where the organization's gross profit at those premises does not
exceed $4,000, up to $400; and
    (ii) in any month where the organization's gross profit at those premises exceeds
$4,000, up to $400 plus not more than ten percent of the gross profit for that month in
excess of $4,000;
    (2) For bar operations, including bar operations where a pull-tab dispensing device
is located but not including bar operations subject to clause (1), and for locations where
only a pull-tab dispensing device is located: monthly rent may not exceed:
(i) 15 percent of the gross profits for that month from pull-tabs sold from a pull-tab
dispensing device, electronic pull-tab games, and electronic linked bingo games; and
(ii) more than 20 percent of gross profits from all other forms of lawful gambling.
    (i) in any month where the organization's gross profit at those premises does not
exceed $1,000, up to $200; and
    (ii) in any month where the organization's gross profit at those premises exceeds
$1,000, up to $200 plus not more than 20 percent of the gross profit for that month
in excess of $1,000;
    (3) a lease not governed by clauses (1) and (2) must be approved by the board before
becoming effective; For electronic linked bingo games and electronic pull-tab games that
are operated for separate time periods within a business day by an organization and the
lessor, monthly rent may not be more than:
(i) 15 percent of the gross profits for that month for the time periods operated by
the lessor. The lessor is responsible for cash shortages that occur during the time periods
the games are operated by the lessor; and
(ii) ten percent of gross profits for that month for the time periods operated by the
organization. The organization is responsible for cash shortages that occur during the time
periods the games are operated by the organization.
    (4) total rent paid to a lessor from all organizations from leases governed by clause
(1) may not exceed $1,750 per month.
    (c) Rent paid by an organization for leased premises for the conduct of bingo is
subject to either of the following limits at the option of the parties to the lease:
    (1) (4) For bingo conducted at a leased premises where the primary business is
bingo, rent is limited to either not more than ten percent of the monthly gross profit from
all lawful gambling activities held during bingo occasions, excluding bar bingo or at a
rate based on a cost per square foot not to exceed 110 percent of a comparable cost per
square foot for leased space as approved by the director; and.
    (2) (5) No rent may be paid for bar bingo as defined in section 349.12, subdivision 3c.
(6) A lease not governed by clauses (1) to (5) must be approved by the director
before becoming effective.
    (d) (c) Amounts paid as rent under leases are all-inclusive. No other services or
expenses provided or contracted by the lessor may be paid by the organization, including,
but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn
services, electricity, heat, security, security monitoring, storage, and other utilities or
services, and, in the case of bar operations, cash shortages, unless approved by the
director. The lessor shall be responsible for the cost of any communications network or
service required to conduct electronic pull-tab games or electronic bingo games. Any
other expenditure made by an organization that is related to a leased premises must be
approved by the director. For bar operations, the lessor is responsible for cash shortages.
An organization may not provide any compensation or thing of value to a lessor or the
lessor's employees from any fund source other than its gambling account. Rent payments
may not be made to an individual.
    (e) (d) Notwithstanding paragraph (b), an organization may pay a lessor for food
or beverages or meeting room rental if the charge made is comparable to similar charges
made to other individuals or groups.
    (f) No entity other than the (e) A licensed organization may not conduct any activity
within a booth operation on behalf of the lessor on a leased premises.

    Sec. 54. Minnesota Statutes 2010, section 349.19, subdivision 2, is amended to read:
    Subd. 2. Accounts. (a) Gross receipts from lawful gambling by each organization
must be segregated from all other revenues of the conducting organization and placed in a
separate gambling bank account.
(b) All expenditures for allowable expenses, taxes, and lawful purposes must be
made from the separate account except (1) in the case of expenditures previously approved
by the organization's membership for emergencies as defined by board rule, (2) as provided
in subdivision 2a, or (3) when restricted to one electronic fund transaction for the payment
of taxes for the organization as a whole, the organization may transfer the amount of taxes
related to the conduct of gambling to the general account at the time when due and payable.
(c) The name and address of the bank, the account number for the separate account,
and the names of organization members authorized as signatories on the separate account
must be provided to the board when the application is submitted. Changes in the
information must be submitted to the board at least ten days before the change is made.
(d) Except for gambling receipts from electronic pull-tab games and linked
electronic bingo games, gambling receipts must be deposited into the gambling bank
account within four business days of completion of the bingo occasion, deal, or game from
which they are received.
(1) A deal of paper pull-tabs is considered complete when either the last pull-tab of
the deal is sold or the organization does not continue the play of the deal during the next
scheduled period of time in which the organization will conduct pull-tabs.
(2) A tipboard game is considered complete when the seal on the game flare is
uncovered or the organization does not continue the play of the deal during the next
scheduled period of time in which the organization will conduct tipboards.
(e) Gambling receipts from all electronic pull-tab games and all linked electronic
bingo games must be recorded on a daily basis and deposited into the gambling bank
account within two business days.
(e) (f) Deposit records must be sufficient to allow determination of deposits made
from each bingo occasion, deal, or game at each permitted premises.
(f) (g) The person who accounts for gambling gross receipts and profits may not be
the same person who accounts for other revenues of the organization.

