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Minnesota Introduces Sports Betting Bill

Lawmakers in Minnesota have introduced a bill that would legalize and regulate sports pool betting, although such wagers would be forbidden on college sports.

The sports betting bill, formally known as HF 522 would allow the sports betting industry to be run by the state lottery as well as other private operators.

The bill would allow for land based betting, but not cyber betting as the bill states that an operator shall not: "knowingly make its premises available for placing wagers using the Internet or advertise that its premises may be used for that purpose. A licensee that is determined by the commissioner (of public safety) to have knowingly violated this section shall be subject to a penalty of $1,000 per player per day for making its premises available for placing wagers using the Internet and of $10,000 per violation for advertising that its premises may be used for that purpose."

Sports betting on college athletics would be expressly prohibited as the bill notes that: "Prohibited sports event means a collegiate sport or athletic event that takes place in Minnesota or a sport or athletic event in which any Minnesota college team participates regardless of where the event takes place."

The entire bill's language reads:

1.1A bill for an act 1.2relating to gambling; permitting wagering on the results of certain professional or 1.3collegiate sports or athletic events;proposing coding for new law as Minnesota 1.4Statutes, chapter 349C. 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 Section 1. [349C.01] DEFINITIONS. 1.7(a) As used in this chapter, the following terms have the meanings given them. 1.8(b) "Collegiate sport or athletic event" means a sport or athletic event offered or 1.9sponsored by or played in connection with a public or private institution that offers 1.10educational services beyond the secondary level. 1.11(c) "Commissioner" means the commissioner of public safety. 1.12(d) "Lottery" means the State Lottery created under chapter 349A. 1.13(e) "Professional sport or athletic event" means an event at which two or more 1.14persons participate in sports or athletic events and receive compensation in excess of 1.15actual expenses for their participation in the event. 1.16(f) "Prohibited sports event" means a collegiate sport or athletic event that takes 1.17place in Minnesota or a sport or athletic event in which any Minnesota college team 1.18participates regardless of where the event takes place. 1.19(g) "Sports event" means a professional sport or athletic event or a collegiate sport 1.20or athletic event, except a prohibited sports event. 1.21(h) "Sports pool" means the business of accepting wagers on a sports event by a 1.22system or method of wagering. 1.23(i) "Sports wagering lounge" means an area where a sports pool is operated. 1.24EFFECTIVE DATE.This section is effective July 1, 2013.

2.1 Sec. 2. [349C.02] SPORTS WAGERING. 2.2 Subdivision 1. Operation. Interested parties may operate a sports pool upon 2.3the approval of the commissioner of public safety in accordance with this chapter and 2.4applicable rules adopted under this chapter. The commissioner shall hear and decide 2.5promptly and in a reasonable order all applications for a license to operate a sports pool, 2.6shall have the general responsibility for the implementation of this chapter, and shall have 2.7all other duties specified in this chapter with regard to the operation of a sports pool. The 2.8license to operate a sports pool shall be in addition to any other license required to be issued. 2.9No license to operate a sports pool shall be issued by the commissioner to an entity unless it 2.10has established its financial stability, responsibility, good character, honesty, and integrity. 2.11 Subd. 2. State Lottery. The State Lottery may choose to independently operate 2.12a sports pool or pools, and shall be granted licenses to do so by the commissioner. All 2.13other licensees must have a joint operations agreement with the lottery, and must operate 2.14under that joint agreement. Terms of the agreement are to be determined by the lottery. 2.15The lottery shall be consulted by the commissioner on all rules adopted under this chapter. 2.16 Subd. 3. Renewal of license. No later than five years after the date of the issuance of 2.17a license and every five years thereafter or within such lesser periods as the commissioner 2.18may direct, a licensee shall submit to the commissioner documentation or information the 2.19commissioner may by rule require, to demonstrate to the satisfaction of the commissioner 2.20that the licensee continues to meet the requirements of law and rule. 2.21 Subd. 4. Lounges; requirements. A sports pool shall be operated in a sports 2.22wagering lounge located at a site allowed by the commissioner, which may include a 2.23racetrack. The lounge shall conform to all requirements concerning square footage, design, 2.24equipment, security measures, and related matters that the commissioner prescribes by rule. 2.25The operator of a sports pool shall establish or display the odds at which wagers 2.26may be placed on sports events. 2.27An operator shall accept wagers on sports events from persons physically present in 2.28the sports wagering lounge. A person placing a wager shall be at least 21 years of age. 2.29An operator shall not admit into the sports wagering lounge, or accept wagers from, 2.30any person whose name appears on an exclusion list maintained by the commissioner or 2.31on a self-exclusion list maintained by the commissioner. 2.32 Subd. 5. Contract with entity. The holder of a license to operate a sports pool 2.33may contract with an entity to conduct a sports pool according to the rules of the 2.34commissioner. The entity shall obtain a license as a sports pool operator prior to the 2.35execution of a contract, and the license shall be issued under the requirements adopted by 2.36the commissioner and the lottery. 3.1EFFECTIVE DATE.This section is effective July 1, 2013.

