CR 08-023 Charitable Gambling-ElksFebruary 29, 2008
Council Report 2008-023
CHARITABLE GAMBLING PREMISES PERMIT APPLICATION FOR
THE HOPKINS ELKS LODGE 2221, 30 - 8th Ave S
Staff recommends approval of the following motion: Move that the Hopkins City Council
adopt Resolutions 2008-021 , approving the charitable gambling premises permit for the
Hopkins Elks Lodge 2221 , located at 30 - 8th Ave S.
Adoption of this resolution will allow the Hopkins Elks to continue to run the existing
charitable gambling activities at the Elks Club.
nvPrviPw
The Hopkins Elks Lodge has requested a renewal of their gambling license and premises
permit. The Elks Lodge conducts charitable gambling at the Elks Club location only.
Primary Issues to Consider
• Does this organization meet the criteria of the City's gambling policy?
Yes
• Has the organization conducted its past gambling operations in accordance with
state and local laws?
Yes
Supporting Documents
• Resolutions 2008-021
• Legislative Policy 4-A, Lawful Gambling
• Financial Statement and Independent Auditor's Report, Years ending March 31 ,
2007
• List of Charitable Contributions
• Gamblin License Application available in the City Clerk's office
erry Ob rmaier, City Clerk
Council Report
Page 2
Alternatives
1 . Approve Resolutions 2008-021, allowing the Hopkins Elks Lodge to continue the
present gambling activities at the present location.
2. Do not approve the resolutions with the result that the Hopkins Elks Lodge will no
longer have gambling in the City of Hopkins.
3. Continue to the next meeting for more information.
Staff recommends alternative one.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2008-021
RESOLUTION APPROVING A GAMBLING PREMISES
LICENSE RENEWAL FOR THE HOPKINS ELKS LODGE, AT
30-8T" AVENUE SOUTH
WHEREAS, the Hopkins Elks Lodge 2221 has been an integral part of
the Hopkins Community, and
WHEREAS, the Hopkins Elks Lodge 2221 has applied for a gambling
license to conduct lawful gambling in 2008 and 2009, and
WHEREAS, the Hopkins Elks Lodge 2221 has conducted gambling
activities in accordance with state law and Hopkins City Policy,
NOW, THEREFORE, be it hereby resolved that the City Council of the
City of Hopkins, Minnesota, approves the Hopkins Elks Lodge 2221 Premises
Permit Renewal application for The Hopkins Elks Lodge at 30, 8`'' Avenue
South, Hopkins MN.
Adopted by the City Council of the City of Hopkins, Minnesota, this 4`" day
of March, 2008.
Eugene J. Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
LAWFUI, GAMBLING
1. YU1tPOSE
1.01 The purpose of this policy is to establish rules and procedures for lawful gambling in
the City oI-I-Iopkins.
2. REGULATIONS
2.01 Except as otherwise enumerated herein, the provisions 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
2.02 An applicant f or 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 has its principal or registered office, street address and zip
code within the City of Ilopkins.
2.03 The organization defined in Section 2.02 must be engaged in its primary activities for
the bcnelit of the community within the City of Iloplcins for at least five years on a
perpetual, continuous, uninterrupted basis and have at least 30 active members as
defined in Minnesota Statute Chapter 349.
2.04 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.
2.05 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.
2.06 A 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 Only one organization, as del-fined in Section 2.02, may conduct gambling within a
single owned, occupied or leased premise.
Legislative Policy Manual -- Chapter 4-A
2.08 The operation of gambling devices and the conduct of bingo and raffles licensed or
approved pursuant to the authority granted to the City of I-Iopkins 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 ti-om the operation.
2.09 The gambling manager shall be an active member of the organization issued the license
and shall qualify under state law.
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 t11e 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.
2.11 Participants in raffles, paddlewheels, pull tabs and tip boards shall be restricted to
individuals who have attained the legal drinking age. "phis 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.
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. l 2. "hhe 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.
2.15 The City shall receive 10% of net profits from organizations conducting gambling in
leased premises.
