Current through Register Vol. 49, No. 13, September 23, 2024
Subpart 1.
Purchase or lease of
gambling equipment.
When purchasing, leasing, or obtaining gambling equipment, the
distributor must comply with Minnesota Statutes, sections
349.161 and
349.162.
A. A distributor may only purchase, lease, or
obtain gambling equipment that has been approved by the board and meets the
requirements in parts
7864.0230 and
7864.0235.
B. Within ten days of being notified by the
board that a manufacturer has terminated its license, the license has expired,
or the license was revoked by the board, a licensed distributor must submit a
certified physical inventory to the board. The certified inventory must include
the name, form number, and quantity of all gambling equipment in inventory or
gambling equipment owned or leased that was manufactured by that
manufacturer.
Subp. 2.
Sale or lease of gambling equipment.
This subpart applies to the sale or lease of gambling
equipment.
A. A distributor may not
sell, lease, or furnish gambling equipment to an organization unless the
organization has a license, exempt permit, or exclusion authorization issued by
the board, or meets the requirements of Minnesota Statutes, section
349.166,
subdivision 1, paragraph (b).
B. A
distributor may not sell, lease, or furnish gambling equipment to an
organization before the effective date of the organization's license. This item
does not pertain to exempt or excluded organizations if the distributor has a
copy of the organization's exempt permit or exclusion authorization.
C. Gambling equipment sold or leased for use
in Minnesota must be delivered only to the licensed, exempt, or excluded
organization that ordered the equipment.
D. A distributor may not provide any
merchandise prize, as part of the sale of any game or as a gift or sale, to a
licensed, exempt, or excluded organization or its employees.
E. A distributor must include a packing list
that lists all items for each shipment of gambling equipment to an
organization.
F. A distributor must
not sell or provide a partial series of bingo paper sheets or bingo paper sheet
packets to a licensed organization. A distributor may sell a partial series to
an exempt or excluded organization.
G. A distributor must document the terms of a
lease or sale of permanent gambling equipment and comply with the following.
(1) A distributor must not enter into a lease
agreement for permanent gambling equipment with an organization unless the
distributor owns or has a lease agreement with a licensed manufacturer for that
equipment.
(2) If an organization's
license or authorization is suspended, revoked, lapsed, or terminated, the
lease agreement must be canceled.
(3) A distributor must not provide any
additional keys for a pull-tab dispensing device after the pull-tab dispensing
device has been leased or sold.
H. Gambling equipment designated for sale to
an Indian tribe must be stored in a separate area of the distributor's
warehouse and cannot contain the Minnesota geographic symbol required by
Minnesota Statutes, section
349.163,
subdivision 5, paragraph (d).
I.
The following apply to the lease of electronic bingo devices used for nonlinked
bingo games:
(1) A distributor may only lease
electronic bingo devices to a licensed organization and is prohibited from
selling electronic bingo devices to a licensed organization.
(2) The distributor may lease electronic
bingo devices to more than one licensed organization at the same permitted
premises.
(3) The lease agreement
must contain the organization's license number, name and address of the
permitted premises where the electronic bingo devices will be used, and terms
of the lease agreement, including a prohibition that the electronic bingo
devices must not be transferred to another permitted premises unless approved
in writing by the board.
(4) The
lease price of an electronic bingo device:
(a)
must be based on a predetermined monthly amount or based on the per unit lease
amount for the previous calendar week; and
(b) must not be based on a percentage of
gross receipts.
(5) The
distributor must submit a copy of the lease agreement to the board within ten
days of signing or amending a lease agreement.
J. Electronic pull-tab system and device
leases must contain:
(1) the organization's
license number;
(2) the name and
address of the permitted premises where the electronic pull-tab system and
devices will be used;
(3) the terms
of the lease agreement;
(4) a
clause prohibiting electronic pull-tab devices from being transferred to
another permitted premises unless prior written approval by the board is
obtained; and
(5) a termination
clause of not greater than six months.
