S.F. No. 508, as introduced - 86th Legislative Session (2009-2010) Posted on Feb 05, 2009
1.1A bill for an act1.2relating to State Lottery; authorizing director of the State Lottery to establish
1.3video lottery terminals and dedicating certain revenue for education funding;
1.4providing powers and duties to director of the State Lottery; modifying certain
1.5lawful gambling taxes; making clarifying, conforming, and technical changes to
1.6State Lottery provisions;amending Minnesota Statutes 2008, sections 297A.94;
1.7297E.02, subdivision 1; 299L.02, subdivision 1; 299L.07, subdivisions 2, 2a;
1.8340A.410, subdivision 5; 349.15, subdivision 1; 349A.01, subdivisions 10, 11,
1.912, by adding subdivisions; 349A.04; 349A.06, subdivisions 1, 5, 8, 10, by
1.10adding subdivisions; 349A.08, subdivisions 1, 5, 8; 349A.09, subdivision 1;
1.11349A.10, subdivisions 2, 3, 4, 6; 349A.11, subdivision 1; 349A.12, subdivisions
1.121, 2; 349A.13; 541.20; 541.21; 609.651, subdivision 1; 609.75, subdivisions 3,
1.134; 609.761, subdivision 2; proposing coding for new law in Minnesota Statutes,
1.14chapters 124D; 127A; 135A; 136A; 297A; 349A; repealing Minnesota Statutes
1.152008, sections 297E.01, subdivision 7; 297E.02, subdivisions 4, 6, 7.
1.16BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.18VIDEO LOTTERY TERMINALS
1.19 Section 1. [297A.652] LOTTERY GAMING MACHINES; IN-LIEU TAX.
1.20 Net terminal income from the operation of video lottery terminals authorized under
1.21section 349A.071 is exempt from the tax imposed under section 297A.62. The State
1.22Lottery must on or before the 20th day of each month transmit to the commissioner an
1.23amount equal to the net terminal income from the operation of video lottery terminals
1.24as defined in section 349A.01, for the previous month multiplied by 28 percent. The
1.25commissioner shall deposit the money transmitted under this section in the state treasury
1.26to be credited as provided in section 297A.94.
2.1 Sec. 2. Minnesota Statutes 2008, section 297A.94, is amended to read:
2.2297A.94 DEPOSIT OF REVENUES.
2.3(a) Except as provided in this section, the commissioner shall deposit the revenues,
2.4including interest and penalties, derived from the taxes imposed by this chapter in the state
2.5treasury and credit them to the general fund.
2.6(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
2.7account in the special revenue fund if:
2.8(1) the taxes are derived from sales and use of property and services purchased for
2.9the construction and operation of an agricultural resource project; and
2.10(2) the purchase was made on or after the date on which a conditional commitment
2.11was made for a loan guaranty for the project under section
2.12The commissioner of finance shall certify to the commissioner the date on which the
2.13project received the conditional commitment. The amount deposited in the loan guaranty
2.14account must be reduced by any refunds and by the costs incurred by the Department of
2.15Revenue to administer and enforce the assessment and collection of the taxes.
2.16(c) The commissioner shall deposit the revenues, including interest and penalties,
2.17derived from the taxes imposed on sales and purchases included in section
2.20(1) first to the general obligation special tax bond debt service account in each fiscal
2.21year the amount required by section
2.22(2) after the requirements of clause (1) have been met, the balance to the general
2.24(d) The commissioner shall deposit the revenues, including interest and penalties,
2.25collected under section
2.26general fund. By July 15 of each year the commissioner shall transfer to the highway user
2.27tax distribution fund an amount equal to the excess fees collected under section
2.29(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
2.30for fiscal year 2004 and thereafter,
2.31penalties, transmitted to the commissioner under section
2.32the commissioner in the state treasury as follows:
2.33(1) 50 percent of the receipts must be deposited in the heritage enhancement account
2.34in the game and fish fund, and may be spent only on activities that improve, enhance, or
2.35protect fish and wildlife resources, including conservation, restoration, and enhancement
2.36of 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 as follows:
3.12(1) 33 percent must be deposited in the school lottery fund under section 127A.36;
3.13(2) 33 percent must be deposited into an early childhood family education lottery
3.14fund under section 124D.137;
3.15(3) 33 percent must be deposited in the higher education lottery fund under section
3.17(4) remainder to the general fund.
3.19used as a substitute for traditional sources of funding for the purposes specified, but the
3.20dedicated revenue shall supplement traditional sources of funding for those purposes. Land
3.21acquired with money deposited in the game and fish fund under paragraph (e) must be open
3.22to public hunting and fishing during the open season, except that in aquatic management
3.23areas or on lands where angling easements have been acquired, fishing may be prohibited
3.24during certain times of the year and hunting may be prohibited. At least 87 percent of the
3.25money deposited in the game and fish fund for improvement, enhancement, or protection
3.26of fish and wildlife resources under paragraph (e) must be allocated for field operations.
3.27 Sec. 3. Minnesota Statutes 2008, section 297E.02, subdivision 1, is amended to read:
3.28 Subdivision 1. Imposition. A tax is imposed on all lawful gambling
3.31as defined in section 297E.01, subdivision 8, less prizes actually paid. The tax imposed
3.32by this subdivision is in lieu of the tax imposed by section 297A.62 and all local taxes
3.33and license fees except a fee authorized under section 349.16, subdivision 8, or a tax
3.34authorized under subdivision 5.
