HomeMy WebLinkAbout10. Canterbury Racino Presentation
10
CITY OF SHAKOPEE
Memorandum
TO: Mayor and City Council
FROM: Mark McNeill, City Administrator
SUBJECT: Canterbury Racino Presentation
DATE: February 27, 2003
INTRODUCTION:
At its meeting of March 4th, the City Council will hear a presentation by Canterbury Park
President Randy Sampson regarding the "Racino" proposal currently being considered by
the Legislature. The Council will be asked to endorse the proposal.
BACKGROUND:
Attached is information from Canterbury regarding the Racino proposal. The Racino is a
concept that is in place in some other states and is where casino-type slot machines are
located in a horse racing facility. Currently, slot machines are available only in tribally
owned casinos in Minnesota.
If approved by legislature, Canterbury would start construction of a casino addition to the
current facility, along with a hotel, and horse park/equestrian center. The proposed total
amount of the improvements will be in the $90 million range. It is expected that the
Racino would become operational in 2004.
Legislation to authorize this has been introduced. Bills are being sponsored in the House
by Representative Mark Buesgens (Jordan), and in the Senate by Senator Dick Day
(No~hfield). As proposed, the distribution of net proceeds would be as follows:
State of Minnesota - 40%
Lottery Expenses - 15%
Horse Racing Purses - 7.25%
Canterbury - 36.75%
City of Shakopee/Scott County - 1%
Note that the 1 % would be divided between the City and Scott County, and is in the
recognition ofthe extra costs incurred in hosting gambling.
Mr. Sampson will give a more complete presentation. He is expected to ask for
endorsement of the concept by the Shakopee City Council. A suggested resolution will
be provided.
RECOMMENDATION:
If the Council concurs with the proposal, it should adopt a suggested resolution.
ACTION REQUIRED:
If the Council concurs with the Racino proposal for Canterbury Park, it should adopt a
resolution of support.
'\JJvzjl ~(
Mark McNeill
City Administrator
MM:th
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RESOLUTION NO. 5865
A RESOLUTION ENDORSING THE ESTABLISHMENT
OF A "RAClNO" FACILITY AT CANTERBURY PARK,
SHAKOPEE, MINNESOTA
,
WHEREAS, in 1985, Canterbury Downs opened as Minnesota's pari-mutua:!
horse racing facility; and
WHEREAS, since its opening as Canterbury Downs, the racetrack has seen
significantly increased competition from other outlets for gambling; and
WHEREAS, in 2000, a Card Club was opened at Canterbury Park, which has
provided increased purses to support the horse racing industry in Minnesota; and
WHEREAS, taxpayers in the State of Minnesota are not reaping a financial
benefit from other forms of casino gambling in Minnesota; and
WHEREAS, the establishment of a "Racino" - style gaming facility at Canterbury
Park. could generate millions of dollars as revenues for the State of Minnesota, in addition
to bolstering horse race purses for Canterbury; and
WHEREAS, as proposed, the County of Scott and City of Shakopee would split
one per cent of the net proceeds, which will help offset the additional public safety and
transportation expenses which are experienced by these two units of government in
hosting entertaimnent in the area; and
WHEREAS, Canterbury Park is the logical location for a casino to benefit the
State ofMilU1esota, in that much ofthe infrastructure needed for Ii successful gambling
operation is already in place, and its location in Shakopee is a natural addition to the
other tourism attractions in the area.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council of the
City of Shakopee, Minnesota that it hereby endorses the concept of casino-style slot
machines to be added to the existing Canterbury Park facility (to be known as the
"Racino at Canterbury Park").
Adopted in regular session of the City Council of the City of Shako pee,
Minnesota held this 4th day of March 2003.
Mayor of the City of Shakopee
ATTEST:
City Clerk
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Racino At Canterbury Park I
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"The Vision " I
I
. High Resolution downloadable versions of these images are available on our website at: I
www.nm-racmo.com. Click on the "Media" link.
I
The existing Canterbury I
Park grandstand on the right I
connected by an atrium to
thc new 2SD-room hotel, I
con fcrence center and
casino. the 2SD-room First Turn Hotel I
features private balconies where
guests can comfortably view
morning workouts as well as
I almost feel the racing action
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An overhead shot looking
west at Canterbury Park with
I a view of the new hotel and
casino in the foreground and Inside the main track and turf
I the horse park arenas and course, the infield features a
stalls in the background. beautifully landscaped cross
I country course. Television
coverage of competitions will be
I shown on SLTeens throughout the
entire complex.
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.... - > A bronze statue of a three-
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horse stretch run leads visitors
I along the main promenade to
the entrance that connects the
I grandstand with the casino,
hotel and conference center.
