HF4912

Purpose

• The bill aims to dedicate and direct certain electronic pulltab revenue to support the Minnesotabred Thoroughbred horse industry, while also funding problem gambling programs and making related amendments to the gambling tax and revenue distribution.

Main provisions

• Revenue collection and distribution (gambling tax)
  • Taxes collected under the gambling tax return are due when the return is filed; distributors must report monthly sales figures to the commissioner.
  • Returns must be filed by the 20th day of the month following the previous calendar month.
  • Proceeds from these taxes, along with license and other fees, go to the commissioner of management and budget to be deposited in the general fund.
• Sales tax for pulltabs and tipboards
  • The sales tax on the sale of pulltabs and tipboards by distributors applies to the retail price.
  • The retail sale of pulltabs or tipboards by the organization is exempt from Minnesota sales tax and local taxes and license fees, with the exception of a specified fee under section 349.16 subdivision 8.
• Problem gambling funding
  • Half a percent (0.5%) of revenue deposited in the general fund goes to the commissioner of human services for the compulsive gambling treatment program.
  • Half a percent (0.5%) also goes as a grant to the state affiliate recognized by the National Council on Problem Gambling to increase public awareness, training, treatment, and research related to problem gambling.
  • Money for these programs must supplement, not replace, existing state funding.
  • The commissioner of human services must monthly report to the state affiliate and the legislative chairs, with an annual reconciliation starting in 2022 detailing amounts deposited and allocations.
• Minnesotabred Thoroughbred industry funding (starting in FY 2027)
  • Beginning in fiscal year 2027, $2,000,000 of the general fund revenue attributable to electronic pulltab deals or games is annually appropriated to the Minnesota Racing Commission.
  • This funding is to supplement purses for races held exclusively for Minnesotabred Thoroughbreds and to provide grants, loans, and other financial incentives to breeders and owners to promote, encourage, and support the Minnesotabred Thoroughbred industry in Minnesota.
• Administrative and legal effects
  • The bill amends Minnesota Statutes 2024 section 297E.02 subdivision 3 to reflect the above changes in tax collection/disposition, revenue allocation, and new appropriations.

Significant changes to existing law

• Redirects a portion of electronic pulltab revenue toward two specific areas: (1) strengthening and promoting the Minnesotabred Thoroughbred industry (via the Minnesota Racing Commission and breed incentives), and (2) funding problem gambling treatment, awareness, and research through the appropriate state agencies and a recognized national affiliate.
• Introduces an annual financial allocation (FY 2027 onward) to support breeders, owners, and racing purses for Minnesotabred races.
• Adds ongoing reporting and reconciliation requirements related to how funds are deposited and allocated for problem gambling programs.

Potential impact and considerations

• For the horse industry: Provides dedicated funding to support breeding, racing purses, and incentives to grow and sustain the Minnesotabred Thoroughbred sector.
• For public health and education: Increases funding and oversight for problem gambling treatment, awareness, and research.
• For the broader gambling revenue system: Changes how certain revenues are collected and distributed, with specific exemptions and requirements for reporting.

How it would work in practice (at a glance)

• Electronic pulltab revenue grows or changes, with a portion earmarked for the Minnesotabred industry starting in 2027.
• A separate portion funds problem gambling treatment and a public awareness/education affiliate.
• Annual reporting provides transparency to lawmakers and the affiliate on how funds are allocated.

Relevant terms - electronic pulltabs - Minnesotabred Thoroughbred - Minnesota Racing Commission - problem gambling / compulsive gambling - National Council on Problem Gambling - general fund - revenue deposition - purses - breeders - grants, loans, incentives - annual reconciliation - tax returns - pulltabs and tipboards - license fees - public awareness and training