Pull tabs in Minnesota are a form of lawful gambling that only licensed nonprofit organizations can sell, and only under detailed rules set out in Chapter 349 of the Minnesota Statutes and enforced by the Minnesota Gambling Control Board (MGCB). The rules cover who qualifies for a license, where tickets can be sold, how much a ticket can cost, how much of the profit has to go to charity, and what taxes apply. Getting any of it wrong can mean fines, license revocation, or criminal charges.
What a Pull Tab Is
Minnesota defines a pull tab as a single folded or banded ticket, or a multi-ply card with perforated break-open tabs, whose face is initially covered to conceal one or more numbers or symbols. One or more tickets in each set are designated in advance as winners. Pull tabs sit inside the state’s broader category of “lawful gambling,” which also includes bingo, raffles, paddlewheels, and tipboards. Every pull tab game must be approved by the MGCB before it can be sold, and tickets must come from a manufacturer the board has licensed.
Only nonprofits run these games. Commercial pull tab sales are not a thing in Minnesota; if a bar or liquor store has a pull tab booth, a licensed charitable organization is operating it.
Who Can Get Licensed
The state screens out organizations without a real charitable history. To qualify for an organization license, a nonprofit must meet all of the following:
- Have operated at least three consecutive years as a registered Minnesota nonprofit corporation or as an IRS-recognized tax-exempt entity.
- Have at least 15 active members when it applies.
- Not exist solely to conduct gambling.
- Identify in the application the lawful purposes it will spend net profits on, and set an annual charitable contribution goal as a percentage of gross profits.
- Name a qualified gambling manager to oversee all gambling activity.
The board can also deny a license if it concludes the applicant is really trying to reduce or evade the state gambling tax under Chapter 297E.
License Fees and Ongoing Costs
The annual organization license fee is $350. Organizations expecting less than $100,000 in gross annual receipts can ask the board to waive it. A gambling manager license costs $100 per year. Each premises where the organization operates needs its own permit at $150 per year.
Cities and counties can charge a local investigation fee when an organization applies for or renews a premises permit. The caps are $500 for first-class cities, $250 for second-class cities, $100 for other cities, and $375 for counties. On top of everything else, the organization pays the MGCB a monthly regulatory fee of 0.125 percent of gross receipts from all lawful gambling.
The Gambling Manager
Every licensed organization operates under one gambling manager who is personally responsible for gambling gross receipts and for compliance with the rules. A person can only be the gambling manager for one organization at a time.
The manager must carry a $10,000 dishonesty bond in favor of the organization. Before a new license is issued, the manager must have completed training in lawful gambling laws and rules within the previous six months, followed by continuing education at least once each calendar year. The board will not license anyone convicted of fraud, theft, tax evasion, or a gambling-related crime, or anyone who had a board-issued license revoked in the previous five years.
Where Pull Tabs Can Be Sold
An organization can only sell at premises the MGCB has permitted, and each location needs approval from the local city council or county board first. That local body has to act on the permit application within 90 days by adopting a resolution.
Paper pull-tab dispensing devices are allowed at three types of locations:
- On-sale liquor or beer establishments (bars and restaurants licensed for on-premises consumption).
- Bingo halls where bingo is the primary business.
- Off-sale liquor stores, excluding drug stores and general food stores.
Local governments keep broad authority. A city or county can adopt stricter rules than the state, or ban lawful gambling entirely within its borders. They can also require organizations to contribute up to 10 percent of net gambling profits to a locally administered fund for charitable purposes or public safety.
Electronic Pull Tabs
Electronic pull tabs are more tightly restricted. They can only be offered at premises licensed for on-sale liquor or beer, or at bingo halls with at least 100 seats where a licensed organization also sells paper pull tabs and consents to electronic play.
The number of electronic devices in play at any one location depends on seating:
- 200 seats or fewer: up to 6 devices.
- 201 seats or more: up to 12 devices.
- Bingo-primary premises: up to 50 devices.
Devices can only be used between 8:00 a.m. and 2:00 a.m. All games must be sold and played on the permitted premises and cannot be linked to other locations. Every player must present a valid photo ID showing date of birth before playing. If a player cashes out with $600 or more in credits, the organization must collect and keep identification for three and a half years.
Ticket Prices and Prize Limits
No pull tab can be sold for more than $5. Maximum single-ticket prizes are tied to ticket price:
- $2 tickets and under: $599 maximum prize.
- $3 tickets: $899 maximum prize.
- $4 tickets: $1,199 maximum prize.