Established 1 1/19/85 by Resolution 85-3218
Revised 10/5/ 1993
Revised 4/19/94
Revised 12/16/97
Revised 8/19/2003
City of Hopkins
Legislative Policy Manual -- Chapter 4-A 2
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(License # 00365)
STATEMENT OF ASSETS, LIABILITIES AND PROFIT CARRYOVER
REGULATORY BASIS
MARCH 31, 2007
2007
ASSETS
CASH
Gambling Bank Accounts:
Interest Bearing $ 4,866
Cash -Starting Game Banks 3,500
Tax Overpayment Receivable 1,092
Total Cash 9,458
INVENTORIES 536
Total Assets $ 9,994
LIABILITIES
_
ACCOUNTS PAYABLE
i
State Gambling Taxes $ 39
Total Accounts Payable 39
COMMITMENTS AND CONTINGENCIES
PROFIT CARRYOVER
PROFIT CARRYOVER 9,955
Total Liabilities and Profit Carryover $ 9,994
See accompanying Notes to Financial Statements
(2)
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(License # 00365)
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN PROFIT CARRYOVER
REGULATORY BASIS
YEAR ENDED MARCH 31, 2007
REVENUES
Pull-Tab Receipts
Less: Prizes Awarded
Net Revenues -Pull-tabs
Bingo Receipts
Less: Prizes Awarded
Net Revenues -Bingo
Tipboard Receipts
Less: Prizes Awarded
Net Revenues -Tipboard
GROSS PROFIT
ALLOWABLE EXPENSES
INCOME BEFORE LAWFUL PURPOSE
AND BOARD APPROVED EXPENDITURES
LAWFUL PURPOSE EXPENDITURES
Gambling Taxes:
State Net Receipts Tax
State Board Fees
State Ideal Gambling Taxes
Ideal Tax Refund on Unsold Tickets
State License Fees
Total Gambling Taxes
Program Expenditures
Real Estate Taxes
Total Lawful Purpose Expenditures
REVENUES IN EXCESS (DEFICIT) OF EXPENSES
Profit Carryover -Beginning of Year
PROFIT CARRYOVER -END OF YEAR
See accompanying Notes to Financial Statements
2007
(3)
Amount Percent
$ 305,399 100.0
251,493 82.3
53,906 17.7
3,016 100.0
1, 566 51.9
1,450 48.1
240 100.0
160 66.7
80 33.3
55,436 100.0
39,701 71.6
15, 735 28.4
123
309
5,696
(1,092)
600
5,636
600
11,687
17,923
(2,188)
12,143
$ 9,955
0.2
0.6
10.3
(2.0)
1.1
10.2
1.1
21.1
32.3
(3.9)
LAWFUL GAMBLING FUND OF
HOPKiNS ELKS LODGE NO. 2221
(License # 00365}
RECONCILIATION OF GAMES USED
REGULATORY BASIS
YEAR ENDED MARCH 31, 2007
PULL-TABS
Cost of Games Used:
Beginning Inventories
Purchases
Less: Ending Inventories
Total Cost of Games Used
Reconciliation of Games Used:
Games Used Per Books Above
Games Used and Reported Per Gross
°; Revenues (Receipts) by Month
Difference
TIPBOARDS
Cost of Games Used:
Beginning Inventories
Purchases
Less: Ending Inventories
Total Cost of Games Used
Reconciliation of Games Used:
Games Used Per Books Above
Games Used and Reported Per Gross
Revenues (Receipts) by Month
Difference
2007
Number of
A.r7~ount Games
$ 952 25
5,048 118
6,000 143
440 12
$ 5,560 131
131
$ 120 40
120 40
96 32
$ 24 8
8
(7)
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(License #00365)
ANALYSIS OF MAXIMUM ALLOWABLE EXPENSES
REGULATORY BASIS
YEAR ENDED MARCH 31, 2007
2007
GROSS PROFIT $ 55,436
ALLOWABLE EXPENSES
Gambling Product Sold $ 5,584
Compensation and Payroll Taxes 27,928
Accounting and Legal Services ~ 2,668
Bank Charges and Miscellaneous Expenses 1,183
Purchase and Repair expenses for Office Equipment and
Gambling Devices 1,401
Local Gambling Licenses, Gambling Manager Bond 200
Cash Short (Cash Long) 737
Total Allowable Expenses 39,701
MAXIMUM ALLOWABLE EXPENSES BY
MINNESOTA STATE STATUTES 32,602
MAXIMUM ALLOWABLE EXPENSES iN EXCESS
OF ALLOWABLE EXPENSES -CURRENT YEAR (7,099}
BEGINNING CUMULATIVE MAXIMUM ALLOWABLE
EXPENSES IN EXCESS OF ALLOWABLE EXPENSES 59,821
ENDING CUMULATIVE MAXIMUM ALLOWABLE EXPENSES
IN EXCESS OF ALLOWABLE EXPENSES $ 52,722
(8)
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(License # 00365)
RECONCILIATION OF PROFIT CARRYOVER
~' REGULATORY BASIS
YEAR ENDED MARCH 31, 2007
2007
ADDITIONS
Cash in Gambling Bank Accounts $ 4,866
Cash in Starting Banks 3,500
Ending Inventory 536
Refund on Unsold tickets -Receivable 1,092
Total Additions 9,994
SUBTRACTIONS
Tax to be Paid to Department of Revenue 39
Total Subtractions 39
PROFIT CARRYOVER FROM FINANCIAL STATEMENTS 9,955
PROFIT CARRYOVER FROM TAX REPORT 9,955
VARIANGE FROM BALANCE ~ -
~9)
HOPKINS LODGE N0. 2221
LAWFUL PURPOSE EXPENSES 2006-2007
2006
REAL ESTATE TAX $11,686( Bal. Lodge)
ELKS YOUTH CAMP 3,100
HOPKINS RASPBERRY FESTIVAL 500
HOPKINS~~FAMILY RESOURCE t3TR: " 175
EMPYY BOWLS 50
HOPKINS HI SR. PARTY 50
ST. LOUIS SR. PARTY 75
GIRL SCOUTS
MN. COMPULSIVE GAr1BLING 50
JAYCEES HAUNTED HOUSE
KIDS SANTA
HOPKINS LITTLE LEAGUE 500
VOITURE 281 300
2007
$ 5,000(Bal. Lodge)
3,365
500
200
100
50
50
50
50
50
50
ALLIED CHARIL'IES 200 200
NOTE: Due to severly decreased pulltab sales at our Lodge and the stressed
economy, average age, and a lower number of members, we have had fewer
dollars to spend in our community from gaming funds. rSuch of the slack
has been covered through our lodge`s general and scholarship funds.
As a result, Hopkins Elks has been able to support our charitable donations
to the community, our local schools and other charitable groups including
over $8, 000, per year for High School Senior Scholarships. We hope that
as we see an increase in the areas mentioned we will likewise see an
increase in charitable giving funds from our gaming operation.