CR2003-120 Revise Lawful gambling policy 4-A
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August 19, 2003
Council Report 2003-120
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REVISE LEGISLATIVE POLICY 4-A
LAWFUL GAMBLING
ProDosed Action
Staff recommends approval of the following motion: Move that the Hopkins City Council adopt
Resolution 2003-069 revising Legislative Policy 4-A. Lawful Gambling.
Approval of this motion will revise the language in Policy 4-A in order to clarify the City's
policy on Lawful Gambling.
Overview
Earlier this year, the City received an application for a premises permit from the Hopkins Youth
Hockey Association. It became apparent, during the discussion of this application, that the
current City policy on Lawful Gambling contains language that is unclear and open to various
interpretations.
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The City Attorney reviewed the current policy language and made suggestions for revisions. The
Council met on July 22 to discuss the language changes and accepted input from charitable
organizations and local businesses that lease space for lawful gambling. Based upon these
discussions and suggestions, staff has prepared a resolution making changes to the Lawful
Gambling policy.
Primary Issues to Consider
. What changes are made to the policy?
. Can the City adopt some sort of restriction on where lawful purpose expenditures can be
made?
. Do some rules need to be drafted for temporary licenses?
SUDDortin!! Documents
. Resolution 2003-069
. Lawful Gambling policy with proposed revisions
. Summary of lawful gambling ordinances from other cities
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Council Report 2003-120
Page 2
What changes are made to the policy?
Below are the suggested changes:
2.02 An applicant for a license shall be a registered Minnesota nonprofit corporation or an
organization which is designated as exempt from the payment of income taxes by the
Internal Revenue Code and ':/hose principal wcation or office has its principal or
registered office, street address and zip code is- within the City of Hopkins.
2.03 The organization defined in Section 2.02 must be engaged in its primary activities for the
benefit of the community within the City of Hopkins for at least five years on a perpetual,
continuous, uninterrupted basis and have at least 30 active voting members as defined in
Minnesota Statute Chapter 349.
2.07 More than Only one organization, as defined in Section 2.02, may conduct gambling
within a single owned, occupied or leased premise. More than one organization may
jointly conduct a lawful gambling game at one loeation. However, t\'/o or more
organizations shall not separately conduct the same game at the same time at one
loeation.
or, if the City Council would prefer to allow multiple organizations to conduct gambling
at a single site:
2.07 More than one organization, as defined in Section 2.02, may conduct gambling
within a single owned, occupied or leased premise. More than one organization
may jointly eonduct a lawful gambling game at one location. Ho':/cver, t':/o or
more organizations shall not separately conduct thc same game at the same time
at one location. Each organization must maintain its own leased space within the
premIse.
2.10 Organizations seeking approval for a premises permit, that are not currently conducting
gambling in the City, must provide the City, in addition to the application forms, a coPy
of the notice sent to the general membership announcing the meeting to authorize
gambling activities. and a copy of the minutes of a general membership meeting, where a
quorum was present, wherein the organization approved a motion authorizing the
gambling activities.
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Council Report 2003-120
Page 3
In addition, staff recommends that Section 2.06 be revised. This section was included in 1993 in
order to limit bingo to essentially the service organizations, i.e. those organizations, which are
engaged in lawful gambling, that own their own facilities. However, in reviewing the wording,
staff thinks it needs to be changed. The City does not grant any licenses. What it does is approve
premises permits.
2.06 A Class .^~ permit or license to conduct bingo will only be approved for an organization
that is licensed pursuant to Minnesota Statute, section 349.16, and that conducts
gambling on premises that it owns and operates.
Can the City adopt some sort of restriction on where lawful purpose expenditures can be
made?
The City can control lawful purpose expenditures in two ways:
1. The City can require that licensed organizations contribute 10% of their net profits derived
from lawful gambling to a fund, administered and regulated by the City, for disbursement by
the City for any lawful purpose.