I
I 1 arena
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Floor to ceiling windows
inside the Casino's full menu
restaurant provide patrons
with an up close preview of A giant !lying horse is
the horses on post parade to suspended over the main /loor of ~
the track. the Casino gaming area. Large .
video screens provide customers '. .
I with coverage of Canterbury ~.
I races and action from tracks . '" 11
i around the country.
CANTERBURY PARK HOLDING CORPORATION
1 100 CANTERBURY ROAD SHAKOPEE, MINNESOTA 55379
TELEPHONE 952.445.7223 FAX 952-496-6400 WWW.CANTERBURYPARK.COM
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1 1 00 CANTERBURY ROAD SHAKOPEE, MN 55379
Racino at Canterbury Parklikely to generate
, significant revenues for Minnesota
Canterbury Park unveils updated economic assessment and architectural work of Racino proposal
February 24,2003
Contact: Joe Anderson
(952) 496-6408
SHAKOPEE, Minn. - Canterbury Park today released an independent economic analysis that
concludes a Racino development can generate at least $150 million in new tax revenue for the
state during the first full two years of operation. The report was unveiled at a St. Paul press
conference announcing the introduction of legislation to authorize the State Lottery to operate
slot and video gaming at Canterbury Park's existing 362-acre site in Shakopee.
The. Innovation Group of New Orleans, LA examined the market for increased entertainment
options such as slot and video gaming in the Shakopee area. Their report concluded the Racino
at Canterbury Park would generate:
. At least $150 million in new tax revenue for the state in the first full biennium of operation,
including state gaming, sales, corporate and income taxes;
. Nearly 1,400 new jobs, with 815 jobs at the Racino for gaming, food and beverage operations
and an additional 578 jobs as a result of the new economic activity generated by the Racino
spending; and
. Approximately $4 million per biennium in new taxes for local communities.
"The report confirmed that a Racino can be successful in Minnesota in the same way it has been
a success for states like Iowa, Delaware and West Virginia," said Randy Sampson, CEO of
. Canterbury Park. "The Racino at Canterbury Park would generate substantial new tax
revenues for the state and local governments, increase employment in our area, create higher
racing purses for the horse industry, and pump more money into Minnesota's agricultural
industry."
CANTERBURY PARK HOLDING CORPORATION
1100 CANTERBURY ROAD SHAKOPEE, MINNESOTA 55379
TELEPHONE 952-445-7223 FAX 952-496-6400 WWW.CANTERBURYPARK.COM
The Racino at. Canterbury Park combines existing entertainment options - live horse racing,
teleracing, the Card Club, live concerts and special events - with new features including:
. Slot and video gaming ,
. Olympic horse park
. Agricultural event facility
. First~class hotel and conference center
Senator Dick Day (R-Owatonna), Senate author of the Racino bill, expressed enthusiasm for the
Racino's impact on the state's budget deficit. "The Legislature's top priority this year is to work
on the state'sbudget deficit -- we need to be creativein finding ways to bring in more revenue,"
said Sen. Day. "Polls show a majority of Minnesotans support using gaming proceeds as part of
the solution to the budget deficit, and Canterbury Park has already demonstrated that they can
responsibly manage a variety of regulated gaming options at their site in Shakopee."
Canterbury Park also released architectural drawings and a three-dimensional model of the
proposed'Racino development. "Looking at the plans for the Racino,you can see why people are
so excited about Canterbury Park's proposal," explained Mark Buesgens (R-Jordan), who will
author. the House version of the Racino bill. "This has the possibility. of being one of the most
successful entertainment complexes in the Upper Midwest."
Dan Mjolsness, of the Minnesota Horsemen's Benevolent and Protective Association, suggested,
"Minnesota's horse industry received a substantial shot in the arm from the success of the
Canterbury Card Club. As we look southward at the success of racinos in building Iowa's horse
breeding -- where money spent on care and maintenance of horses doubled in four years -- we
think the Racino at Canterbury Park will pump millions of dollars into rural Minnesota."
For more information about the Racinoproposal, or to view the architectural drawings, go to the
Racino web site at www.mn-racino.com.
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. Canterbury Park Racino Market Potential and Economic Impact
Executive Summary <
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. Canterbury Park in ShakQpee, Minnesota is ptoposing the. addition of electronic gaming devices, ..
to be operated by the State Lottery, for their property, in addition to a hoteVconference center and
an equestrian center. Canterbury Park is currently the only non-tribal gaming establishment in
Minnesota, though the gaming product is different frqm that which is found at the tribal casinos.
Canterbury currently operates a card room with player-pooled games and poker, in addition to
live racing and simulcast race wagering, whereas the tribal. casinos operate electronic gaming
devices and live blackjack.
