Minnesota Gambling Rules
Minnesota has no state laws that address placing bets with offshore sportsbooks. These federal laws only pertain to US-based sports betting sites as well. Minnesota has laws against state based gambling, but there is nothing in the state’s statutes that prevent.
Registered nonprofit organizations may conduct lawful (charitable) gambling such as bingo, pull-tabs, tip boards, and paddle tickets. Some food or bar establishments lease or grant space to these organizations.
These activities are subject to the state’s Lawful Gambling Tax (but not sales tax).
Lawful Gambling Tax Instructions Forms. Barcode Label Sheet. B2, Lawful Gambling Report of Barcoded Games CI, Annual Certified Physical Inventory and Cash Count Summary DA101, Lawful Gambling Distributor Permit Application. ER, Lawful Gambling Tax Credit for Exempt Raffles G1, Lawful Gambling Monthly Tax Return. GAMBLING LAWS IN MINNESOTA In Minnesota, legal forms of gambling include lotteries, poker, casino gambling, pari-mutuel wagering on horses and dogs, skilled based tournaments, bingo, raffles, paddlewheel, tip board, and charitable gambling. Click on the following links for more information about Minnesota gambling regulatory statutes. These links bring you to the Minnesota Office of the Revisor of Statutes. Minnesota Gambling Regulations; Lawful gambling; State Lottery; Parimutuel racing; Gambling Enforcement; Statute regarding compacts for indian gaming; Agency rules and regulations. Gambling Winnings Gambling winnings are subject to federal and Minnesota income taxes. This includes winnings from the Minnesota State Lottery and other lotteries.
For more information:
- See Gambling Taxes
- Visit the Gambling Control Board website
- Call the Gambling Control Board at 651-539-1900
A retail sale is:
- The sale, lease, or rental of tangible personal property
- The sale of tangible personal property used in conducting lawful gambling under chapter 349 or State Lottery under chapter 349A and is not considered a sale of property for resale
The table below explains when sales tax applies to the sale of gambling devices and equipment.
| Question | Is the Item Taxable? | References |
|---|---|---|
| Is the rental of electronic gaming devices taxable? | Yes. The lessee is responsible for the sales tax on the rental or lease of the equipment. It does not matter if there is a revenue sharing agreement. |
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| Are monthly equipment charges taxable? | Yes. The lessee is responsible for the sales tax on the rental or lease of the equipment. |
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| Are revenue sharing agreements taxable? | Yes. The lessee is responsible for the sales tax on the total sales price of the rental or lease of an electronic gaming device – even when the sales price is separated into various components. |
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| Are bingo cards and pull-tabs taxable? | Yes. The retailer is responsible for the sales tax unless an exemption applies – including purchases of digital products. |
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| Are electronic pull-tabs taxable? | Yes. The retailer is responsible for the sales tax unless an exemption applies – including purchases of digital products. |
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| Are apps for electronic gaming devices taxable? | Yes, they are taxable when sold to the distributor. |
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| Is the sale of the software taxable? | Yes, they are taxable when sold to the distributor. |
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| Does local sales and use tax apply when the city also has a local gambling tax? | No. However, Minnesota sales tax (6.875%) still applies. |
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| Are purchases of gambling equipment by a 501(c)3 organization with a gambling license taxable? | Yes. These organizations must pay sales tax when they purchase, lease, or rent gambling devices and equipment. |
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If you have any questions, email us at salesuse.tech@state.mn.us.
Federal Internet Gambling Laws
Internet gambling violates provisions of federal law under 18 U.S.C. § 1084. This section prohibits the foreign or interstate transmission of bets or wagers or information on bets or wagers by use of a wire communication. For example, operating an off-shore sports betting operation that utilizes the telephone system within the United States is illegal, United States v. Blair, 54 F.3d 639 (10th Cir. 1995). As Internet transmissions are conducted over telephone lines, this is a potential area of liability for gambling service providers.
Mn Gambling Rules And Regulations
Minnesota Internet Gambling Laws
Internet gambling services are also illegal in Minnesota. Such activities include sporting events, lottery tickets, and simulated casino games. Generally, it is unlawful in Minnesota to sell or transfer a chance to participate in a lottery, Minn. Stat. § 609.755(2). Sports bookmaking is defined as “the activity of intentionally receiving, recording or forwarding within any 30-day period more than five bets, or offers to bet, that total more than $2,500 on any one or more sporting events,” Minn. Stat. § 609.75, Subd. 7.
Engaging in sports bookmaking is a felony. Finally, intentionally receiving, recording, or forwarding bets or offers to bet in lesser amounts is a gross misdemeanor, Minn. Stat. § 609.76, Subd. 1(7).
MN Court of Appeals on Internet Gambling
The Minnesota Court of Appeals upheld jurisdiction against an out of state Internet gambling service provider in State of Minnesota v. Granite Gate Resorts, Inc., 568N.W.2d 715 (Minn. Ct. App. 1997). The Court found that because the provider had advertised on the Internet on-line gambling services and had developed from the Internet a mailing list that included one or more Minnesota residents, the provider had purposefully availed itself of the privilege of conducting commercial activities in Minnesota to an extent that maintenance of an action in Minnesota did not offend traditional notions of fair play and substantial justice. Therefore, the provider was subject to personal jurisdiction in Minnesota.
Individual Bettor Liability
Minnesota State Gambling Rules
There is also a potential for individual bettor liability in Minnesota. In Minnesota it is unlawful to make a bet through Internet gambling organizations. Minnesota law makes it a misdemeanor to place a bet unless done pursuant to an exempted, state-regulated activity, such as licensed charitable gambling or the state lottery, Minn. Stat. §§ 609.75, Subd. 2 -3; 609.755(1). As Internet gambling organizations are not exempted, any person in Minnesota who places a bet through one of these organizations may be committing a crime. Further, Minnesota law provides for forfeiture provisions related to unlawful gambling activity. It is the Minnesota Attorney General’s position that a computer that is used to play a game of chance for something of value would be subject to forfeiture under Minnesota law. For the Minnesota Attorney General’s position on the legality of gambling, see http://www.jmls.edu/cyber/ docs/minn-ag.html.