2. The City may, by ordinance, require that a licensed organization expend all or a portion of its
expenditures for lawful purposes within the city's "trade area". Such an ordinance must
define the city's trade area and must specify the percentage of lawful purpose expenditures
which must be expended within the trade area. A trade area must include each city
contiguous to the defining city.
Past City Councils have not imposed either of these restrictions on organizations which conduct
lawful gambling in Hopkins. These Councils have felt that the local organizations that conducted
gambling have contributed much more than 10% to the community. Secondly, past Councils
have recognized the fact that the service organizations, VFW, American Legion, and Elks,
normally donate a good percentage of their lawful purpose funds outside of Hopkins.
One possible compromise would be to establish a trade area but only require a percentage, e.g.
50%, of the lawful purpose expenditures to be made in that trade area.
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Council Report 2003-120
Page 4
Do some rules need to be drafted for temporary licenses?
The subject of temporary licenses came up at the Worksession. The state statute (MS 349) does
not recognize temporary licenses. Instead it has created licensing exemptions for organizations
that conduct only a limited amount of gambling during a year, for example:
. organizations that conduct bingo on only a few days per year
. organizations that conduct bingo for seniors with total prizes per occasion limited to $200
. organizations that have raffles if the value of all raffle prizes awarded by the organization in a
calendar year does not exceed $750
. organizations that conduct lawful gambling on five or fewer days in a calendar year and the
organization does not award more than $50,000 in prizes for lawful gambling in a calendar
year
The City could require pennits for most of these organizations. However, organizations that have
conducted this type of gambling in the past have almost invariably been local charitable
organizations.
Alternatives:
1. Adopt Resolution 2003-069.
2. Adopt Resolution 2003-069 with changes. This alternative would make other changes to
Policy 4-A.
3. Do not adopt Resolution 2003-069. This alternative would leave the Policy 4-A
unchanged.
4. Continue this item for more infonnation or additional discussion. Approval of this
alternative should be accompanied by a resolution extending the moratorium that is
scheduled to expire on September 2.
Staff recommends Alternative #1.
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City of Hopkins
Hennepin County, Minnesota
RESOLUTION NO. 2003-069
WHEREAS, the City Council of the City of Hopkins has approved a document entitled
the Legislative Policy Manual to provide uniform guidelines on City policies
so that actions taken are consistent and fair; and
WHEREAS, the City Council has established Legislative Policy 4-A in order to regulate
lawful gambling; and
WHEREAS, the City Council has determined that the existing policy needs to be
revised in order to clarify the language and intent of the Policy,
NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins
hereby adopts the following changes to Legislative Policy 4-A, Lawful
Gambling:
2.02 An applicant for a license shall be a registered Minnesota nonprofit corporation or an
organization which is designated as exempt from the payment of income taxes by the
Internal Revenue Code and '.vhose principal location or office is has its principal or
registered office. street address and zip code within the City of Hopkins.
2.03 The organization defined in Section 2.02 must be engaged in its primarv activities for the
benefit of the community within the City of Hopkins for at least five years on a perpetual,
continuous, uninterrupted basis and have at least 30 active 'foting members as defined in
Minnesota Statute Chapter 349.
2.06 A Class .^.. permit or license to conduct bingo will only be approved for an organization
that is licensed pursuant to Minnesota Statute, section 349.16, and that conducts
gambling on premises that it owns and operates.
2.07 More than Only one organization, as defined in Section 2.02, may conduct gambling
within a single owned, occupied or leased premise. More than one organization may
jointly conduct a lawful gambling game at one location. However, two or morc
organizations shall not separately conduct the same game at the same time at one
location.
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2.10 Organizations seeking approval for a premises permit, that are not currently conducting
gambling in the City, must provide the City, in addition to the application forms, a COpy
of the notice sent to the general membership announcing the meeting to authorize
gambling activities, and a copy of the minutes of a general membership meeting, where a
quorum was present, wherein the organization approved a motion authorizing the
gambling activities.
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Adopted by the City Council of the City of Hopkins this 19th day of August 2003.
By
Gene Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
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1.01
2.