K. The lease price of an electronic pull-tab
system and devices:
(1) must be based on a
predetermined lease amount; and
(2)
must not be based on a percentage of gross receipts.
L. The distributor must submit a copy of the
electronic pull-tab system and device lease agreement to the board within ten
days of signing or amending a lease agreement.
M. The following pertain to gambling
equipment that is sold or leased on an exclusive basis.
(1) Gambling equipment with a proprietary
name of an organization that owns its permitted premises may be sold or leased
on an exclusive basis to that organization.
(2) Gambling equipment with a proprietary
name for a leased site may not be sold or leased on an exclusive basis to an
organization.
(3) A distributor may
not pay a royalty to another licensed distributor for the design and
manufacture of gambling equipment that is sold or leased on an exclusive
basis.
Subp.
3.
Registration of permanent gambling equipment.
A distributor must not sell, lease, transfer, furnish, or
provide any permanent gambling equipment to an organization unless the
equipment has been registered in the following manner.
A. A distributor must place a state
registration stamp, obtained from the board, on permanent equipment sold or
leased to an organization. The distributor must place the stamp on the front of
each paddlewheel, paddlewheel table, and pull-tab dispensing device, and on
each bingo number selection device. This item does not pertain to a
programmable electronic device as defined under Minnesota Statutes, section
349.12, subdivision
18, paragraph (b), clauses (2), (3), and (5).
B. The distributor must keep a record of
permanent gambling equipment leased to a licensed organization. The record must
include the organization's name, address, and license number, and the date the
equipment was leased to the organization, and if returned, the date the
equipment was returned by the organization to the distributor.
C. To register permanent gambling equipment
with the board, the distributor must submit a report to the board, on a form
prescribed by the board, that includes the information required by items A and
B.
D. A distributor must not
transfer or give state registration stamps to any person, distributor, linked
bingo game provider, or manufacturer.
Subp. 4.
Return of defective paper
pull-tab and tipboard game; issuing credit invoices.
This subpart pertains to the return of a paper pull-tab or
tipboard game that was not manufactured in compliance with the standards in
part
7864.0230 and was returned to the
distributor according to this subpart and part
7861.0260, subpart
7.
A. For a game that is returned from an
organization before being put into play, the following apply.
(1) Within five business days of accepting
the return of a game, the distributor must return the game to the manufacturer
with documentation that the game does not meet the standards in part
7864.0230.
(2) Within five business days of receiving
credit from the manufacturer, the distributor must issue a credit invoice to
the organization unless the distributor notifies the commissioner of revenue in
writing that there is a business dispute regarding the returned game. A copy of
the credit invoice must be filed electronically, as required by the
commissioner of revenue.
(3) If the
distributor ships a replacement game to the organization, the distributor must
prepare a sales invoice as required in subpart
6.
B. For a game returned to a distributor from
an organization during play or after being removed from play, the following
apply.
(1) Within five business days of
accepting the return of a game, the distributor must return the game to the
manufacturer for a determination as to whether the game was manufactured in
compliance with the standards in part
7864.0230. After a determination
has been made and the game returned to the distributor, the distributor must
return the game to the organization to keep as a played game.
(2) Within five business days of receiving a
credit invoice and written determination from the manufacturer, the distributor
must issue a credit invoice to the organization for the cost of the game and
any valid and documented losses incurred over which the organization had no
control or ability to prevent. A copy of the credit invoice must be filed
electronically, as required by the commissioner of revenue.
Subp. 4a.
Defective electronic pull-tab game.
A. If an electronic pull-tab game is found to
be defective, the distributor must immediately:
(1) suspend the defective game and remove it
from play if active;
(2) notify the
Gambling Control Board; and
(3)
file with the board a report of games pulled from play.
B. For an electronic pull-tab game that is
returned from an organization before being put into play, the following apply:
(1) Within five business days of returning a
game, the distributor must return the game to the manufacturer with
documentation that the game does not meet the standards in part
7864.0235.