The Innovation Group was engaged to perform a market analysis in order to estimate the annual
gaming revenues that Canterbury Park could expect from the installation of video lottery
. terminals (VLTs), and the fiscal benefits that would result at the local and state level.
Nearly 2 million people live within 25 miles of Shakopee, of which 1.5 million are adults. Over 4
million people live within 100 miles of Shakopee. As a result, the Twin Cities area isa
substantial gaming market. From. a competitive standpoint, there are several casinos that already
are in operation in the market, with the most proximate and largest facility being the Mystic Lake.
casino resort in Prior Lake, approximately 4 miles from Canterbury Park.
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With the proposed addition of 2,000 VL Ts at Canterbury Park, it is estimated that the market
revenue potential from the greater Twin Cities area, extending 100 miles from Canterbury, would
be $683 million, from a total of13.9 million casino patron visits annually. Based on the relative
location, size and amenities Of casinos that attract patrons from this market area, it is estimated
that Canterbury Park could generate approximately $165 million in gaming win from the local
patron base, from 3.35 annual gamer visits.
The expansion plans also include a 250-room conference hotel and equestrian center, which could
attract gaming patrons from well outside of the local market area. Additionally, Canterbury Park
provides live racing and an entertainment venue that attracts visitors from a broad area. As a
result, some addition<;tl gaming patronage should be generated from .these amenities that are not
considered in the local market patronage and revenue estimates provided above. It is estimated
that an incremental $9.3 million from 158 thousand gamer visits would be generated from these
areas.
In total, it is estimated that Canterbury Park could generate $174 million in VLT gaming win in .
its first full year of operation, increasing to $191 million by the fifth year of operation. The
average win per position in this facility would be comparable to that which is currently attained in
similar racino markets such as Iowa, West Virginia and Louisiana.
,
The current proposal calls for the State to receive 40% of VL T win, which would translate to
between $69.6 and $76.5 million per year, or $140 to $150 mmion per biennium. A purse
enhancement equal to 7.25% of the VL T win would result in a more than 100% increase in purses
offered, which would have a significant impact on the racing industry in the state, and in turn
would have a broad impact on the agriculture industry in the state.
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The Innovation Group Project #14602 February 2003 Page 1
. Five - Year Forecast
.
Year VL T Revenues State Gaming Taxes Purse Enh:lDcement
1 $174,025,457 $69,610,183 $12,616,846
2 $177,505,966 $71,002,386 $12,869,183
3 $181,943,616, $72,777 ,446 $13,190,912 <
4 $186,492,206 $74,596,882 $13,520,685
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5 $191,154,511, ~. $76,461,804 $13,858,702
.
From an economicimpactperspe,ctive, the budget for construction and design of the facility:
expansion is $90 million,which will have an immediate impact on the local economy. It is
estimated that this will require approximately 710 man-years of employment, with the project
taking approximately 2 years to complete. Once the new casino is operational, it is estimated that
by combining the indirect impacts with the direct impacts. of casino operations, the positive
impact on employment and tax revenues could'be summarized as follows:
./ Neariy iAOO new jobs, with 815 jobs at the racino fOf gaming, food and beverage
operations and an additional 578 jobs as a result of the spending enabled by the
racino spending;
../. At least $150 million in new revenue each bienniUl'l} for the state, including:
. State gaming taxes
. State sales taxes I .
. State personal and corporate taxes .
./ Approximately $4 million per biennium in new locl:lI taxes, including: -,
. Local gaming taXes
. Local property taxes
These figures are estimat,es - the actual benefit to the state and local governments will depend on C
the conditions placed on the proposal upon passage by the Legislature. These figures are also
conservative from an economic impact perspective, as they do not consider the following, each of
which would have significant impacts oftheir own. We did not quantifY the following items:
./ Tax or employment benefits from the hotel and conference center
,/ Tax or employment benefits from the equestrian center
,/ Impact on Minnesota's horse and agriculture industry from a $12 to $14 million
increase in the purses for live racing at Canterbury Park
,/ fudirect spending attributable to the operation of each of these amenities and their
employees' spending patterns, and the taxes that would resu1t .
,/ Impact of new spending enabled by the State as a result of the $150 milli~m generated
in new revenues. For example, if these funds were used for infrastructure
investment, the ripple effect attributable to Canterbury would be substantially greater
than considered in tbis report.
The Innovation Group Project #14602 Februmy 2003 Page 2
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Racino at Canterbury
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Bill Sununaty & Analysis
This bill authorizes the state lottery to operate gaming machines - video or electromechanical slot machines -
on the premises of a licensed racetrack Proceeds from the operation of the gaming machines will be used to
pay for purchase and maintenance of the machines, oversight activities conducted by the Lottery and use of
the racetrack facilities where the machines are located.