4.1 The tax imposed under this subdivision is payable by the organization or party
4.2conducting, directly or indirectly, the gambling.
4.3EFFECTIVE DATE.This section is effective July 1, 2009.
4.4 Sec. 4. Minnesota Statutes 2008, section 299L.02, subdivision 1, is amended to read:
4.5 Subdivision 1. Lottery. (a) The director shall when required under chapter 349A or
4.6when requested by the director of the lottery conduct background checks on employees of
4.7the State Lottery, lottery retailers, and bidders of lottery procurement contracts.
4.8 (b) The director shall, when so requested by the director of the State Lottery or when
4.9the director believes it to be reasonable and necessary, conduct investigations of lottery
4.10retailers, applicants for lottery retailer contracts, suppliers of goods or services to the State
4.11Lottery, and persons bidding on contracts for goods or services with the State Lottery.
4.12 (c) The director shall conduct an annual security audit of the State Lottery, or arrange
4.13for such an audit by an outside agency or person, firm, or corporation. The director shall
4.14report to the director of the lottery on the results of the audit.
4.15 (d) The director shall deposit in a separate account in the state treasury all money
4.16received from the director of the State Lottery for charges for investigations and
4.17background checks relating to the owning and operating of video lottery terminals under
4.18chapter 349A. Money in the account is appropriated to the director for the purpose of
4.19carrying out the director's powers and duties under this subdivision.
4.20 Sec. 5. Minnesota Statutes 2008, section 299L.07, subdivision 2, is amended to read:
4.21 Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
4.22(1) may be sold by a person who is not licensed under this section, if the person (i) is
4.23not engaged in the trade or business of selling gambling devices, and (ii) does not sell
4.24more than one gambling device in any calendar year;
4.25(2) may be sold by the governing body of a federally recognized Indian tribe
4.26described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
4.27section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
4.28a distributor licensed under this section, and (iii) the licensed distributor notifies the
4.29commissioner of the purchase, in the same manner as is required when the licensed
4.30distributor ships a gambling device into Minnesota;
4.31(3) may be possessed by a person not licensed under this section if the person holds
4.32a permit issued under section
4.33(4) may be possessed by a state agency, with the written authorization of the director,
4.34for display or evaluation purposes only and not for the conduct of gambling; and
5.1(5) may be possessed by the State Lottery as authorized under chapter 349A.
5.2 Sec. 6. Minnesota Statutes 2008, section 299L.07, subdivision 2a, is amended to read:
5.3 Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
5.4offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
5.5licensed under this section or to the State Lottery as authorized under chapter 349A.
5.6(b) A distributor licensed under this section may sell, offer to sell, market, rent,
5.7lease, or otherwise provide, in whole or in part, a gambling device only to:
5.8(1) the governing body of a federally recognized Indian tribe that is authorized
5.9to operate the gambling device under a tribal state compact under the Indian Gaming
5.10Regulatory Act, Public Law 100-497, and future amendments to it;
5.11(2) a person for use in the person's dwelling for display or amusement purposes in a
5.12manner that does not afford players an opportunity to obtain anything of value;
5.13(3) another distributor licensed under this section;
5.14(4) a person in another state who is authorized under the laws of that state to possess
5.15the gambling device; or
5.16(5) the State Lottery as authorized under chapter 349A.
5.17 Sec. 7. Minnesota Statutes 2008, section 340A.410, subdivision 5, is amended to read:
5.18 Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
5.19subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
5.20or operate, or permit the keeping, possession, or operation on the licensed premises of dice
5.21or any gambling device as defined in section
5.22(b) Gambling equipment may be kept or operated and raffles conducted on licensed
5.23premises and adjoining rooms when the use of the gambling equipment is authorized by
5.24(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
5.25Act, Public Law 100-497, or (3) a tribal-state compact authorized under section
5.26(c) Lottery tickets may be purchased and sold within the licensed premises as
5.27authorized by the director of the lottery under chapter 349A.
5.28(d) Dice may be kept and used on licensed premises and adjoining rooms as
5.29authorized by section
5.30(e) Gambling devices may be operated and gambling permitted as authorized by
5.32 Sec. 8. Minnesota Statutes 2008, section 349.15, subdivision 1, is amended to read:
6.1 Subdivision 1. Expenditure restrictions. (a) Gross profits from lawful gambling
6.2may be expended only for lawful purposes or allowable expenses as authorized by the
6.3membership of the conducting organization at a monthly meeting of the organization's
6.6gross profit from bingo, and no more than 60 percent of the gross profit from other forms of
6.7lawful gambling, may be expended biennially during the term of the license for allowable
6.8expenses related to lawful gambling, except that for the period of July 1, 2008, to June 30,
6.92009, no more than 75 percent of the gross profit from bingo, and no more than 65 percent
6.10of the gross profit from other forms of lawful gambling, may be expended for allowable
6.11expenses related to lawful gambling. For licenses issued after June 30, 2006, compliance
6.12with this subdivision will be measured on a biennial basis that is concurrent with the term
6.13of the license. Compliance with this subdivision is a condition for the renewal of any
6.14license beginning on July 1, 2008. For licenses renewed with an effective date between
6.15July 1, 2006, and June 30, 2008, an organization shall carry forward an amount equal to
6.1615 percent of any positive allowable expense carryover amount. This balance must be
6.17used to offset any future negative expense balance at the time of license renewal.
6.18(c) Money received by an organization from net video lottery terminal income under
6.19section 349A.06, subdivision 6a, may be expended only for lawful purposes.