(2) Within five business days of receiving
credit, if applicable, from the manufacturer, the distributor must issue a
credit to the organization unless the distributor notifies the commissioner of
revenue in writing that there is a business dispute regarding the returned
game. A copy of the credit must be filed electronically, as required by the
commissioner of revenue.
(3) If the
distributor provides a replacement game to the organization, the distributor
must prepare a sales invoice as required in subpart
6.
C. For an electronic pull-tab game found to
be defective during play or after being removed from play, the following apply:
(1) If a determination is made that the game
was not manufactured in compliance with the standards in part
7864.0235, the distributor must
notify the organization to close the game and to retain it as a played game in
the organization's records.
(2)
Within five business days of receiving a credit and written determination from
the manufacturer, the distributor must issue a credit to the organization for
the cost of the game, if applicable, and any valid and documented losses
incurred over which the organization had no control or ability to prevent. A
copy of the credit must be filed electronically, as required by the
commissioner of revenue.
Subp. 4b.
Defective, altered, lost, or
stolen electronic pull-tab device.
A.
If an organization notifies a distributor of a defective or an altered
electronic pull-tab device, the distributor must immediately notify the
manufacturer, or the linked bingo game provider, if applicable, and the board.
If the organization has not removed the device from play, the distributor or
the linked bingo game provider must immediately ensure the device is removed
from play.
B. If an organization
notifies a distributor of a lost or stolen electronic pull-tab device, the
distributor must immediately notify the manufacturer, or the linked bingo game
provider if applicable, and the board.
C. The distributor or linked bingo game
provider must report to the board any removal of a defective or an altered
electronic pull-tab device at a site, or any lost or stolen device, within one
business day.
Subp. 5.
Recall of gambling equipment; issuing credit invoices.
A distributor must participate in a gambling equipment recall
mandated by the board or initiated by the manufacturer.
A. Within three business days of receiving
notification from the manufacturer or the board director, the distributor must
initiate the recall from organizations to which it sold the gambling
equipment.
B. The distributor must
complete the recall within 15 business days of initiation and notify the board
and the commissioner of revenue in writing that it has completed the recall.
The recall does not pertain to games already in play which must be kept by the
organization as played games. The notification must include the following:
(1) an inventory of the recalled gambling
equipment;
(2) bar code
information, as required by the commissioner of revenue; and
(3) a list of all organizations, including
license or exempt numbers, from which the gambling equipment was
recalled.
C. Within
seven business days of receiving a credit invoice from the manufacturer, the
distributor must issue credit invoices to all organizations returning gambling
equipment under the recall. Credit invoices must include the cost of freight
paid by the organization and any valid and documented losses incurred over
which the organization had no control or ability to prevent. Copies of the
credit invoices must be filed electronically as required by the commissioner of
revenue.
Subp. 6.
Sales invoices.
A distributor who sells, leases, or provides gambling equipment
must record the transaction on a sales invoice which must contain the following
information:
A. distributor's name,
address, telephone number, and license number;
B. organization's name, address, license
number or excluded or exempt authorization, and premises permit number of the
site where the gambling equipment was delivered, and for a licensed
organization the name and address of an entity as allowed under Minnesota
Statutes, section
349.166,
subdivision 1, paragraph (b);
C.
invoice number;
D. name of the
person who ordered the gambling equipment, and name of the distributor's
licensed salesperson who sold the gambling equipment;
E. date of shipment and shipping charges, if
any;
F. any applicable sales
tax;
G. unit price or lease cost of
each item and total amount being invoiced; and
H. any value for discount, rebate, or other
incentive affecting the unit price which must be separately stated.
Invoices must also contain information required for the type of
gambling equipment sold, as required by subparts
7 to
12.
Subp. 7.
Sales invoice for
pull-tabs and tipboards.