Forty percent of the "adjusted gross gaming machine revenues" will be deposited each month into the state
general fund, with 1 percent dedicated to services. for compulsive gambling treatment.
The racetrack will receive at least 45 percent of the adjusted gross revenues. From this amount, 7.25 percent
of the total adjusted gross revenue will be set aside for purses for live horse races conducted at the track,
including an amount exclusively for :Minnesota breed horses. In addition, the local city and county where the
track is located will each receive one-half of 1 percent of the adjusted gross revenue.
The gaming machines used by the lottery must by certain specifications for recording and monitoring of
machine activity. Persons under the age of 18 may not playa game on or claim a prize from a gaming
machine. Lottery employees are prohibited from playing the machines. The lottery director must give notice
of where compulsive gambling assistance is available.
Section-by-section analysis
Section 1: Requires the licensed race track that is the gaming machine location provider to set aside an
amount equal to 7.25 percent of the "adjusted gross gaming machine revenues" for purses for live horse races
conducted by the licensee. These payments are in addition to all others required by law or contract. Twenty
percent of the money set aside must be transferred to the racing commission for administration through the
breeder's fund. These amounts may be changed through negotiations between the race track and the majority
horsemen's association.
Sec.2: Exempts the gross revenue from the operation of the gaming machines from state sales taxation.
However, 40 percent of the proceeds must be deposited each month into the state general fund. One
percent of this amount is appropriated to the commissioner of human services for compulsive gambling
treatement.
Sec. 3: Exempts the state lottery from the statutory prohibition on possession of a gambling devise.
Sec. 4: Allows a licensed manufacturer to sell a gambling devise to th~ state lottery.
Sec. 5: Allows gambling devises to be operated on at a licensed racetrack where liquor is served.
Sec. 6: Allows the state lottery to enter into contracts to procure gaming machines and provide for their
maintenance and monitoring.
Sec. 7: Defines "gaming machine" as any machine in which a coin or other currencyis deposited to playa
game that uses a video display and microprocessors or electromechanical devise with a spinning reel.
CANTERBURY PARK HOLDING CORPORATION
1100 CANTERBURY ROAD SHAKOPEE, MINNESOTA 55379
TELEPHONE 952-445-7223 FAX 952-496-6400 WWW.CANTERBURYPARK.COM
.,.... II
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See.8: Defines "gaming inachine game" to mean a game operated by a gaming machine as authorized by the
state lottery director.
Sec. 9: Defines "gaming machine play" to mean an electronic record that proves participation in a gaming
machine game. . .. .
Sec. 10; Defines "adjusted gross gaming machine re~enue" to mean the sum of all money received in gaming
machine play less the amounts paid out inprizes.
Sec. 11: As with payments made to lottery retailers, allows the director to deduct amounts paid to the
racetrack under the location contract before crediting a maximum 15 percent of that annual gross lottery
revenue to the lottery operations account.
Sec. 12: Amends the restrictions on what activities the state lottery may conduct to include the use of gaming
machines as provided in this act.
Sec. 13: Provides requirements for the location of and specifications for gaming machines operated by the
state lottery as follows:
Subdivision 1: Provides that the lottery director may contract for location of gaming machines with
a class A racetrack that is in operation before this bill is enacted.1he racetrack licensee holder is to be paid
an amOunt equal to not less that 45 percent of the adjusted gross gaming machine revenue. From that
amount the racetrack must pay one- half of. one percent to both the city and county where the racetrack is
located (in addition to amounts set aside for,h0rse race pUlSes). .
Subd. 2: Requires that gaming machines have nonresettablemeters capable of transaction printouts
and of being linked electronicaIlyto a central communication system to provide auditing by the director.
Subd. 3: Allows the lottery director to detennine games to be played on the gaming machine games
and allows for pari-mutel wagering and display of horse races on the machines.
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Subd. 4: Requires the lottery director to examine prototypes of gaming machines with the cost paid
by the ma~hine manufacturers.
Subd. 5: Allows the lottery director to require machine manufacturers to provide working models of
gaming machines, at the manufacturer's expense, fortesting and analysis purposes.
Subd. 6: Provides that persons playing gaming machines are bound by the rules applicable to the
particular game and that the person acknowledges that d~termination of winning a prize is subject to the roles
and procedures established by the director. Persons under 18 may not claim a prize from a gaming machine.
Prizes are not subject to the requirements for withholding for delinquent taxes or other debts.
Subd. 7: Persons under 18 may not play gaming machines. Lottery employees and their families
may not play gaming machines or claim gaming machine prizes.
Subd. 8: The lottery director must post infonnation regarding compulsive gambling services in the
area where the gaming machines are located.