6.20 Sec. 9. Minnesota Statutes 2008, section 349A.01, is amended by adding a subdivision
6.22 Subd. 9a. Lottery game. "Lottery game" means any game operated by the lottery
6.23where the prize is determined primarily by chance.
6.24 Sec. 10. Minnesota Statutes 2008, section 349A.01, subdivision 10, is amended to read:
6.25 Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
6.26contract to provide lottery products, computer hardware and software used to monitor sales
6.27of lottery tickets and sales on a video lottery terminal,
6.28terminals, and maintenance of video lottery terminals.
6.29does not include a contract to provide an annuity or prize payment agreement or materials,
6.30supplies, equipment, or services common to the ordinary operation of a state agency.
6.31 Sec. 11. Minnesota Statutes 2008, section 349A.01, subdivision 11, is amended to read:
6.32 Subd. 11. Lottery retailer. "Lottery retailer" means a person with whom the
6.33director has contracted to sell lottery tickets to the public. A lottery retailer includes a
7.1person with whom the director has contracted to place a video lottery terminal within its
7.2premises where video lottery terminal plays are sold.
7.3 Sec. 12. Minnesota Statutes 2008, section 349A.01, subdivision 12, is amended to read:
7.4 Subd. 12. Lottery ticket or ticket. "Lottery ticket" or "ticket" means any tangible
7.5evidence issued by the lottery to prove participation in a lottery game other than a video
7.7 Sec. 13. Minnesota Statutes 2008, section 349A.01, is amended by adding a
7.8subdivision to read:
7.9 Subd. 14. Net terminal income. "Net terminal income" means the sum of all
7.10money spent for video lottery terminal plays less the value of video lottery credit receipts.
7.11 Sec. 14. Minnesota Statutes 2008, section 349A.01, is amended by adding a
7.12subdivision to read:
7.13 Subd. 15. Video lottery credit. "Video lottery credit" means the basic unit of
7.14play for a video lottery terminal.
7.15 Sec. 15. Minnesota Statutes 2008, section 349A.01, is amended by adding a
7.16subdivision to read:
7.17 Subd. 16. Video lottery credit receipt. "Video lottery credit receipt" means a
7.18receipt generated by a video lottery terminal that provides evidence of cash payment due a
7.19player from play on a video lottery terminal.
7.20 Sec. 16. Minnesota Statutes 2008, section 349A.01, is amended by adding a
7.21subdivision to read:
7.22 Subd. 17. Video lottery game. "Video lottery game" means an electronically
7.23simulated game authorized by the director that is displayed and played on a video lottery
7.24terminal for consideration and with prizes awarded for designated results. Video lottery
7.25game includes video poker games, keno, and video pull-tabs.
7.26 Sec. 17. Minnesota Statutes 2008, section 349A.01, is amended by adding a
7.27subdivision to read:
7.28 Subd. 18. Video lottery terminal. "Video lottery terminal" means any machine,
7.29system, or device which upon payment of consideration permits the play of a video
8.1 Sec. 18. Minnesota Statutes 2008, section 349A.01, is amended by adding a
8.2subdivision to read:
8.3 Subd. 19. Video lottery terminal play. "Video lottery terminal play" means an
8.4electronic record that proves participation in a video lottery game.
8.5 Sec. 19. Minnesota Statutes 2008, section 349A.01, is amended by adding a
8.6subdivision to read:
8.7 Subd. 20. Win percentage. "Win percentage" means the portion of the money
8.8wagered by players on a video lottery terminal that is available for the payment of prizes
8.9to winning players.
8.10 Sec. 20. Minnesota Statutes 2008, section 349A.04, is amended to read:
8.11349A.04 LOTTERY GAME PROCEDURES.
8.12The director may adopt game procedures governing the following elements of the
8.14(1) lottery games;
8.15(2) ticket prices;
8.16(3) number and size of prizes;
8.17(4) methods of selecting winning tickets;
8.18(5) frequency and method of drawings;
8.19(6) video lottery terminals; and
8.20(7) cost of video lottery plays.
8.21The adoption of lottery game procedures is not subject to chapter 14.
8.22 Sec. 21. Minnesota Statutes 2008, section 349A.06, subdivision 1, is amended to read:
8.23 Subdivision 1. Contracts. The director shall sell tickets and operate video lottery
8.24terminals for the lottery through lottery retailers with whom the director contracts.
8.25Contracts under this section are not subject to the provisions of sections 16C.03, 16C.05,
8.2616C.06, 16C.08, 16C.09, and 16C.10, and are valid for a period of one year. The director
8.27may permit a retailer to sell tickets and operate video lottery terminals at more than one
8.28business location under a contract entered into under this section.
8.29 Sec. 22. Minnesota Statutes 2008, section 349A.06, subdivision 5, is amended to read:
8.30 Subd. 5. Restrictions on lottery retailers. (a) A lottery retailer may sell lottery
8.31tickets or have a video lottery terminal placed only on the premises described in the
9.1 (b) A lottery retailer must prominently display a certificate issued by the director
9.2on the premises where lottery tickets will be sold or where video lottery terminals are
9.4 (c) A lottery retailer must keep a complete set of books of account, correspondence,
9.5and all other records necessary to show fully the retailer's lottery transactions, and make
9.6them available for inspection by employees of the lottery at all times during business
9.7hours. The director may require a lottery retailer to furnish information as the director
9.8deems necessary to carry out the purposes of this chapter, and may require an audit to be
9.9made of the books of account and records. The director may select an auditor to perform
9.10the audit and may require the retailer to pay the cost of the audit. The auditor has the same
9.11right of access to the books of account, correspondence, and other records as is given to
9.12employees of the lottery.
