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HF 4994

Townships permitted to regulate lawful gambling.

2025-2026 Regular Session Introduced by Drew Roach

Minnesota townships could regulate lawful gambling with permits, local fees up to $100, and a 3% local tax to cover regulatory costs, plus required reporting.

Introduction and first reading, referred to Elections Finance and Government Operations
#citiesandtowns #gambling #governmentaloperations-local
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Bill Summary · HF 4994

Summary of HF 4994 (2025-2026) — Townships Permitted to Regulate Lawful Gambling (Minnesota)

  • Jurisdiction: Minnesota House of Representatives
  • Session: 2025-2026
  • Bill Number: HF 4994
  • Author: Roach (co-sponsor)

Purpose and Intent

HF 4994 would authorize statutory or home rule townships (in addition to cities and counties) to regulate, and in some cases tax, lawful gambling within their jurisdiction. The bill clarifies and expands local government's authority to impose more stringent regulations, require permits, set investigation fees, and establish local gambling taxes to cover regulatory costs, subject to specific limits and reporting requirements.

Key Provisions and Changes

1) Local Investigation Fees (Section 1)

  • Expands the ability to assess an annual local investigation fee on organizations applying for an initial premises permit or conducting lawful gambling at a site within the jurisdiction under Minnesota Statutes § 349.213, subd. 2.
  • Fee caps (subd. 8, amended):
    • Cities of the first class: up to $500
    • Cities of the second class: up to $250
    • All other cities and townships: up to $100
    • Counties: up to $375

2) Local Authority to Regulate and Permit (Section 2)

  • Local Regulation (Subd. 1(a)):
    • Cities, townships, and counties may adopt more stringent regulation of lawful gambling within their jurisdiction, including prohibition of lawful gambling.
  • Permit Requirement (Subd. 1(b)):
    • Local governments may require a permit for conduct of gambling exempt from licensing under § 349.166.
    • Permit fee cap: up to $100.
  • Scope of Local Authority (Subd. 1(c)–(1)(g)):
    • The authority does not grant power to require licenses or fees for licenses or permits to license or permit organizations, gambling managers, employees, or sales by distributors or linked bingo providers licensed/registered with the board.
    • No requirement for organizations to spend more than 10% per year of net profits derived from lawful gambling, with definitions of net profits and allowable expenses.
    • Permissible expenditures and reporting:
    • If a city/township/county imposes a condition to contribute, a 10%-per-year net profits contribution to a fund administered by the local government is allowed (and must be used for charitable contributions or police/fire/public safety-related services, excluding pension obligations).
    • Annual reporting to the Board by March 15, detailing revenues, interest, and expenditures for the previous calendar year.
    • The fund’s use must be for charitable contributions or public safety-related services; contributions are not considered expenditures or taxes.
  • Local Expenditure Requirements (Subd. 1(f)):
    • A local government may require charitable contributions of organizations conducting lawful gambling, and must report financials if such contributions are authorized under this clause.
  • Local Expenditure Within Trade Area (Subd. 1(g)):
    • May require that expenditures for lawful purposes be directed to activities conducted or located within the local trade area.
    • The trade area must include each adjacent city/township.
  • Uniformity (Subd. 1(h)):
    • If a more stringent regulation or prohibition is adopted by a political subdivision, it must apply equally to all forms of lawful gambling within that jurisdiction, with an exception allowing paddlewheels to be prohibited.

3) Local Approval for Premises Permits (Subd. 2)

  • An initial premises permit cannot be issued without local approval.
    • Approval must come from the city council, township board, or county board where the premises is located.
    • The approving body must adopt a resolution within 90 days of the permit application date.

4) Local Gambling Tax (Subd. 3)

  • Authorized use: A statutory/home rule city, township, or county may impose a local gambling tax on licensed organizations within its jurisdiction, but only to cover regulatory costs.
  • Tax cap: Up to 3% per year of gross receipts from all lawful gambling, less prizes paid out.
  • Tax proceeds usage: Limited to regulation of lawful gambling; cannot be used for other purposes.
  • Administration: Local documents related to inspections, fines, penalties, or corrective actions must be shared with the Board within 30 days of filing.
  • Tax as in lieu: The local tax replaces all other local taxes and local investigation fees on lawful gambling.
  • Reporting: Annual reporting to the Board by March 15 with (1) revenue from the tax and (2) how the proceeds were used.

Who Is Affected

  • Local governments: Townships, statutory or home rule cities, and counties may gain greater regulatory authority over lawful gambling.
  • Gambling organizations: Premises operators, gambling managers, employees, and distributors linked to licensed gambling activities may see new permit requirements, reporting obligations, and potential local taxes or fees to support regulation.
  • The Minnesota Gaming Board: Receives required reports and will coordinate with local units on regulatory costs and compliance.

Procedural and Timeline Considerations

  • Local approvals: For new premises permits, a resolution approving the permit must be adopted within 90 days of application.
  • Reporting deadlines:
    • Annual financial/reporting to the Board by March 15 for fund contributions and regulatory expenditures.
    • March 15 reporting also applies to revenue and use of local tax proceeds.
  • Effective date: Not specified in the text provided; typically, if enacted, would follow standard statutory effective dates after passage and signing.

Summary

HF 4994 would authorize Minnesota townships to impose local regulation, permits, investigation fees (up to $100), and local gambling taxes (up to 3% of gross receipts) to fund regulatory activities for lawful gambling. It clarifies local control to prohibit gambling or impose stricter rules, requires local approval for new premises permits, and mandates reporting to the Minnesota Gaming Board. It also allows limited requirements around charitable contributions and expenditures directed within defined trade areas, with safeguards to ensure uniform application and transparency. The bill aims to formalize township authority to regulate lawful gambling in a manner consistent with existing framework used by cities and counties.

Compiled from official sources — confirm details with the bill’s official record.

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