    Sec. 55. Minnesota Statutes 2010, section 349.19, subdivision 3, is amended to read:
    Subd. 3. Expenditures. (a) All expenditures of gross profits from lawful gambling
must be itemized as to payee, purpose, amount, and date of payment.
(b) Each licensed organization must report monthly to the board on a form in an
electronic format prescribed by the board each expenditure or contribution of net profits
from lawful gambling. The reports must provide for each expenditure or contribution:
(1) the name of the recipient of the expenditure or contribution;
(2) the date the expenditure or contribution was approved by the organization;
(3) the date, amount, and check number or electronic transfer confirmation number
of the expenditure or contribution;
(4) a brief description of how the expenditure or contribution meets one or more of
the purposes in section 349.12, subdivision 25; and
(5) in the case of expenditures authorized under section 349.12, subdivision 25,
paragraph (a), clause (7), whether the expenditure is for a facility or activity that primarily
benefits male or female participants.
(c) Authorization of the expenditures must be recorded in the monthly meeting
minutes of the licensed organization.
(d) Checks or authorizations for electronic fund transfers for expenditures of gross
profits must be signed by at least two persons authorized by board rules to sign the
checks or authorizations.
(e) Expenditures of gross profits from lawful gambling for local, state, and federal
taxes as identified in section 349.12, subdivision 25, paragraph (a), clause (8), may be
transferred electronically from the organization's gambling account directly to bank
accounts identified by local, state, or federal agencies if the organization's gambling
account monthly bank statement specifically identifies the payee by name, the amount
transferred, and the date of the transaction.
(f) Expenditures of gross profits from lawful gambling for payments for lawful
purpose expenditures and allowable expenses may be transferred electronically from the
organization's gambling account directly to bank accounts identified by the vendor if the
organization's gambling account monthly bank statement specifically identifies the payee
by name, the amount transferred, the account number of the account into which the funds
were transferred, and the date of the transaction.
(g) Expenditures of gross profits from lawful gambling for payroll compensation
to an employee's account and for the payment of local, state, and federal withholding
taxes may be transferred electronically to and from the account of a payroll processing
firm provided that the firm:
(1) is currently registered with and meets the criteria of the Department of Revenue
as a third-party bulk filer under section 290.92, subdivision 30;
(2) is able to provide proof of a third-party audit and an annual report and statement
of financial condition;
(3) is able to provide evidence of a fidelity bond; and
(4) can provide proof of having been in business as a third-party bulk filer for the
most recent three years.
(h) Electronic payments of taxes, lawful purpose expenditures, and allowable
expenses are permitted only if they have been authorized by the membership, the
organization maintains supporting documentation, and the expenditures can be verified.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 56. Minnesota Statutes 2010, section 349.19, subdivision 5, is amended to read:
    Subd. 5. Reports. (a) A licensed organization must report monthly to the
Department of Revenue board in an electronic format prescribed by the board and to its
membership monthly, or quarterly in the case of a licensed organization which does not
report more than $1,000 in gross receipts from lawful gambling in any calendar quarter,
on its gross receipts, expenses, profits, and expenditure of profits from lawful gambling
for each permitted premises. The organization must account for and report on each form
of lawful gambling conducted. The report organization must include a reconciliation of
the organization's profit carryover with its cash balance on hand. If the organization
conducts both bingo and other forms of lawful gambling, the figures for both must be
reported separately.
(b) The organization must report annually to its membership and annually file with
the board a financial summary report in a format prescribed by the board that identifies the
organization's receipts and use of lawful gambling proceeds, including: monthly to the
commissioner of revenue as required under section 297E.06.
(1) gross receipts;
(2) prizes paid;
(3) allowable expenses;
(4) lawful purpose expenditures, including annual totals for types of charitable
contributions and all taxes and fees as per section 349.12, subdivision 25, paragraph
(a), clauses (8) and (18);
(5) the percentage of annual gross profits used for charitable contributions; and
(6) the percentage of annual gross profits used for all taxes and fees as per section
349.12, subdivision 25, paragraph (a), clauses (8) and (18).
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 57. Minnesota Statutes 2010, section 349.19, subdivision 10, is amended to read:
    Subd. 10. Pull-tab records. (a) The board shall by rule require a licensed
organization to require each winner of a paper pull-tab prize of $50 or more to present
identification in the form of a driver's license, Minnesota identification card, or other
identification the board deems sufficient to allow the identification and tracking of the
winner. The rule must require the organization to retain winning paper pull-tabs of $50 or
more, and the identification of the winner of the pull-tab, for 3-1/2 years.
    (b) An organization must maintain separate cash banks for each deal of paper
pull-tabs unless (1) the licensed organization uses a pull-tab dispensing device, or (2) the
organization uses a cash register, of a type approved by the board, which records all
sales of paper pull-tabs by separate deals.
    (c) The board shall:
    (1) by rule adopt minimum technical standards for cash registers that may be used
by organizations, and shall approve for use by organizations any cash register that meets
the standards; and
    (2) before allowing an organization to use a cash register that commingles receipts
from several different paper pull-tab games in play, adopt rules that define how cash
registers may be used and that establish a procedure for organizations to reconcile all
pull-tab games in play at the end of each month.