9.13 (d) A contract issued under this section may not be transferred or assigned.
9.14 (e) The director shall require that lottery tickets may be sold by retailers only for
9.16 (f) A lottery retailer must prominently post at the point of sale of lottery tickets
9.17and the area where video lottery terminals are located, in a manner approved by the
9.18commissioner of human services, the toll-free telephone number established by the
9.19commissioner of human services in connection with the compulsive gambling program
9.20established under section 245.98.
9.21 Sec. 23. Minnesota Statutes 2008, section 349A.06, is amended by adding a
9.22subdivision to read:
9.23 Subd. 5a. Restrictions on lottery retailers; video lottery terminals. (a) The
9.24director may only enter into a lottery retailer contract for games operated by a video lottery
9.25terminal with a retailer that has a license to sell alcoholic beverages for consumption on
9.26the premises where sold. This does not include a retailer who has only a temporary on-sale
9.27license or a retailer of 3.2 percent malt liquor whose total gross receipts from the premises
9.28were less than 50 percent attributable to the sale of 3.2 percent malt liquor.
9.29 (b) The director may not contract with a retailer for games operated by a video
9.30lottery terminal unless the retailer has an organization licensed under chapter 349
9.31authorized and conducting lawful gambling on the premises.
9.32 (c) A lottery retailer authorized to sell games operated by a video lottery terminal
9.33may not cancel or refuse to renew a lease with an organization licensed under chapter 349
9.34authorized and conducting lawful gambling on its premises for three years following
10.1the effective date of this act, unless the organization has failed to comply with its lease
10.2with the retailer.
10.3 (d) A lottery retailer may have up to five video lottery terminals on the retailer's
10.4premises, as determined by the director.
10.5 (e) A lottery retailer that is authorized to operate a video lottery terminal may not
10.6make reference to the establishment being a "casino," or use the word "casino" in its name
10.7or in any of its advertisements.
10.8 (f) The director, or any employee of the director, may inspect any video lottery
10.9terminal at any time during the hours when alcoholic beverages may be sold at on-sale
10.10under section 340A.504, subdivisions 1, 2, and 3, without notice, to ensure compliance
10.11with this chapter and any rules adopted by the director.
10.12 Sec. 24. Minnesota Statutes 2008, section 349A.06, is amended by adding a
10.13subdivision to read:
10.14 Subd. 6a. Retention by retailers; video lottery terminals. A lottery retailer who
10.15has a contract for placement of video lottery terminals may retain 31 percent of the net
10.16terminal income from the terminals located within its premises as commission. The lottery
10.17retailer receiving commission under this subdivision shall transmit to an organization
10.18licensed under chapter 349, and conducting lawful gambling on the premises of the
10.19retailer, 29 percent of the lottery retailer's commission received under this subdivision.
10.20If more than one organization conducts lawful gambling on the premises, the payment
10.21must be reasonably allocated between the organizations, pro rata based on their respective
10.23 Sec. 25. Minnesota Statutes 2008, section 349A.06, subdivision 8, is amended to read:
10.24 Subd. 8. Proceeds of sales. All proceeds from the sale of lottery tickets or proceeds
10.25from the sale of video lottery terminal plays received by a lottery retailer constitute a trust
10.26fund until paid to the director. The lottery retailer is personally liable for all proceeds.
10.27 Sec. 26. Minnesota Statutes 2008, section 349A.06, subdivision 10, is amended to read:
10.28 Subd. 10. Local licenses. No political subdivision may require a local license to
10.29operate as a lottery retailer, restrict or regulate the placement of a video lottery terminal,
10.30or impose a tax or fee on the business of operating as a lottery retailer.
10.31 Sec. 27. [349A.071] VIDEO LOTTERY TERMINALS.
11.1 Subdivision 1. Operation. (a) All video lottery terminals must be operated and
11.2controlled by the director.
11.3(b) Video lottery terminals must be owned or leased by the director.
11.4(c) Video lottery terminals must be maintained by the lottery, or by a vendor that is
11.5under the control and direction of the director.
11.6(d) The director must have a central communications system that monitors activities
11.7and provides auditing program information on each video lottery terminal.
11.8(e) The director must approve the general security arrangements associated with and
11.9relating to the operation of the video lottery terminal.
11.10(f) Video lottery terminals must maintain on nonresettable meters, a permanent
11.11record, capable of being printed out, of all transactions by the terminal and all entries
11.12into the terminal.
11.13(g) The director may implement other controls as are deemed necessary to ensure
11.14and maintain the integrity of video lottery terminals operated under this section.
11.15 Subd. 2. Testing and examination of machines. The director shall examine
11.16prototypes of video lottery terminals and require that the manufacturer of the terminal
11.17pay the cost of the examination. The director may contract for the examination of
11.18video lottery terminals. The director may require working models of a video lottery
11.19terminal transported to the locations the director designates for testing, examination,
11.20and analysis. The manufacturer shall pay all costs of any testing, examination, analysis,
11.21and transportation of the terminal model.
11.22 Subd. 3. Deactivation of terminal. The director may deactivate a video lottery
11.23terminal without notice if the lottery retailer has violated any provision of this chapter,
11.24rule, or provision of its contract with the director.
