Lawful Gambling


Registered nonprofit organizations may conduct lawful (charitable) gambling such as bingo, raffles, paddletickets, tipboards, and pull-tabs. 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.

For more information:

Gambling Device and Equipment Sales

Retail sales of tangible personal property used in conducting lawful gambling (under Minnesota Statutes, Chapter 349) or State Lottery (Chapter 349A) are subject to sales tax. A retail sale includes the sale, lease, or rental of tangible personal property. A retail sale does not include the sale of tangible personal property for the purpose of resale, sublease, or subrent.

The following are examples of taxable items when sold by a distributor or other entity to a lawful gambling organization.

Gambling Devices and Equipment Type Taxable Examples Include, But Are Not Limited To:
Gambling devices and equipment for non-electronic lawful gambling games
  • Paper stock for pull-tabs
  • Paper bingo cards
  • Paper tipboards
  • Bingo ball blowers
Gambling devices and equipment for electronic lawful gambling games (such as electronic pull-tabs or electronic bingo)
  • Computer tablets used to play electronic lawful gambling games
  • Software and apps that facilitate the playing of electronic lawful gambling games

Monthly Charges

Monthly gambling device or equipment charges are taxable when sold, leased, or rented to a lawful gambling organization by a distributor or other entity. The taxable sales price includes any monthly charges.

Revenue Sharing Agreements

When an agreement between the lawful gambling organization and a distributor or other entity (such as the distributor or manufacturer) includes revenue sharing, the revenue sharing agreement is taxable. The taxable sales price of the gambling devices and equipment includes any revenue the lawful gambling organization shares with other entities (such as the distributor, manufacturer, or both) under a revenue sharing agreement.

Local Sales Tax Rate

The tax rate the distributor or other entity must charge the lawful gambling organization depends on if the city where the sale takes place has a local gambling tax. See the chart below.

Does the city have a local gambling tax where the sale takes place? What tax rates apply?
  • Local gambling tax rate
  • 6.875% state general rate sales tax
  • Any applicable local sales taxes
  • 6.875% state general rate sales tax

Sales Tax Resources

Statutes and Rules

Revenue Notices

Fact Sheets