Subd. 9: Local governments may not impose addihonallicensing or operating restrictions on the
gaming machines or impose additi:mal fees or taxes on the business.
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Sec. 14: Prohibits suits for recovery of gambling loses from gaming machines.
Sec.15: Gambling debts, except those involving certain permitted activities, are void by law.
Sec. 16: Exempts gaming machine play from the prohibition on betting.
Sec. 17: Includes the manufacture, possession, sale, or operation of a gaming machine operating by the state
lottery from the prohibition against gambling.
Sec. 18: Makes the act effective the day following final enacttnent.
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02/21/03 [REVISOR ] JSK/DA 03-1804
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1 A bill for an act
2 relating to gambling; state lottery; providing for
3 gaming machines; establishing horse racing purse
4 payments; amending Minnesota Statutes 2002, sections
5 240.13, by adding a subdivision; 299L.07, subdivisions
6 2, 2a; 340A.410, subdivision 5; 349A.01, subdivision
7 10, by adding subdivisions; 349A.10, subdivision 3;
8 349A.13; 541.20; 541.21; 609.75, subdivision 3;
9 609.761, subdivision 2; proposing coding for new law
10 in Minnesota Statutes, chapters 297A; 349A.
11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
12 Section 1. Minnesota Statutes 2002, section 240.13, is
13 amended by adding a subdivision to read:
14 Subd. 5a. [PURSES; GAMING MACHINES.] From the commission
15 received by a licensee pursuant toa gaming machine location
16 contract entered into under section 349A.17, the licensee must
17 ~t aside an amount equal to not less than 7.25 percent of the
18 adjusted gross gaming machine revenues as defined under chapter
19 349A, for purses for live horse races conducted by the
20 licensee. Purse payments made pursuant to this subdivision are
21 in addition to purse payments otherwise established bylaw or
22 contract. Twenty percent of the money set aside for purses
23 pursuant to this subdivision shall be transferred to the
24 commission and used for the purposes in section 240.18,
25 subdivisions 2, paragraph(d}~ and 3, paragraph (b), subject tQ
26 the proportionality requirement in section 240.18, subdivision
27 1. The licensee and the horseperson's organization representing
28 the majority of horsepersons who have raced at the racetrack
Section 1 1
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02/21/03 (REVISOR ) JSK/DA 03-1804
1 dur ing the precedingJ.,4II\onths may negotiate percentages
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2 different from those stated in this section if the agreement is
3 in writing and filed with the racing commission.
4 Sec. 2. [297A.65l] [LOTTERY GAMING MACHINES; IN-LIEU TAX.]
5 Adjusted gross revenue from the operation of gaming
6 machines authorized under chapter 349A are exempt from the tax
7 imposed under section 297A.62. The state lottery must on or
8 before the 20th day of each 'month transmit to the commissioner
9 an amount equal to the adjusted gross revenue from the ~peration
10 of gaming machines, as defined in section 349A.Ol, for the
11 previous month multiplied by 40 percent. The commissioner shall
12 deposit the money transmitted under this paragraph in the state
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13 treasury in the general fund. Of the money deposited into the
14 general fund under this section, an amount equal to one percent
15 of the adjusted gross revenue from the operation of gaming
16 machines is annually appropriated to the commissioner of human
17 services for the compulsive gambling treatment program under
18 section 245.98.
19 Sec. 3. Minnesota Statutes 2002, section 299L.07,
20 subdivision 2, is amended to read:
21 Subd. 2. [EXCLUSIONS.) Notwithstanding subdivision 1, a
22 gambling device:
23 (1) may be sold by a person who is not licens~d under this
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24 section, if the person (i) is not engaged in the trade or
25 business of selling gambling dev,ices, and (ii) does not sell
26 more than one gambling device in any calendar year:
27 (2) may be sold by the governing body of a federally
28 recognized Indian tribe described in subdivision 2a, paragraph
29 (b), clause (1), which is not licensed under this section, if
30 (i) the gambling device was operated by the Indian tribe, (ii)
31 the sale is to a distributor licensed under this section, and
32 (iii) the licensed distributor notifies the commissioner of the
33 purchase, in the same manner as is required when the licensed
34 distributor ships a gambling device into Minnesota:
35 (3) may be possessed by a person not licensed under this
36 section if the person holds a permit issued under section
Section 3 2
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02/21/03 [REVISOR ] JSK/DA 03-1804
1 299L.08~ and
2 (4) may be possessed by a state agency, with the written
3 authorization of the director, for display or evaluation
4 purposes only and not for the conduct of gambling~ and
5 (5) may be possessed by the state lottery as authorized
6 under chapter 349A.