11.25 Subd. 4. Airport. The director shall enter into a lease with the Metropolitan Airports
11.26Commission for placement of video lottery terminals within the Lindbergh and Humphrey
11.27terminals of the Minneapolis-St. Paul International Airport at locations mutually agreed
11.28to by the director and the commission. The Metropolitan Airports Commission shall not
11.29unreasonably refuse to lease space within the terminals for this purpose. Video lottery
11.30terminals operated at the airport under this subdivision are exempt from the restrictions
11.31and requirements of section 349A.06, subdivisions 5a and 6.
11.32 Sec. 28. Minnesota Statutes 2008, section 349A.08, subdivision 1, is amended to read:
11.33 Subdivision 1. Agreement by players. A person who buys a lottery ticket or plays a
11.34video lottery game agrees to be bound by the rules and game procedures applicable to
11.35that particular lottery game
12.1that the determination of whether a ticket or video lottery credit receipt is
12.3procedures established by the director for that game, and any confidential or public
12.4validation tests established by the director for that game.
12.5 Sec. 29. Minnesota Statutes 2008, section 349A.08, subdivision 5, is amended to read:
12.6 Subd. 5. Payment; unclaimed prizes. (a) Except as provided in this subdivision, a
12.7prize in the State Lottery must be claimed by the winner within one year of the date of
12.8the drawing at which the prize was awarded or the last day sales were authorized for a
12.9game where a prize was determined in a manner other than by means of a drawing. If
12.10a valid claim is not made for a prize payable directly by the lottery by the end of this
12.11period, the prize money is considered unclaimed and the winner of the prize shall have no
12.12further claim to the prize.
12.13 (b) A video lottery credit receipt from a video lottery terminal must be presented
12.14for payment within 60 days of the date the video lottery credit receipt was printed. If a
12.15valid claim for a video lottery credit receipt is not made by the end of this period, the
12.16video lottery credit receipt is considered unclaimed and the player shall have no further
12.17claim to the amount due from the video lottery credit receipt.
12.18 (c) A prize won by a person who purchased the winning ticket or played a video
12.19lottery game in violation of section 349A.12, subdivision 1, or won by a person ineligible
12.20to be awarded a prize under subdivision 7 must be treated as an unclaimed prize under this
12.21section. The director must transfer all unclaimed prize money at the end of each fiscal
12.22year from the lottery cash flow account to the general fund.
12.23 Sec. 30. Minnesota Statutes 2008, section 349A.08, subdivision 8, is amended to read:
12.24 Subd. 8. Withholding of delinquent state taxes or other debts. The director
12.25shall report the name, address, and Social Security number of each winner of a lottery
12.26prize of $600 or more, or a video lottery prize of $1,200 or more, to the Department of
12.27Revenue to determine whether the person who has won the prize is delinquent in payment
12.28of state taxes or owes a debt as defined in section 270A.03, subdivision 5. If the person
12.29is delinquent in payment of state taxes or owes a debt as defined in section 270A.03,
12.30subdivision 5, the director shall withhold the delinquent amount from the person's prize
12.31for remittance to the Department of Revenue for payment of the delinquent taxes or
12.32distribution to a claimant agency in accordance with chapter 270A. Section 270A.10
12.33applies to the priority of claims.
13.1 Sec. 31. Minnesota Statutes 2008, section 349A.09, subdivision 1, is amended to read:
13.2 Subdivision 1. Odds; required information. (a) The director shall include on each
13.3brochure, pamphlet, booklet, or other similar material the director publishes to promote
13.4or explain any lottery game, a prominent and clear statement of the approximate odds of
13.5winning each prize offered in that lottery game.
13.6 (b) Except for the operation of a video lottery terminal, each lottery retailer must
13.7post prominently at or near the point of ticket sale a notice or notices printed and provided
13.8by the director of the approximate odds of winning each prize in each game for which
13.9the lottery retailer sells tickets.
13.10 (c) The approximate odds of winning a prize from a video lottery terminal must be
13.11displayed on the face or screen of the video lottery terminal.
13.12 Sec. 32. Minnesota Statutes 2008, section 349A.10, subdivision 2, is amended to read:
13.13 Subd. 2.
13.14fund outside the state treasury. The fund consists of all money deposited in it under this
13.15subdivision and all interest earned thereon.
13.16(b) The director shall deposit in the lottery prize fund, from gross receipts from the
13.17sale of lottery tickets, an amount sufficient to pay lottery prizes from the lottery prize
13.18fund according to the following provisions:
13.19(1) for games which require online terminal connections, the prizes paid in any fiscal
13.20year must be at least 45 percent of gross receipts from those games in that fiscal year;
13.21(2) for games which do not require online terminal connections, the prizes paid in any
13.22fiscal year must be at least
13.26(c) For lottery games played on a video lottery terminal, the win percentage in any
13.27fiscal year will be the win percentage established by the game procedures adopted for the
13.28game, but shall be at least 80 percent but not more than 95 percent.
13.29 Sec. 33. Minnesota Statutes 2008, section 349A.10, subdivision 3, is amended to read:
13.30 Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
13.31account in the lottery fund. The director shall pay all costs of operating the lottery,
13.32including payroll costs or amounts transferred to the state treasury for payroll costs, but
13.33not including lottery prizes, from the lottery operating account. The director shall credit to
13.34the lottery operations account amounts sufficient to pay the operating costs of the lottery.
