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<br />Minn. Stat SS 609.75-609.763. <br /> <br />25 U,S.c. 2701 et seq.; Minn. <br />Stat. ~ 3.9221. <br /> <br />Minn. Stat. ch. 349A; Minn. <br />Stat. ch, 240; Minn. Stal ch. <br />349 <br /> <br />Minn. Stat. S 349.12 subd. 24. <br /> <br />Minn. Stat. S 349.12 subd. 28. <br />Minn. Rule part 7861.0010. <br /> <br />Minn. Stat. S 349.15. <br /> <br />Minn. Stat S 349.]2 subd. 3((I} <br /> <br />Lawful Gambling <br /> <br />I. Introduction <br /> <br />Minnesota law generally criminalizes gambling. But, there are number of <br />exceptions. Inman gaming may be conducted pursuant to a tribal-state <br />compact. State law allows the making of private social bets, and permits <br />certain types of regulated gambling. Permitted gambling includes the state <br />lottery, pari-mutuel betting, and lawful gambling. These are the only types of <br />gambling that may be conducted in Minuesota. <br /> <br />This memorandum mscusses lawful gambling. Lawful gambling is the <br />"operation, conduct or sale of bingo, raffles, paddlewheels, tipboards, and <br />pull-tabs." It is the type of gambling that cities are most likely to regulate. <br /> <br />II. Who may conduct lawful <br />gambling? <br /> <br />State law authorizes fraternal, religious, veterans', or other non-profit <br />organizations to conduct lawful gambling. Non-profit organizations are <br />organizations that: <br /> <br />. Have a current letter of exemption from the Internal Revenue Service <br />recognizing the organization as a non-profit organization exempt from <br />payment of income taxes; <br /> <br />. Are incorporated as a nonprofit corporation and registered with the <br />secretary of state under Minuesota law; or <br /> <br />. Are affiliates, subordinates, or chapters of a statewide parent <br />organization that qualifies as a non-profit. <br /> <br />In order to be licensed to conduct lawful gambling, organizations must also <br />have at least 15 members and have been in existence for three consecutive <br />years. In addition, the Board will not license organizations that exist solely <br />for the purpose of conducting gambling. <br /> <br />Neither cities nor departments of cities are authorized to conduct gambling. <br />A city fire department, for example, may not conduct lawful gambling. <br />However, a fire relief association may conduct lawful gambling since it is <br />separately incorporated as a non-profit organization. <br /> <br />III. Lawful gambling expenditures <br /> <br />Organizations conduct lawful gambling to raise money. However, they are <br />not completely free to spend the money as they please. State law allows <br />organizations to spend lawful gambling profits only on allowable expenses or <br />for lawful purposes. Allowable expenses include purchases of goods, <br />services or other items directly related to the conduct of lawful gambling. <br />Advertising expenditures are also allowable expenses provided that the <br />amount expended does not exceed the lesser of 5 percent of the annual gross <br />profits of the organization or $5,000. <br /> <br />7 <br />