- $5 tickets: $1,499 maximum prize.
Cumulative or carryover prizes in a pull tab game cannot exceed $2,500, regardless of the ticket price.
The 30 Percent Charitable Spending Rule
A licensed organization has to actually spend a meaningful share of its gambling profits on charity. Each year it must devote at least 30 percent of gross profits to lawful purpose expenditures. For organizations operating primarily at bingo locations, the minimum is 20 percent.
The MGCB assigns each organization an annual star rating based on the share of gross profits going to lawful purposes:
- Five stars: 50 percent or more.
- Four stars: 40 to 49 percent.
- Three stars: 30 to 39 percent.
- Two stars: 20 to 29 percent.
- One star: less than 20 percent.
Falling below the applicable minimum puts the organization on automatic probation for one year. If it still hasn’t hit the threshold after probation, the board can suspend the license or impose a civil penalty of up to $10,000. The board considers extenuating circumstances such as natural disasters, road construction blocking access to premises, or needed capital equipment purchases before deciding.
Recordkeeping and Player ID
Recordkeeping obligations are extensive and the board enforces them closely. Organizations file monthly electronic reports with the MGCB covering gross receipts, expenses, profits, and expenditure of profits for each permitted premises. Records for bingo must be kept separately from records for other lawful gambling.
Paper pull tab receipts must be deposited into the organization’s gambling bank account within four business days after a deal is completed. A deal is complete when the last ticket is sold, or when the organization doesn’t continue play at its next scheduled pull tab session. Electronic receipts must be recorded daily and deposited when cumulative net receipts hit $2,000 or within four business days of the start of the following month, whichever comes first.
Organizations must keep separate cash banks for each paper pull tab deal, with limited exceptions for dispensing device operations. Winners of paper pull tab prizes of $100 or more have to present identification, and the organization must retain both the winning ticket and the winner’s identification for three and a half years. All gambling records must be kept for at least three and a half years.
Every point of sale must also display a sign showing the toll-free compulsive gambling hotline number established by the Minnesota Commissioner of Human Services. The sign must either be approved by the commissioner or use block letters at least three-quarters of an inch high.
State and Federal Taxes
Pull tab revenue is subject to a graduated combined net receipts tax under Chapter 297E. Combined net receipts equal gross gambling receipts minus receipts from paper bingo, raffles, and paddlewheels, and minus net prizes actually paid. The brackets are:
- Up to $87,500: 8 percent.
- $87,501 to $122,500: $7,000 plus 17 percent of the amount over $87,500.
- $122,501 to $157,500: $12,950 plus 25 percent of the amount over $122,500.
- Over $157,500: $21,700 plus 33.5 percent of the amount over $157,500.
Returns are filed with the Commissioner of Revenue by the 20th of the month following the month of gambling activity. Retail sales of pull tabs by the organization are exempt from state sales tax and all local taxes, though distributors pay sales tax on pull tabs at the retail sales price when they sell to organizations.
On the federal side, starting in 2026, gambling winnings of $2,000 or more trigger a Form W-2G reporting requirement, up from the previous $600 threshold because of inflation adjustments Congress mandated. Organizations paying prizes at or above that amount must collect two forms of identification from the winner, one with a photo. Acceptable IDs include a driver’s license, passport, military ID, or tribal member identification card. If a winner does not provide a taxpayer identification number, the organization applies federal backup withholding at 24 percent.
Tax-exempt organizations with $1,000 or more in gross income from an unrelated trade or business must file IRS Form 990-T. Whether gambling revenue is unrelated business income depends on the situation, but an IRS ruling helps Minnesota organizations: because state law requires gambling proceeds to be spent on charitable purposes, charitable distributions from those proceeds can qualify as fully deductible ordinary and necessary business expenses under IRC Section 162, rather than being limited to the usual 10 percent charitable deduction cap.
Penalties for Violations
Penalties escalate with the severity and history of the violation. Any violation of sections 349.11 through 349.23 for which no other specific penalty applies is a misdemeanor. A second violation within five years of a prior conviction under those sections is a gross misdemeanor. Interfering with or hindering authorities during a lawful seizure of gambling equipment is also a gross misdemeanor.
The most serious criminal charge applies to organizations or individuals who keep selling pull tabs or tipboards after their license or permit has been revoked. That’s a felony.
The board has its own civil tools alongside the criminal statutes: fines, mandatory corrective training, and license suspension or revocation. County attorneys and the state attorney general share prosecution authority; if a county attorney doesn’t file within 30 days, the attorney general can take the case.