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S.F. No. 702 - Lawful Gambling: Electronic Bingo and Pull-Tabs (Delete-Everything Amendment - SCS0702A-1)
 
Author: Senator Mike Parry
 
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
 
Date: May 4, 2011



 

            S.F. No. 702, the delete-everything amendment, changes the definitions of "electronic bingo device," "electronic bingo," "pull-tab," and "pull-tab dispensing devices;" lowers taxes on gambling receipts; adds specifications for linked bingo games and pull-tab dispensing devices; and specifies gross profit allocation for linked bingo played on an electronic bingo device.

Section 1 [Imposition] lowers the tax rate from 8.5 to 5.0 percent on gross receipts for all lawful gambling other than pull-tabs, tipboards, raffles, and paddle tickets.
 
Section 2 [Pull-tab and tipboard tax] lowers the tax rate from 1.7 to 1.0 percent of the ideal gross for pull-tab and tipboard deals.  Lowers the refundable amount for unsold pull-tabs and tipboards.
 
Section 3 [Combined receipts tax] amends tax brackets and lowers tax rates on combined receipts for lawful gambling as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current law
 
As amended by S.F. No. 702
 Combined receipts
Tax
 
Combined receipts
Tax
$0-500,000
Zero
 
$0-600,000
Zero
$500,000-700,000
1.7% of the amount over $500,000, but not over $700,000
 
$600,000-800,000
1.0% of the amount over $600,000, but not over $800,000
$700,000-$900,000
$3,400 plus 3.4% of the amount between $700,000 and $900,000
 
$800,000-$1,000,000
$2,000 plus 2.0% of the amount between $800,000 and $1,000,000
Over $900,000
$10,200 plus 5.1% of the amount over $900,000
 
Over $1,000,000
$6,000 plus 3.0% of the amount over $1,000,000
 
Section 4 [Bingo occasion] provides for play of unlimited duration on an electronic bingo device during the regular business hours of a permitted bingo premises.
 
Section 5 [Electronic bingo device] modifies the definition of "electronic bingo device" so that actions by players or a caller are not required. Allows for activation of numbers that are displayed as well as announced. Allows electronic bingo devices to be activated by coded date entry.
 
Section 6 [Linked bingo game provider] expands the definition of “linked bingo game provider” to include those who provide the means to link bingo games. Prior law limited this to those who link bingo prizes or paper sheets.  
 
Section 7 [Linked bingo game system] amends the definition of “linked bingo game system” to eliminate reference to a dial-up system.
 
Section 8 [Linked bingo prize pool] amends the definition “linked bingo prize pool” to provide carry over of prize pools from one "game" to another, instead of from one bingo “occasion” to another.
 
Section 9 [Paddle wheel] amends the definition of “paddle wheel” to allow electronic spinning in addition to manual spinning.
 
Section 10 [Pull-tab] amends the definition of “pull-tab” to include a facsimile of a pull-tab when used in conjunction with a pull-tab dispensing device.
 
Section 11 [Pull-tab dispensing device] amends the definition of “pull-tab dispensing device” to include an electronic device that displays facsimiles of paper pull-tabs. A pull-tab dispensing device is not allowed to  accept coins, currency, or tokens, but is allowed to accept a coded data entry.
 
Section 12 [Lawful gambling] amends the lawful gambling law to allow the limited use of electronic game devices.
 
Section 13 [Pull-tab sales from dispensing devices] deletes direction to the board about rules limiting the number and use of pull-tabs.  Provides specifications for the number of devices allowed on premises.  These limitations are moved to another statute in section 27 of this amendment.
 
Section 14 [Electronic bingo] eliminates the requirement for facsimiles of a bingo sheet to be printed at the point of sale.
 
 
Section 15 [Electronic game devices] authorizes the board to promulgate rules for electronic games under Minnesota Statutes, section 14.389.
 
Section 16 [Mandatory disqualifications] removes prior license revocation from the list of things that bar the board from issuing an organization license.
 
Section 17 [License revocation, suspension, denial; censure] limits the revocation of an organization license to ten years, with two exceptions:  (1) prohibitions on individuals involved in conduct, oversight, or management may be permanent; and (2) the revocation period may be extended until delinquent taxes or fines are paid.

