What is Allowed
Compensation (wages) paid to an organization’s employees for the percentage of time spent on activities directly related to the conduct of gambling is an allowable expense. Compensation includes the following:
- wages
- payroll tax
- federal unemployment tax
- Minnesota unemployment compensation tax
- workers’ compensation insurance
- FICA
- federal and state income tax withholdings
- monetary bonus
Bar operation—At a bar operation, an organization may compensate an organization employee for the conduct of tipboards and paddlewheels if the games are limited to 32 tickets or less per game and the frequency of the activity is one day or less per week. If conducted more than one day a week and compensation is paid, then the operation is considered a booth operation and the lease must be amended because booth rent limits would then apply.
An organization that leases a premises may not pay compensation to the lessor, a member of the lessor's immediate family, or the lessor's employees, other than as a seller of pull-tabs and tipboards within a booth operation on the premises. An employee of the lessor or a member of the lessor's immediate family may be compensated by an organization for the conduct of gambling at other sites not owned by the lessor.
An organization may compensate an employee of a lessor for gambling-related activities that are not related to the site owned by the lessor.