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House Research Department <br />Charitable Gambling in Minnesota <br />License and Permits <br />August2402 <br />Page 4 <br />Charitable gambling. may only be conducted by a licensed organization.. A fraternal, veterans, <br />religious, or other nonprofit organization may apply for licensing if it has been in for at <br />least three years and has at least 15 active members. <br />Gambiiug licenses are issued. by the.director of the board under criteria set down by the board. <br />Licenses are valid for two years and are issued without fee. <br />In addition to the licensing requirements organizations are required to obtain a separate preimiseg <br />permit from. the director of the board for each location where gambling will be conducted, Like: <br />licenses, premises permits are valid for two years. The annual cost of the.permits ranges from <br />$75 to $200 depending on the type or types of gambling to be conducted at the location, <br />The board also licenses distributors (wholesalers) and manufacturers of gambling equipment and <br />the owners of bingo halls. <br />Use of:Proceeds. <br />An organization's gross profits from gambling (gross receipts minus pries) amgbe used only for <br />"allowable: expenses" and expenditures for "lawful purposes" (including. gambling taxes), <br />Allowable expenses are defined: as any expenses directiy related to the conduct of gambling:. The <br />law limits expenses.for.bingo to a:maximum of 70 percent.of gross. profitless the state bingo tax. <br />For pull -tabs and. other forms of gambling the niaximuni expense percentage is 55.13ercent, <br />"Lawful. purposes" axe: <br />Atiy expenditure by or contribution to a 501(c)(3) tax-exempt organization, or, to. <br />a.501(c)(4) organization that:conducts a.com=nity festival, if the organization <br />insets board operating and expeiiditure.0takdards <br />< Contributions to- individuals. or families o.relieve poverty, homelessness, or <br />disability <br />< Contributions for treatment of delayer] post traumatic stress syndrome or <br />compulsive gambling <br />Contributions to an accredited educational institution <br />< Contributions to a. scholarship fund wherefluids are awarded; through an open <br />and fair selection process. <br />< Activities that recognize humanitarian or military service <br />< Recreational, community, and athletic facilities primarily for persons under 21, <br />provided they &- not discriminate on the basis of gender <br />< State, local, and federal.. taxes on gambling and the state unrelated business <br />income tax on gambling <br />