SF5045

Purpose

This bill changes how revenue from electronic pulltab gambling is collected and used in Minnesota. It preserves general tax collection while dedicating portions of the revenue to specific programs and industries. It also creates new funding streams to support problem gambling treatment, public awareness, and, starting in 2027, the Minnesotabred Thoroughbred racing industry.

Key Provisions

• Tax collection and distribution
  • Distributors must file monthly sales figures; taxes are due with the gambling tax return and returned by the 20th day of the following month.
  • Proceeds from these taxes, along with license and other relevant fees, go to the general fund.
  • The retail sale of pulltabs or tipboards by the organization is exempt from the state sales tax and local taxes and licenses, except for a specified fee.
• Revenue allocation for problem gambling and awareness
  • 0.5% of the revenue deposited in the general fund is appropriated to the commissioner of human services for the compulsive gambling treatment program (section 245.98).
  • 0.5% of the revenue deposited in the general fund is appropriated to a state affiliate recognized by the National Council on Problem Gambling to support public awareness, education, treatment training, and research related to problem gambling.
  • The funds must supplement, not replace, existing funding.
  • The commissioner of human services must provide monthly statements to the state affiliate and, beginning in 2022, an annual reconciliation of deposited amounts to legislative chairs and ranking minority members.
• Support for the Minnesotabred Thoroughbred industry
  • Beginning in fiscal year 2027, $2,000,000 of revenue deposited in the general fund attributable to electronic pulltab deals or games is annually appropriated to the Minnesota Racing Commission.
  • These funds are intended to supplement purses for races exclusively for Minnesotabred Thoroughbreds and to provide grants, loans, and other financial incentives to breeders and owners to promote and support the Minnesotabred industry.
• Compliance and reporting
  • The bill requires reporting and reconciliation of money deposited under the problem gambling and awareness provisions, ensuring transparency and oversight.

What This Changes in the Law

• Adds dedicated funding streams from electronic pulltab revenue to:
  • Problem gambling treatment and public awareness programs (through the Department of Human Services and the National Council on Problem Gambling affiliate).
  • The Minnesota Racing Commission for Minnesotabred Thoroughbred purses and related industry incentives starting in 2027.
• Implements a new mechanism to track and publicly reconcile how pulltab revenue is spent, including annual reporting to lawmakers.
• Maintains a general tax framework for pulltables but provides a targeted use for revenue and clarifies tax treatment for organizations selling pulltabs vs. distributors.

Financial and Administrative Impacts

• Increases earmarked funding for problem gambling initiatives and for horse racing-related support aimed at the Minnesotabred industry.
• Creates ongoing annual funding of $2,000,000 to the Minnesota Racing Commission starting in 2027.
• Introduces monthly reporting requirements and annual reconciliations to increase transparency of fund allocations.

Implementation Timeline (Highlights)

• 2022: Annual reconciliation requirement begins (for deposits related to the problem gambling provisions).
• 2027: First year for the $2,000,000 annual appropriation to the Minnesota Racing Commission for Minnesotabred-related purses and incentives.

Relevant Terms - electronic pulltab, pulltabs, tipboards - Minnesotabred Thoroughbred, Minnesota Racing Commission - compulsive gambling treatment program, National Council on Problem Gambling - problem gambling, public awareness, education, training, research - distributor, organization (pulltab seller), general fund - sales tax (chapter 297A), licenses, fees (section 349.16 subdivision 8) - Minnesota Statutes 2024 section 297E.02 subdivision 3; section 245.98 - appropriations, grants, loans, incentives, purses