Section 18 [Prohibited acts; licenses required] precludes distributors of gambling devices and their salespeople from also being licensed as linked bingo game providers.
 
Section 19 [License required]  allows a licensed gambling equipment manufacturer to be licensed as a linked bingo game provider.
 
Section 20 [Samples of gambling equipment] requires manufacturers of electronic devices to provide software to the board and requires the board to test software.
 
Section 21 [License application] authorizes the Gambling Control Board to issue linked bingo game provider licenses to licensed manufacturers of gambling equipment.
 
Section 22 [Linked bingo game services requirements] requires linked bingo game providers to contract with distributors for soliciting contracts with licensed organizations and for installation, repair, and maintenance of linked bingo game systems. Precludes linked bingo game providers from contracting with any distributor on an exclusive basis, but allows a linked bingo game provider to refuse to contract with a distributor not capable of performing.
 
Section 23 [Contents of application] removes the specified 30-day time allowance for termination of a lease.
 
Section 24 [Conduct of bingo] makes technical amendments to accommodate electronic bingo games.
 
Section 25 [Bar bingo] allows payment of rent to lessors of electronic bingo locations.
 
Section 26 [Linked bingo games] removes the limitation on the number of linked bingo games that can be conducted in a time period.  Removes the requirement for licensed organizations to contribute to the prizes awarded for linked bingo games and removes the $300 cap on such contributions.  Specifies that only licensed organizations who have a contract with the linked bingo game provider may conduct linked bingo games played on an electronic bingo device.  Sets forth standards for permitted premises to conduct linked bingo games played on electronic devices.  The permitted premises must conduct other forms of gambling, have a liquor license and, where bingo is the primary business, have a seating capacity of over 100, and restrict age to 18 plus.  Sets limits on the number of electronic linked bingo devices that may be in play.  Requires linked bingo game providers to provide a bingo program to the board before its first use.
 
Section 27 [Pull-tab dispensing devices restrictions and requirements]
 
Paragraph (a) limits the number of pull-tab dispensing machines on a permitted premise to three.

Paragraph (b) limits the number of pull-tab dispensing machines that use facsimiles of paper pull-tabs to six if the premises seats 200 or less and to 12 if the premises seats more than 200. Allows the board to set a device limit for premises where the primary business is bingo with an age limit of 18 years.

Paragraph (c) limits the use of pull-tab dispensing devices to premises with on-sale liquor licenses or premises where bingo is the primary business.

Paragraph (d) allows use of pull-tab dispensing devices on premises licensed for off-sale liquor sales, but excluding drugstores and grocery stores.

Paragraph (e) requires that, to use pull-tab dispensing devices that use a facsimile of paper pull-tabs, an organization must conduct other forms of gambling at a premise.

Section 28 [Electronic facsimile of paper pull-tabs] sets standards for electronic pull-tabs.

Section 29 [ Multiple chance games] permits players to turn in designated winning pull-tabs for a chance to win a prize of greater value.
 
Section 30 [Lease or ownership required; rent limitations] changes rent calculation for booth operations.  Limits rent for booth operations to ten percent of gross profits.  Limits rent for bar operations to 20 percent for pull-tabs or tipboards and 17 percent for electronic linked bingo games and electronic pull-tabs.  Excludes rent from allowable expenses for linked bingo except as specified.
 
Section 31 [Gross profit allocation; linked bingo on an electronic bingo device] establishes the allocation of gross profits from the operation of linked bingo devices.  Shares go to the licensed organization to fund lawful purposes (50 percent) and to pay allowable expenses (no more than 13 percent); to a linked bingo provider (no more than 20 percent); and to lessors on the amount of rent allowed.

Section 32 [Linked bingo prizes] establishes prize limits for linked bingo games played with and without electronic bingo devices.  Changes the conditions under which a prize is carried over in a progressive linked bingo game.  Removes the annual limit for progressive bingo game prizes. Sets time limits for paying large prizes for linked bingo games played on an electronic device.
 
SJJ:ph

 

 
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