SF3948

Purpose

• This bill changes how certain lawful gambling activities can operate without a license and updates related reporting, record-keeping, and compliance rules. It expands exemptions for some organizations (notably county agricultural societies) and sets new prize limits, application processes, and distribution requirements to improve transparency and oversight.

Main provisions

• Exemption from licensing for lawful gambling (excluding linked bingo) under the following conditions:
  • The organization conducts lawful gambling on five or fewer days in a calendar year.
  • The organization does not award more than $50,000 in prizes in a calendar year (or, if the organization is a county agricultural society as defined in section 38.01, not more than $100,000 in prizes in a calendar year).
  • The organization submits a board-prescribed application and pays a fee of $100 for each gambling occasion (if the application is postmarked or received fewer than 30 days before the occasion, the fee rises to $150).
  • The organization notifies the local government unit 30 days before the occasion (60 days for a city of the first class).
  • The organization purchases all gambling equipment and supplies from a licensed distributor.
  • The organization reports to the board on a single-page form within 30 days of each gambling occasion, including the gross receipts, prizes, expenses, net profits, and the distributor’s identity.
• Raffle-related limitations:
  • No more than one exempted or excluded organization may conduct an individual raffle.
  • Exempt organizations may not combine raffle tickets with those of other exempt organizations; raffle tickets must be sold separately.
• Compliance and information:
  • If a timely report is not filed, the board cannot issue any authorization, license, or permit to conduct lawful gambling on an exempt/excluded/licensed basis until the report is filed; penalties may apply if information is incomplete or knowingly false.
  • Merchandise prizes must be valued at their fair market value.
  • Organizations that qualify for exempt raffles under the specified exemption may be exempt from a referenced statute if raffle tickets are sold only with the organization’s membership or a membership-dinner ticket and are not bundled with other exempt raffles.
• Pull-tabs and tipboards:
  • Unused pull-tab and tipboard deals must be returned to the distributor within seven working days after the end of the gambling occasion; distributors must accept returns and refund for unopened/undamaged deals.
• Recordkeeping:
  • The organization must maintain all required records of exempt gambling activity for 3 years.

Significant changes to existing law

• Introduces and expands exemptions from licensing for short-term gambling events, with higher prize caps for county agricultural societies.
• Creates a formal, board-driven application and reporting framework for exempt gambling, including a specific per-event fee and late filing penalties.
• Requires procurement from licensed distributors and standardized, time-bound reporting of financials and distributors.
• Tightens raffle rules by limiting to one exempt organization per raffle and prohibiting cross-organization ticket mixing.
• Adds specific valuation rules for prizes (FMV) and clarifies conditions under which certain exempt raffles may be treated differently under existing statutes.
• Establishes a duty to return unused items and imposes a defined record retention period for exempt gambling activity.

Relevant terms - lawful gambling - exemptions from licensure - exempt permit number - licensed distributor - board (Minnesota Gambling Board/board in context) - five days (calendar year limit) - prize limits ($50,000; $100,000 for county agricultural societies) - county agricultural society - raffle - pull-tab - tipboard - raffle tickets - membership/dinner ticket combination - local government unit - city of the first class - gross receipts - net profits - prizes - expenses - fair market value (FMV) - reports (single-page form) - penalties - incomplete or false information - authorization license or permit - recordkeeping (3 years)