14.1(b) Except as provided in paragraph (e), the director may not credit in any fiscal year
14.3percent of gross revenue, exclusive of net terminal income, and 12 percent of net terminal
14.4income to the lottery fund in that fiscal year. In computing total amounts credited to
14.5the lottery operations account under this paragraph the director shall disregard amounts
14.6transferred to or retained by lottery retailers as sales commissions or other compensation.
14.7(c) The director of the lottery may not expend
14.8percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
14.9placement of advertising.
14.10(d) Except as the director determines, the lottery is not subject to chapter 16A
14.11relating to budgeting, payroll, and the purchase of goods and services.
14.12(e) In addition to the amounts credited to the lottery operations account under
14.13paragraph (b), the director is authorized, if necessary, to meet the current obligations of
14.14the lottery and to credit up to 25 percent of an amount equal to the average annual amount
14.15which was authorized to be credited to the lottery operations account for the previous three
14.16fiscal years but was not needed to meet the obligations of the lottery.
14.17 Sec. 34. Minnesota Statutes 2008, section 349A.10, subdivision 4, is amended to read:
14.18 Subd. 4. Deposit of receipts. (a) The director may require lottery retailers to:
14.19 (1) deposit in a separate account to the credit of the lottery fund, in banks designated
14.20by the director, all money received by the lottery retailer from the sale of lottery tickets
14.21and video lottery terminal plays, less money retained as the lottery retailer's commission
14.22and for payment of prizes;
14.23 (2) file with the director reports of the lottery retailer's receipts and transactions in
14.24ticket sales and video lottery terminal plays in a form that the director prescribes; and
14.25 (3) allow money deposited by the lottery retailer from the sale of lottery tickets and
14.26video lottery terminal plays to be transferred to the lottery through electronic fund transfer.
14.27 (b) The director may make arrangements for any person, including a financial
14.28institution, to perform functions, activities, or services in connection with the receipt and
14.29distribution of lottery revenues.
14.30 (c) A lottery retailer who fails to pay any money due to the director within the time
14.31prescribed by the director shall pay interest on the amount owed at the rate determined by
14.33 Sec. 35. Minnesota Statutes 2008, section 349A.10, subdivision 6, is amended to read:
15.1 Subd. 6. Budget; plans. The director shall prepare and submit a biennial budget
15.2plan to the commissioner of finance. The governor shall recommend the maximum
15.3amount available for the lottery in the budget the governor submits to the legislature under
15.5capital expenditures shall be determined by law. Operating expenses shall not include
15.6expenses that are a direct function of lottery sales, which include the cost of lottery prizes,
15.7amounts paid to lottery retailers as sales commissions or other compensation, amounts
15.8paid to produce and deliver scratch lottery games,
15.9to operate and maintain an online gaming system, amounts paid to an outside vendor to
15.10operate and maintain a central system for video lottery terminals, and amounts paid to
15.11acquire and maintain video lottery terminals. In addition, the director shall appear at least
15.12once each fiscal year before the senate and house of representatives committees having
15.13jurisdiction over gambling policy to present and explain the lottery's plans for future games
15.14and the related advertising and promotions and spending plans for the next fiscal year.
15.15 Sec. 36. Minnesota Statutes 2008, section 349A.11, subdivision 1, is amended to read:
15.16 Subdivision 1. Lottery ticket; retailer. The director, an employee of the lottery,
15.17a member of the immediate family of the director or employee residing in the same
15.18household may not:
15.19 (1) purchase a lottery ticket or play a game on a video lottery terminal; or
15.20 (2) have any personal pecuniary interest in any vendor holding a lottery procurement
15.21contract, or in any lottery retailer; or
15.22 (3) receive any gift, gratuity, or other thing of value, excluding food or beverage,
15.23from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in
15.24excess of $100 in any calendar year.
15.25 Sec. 37. Minnesota Statutes 2008, section 349A.12, subdivision 1, is amended to read:
15.26 Subdivision 1. Purchase by minors. A person under the age of 18 years may not
15.27buy or redeem for a prize a ticket in the state lottery and a person under the age of 21 years
15.28may not play a game or redeem a video lottery credit receipt from a video lottery terminal.
15.29 Sec. 38. Minnesota Statutes 2008, section 349A.12, subdivision 2, is amended to read:
15.30 Subd. 2. Sale to minors. A lottery retailer may not sell and a lottery retailer or other
15.31person may not furnish or redeem for a prize a ticket in the state lottery to any person
15.32under the age of 18 years, or allow a person under the age of 21 years to play a game or
15.33redeem a video lottery credit receipt from a video lottery terminal. It is an affirmative
16.1defense to a charge under this subdivision for the lottery retailer or other person to prove
16.2by a preponderance of the evidence that the lottery retailer or other person reasonably and
16.3in good faith relied upon representation of proof of age described in section 340A.503,
16.4subdivision 6, in making the sale or furnishing or redeeming the ticket or allowing the
16.5play of a video lottery game or redeem a video lottery credit receipt from a video lottery
16.7 Sec. 39. Minnesota Statutes 2008, section 349A.13, is amended to read:
16.9 Nothing in this chapter:
16.10 (1) authorizes the director to conduct a lottery game or contest the winner or winners
16.11of which are determined by the result of a sporting event other than a horse race conducted
16.12under chapter 240; or
16.17 Sec. 40. Minnesota Statutes 2008, section 541.20, is amended to read:
16.18541.20 RECOVERY OF MONEY LOST.
16.19Every person who, by playing at cards, dice, or other game, or by betting on the
16.20hands or sides of such as are gambling, shall lose to any person so playing or betting
16.21any sum of money or any goods, and pays or delivers the same, or any part thereof, to
16.22the winner, may sue for and recover such money by a civil action, before any court
16.23of competent jurisdiction. For purposes of this section, gambling shall not include
16.24pari-mutuel wagering conducted under a license issued pursuant to chapter 240, purchase
16.25or sale of tickets in the state lottery, purchase of video lottery plays as authorized under
16.26chapter 349A, or gambling authorized under chapters 349 and 349A.