2.01
2.02
2.03
2.04
2.05
2.06
2.07
POLICY 4-A
LAWFUL GAMBLING
PURPOSE
The purpose of this policy is to establish rules and procedures for lawful gambling
in the City of Hopkins.
REGULA TIONS
Except as othelWise enumerated herein, the prOVlSlons of Minnesota Statute
Chapter 349 relating to the definition of terms, licensing and restrictions of
gambling are adopted and made a part of the statement of policy promulgated by
the City of Hopkins as if set out in full
An applicant for a license shall be a registered Minnesota nonprofit corporation or
an organization which is designated as exempt from the payment of income taxes
by the Internal Revenue Code and whose principal location or office is has its
principal or registered office. street address and zip code within the City of
Hopkins.
The organization defined in Section 2.02 must be engaged in its primary activities
for the benefit of the community within the City of Hopkins for at least five years
on a perpetual, continuous, uninterrupted basis and have at least 30 active '/oting
members as defined in Minnesota Statute Chapter 349.
Gambling allowed by the city shall be carried on only within premises owned,
occupied or leased by the organization except such activities permissible under
M.S. 349.166.
No application for a premises permit will be approved for any organization to
conduct gambling on any premises other than the premises of an on-sale liquor
licensee or the premises of a fraternal, veterans or other non-profit organization.
In order for a fraternal, veterans, or other non-profit organization to conduct
gambling on their premises, such premises must have been continuously owned
and occupied for a period of at least five years. No application for premises
permit shall be approved for any organization for a site established for the
primary purpose of conducting gambling. This section shall not apply to any
organization which is exempt from the requirement for a gambling license
according to M.S. 349.166.
A Class .^... permit or license to conduct bingo will only be approved for an
organization that is licensed pursuant to Minnesota Statute, section 349.16, and
that conducts gambling on premises that it owns and operates.
More than Only one organization, as defined in Section 2.02, may conduct
gambling within a single owned, occupied or leased premise. More tHan one
The operation of gambling devices and the conduct of bingo and raffles licensed
or approved pursuant to the authority granted to the City of Hopkins shall be
carried on under the supervision of a gambling manager designated by the
organization. The gambling manager shall be responsible for the operation of the
gambling activity and the receipts and profits generated from the operation.
The gambling manager shall be an active member of the organization issued the
license and shall qualify under state law.
Organizations seeking approval for a premises permit, that are not currently
conducting gambling in the City, must provide the City, in addition to the
application forms, a copy of the notice sent to the general membership
announcing the meeting to authorize gambling activities, and a copy of the
minutes of a general membership meeting, where a quorum was present, wherein
the organization approved a motion authorizing the gambling activities.
Participants in raffles, paddlewheels, pull tabs and tip boards shall be restricted to
individuals who have attained the legal drinking age. This restriction only applies
to premises where liquor, wine, beer or 3.2 beer is served. Where intoxicating
beverages are not served the age shall be eighteen.
2.12 Organizations wishing to renew a gambling license must provide the City with a
financial audit of its lawful gambling activities and funds for the previous two
years. The audit(s) must be performed by an independent accountant licensed by
the state of Minnesota.
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2.08
2.09
2.10
2.11
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organization may jointly conduct a la.....&l gambling game at one location.
However, t\'lO or more organizations shall not separately conduct the same game
at the same time at one location.
2.13 In addition, such organizations must provide the City with information on all
expenditures of lawful gambling funds during the previous two years. Such
information must include at a minimum the name of the recipient, the amount of
the expenditure or contribution, and a brief description of how the expenditure or
contribution meets the definition of "lawful purposes" as defined in M.S. 349.12.
The City reserves the right to require additional documentation from licensed
organizations, or organizations seeking licenses, as it deems necessary.
2.14 A fee of $100.00 shall be charged to all organizations submitting a Premises
Permit Application or Applications for approval by the City.
Established 11/19/85 by Resolution 85-3218
Revised 10/5/1993
Revised 4/19/94
Revised 12/16/97
City of Hopkins
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-, ::J
wen
::!:r
o 0
::J (")
(fl ~
o'
::J
...