    Sec. 58. Minnesota Statutes 2010, section 349.211, subdivision 1a, is amended to read:
    Subd. 1a. Linked bingo prizes. Prizes for a linked bingo game shall be limited
as follows:
(1) no organization may contribute more than $300 per linked bingo game to a
linked bingo prize pool for linked bingo games played without electronic bingo devices,
an organization may not contribute to a linked bingo game prize pool more than $300
per linked bingo game per site;
(2) for linked bingo games played exclusively with electronic bingo devices, an
organization may not contribute more than 85 percent of the gross receipts per permitted
premises to a linked bingo game prize pool;
(2) (3) no organization may award more than $200 for a linked bingo game
consolation prize. For purposes of this subdivision, a linked bingo game consolation
prize is a prize awarded by an organization after a prize from the linked bingo prize pool
has been won; and
    (3) (4) for a progressive linked bingo game, if no player declares a valid bingo
within the for a progressive prize or prizes based on a predetermined amount of bingo
numbers called and posted win determination, a portion of the prize is gross receipts
may be carried over to another occasion game until the accumulated progressive prize
is won. The portion of the prize that is not carried over must be awarded to the first
player or players who declares a valid bingo as additional numbers are called. If a valid
bingo is declared within the predetermined amount of bingo numbers called, the entire
prize pool for that game is awarded to the winner. The annual limit for progressive bingo
game prizes contained in subdivision 2 must be reduced by the amount an organization
contributes to progressive linked bingo games during the same calendar year.; and
(5) for linked bingo games played exclusively with electronic bingo devices, linked
bingo prizes in excess of $599 shall be paid by the linked bingo game provider to the
player within three business days. Winners of linked bingo prizes in excess of $599 will
be given a receipt or claim voucher as proof of a win.

    Sec. 59. Minnesota Statutes 2010, section 349.211, subdivision 2c, is amended to read:
    Subd. 2c. Tipboard prizes. (a) The maximum prize which may be awarded for
a tipboard ticket is $599 for $2 and under tipboard tickets, $899 for $3 tipboard tickets,
$1,199 for $4 tipboard tickets, and $1,499 for $5 tipboard tickets, not including any
cumulative or carryover prizes. Cumulative or carryover prizes in tipboard games shall
not exceed $2,500. An organization may not sell any tipboard ticket for more than $5.
(b) For sports-themed tipboards, the total prize payout may not exceed the amount in
section 349.2113, and each chance or ticket may not be sold for more than $10.

    Sec. 60. APPROPRIATION.
$880,000 in fiscal year 2013 is appropriated from the lawful gambling regulation
account in the special revenue fund to the Gambling Control Board for operating expenses
related to the regulatory oversight of lawful gambling for electronic pull-tabs and
electronic linked bingo.

    Sec. 61. REPEALER.
Minnesota Statutes 2010, section 297E.02, subdivision 4, is repealed.
EFFECTIVE DATE.This section is effective for games sold after July 1, 2012.

    Sec. 62. EFFECTIVE DATE.
Unless otherwise specifically provided, this act is effective the day following final
enactment.