7 Sec. 4. Minnesota Statutes 2002, section 299L.07,
8 subdivision 2a, is amended to read:
9 Subd. 2a. [RESTRICTIONS.] (a) A manufacturer licensed
10 under this section may sell, offer to sell, lease, or rent, in
11 whole or in part, a gambling device only to a distributor
12 licensed under this section or to the state lottery as
13 authorized under chapter 349A.
14 (b) A distributor licensed under this section may sell,
15 offer to sell, market, rent, lease, or otherwise provide, in
16 whole or in part, a gambling device only to:
17 (1) the governing body of a federally recognized Indian
18 tribe that is authorized to operate the ga~bling device under a
19 tribal state compact under the Indian Gaming Regulatory Act,
20 Public Law N~mbe~ 100-497, and future amendments to it~
21 (2) a person for use in the person's dwelling for display
22 or amusement purposes in a manner that does not afford players
23 an opportunity to obtain anything ofvalue~
24 (3) another distributor licensed under this section~ O~
25 (4) a person in another state who is authorized under the
26 laws of that state to possess the gambling device; or
27 (5) the state lottery as authorized under chapter 349A.
28 Sec. 5. Minnesota Statutes 2002, section 340A.4l0,
29 subdivision 5, is amended to read:
30 Subd. 5. [GAMBLING PROHIBITED.] (a) Except as otherwise
31 provided in this subdivision, no retail establishment licensed
32 to sell alcoholic beverages may keep, possess, or operate, or
33 permit the keeping, possession, or operation on the licensed
34 premises of dice or any gambling device as defined in section
35 349.30, or permit gambling therein.
36 (b) Gambling equipment may be kept or operated and raffles
Section 5 3
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02/21/03 [REVISOR ] JSK/DA 03-1804
1 conducted on licensed premises and adjoining rooms when the use
2 of the gambling equipment is authorized by (1) chapter 349, ( 2 )
3 a tribal ordinance in conformity with the Indian Gaming
4 Regulatory Act~ Public Law Ntlmber 100-497, or (3) a tribal-state
5 compact authorized under section 3.9221.
6 (c) Lottery tickets may be purchased and sold within the
7 licensed premises as authorized by the director of the lottery
8 under chapter 349A.
9 (d) Dice may be kept and used on licensed premises'and
10 adjoining rooms as authorized by section 609.761, subdivision 4.
11 (e) Gambling devices may be operated on the premises of a
12 licensed racetrack as authorized by chapter 349A.
13 Sec. 6. Minnesota Statutes 2002, section 349A.Ol,
14 subdivision 10, is amended to read:
15 Subd. 10. [LOTTERY PROCUREMENT CONTRACT.] "Lottery
16 procurement contract" means a contract to provide lottery
17 products, gaming machines, maintenance of gaming machines,
18 computer hardware and software used to monitor sales of lottery
19 tickets and gaming machine plays, and lottery tickets. "Lottery
20 procurement contract" does not include a contract to provide an
21 annuity or prize payment agreement or materials, supplies,
22 equipment, or services common to the ordinary operation of a
23 state agency.
24 Sec. 7. Minnesota Statutes 2002, section 349A.Ol, is
25 amended by adding a subdivision to read:
26 Subd. 14. [GAMING MACHINE.] "Gaming machine" means any
27 machine in which a coin token or other currency is deposited to
28 play a game that uses a video display and microprocessors or an
29 electromechanical device with a spinning reel.
30 Sec. 8. Minnesota statutes 2002, section 349A.Ol, is
31 amended by adding a subdivision to read:
32 Subd. 15. [GAMING MACHINE GAME.] "Gaming machine game"
33 means a game operated by a gaming machine as authorized by the
.34 director.
35 Sec. 9. Minnesota Statutes 2002, section 349A.Ol, is
36 amended by adding a subdivision to read:
Section 9 4
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02/21/03 [REVISOR ] JSK/DA 03-1804
1 Subd. 16. [GAMING MACHINE PLAY.) "Gaming machine play"
2 means an electronic record that proves participation in a gamin~
3 machine game.
4 Sec. 10. Minnesota Statutes 2002, section 349A.Ol, is
5 amended by adding a subdivision to read:
6 Subd. 17. [ADJUSTED GROSS GAMING MACHINE
7 REVENUE.} "Adjusted gross gaming machine revenue" means the sum
8 of all money received by the lottery for gaming machine plays,
9 less the amount paid out in prizes for gaming machine games.
10 Sec. 11. Minnesota Statutes 2002, section 349A.I0,
11 subdivision 3, is amended to read:
12 Subd. 3. [LOTTERY OPERATIONS.} (a) The director shall
13 establish a lottery operations account in the lottery fund. The
14 director shall pay all costs of operating the lottery, including
15 payroll costs or amounts transferred to the state treasury for
16 payroll costs, but not including lottery prizes, from the
17 lottery operating account. The director shall.credit to the ...-"
18 lottery operations account amounts sufficient to pay the
19 operating costs of the lottery.