3.2 Sec. 3. [349C.03] EMPLOYEES. 3.3All employees who are working in the sports wagering lounge may be required 3.4to be registered, if appropriate, in accordance with rules of the commissioner adopted 3.5in consultation with the lottery. 3.6Each operator of a sports pool shall designate one or more key employees who shall 3.7be responsible for the operation of the sports pool. At least one such key employee shall 3.8be on the premises whenever sports wagering is conducted. 3.9EFFECTIVE DATE.This section is effective July 1, 2013.

3.10 Sec. 4. [349C.04] AUTHORITY; RULES. 3.11Except as otherwise provided by this chapter, the State Lottery and the commissioner 3.12shall jointly have the authority to regulate sports pools and the conduct of sports wagering 3.13under this chapter. No organization shall be authorized to operate a sports pool unless 3.14it has produced information, documentation, and assurances concerning its financial 3.15background and resources, including cash reserves, that are sufficient to demonstrate 3.16that it has the financial stability, integrity, and responsibility to operate a sports pool. 3.17In developing rules applicable to sports wagering, the commissioner shall examine the 3.18rules implemented in other states where sports wagering is conducted and shall, as far as 3.19practicable, adopt a similar regulatory framework. The commissioner, in consultation with 3.20the State Lottery, shall adopt rules necessary to carry out this chapter including, but not 3.21limited to, rules governing the: 3.22(1) amount of cash reserves to be maintained by operators to cover winning wagers; 3.23(2) acceptance of wagers on a series of sports events; 3.24(3) maximum wagers that may be accepted by an operator from any one patron 3.25on any one sports event; 3.26(4) type of wagering tickets that may be used; 3.27(5) method of issuing tickets; 3.28(6) method of accounting to be used by operators; 3.29(7) types of records that shall be kept; 3.30(8) use of credit and checks by patrons; 3.31(9) type of system for wagering; 3.32(10) protections for a person placing a wager; and 3.33(11) making of problem gambling resources available to gamblers. 4.1EFFECTIVE DATE.This section is effective July 1, 2013.

4.2 Sec. 5. [349C.05] OPERATORS. 4.3Each operator shall adopt comprehensive house rules governing sports wagering 4.4transactions with its patrons. The rules shall specify the amounts to be paid on winning 4.5wagers and the effect of schedule changes. The house rules, together with any other 4.6information the commissioner deems appropriate, shall be conspicuously displayed in the 4.7sports wagering lounge and included in the terms and conditions of the account wagering 4.8system, and copies shall be made readily available to patrons. 4.9EFFECTIVE DATE.This section is effective July 1, 2013.

4.10 Sec. 6. [349C.06] JOINT OPERATIONS. 4.11 Subdivision 1. Lottery role in operations. The State Lottery must have a role in 4.12the operation of any sports betting lounge, in a manner to be negotiated between the 4.13lottery and the licensee. This role may be oversight and monitoring, joint operation, 4.14or sole operation by the lottery. 4.15 Subd. 2. Joint agreements; revenues. When a licensee and the lottery enter into an 4.16agreement to jointly establish a sports wagering lounge, and to operate and conduct sports 4.17wagering under this chapter, the agreement shall specify the distribution of revenues from 4.18the joint sports wagering operation among the parties to the agreement. The sums received 4.19by the licensee from the joint sports wagering operation shall be considered gross revenue. 4.20The sums actually received by the licensee from any sports wagering operation, either 4.21jointly established with the lottery or established semi-independently or with nonlottery 4.22partners, less only the total of all sums actually paid out as winnings to patrons, shall be 4.23subject to an eight percent tax to be collected by the commissioner and paid to the State 4.24Lottery fund. 4.25A percentage of the fee paid for a license to operate a sports pool shall be deposited 4.26into the state general fund for appropriation by the legislature to the Department of 4.27Human Services to provide funds for prevention, education, and treatment programs for 4.28compulsive gambling programs. The percentage shall be determined by the commissioner. 4.29EFFECTIVE DATE.This section is effective July 1, 2013.

4.30 Sec. 7. [349C.07] REVENUES. 4.31"Gross revenue" means the total of all sums actually received by a licensee from 4.32operation of a sports pool, less only the total of all sums actually paid out as winnings to 5.1patrons; provided, however, that the cash equivalent value of any merchandise or thing of 5.2value included in a jackpot or payout shall not be included in the total of all sums paid out 5.3as winnings to patrons for purposes of determining gross revenue. 5.4EFFECTIVE DATE.This section is effective July 1, 2013.

5.5 Sec. 8. [349C.08] INTERNET. 5.6A licensee that has been issued a permit to conduct a sports pool shall not knowingly 5.7make its premises available for placing wagers using the Internet or advertise that its 5.8premises may be used for that purpose. A licensee that is determined by the commissioner 5.9to have knowingly violated this section shall be subject to a penalty of $1,000 per player 5.10per day for making its premises available for placing wagers using the Internet and of 5.11$10,000 per violation for advertising that its premises may be used for that purpose. 5.12EFFECTIVE DATE.This section is effective July 1, 2013. The bill goes on to spell out that some of the tax revenues would be set aside to the states Department of Human Services to "provide funds for prevention, education, and treatment programs for compulsive gambling programs."

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