In addition to the requirements of subpart
6, invoices for pull-tabs and
tipboards must contain the following information:
A. number of deals;
B. description of each deal, including the
game name, manufacturer identification, part number, and serial
number;
C. last sale amount, if
any;
D. total ideal gross receipts;
and
E. total applicable gambling
tax.
Subp. 7a.
Sales invoice for promotional pull-tab and tipboard tickets.
A distributor who sells promotional pull-tab and tipboard
tickets, as defined in part
7861.0210, subpart 43, and
Minnesota Statutes, section
349.12, subdivisions
18 and 31, must record the transaction on a sales invoice which must contain
the following information:
A.
distributor's name, address, telephone number, and license number;
B. name of the business entity to whom the
tickets are sold and the address of the site where the tickets were delivered.
If the tickets are sold to an individual, the sales invoice must contain the
individual's name and address and the address of the site where the tickets
were delivered;
C. invoice
number;
D. name of the person who
ordered the tickets, and name of the distributor's licensed salesperson who
sold the tickets;
E. description of
the tickets, including name, manufacturer identification, form number, part
number, and serial number;
F. date
of shipment and shipping charges, if any;
G. any applicable sales tax; and
H. unit price and total amount being
invoiced.
Subp. 8.
Sales invoice for paddleticket cards.
In addition to the requirements of subpart
6, invoices for paddleticket
cards must contain the following information:
A. number of sealed groupings;
B. ideal gross receipts for each sealed
grouping; and
C. for each sealed
grouping, a complete description including the game name, manufacturer
identification, part number, and serial number.
Subp. 9.
Sales invoice for sealed
breakopen bingo paper.
In addition to the requirements of subpart
6, invoices for sealed
breakopen bingo paper sheets must contain the following information:
A. serial number and color of each set of
sealed breakopen bingo paper sheets;
B. whether each set is an original or
trade-in set; and
C. price for
which the sealed breakopen bingo paper sheet must be sold by the
organization.
Subp. 10.
Sales invoice for sets of bingo paper sheet packets.
In addition to the requirements of subpart
6, invoices for sets of bingo
paper sheet packets must contain the following information:
A. color of each sheet in the packet in the
order of collation;
B. number of
sheets per packet (UP's);
C. number
of faces per sheet (ON's);
D.
series;
E. price for which the
packet must be sold by the organization; and
F. serial number from each sheet in the
packet if the serial numbers are not uniform throughout the packet, or the
serial number from the top sheet in each packet if the serial numbers are
uniform throughout the packet. The serial numbers may be recorded on a separate
document if the invoice states that the document is attached.
Subp. 11.
Sales invoice for
bingo paper sheets (case paper).
In addition to the requirements of subpart
6, invoices for bingo paper
sheets (case paper) must contain the following:
A. color;
B. number of sheets per case;
C. number of faces per sheet
(ON's);
D. series;
E. price for which the bingo paper sheets
must be sold by the organization; and
F. serial number from the top sheet in the
case.
Subp. 11a.
Sales invoice for raffle boards.
In addition to the requirements of subpart
6, invoices for raffle boards
must contain the following:
A. the
number of raffle boards;
B. the
price for which the raffle board entries must be sold by the
organization;
C. a description of
each board, including the game name, manufacturer identification, part number,
and serial number; and
D. total
ideal gross receipts.
Subp.
12.
Sales invoice for permanent gambling equipment.
In addition to the requirements of subpart
6, invoices for permanent
gambling equipment must contain the following information:
A. a description of the equipment being sold
or leased, including the manufacturer name and the make, model number, and
serial number; and
B. the state
registration stamp number attached to the gambling equipment, as required by
subpart
3.
Subp. 13.
Monthly sales report to board
required for permanent gambling equipment.
