Purpose

• Clarify and expand exemptions from licensing for certain lawful gambling activities. The bill lets some organizations conduct lawful gambling without a state license or as exempted activities, under specific limits and oversight.

Main Provisions

• Exemption scope and limits

  • Lawful gambling (with the exception of linked bingo games) may be conducted without a license if:
  • The organization runs lawful gambling on five or fewer days in a calendar year, or
  • The organization’s prize total for lawful gambling does not exceed 50,000 per calendar year (or 100,000 for a county agricultural society defined in section 38.01).
  • Each exempt activity requires a board-prescribed application and a fee of 100 per gambling occasion, and the organization must receive an exempt permit number from the board. If the application is received less than 30 days before the occasion, the fee increases to 150.
  • The organization must notify the local government unit about the occasion 30 days in advance (or 60 days in a city of the first class).

• Operation and reporting requirements

  • The organization must purchase all gambling equipment and supplies from a licensed distributor.
  • The organization must report to the board within 30 days after each gambling occasion, using a single-page form. The report must include gross receipts, prizes, expenses, net profits, and the distributor from whom equipment was purchased.

• Raffle and ticket rules

  • No more than one exempted or excluded organization may conduct an individual raffle.
  • Exempt organizations may not combine raffle tickets with other exempted or excluded organizations’ raffles.
  • Raffle tickets must be sold separately and cannot be attached to or mixed with tickets from other exempted organizations.

• Compliance and penalties

  • If an organization fails to file a timely report, the board cannot issue any authorization, license, or permit for exempt, excluded, or licensed gambling until the report is filed. The board may impose penalties for incomplete or false information.

• Prize valuation and exemptions

  • Merchandise prizes must be valued at their fair market value.
  • Some exempt raffles may be exempt from certain statute requirements if raffle tickets are sold only in connection with an organization’s membership or a membership dinner and are not part of any other exempt raffle.

• Return of unused items

  • Unused pulltab and tipboard deals must be returned to the distributor within seven working days after the end of the occasion. The distributor must accept those returns and refund for unopened and undamaged deals.

• Recordkeeping

  • The organization must maintain all required records of exempt gambling activity for an extended period (the text states “312 years,” which appears to be a typographical error in the bill as published; the intent is to require long-term recordkeeping).

How this changes the law (Significant Changes)

• Adds a structured exemption framework for certain organizations to conduct lawful gambling without a license, subject to prize caps and specific administrative steps.
• Introduces explicit reporting, disclosure, and distribution-tracking requirements for exempt activities.
• Tightens raffle rules by limiting to one exempt organization per raffle and by prohibiting mixing raffle tickets between exempt groups.
• Provides clear consequences for noncompliance, including denial of exemptions and potential penalties.
• Requires prize valuation at fair market value and ties some raffles to membership-related activities for exemption.
• Establishes a process for returning unused gambling supplies to distributors and requiring distributor refunds.
• Moves toward stronger oversight by mandating notices to local governments and mandatory recordkeeping for exempt gambling activities.

Who is Affected

• County agricultural societies and other organizations that conduct lawful gambling but want to operate under exemptions rather than full licensure.
• Licensed distributors who supply gambling equipment to exempt activities.
• Local government units that must be notified of exempt gambling events.
• The Minnesota Gambling Control Board (the board), which administers exemptions, license/permit issuance, reporting, and enforcement.

Compliance Considerations

• Prepare and submit board-prescribed exemption applications with timely payments.
• Ensure prize totals stay within caps or qualify under the county agricultural society exception.
• Maintain compliance with notice, reporting, and recordkeeping requirements.
• Use only licensed distributors for gambling equipment.
• Keep raffle activities separate and avoid combining tickets across organizations.
• Track and value prizes at fair market value; manage pulltabs and tipboards according to the return timeline.

Notes on Textual Details

• The bill specifies exemptions “with the exception of linked bingo games,” meaning linked bingo games are not exempt.
• The line about record retention lists “312 years,” which appears to be a drafting or transcription error in the published text; the intended requirement is to retain records for a multi-year period.

Relevant Terms - lawful gambling - license - exempt license / exempt permit - exemptions (Subd.2) - linked bingo games - five or fewer days - prize caps (50,000; 100,000 for county agricultural societies) - board-prescribed application - exempt permit number - license/authorization/permit - raffle / raffle tickets - separate ticket sales - licensed distributor - gross receipts - net profits - merchandise prizes / fair market value - pulltabs - tipboard deals - returns / refunds - local government unit notification - records / recordkeeping - penalties - noncompliance