16.27 Sec. 41. Minnesota Statutes 2008, section 541.21, is amended to read:
16.28541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
16.29Every note, bill, bond, mortgage, or other security or conveyance in which the whole
16.30or any part of the consideration shall be for any money or goods won by gambling or
16.31playing at cards, dice, or any other game whatever, or by betting on the sides or hands
16.32of any person gambling, or for reimbursing or repaying any money knowingly lent or
17.1advanced at the time and place of such gambling or betting, or lent and advanced for any
17.2gambling or betting to any persons so gambling or betting, shall be void and of no effect
17.3as between the parties to the same, and as to all persons except such as hold or claim
17.4under them in good faith, without notice of the illegality of the consideration of such
17.5contract or conveyance. The provisions of this section shall not apply to: (1) pari-mutuel
17.6wagering conducted under a license issued pursuant to chapter 240; (2) purchase of tickets
17.7in the state lottery or other wagering authorized under chapter 349A; (3) gaming activities
17.8conducted pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.; or (4)
17.9lawful gambling activities permitted under chapter 349.
17.10 Sec. 42. Minnesota Statutes 2008, section 609.651, subdivision 1, is amended to read:
17.11 Subdivision 1.
17.12under subdivision 4 if the person does any of the following with intent to defraud the
17.14 (1) alters or counterfeits a state lottery ticket or a video lottery credit receipt from a
17.15State Lottery video lottery terminal;
17.16 (2) knowingly presents an altered or counterfeited state lottery ticket or video lottery
17.17credit receipt from a State Lottery video lottery terminal for payment;
17.18 (3) knowingly transfers an altered or counterfeited state lottery ticket or video lottery
17.19credit receipt from a State Lottery video lottery terminal to another person;
17.20 (4) tampers with or manipulates the outcome, prize payable, or operation of a State
17.21Lottery video lottery terminal; or
17.22 (5) otherwise claims a lottery prize by means of fraud, deceit, or misrepresentation.
17.23 Sec. 43. Minnesota Statutes 2008, section 609.75, subdivision 3, is amended to read:
17.24 Subd. 3. What are not bets. The following are not bets:
17.25(1) a contract to insure, indemnify, guarantee or otherwise compensate another for a
17.26harm or loss sustained, even though the loss depends upon chance;
17.27(2) a contract for the purchase or sale at a future date of securities or other
17.29(3) offers of purses, prizes or premiums to the actual contestants in any bona fide
17.30contest for the determination of skill, speed, strength, endurance, or quality or to the bona
17.31fide owners of animals or other property entered in such a contest;
17.32(4) the game of bingo when conducted in compliance with sections
17.33(5) a private social bet not part of or incidental to organized, commercialized, or
18.1(6) the operation of equipment or the conduct of a raffle under sections
18.3exempt from licensing under section
18.4(7) pari-mutuel betting on horse racing when the betting is conducted under chapter
18.6(8) the purchase and sale of state lottery tickets and plays on a video lottery terminal
18.7under chapter 349A.
18.8 Sec. 44. Minnesota Statutes 2008, section 609.75, subdivision 4, is amended to read:
18.9 Subd. 4. Gambling device. A gambling device is a contrivance the purpose of which
18.10is that for a consideration a player is afforded an opportunity to obtain something of value,
18.11other than free plays, automatically from the machine or otherwise, the award of which
18.12is determined principally by chance, whether or not the contrivance is actually played.
18.13"Gambling device" also includes a video game of chance, as defined in subdivision 8, but
18.14does not include a video lottery terminal operated by the State Lottery under chapter 349A.
18.15 Sec. 45. Minnesota Statutes 2008, section 609.761, subdivision 2, is amended to read:
18.16 Subd. 2. State lottery. Sections 609.755 and 609.76 do not prohibit the operation
18.17of the state lottery
18.18the manufacture, possession, or operation of a video lottery terminal for the state lottery
18.19under chapter 349A.
18.20 Sec. 46. LOTTERY BUDGET; VIDEO LOTTERY TERMINALS.
18.21The director of the State Lottery shall submit a budget for the operation of video
18.22lottery terminals as authorized under Minnesota Statutes, section 349A.071, to the
18.23commissioner of finance. Notwithstanding Minnesota Statutes, section 349A.10,
18.24subdivision 6, the director of the State Lottery may expend amounts necessary to operate
18.25video lottery terminals. Amounts expended by the director of the State Lottery for the
18.26conduct of video lottery terminals in fiscal year 2010 are not subject to the maximum
18.27amount set in law for the operation of the lottery.
18.28 Sec. 47. REPEALER.
18.29Minnesota Statutes 2008, sections 297E.01, subdivision 7; and 297E.02, subdivisions
18.304, 6, and 7, are repealed.
18.31EFFECTIVE DATE.This section is effective July 1, 2009.