After the sale or lease of permanent gambling equipment, the
distributor must provide the following information to the board by the 20th of
the next month:
A. distributor's name,
address, and license number;
B.
manufacturer's name, address, and license number from which the distributor
purchased or leased the gambling equipment;
C. organization's name, address, and license
number, exempt permit number, or exclusion authorization, or the name and
address of the entity as allowed by Minnesota Statutes, section
349.166,
subdivision 1, paragraph (b);
D.
make, model number, and serial number of the gambling equipment; and
E. state registration stamp number attached
to the gambling equipment, as required by subpart
3.
Subp. 14.
Monthly sales report to
revenue required.
A distributor who sells, leases, or provides gambling equipment
must electronically report the transactions made each month to the commissioner
of revenue as required under Minnesota Statutes, section
297E.05.
The report is due by the 20th of the next month.
Subp. 15.
Pricing report to director
required.
A. A distributor must submit
a pricing report to the director on a monthly basis, in a format approved by
the director, listing sales prices for which all gambling equipment was
sold.
B. A distributor must submit
a pricing report to the director on an annual basis in a format approved by the
director and must include:
(1) distributors
name, address, and license number;
(2) date the report was prepared;
(3) gambling equipment the distributor offers
for sale or lease; and
(4) prices
at which all gambling equipment currently offered by the distributor will be
sold or leased.
C.
Adjustments for transportation, discounts, and rebates must be reported
separately on the annual pricing report, and are subject to review and approval
by the director.
D. Changes or
additions to the previously filed reports must be reported ten days before the
change or addition.
Subp.
16.
Delinquent organization notice to board required.
This subpart pertains to the notice to the board that an
organization is delinquent in payment of an invoice or lease agreement.
A. If a distributor has not received payment
from an organization within 30 days of the day immediately following the date
of the invoice or lease agreement, the distributor must report the delinquency
to the board in writing in an electronic format authorized by the board. The
distributor must ensure that the board will receive the notice by the 31st day,
or the next business day, after the invoice date for the sale or lease of the
gambling equipment. The notice must include:
(1) the organization's name and license or
exempt number; and
(2) an invoice
or lease agreement date, invoice number, and total dollar amount of the invoice
or lease agreement.
B.
If a distributor has not received payment in full within 60 days of its initial
notice to the board, the distributor must notify the board of the continued
delinquency. The distributor must ensure that the board will receive the notice
on the 61st day, or the next business day, after the distributor's initial
report to the board.
C. When the
delinquency is paid, the distributor must notify the board
immediately.
D. Upon receipt of the
initial notice under item A, the board must:
(1) notify and direct the organization to
eliminate the delinquency; and
(2)
notify all distributors and linked bingo game providers that until further
notice they may only sell or lease gambling equipment to the delinquent
organization on a cash basis. "Cash" means a debit card payment, electronic
transaction, or check drawn on the organization's gambling account.
E. Upon receipt of the second
notice under item B, the board must notify:
(1) the organization that the sale and lease
of gambling equipment to the organization will not be authorized until the
delinquency is eliminated; and
(2)
all distributors or linked bingo game providers that they may not sell or lease
any gambling equipment to the delinquent organization.
F. When the board has been notified that the
delinquency is paid in full, the board must notify all distributors and linked
bingo game providers that the delinquency has been paid and that the sale or
lease of gambling equipment to the organization is authorized.
G. Until authorized by the board, a
distributor or linked bingo game provider may not extend credit or sell or
lease gambling equipment to an organization in violation of an order under
items D and E.
Subp. 17.
Records and reports maintained.
A distributor must maintain reports and records of the
purchase, sale, and lease of gambling equipment as required by this part and by
Minnesota Statutes, section
297E.05,
for 3-1/2 years. A distributor must maintain a record of the registration of
permanent gambling equipment.
Statutory Authority: MS s
14.055;
349.12;
349.151;
349.154;
349.155;
349.16;
349.162;
349.163;
349.1635;
349.165;
349.166;
349.167;
349.169;
349.17;
349.1711;
349.1721;
349.173;
349.19;
349.191;
349.211