20 (b) Except as provided in paragraph (e), the director may
21 not credit in any fiscal year thereafter amounts to the lottery
22 operations account which when totaled exceed 15 percent of gross
23 revenue to the lottery fund in that fiscal year. In computing.
24 total amounts credited to the lottery operations account under
25 this paragraph the director shall disregard amounts transferred
26 to or retained by lottery retailers as sales commissions or
27 other compensation and amounts transferred or retained by a
28 racetrack pursuant to a location contract under section 349A.17.
29 (c) The director of the lottery may not expend after July
30 1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
31 year for contracts for the preparation, publication, and
32 placement of advertising.
33 (d) Except as the director determines, the lottery 'is not
34 subject to chapter 16A relating to budgeting, payroll, and the
35 purchase of goods and services.
36 (e) In addition to the amounts credited to the lottery
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1 operations account under paragraph (b), the director is
2 authorized, if necessary, to meet the current obligations of the
3 lottery and to credit up to 25 percent of an amount equal to the
4 average annual amount which was authorized to be credited to the
5 lottery operations account for the previous three fiscal years
6 but was not needed to meet the obligations of the lottery.
7 Sec. 12. Minnesota Statutes 2002, section 349A.13, is
8 amended to read:
9 349A.13 [RESTRICTIONS.]
10 Nothing in this chapter:
11 (I) authorizes the director to conduct a lottery game or
12 contest the winner or winners of which are determined by the
13 result of a sporting event other than a horse race conducted
14 under chapter 240;
15 (2) authorizes the director to install or operate a lottery
16 device operated by coin or currency which when operated
17 determines the winner of a game except as authorized under
18 section 349A.17i and
19 (3) authorizes the director to sell pull-tabs as defined
20 under section 349.12, subdivision 32.
21 Sec. 13. [349A.17] [GAMING MACHIN~S.)
22 Subdivision 1. [LOCATION CONTRACT.] The director may enter
23 into a contract with a person to provide locations for gami~g .
24 machines. Contracts entered into under this section are not
25 subject to chapter 16C. The director may only enter a contract
26 under this subdivision with a person that holds a class A
27 license under chapter 240. The gaming machines may only be
28 placed at the racetrack for which the class A license under
29 chapter 240 was issued. The racetrack must have been operating
30 as a racetrack prior to the effective date of this section.
31 Contracts entered into must provide for compensation to the
32 racetrack in an amount equal to at least 45 percent of ~djusted
33 gross gaming machine revenue. From the amount received by the
34 lottery under this section, the racetrack shall annually remit
35 an amount equal to one-half of one percent of the adjusted gross
36 gaming machine revenue to both the city and the county where the
Section 13 6
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1 racetrack is located.
2 Subd. 2. [SPECIFICATIONS.) Gaming machines must:
3 (1) maintain on nonresettable meters a permanent record,
4 capable of being printed out, of all transactions by the machine
5 and all entries into the machine; and
6 (2) be capable of being linked electronically to a central
7 communication system to provide auditing program information as
8 required by the director.
9 Subd. 3. [GAMES.} The director shall specify the games
10 that may be placed on a gaming machine as set forth under
11 section 349A.04. Gaming machines may conduct pari-mutuel
12 wagering and display horse races pursuant to specifications set
13 forth by the director.
14 Subd. 4. [EXAMINATION OF MACHINES.] The director shall
15 examine prototypes of gaming machines and require that the
16 manufacturer of the machine pay the cost of the examination.
17 The director may contract for the examination of gaming machines.
18 Subd. 5. [TESTING OF MACHINES.) The director may require
19 working models of a gaming machine to be transported to the
20 locations the director designates for testin~, examination, and
21 analysis. The manufacturer shall pay all costs for testing,
22 examination, analysis, and transportation of the machine model.
23 Subd. 6. [PRIZES.} A person who plays a gaming machine
24 agrees to be bound by the rules and game procedures applicable
25 to that particular gaming machine game. The player acknowledges
26 that the determination of whether the player has won a prize is
27 subject to the rules and game procedures adopted by the
28 director, claim procedures established by the director for the
29 game, and any confidential or public validation tests
30 established by the director fo~ that game. A person under 18
31 years of age may not claim a prize from the operation of a
32 gaming.machine. A prize claimed from the play of a gaming
33 machine game is not subject to the provisions of section
34 349A.08, subdivision 8.
35 Subd. 7. [PROHIBITIONS.] (a) A person under the age of 18
36 years may not playa game on a gaming machine.