19.1 Sec. 48. EFFECTIVE DATE.
19.2 Except as otherwise provided, this article is effective the day following final
19.6 Section 1. [124D.137] EARLY CHILDHOOD FAMILY EDUCATION LOTTERY
19.8 Subdivision 1. Creation; purpose. An early childhood family education fund is
19.9established for the purpose of early childhood family education programs under section
19.10124D.13. The early childhood family education fund shall consist of deposits under
19.11section 297A.94, paragraph (f), and all interest earned thereon.
19.12 Subd. 2. Apportionment. The commissioner shall apportion the school lottery
19.13fund semiannually on the first Monday in March and September in each year, to districts
19.14providing early childhood family education programs. The apportionment shall be in
19.15proportion to the number of people under five years of age residing in the district, as
19.16determined under section 124D.135, subdivision 2.
19.17 Subd. 3. Copy to commissioner of finance; appropriation. The commissioner
19.18shall furnish a copy of the apportionment of the early childhood family education
19.19lottery fund to the commissioner of finance, who thereupon shall draw warrants on the
19.20state treasury, payable to the several school districts, for the amount due each district.
19.21There is hereby annually appropriated from the school lottery fund the amount of such
19.23 Sec. 2. [127A.36] SCHOOL LOTTERY FUND.
19.24 Subdivision 1. Creation; purpose. For the purpose of aid to public schools, a
19.25school lottery fund is established. The school lottery fund shall consist of deposits under
19.26section 297A.94, paragraph (f), and all interest earned thereon.
19.27 Subd. 2. Apportionment. The commissioner shall apportion the school lottery
19.28fund semiannually on the first Monday in March and September in each year, to districts
19.29whose schools have been in session at least nine months. The apportionment shall be in
19.30proportion to the number of pupils in average daily membership during the preceding
19.31year. The apportionment shall not be paid to a district for pupils for whom tuition is
19.32received by the district.
19.33 Subd. 3. Copy to commissioner of finance; appropriation. The commissioner
19.34shall furnish a copy of the apportionment of the school lottery fund to the commissioner of
20.1finance, who thereupon shall draw warrants on the state treasury, payable to the several
20.2districts, for the amount due each district. There is hereby annually appropriated from the
20.3school lottery fund the amount of such apportionments.
20.4 Sec. 3. [135A.035] HIGHER EDUCATION LOTTERY FUND.
20.5A higher education lottery fund is established in the state treasury, consisting of
20.6money deposited in the fund under section 349A.10, subdivision 5, and any interest earned
20.7thereon. Money in the fund is annually appropriated to the director of the Minnesota
20.8Office of Higher Education for the higher education lottery scholarship program under
20.10 Sec. 4. [136A.129] MINNESOTA HIGHER EDUCATION LOTTERY
20.12 Subdivision 1. Creation; purpose. The Minnesota higher education lottery
20.13scholarship program is established to provide scholarships to residents of Minnesota
20.14attending postsecondary institutions to reward students for outstanding academic
20.15achievement, help students complete their degrees, and expand educational opportunities
20.16beyond high school for students.
20.17 Subd. 2. Eligibility. An applicant is eligible to be considered for a scholarship
20.18if the applicant is:
20.19(1) a resident student;
20.20(2) a graduate of a public or nonpublic high school with a grade point average of at
20.21least 3.0 on a 4.0 scale, or has just completed the first year of study at a postsecondary
20.22institution attending full time and has achieved a grade point average of at least 3.0 on a
20.24(3) admitted to enroll, or is enrolled, full time in a public or private postsecondary
20.25education institution located in this state; and
20.26(4) not in default, as defined by the office, of any federal or state student educational
20.28 Subd. 3. Amount and use of scholarship. (a) The amount of the scholarship
20.30(1) at public postsecondary institutions, an amount equal to the cost of tuition and
20.31fees for full-time attendance for one academic year not to exceed $......., and a $300 book
20.33(2) at private postsecondary institutions, $....... for one academic year.
21.1(b) Money awarded by a scholarship under this section may be applied only to
21.2education costs. Scholarships under this section must not exceed the applicant's education
21.3costs. For purposes of this section, "education costs" means tuition, fees, and books.
21.4 Subd. 4. GED. Applicants who have a grade point average that is less than 3.0 on
21.5a 4.0 scale, but otherwise meet the eligibility requirements in subdivision 2, and who
21.6have received a GED high school equivalency diploma, are eligible to receive a onetime
21.7$500 scholarship toward education costs at a public or private postsecondary institution.
21.8Scholarships awarded under this subdivision must not be considered in determining a
21.9student's financial need as provided in section 136A.101, subdivision 5.
21.10 Subd. 5. Application; selection of recipients. Applicants shall apply for
21.11scholarships under this section on a form and in a manner prescribed by the director.
21.12The director shall establish by rule, in consultation with the Higher Education Services
21.13Council, application and award dates and procedures, criteria to be considered, and
21.14methods of selecting students to receive scholarships.
21.15 Subd. 6. Renewals. The scholarship shall be renewed yearly for up to three
21.16additional academic years if the student maintains full-time enrollment with a grade
21.17point average of at least 3.0 on a 4.0 scale and is achieving satisfactory progress toward
21.18completion of a degree.
21.19 Subd. 7. Number of awards. The number of scholarships awarded each year shall
21.20be determined by the money available in the higher education lottery fund in section
21.21135A.035. The number of new awards must be determined after subtracting the actual and
21.22projected amount necessary for renewals.
21.23 Sec. 5. EFFECTIVE DATE.
21.24This article is effective the day following final enactment.