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1 (b) The director or any employee of the lottery, or a
2 member of their immediate family residing in the same household,
3 may not playa game on a gaming machine or receive a prize from
4 the operation of a gaming machine.
5 Subd. 8. [COMPULSIVE GAMBLING NOTICE.] The director shall
6 prominently post, in the area where the gaming machines are
7 located, the toll-free telephone number established by the
8 commissioner of human services in connection with the compulsive
9 gambling program established under section 245.98. The director
10 and the location provider shall establish a proactive plan to
11 identify problem gamblers and take appropriate action.
12 Subd. 9. [LOCAL LICENSES.] Except as provided in
13 subdivision 1, no political subdivision may require a license to
14 operate a gaming machine, restrict or regulate the placement 6f
15 gaming machines, or impose a tax or fee on the business of
16 operating gaming machines.
17 Sec. 14. Minnesota Statutes 2002, section 541.20, is
18 amended to read:
19 541.20 [RECOVERY OF MONEY LOST.)
20 Every person who, by playing at cards, dice, or other game,
21 or by betting on the hands or sides of such as are gambling,
22 shall lose to any person so playing or betting any sum of money
23 or any goods, and pays or delivers the same, or any part
24 thereof, to the winner, may sue for and recover such money by a
25 civil action, before any court of competent jurisdiction. For
26 purposes of this section, gambling shall not include pari-mutuel
27 wagering conducted under a license issued pursuant to chapter
28 240, purchase or sale of tickets in the state lottery, purchase
29 of gaming machine plays as authorized under chapter 349A, or
30 gambling authorized under chapters 349 and 349A.
31 Sec. 15. Minnesota Statutes 2002, section 541.21, is
32 amended to read:
33 541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.]
34 Every note, bill, bond, mortgage, or other security or
35 conveyance in which the whole or any part of the consideration
36 shall be for any money or goods won by gambling or playing at
Section 15 8
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1 cards, dice, or any other game whatever, or by betting on the
2 sides or hands of any person gambling, or for reimbursing or
3 repaying any money knowingly lent or advanced at the time and
4 place of such gambling or betting, or lent and advanced for any
5 gambling or betting to any persons so gambling or betting, shall
6 be void and of no effect as between the parties to the same, and
7 as to all persons except such as hold or claim under them in
8 good faith, without notice of the illegality of the
9 consideration of such contract or conveyance. The provisions of
10 this section shall not apply to: (I) pari-mutuel wagering
11 conducted under a license issued pursuant to chapter 240; ( 2 )
12 purchase of tickets in the state lottery or other wagering
13 authorized under chapter 349A; (3) gaming activities conducted
14 pursuant to the Indian Gaming Regulatory Act, 25 D.S.C. 2701 et
15 s eq.; 0 r (4) lawful gambling activities permitted under chapter
16 349.
17 Sec. 16. Minnesota Statutes 2002, section 609.75,
18 subdivision 3, is amended to read:
19 Subd. 3. [WHAT ARE NOT BETS.) The following are not bets:
20 (1) A contract to insure, indemnify, guarantee or otherwise
21 compensate another for a harm or loss sustained, even though the
22 loss depends upon chance.
23 (2) A contract for the purchase or sale at a future date Of
24 securities or other commodities.
25 (3) Offers of purses, prizes or premiums to the actual
26 contestants in any bona fide contest for the determination of
27 skill, speed, strength, endurance, or quality or to the bona
28 fide owners of animals or other property entered in such a
29 contest.
30 (4) The game of bingo when conducted in compliance with
31 sections 349.11 to 349.23.
32 (5) A private social bet not part of or incidental to
33 organized, commercialized, or systematic gambling.
34 (6},The operation of equipment or the conduct of a raffle
35 under sections 349.11 to 349.22, by an organization licensed by
36 the gambling control board or an organsization exempt from
Section 16 9
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(, 02/21/03 [REVISOR ] JSK/DA 03-1804
1 licensing under section 349.166.
2 (7) Pari-mutuel betting on horse racing when the betting is
3 conducted under chapter 240.
4 (8) The purchase and sale of state lottery tickets and
5 plays on a gaming machine under chapter 349A.
6 Sec. 17. Minnesota Statutes 2002, section 609.761,
7 subdivision 2, is amended to read:
8 Subd. 2. [STATE LOTTERY.] Sections 609.755 and 609.76 do
9 not prohibit the operation of. the state lottery or the $ale,
10 possession, or purchase of tickets for the state lottery under
11 ch~pter 349A, or the manufacture, possession, sale, or operation
12 of a gaming machine under chapter 349A.
13 Sec. 18. [EFFECTIVE DATE.]
14 This act is effective the day fOllowing final enactment.
10