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CR 97-173 Gambling License - Knights Of ColumbusOctober 2, 1997 Proposed Action Staff recommends approval of the following motion: Move that the Hopkins City Council adopt Resolution 97 -94, approving the gambling license for The Knights of Columbus. Approval of this motion will allow the Knights of Columbus to submit their application for a premises permit to the State of Minnesota. Overview The Knights of Columbus have applied for a gambling license and premises permit at Lindees Bar and Eatery, 919 Cambridge Street. The application is for a Class A license, and includes Bingo, Raffles, Paddlewheels, Tipboards, and Pull -Tabs. State Statutes require that the City approve or deny local lawful gambling activities by resolution. Primary Issues to Consider • Does this organization meet the criteria of the City's gambling policy? • Does this organization meet State requirements? • Should the City's Legislative Policy 4A, regulating lawful gambling be changed to address issues brought up by the Jaycees? • Can bingo be restricted in the City of Hopkins? Supporting Documents Lee s is GAMBLING LICENSE APPLICATION BY THE KNIGHTS OF COLUMBUS s is Council Report 97-x' • Resolution 97 -94 • Legislative Policy 4 -A, Lawful Gambling Gambling License Application available in the City Clerk's office • Letter to the City Council from Paula Cayemberg, Charitable gambling Manager, Jaycees s A. Genellie As City y nager Council Report #97 -173 Page 2 Issues to Consider Does this organization meet the criteria of the City's gambling policy? The organization meets all the criteria set forth in Legislative Policy #4 -A. Does this organization meet State requirements? The State Gambling Control Board will review this application to ensure it meets State requirements in regards to the type of organization, the purpose for which the organization intends to spend the money that is raised, the qualifications of the organization's gambling manager, etc. Should the City's Legislative Policy 4A, regulating lawful gambling be changed to address issues brought up by the Jaycees? The Jaycees have requested that the City review Legislative Policy 4A. In the attached letter from Paula Cayemberg, the Jaycees maintain that bingo cannot be profitable if played, in the proposed site. They further argue that bingo rent will have to be subsidized by other forms of gambling and will therefore reduce the amount of money available for charitable giving. Staff is not in a position to comment on the economics of bingo and therefore cannot make a recommendation as to whether bingo occasions should be restricted in the City of Hopkins. Can bingo be restricted in the City of Hopkins? A City has the authority to adopt more stringent regulation of lawful gambling within its jurisdiction, including the prohibition of lawful gambling. The City Council could, for example, amend the current City policy to prohibit bingo, limit the number of bingo occasions at any one site, limit bingo to sites owned and operated by the licensed organization or impose any other restriction that it sees fit. The only requirement would be that any regulation would apply to all organizations and all sites within the City. Alternatives 1. Approve Resolution 97 -94, allowing the Knights of Columbus to operate lawful gambling in the City of Hopkins. 2. Approve Resolution 97 -94 and direct staff to prepare a resolution amending Legislative Policy #4 -A. 3. Do not approve Resolution 97 -94, with the result that the Knights of Columbus will not have a lawful gambling operation in the City of Hopkins. 4. Continue the item to another Council Meeting. Staff recommends alternative one. CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 97 -94 RESOLUTION APPROVING A GAMBLING LICENSE FOR THE KNIGHTS OF COLUMBUS WHEREAS, The Knights of Columbus have been an integral part of the Hopkins Community, and WHEREAS, The Knights of Columbus have applied for a gambling license to conduct lawful gambling in 1998 and 1999, and WHEREAS, The Knights of Columbus meet the criteria of the City of Hopkins Legislative Policy 4A, Lawful Gambling, NOW, THEREFORE, be it hereby resolved that the City Council of the City of Hopkins, Minnesota, approves The Knights of Columbus Premises Permit application for Lindees, 919 Cambridge Street, Hopkins. Adopted by the City Council of the City of Hopkins, Minnesota, this 7th day of October, 1997. ATTEST: Terry Obermaier, City Clerk Charles D. Redepenning, Mayor 1. PURPOSE Legislative Policy Manual -- Chapter 4 -A POLICY 4 -A LAWFUL GAMBLING 1.01 The purpose of this policy is to establish rules and procedures for lawful gambling in the City of Hopkins. 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 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 within the City of Hopkins. 2.03 The organization defined in Section 2.02 must be engaged in its 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 members. 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 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 conduct a lawful gambling game at one location. However, two or more organizations shall not separately conduct the same game at the same time at one location. 2.06 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. 2.07 The gambling manager shall be an active member of the organization issued the license and shall qualify under state law. • 2.08 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. 2.09 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. 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. 2.10 A fee of $100.00 shall be charged to all licensed organizations submitting a Premises Permit Renewal Application for approval by the City. Established 8/18/87 Revised 4/19/94 City of Hopkins Legislative Policy Manual -- Chapter 4 -A 2 Leadership Training Through Community Service o pKIN5 AYcus . Six - SIXTH AVENUE NORTH, HOPKINS, MN 55343 PHONE (612) 931 -0132 FAX (612) 931 -0168 September 29, 1997 Hopkins City Council Dear Council Member: The state of Minnesota allows a licensed charitable gambling organization to pay up to $200 rent per Bingo occurrence to a bar owner for the use of the site. This regulation was intended for large Bingo Halls which draw large crowds and charge a substantial admission charge. It can result in $6,000 additional income per month to a bar owner. Recently the Knight's of Columbus of St. Joseph's Catholic Church approached Lindee's to run Bingo several times per week at $200 per time and to run pulltabs. The owner of Lindee's coerced the Jaycees into matching that offer to continue our gambling operations at the site. We agreed and came before the City Council for approval of Bingo which was granted in July. After this was approved, the K of C's went back to the owner and offered to run Bingo 7 days a week, again at $200 per occurrence. The owner used that offer to coerce us to agree to run Bingo 7 days a week as a condition of renewing our lease effective December 1. We reluctantly agreed to this change to retain our lease at the site. The bar owner thought that we would start the Bingo September 1 We were unable to begin until September 15 The bar owner became upset and signed a lease with the K of C's. He also signed a lease with the Jaycees in case the K of C's were unable to get approval for a license. We believe that the K of C's have been ill advised by individuals who stand to profit at the K of C's expense. These individuals have not given the K of C's complete information including the nature of start up costs that could total $25,000 for the pulltab booth, cash register, Bingo blower and board, and supplies. We believe that Bar Bingo at Lindees will never produce enough revenue to offset the excessive $200 per occurrence fee and other expenses. This fee results in $6,000 additional income per month for the bar owner without any gain to the organization. In fact, the $6,000 in additional rent would have to be paid from pulltab profits. This money would normally be used for donations to the community. Running Bingo solely as a means to provide more income to the bar owner was not the intent of the state. The K of C's have their right to gambling or other sources of fundraising as much as the Jaycees or any other charitable organization. However, we are being played against each other to profit a bar owner and other outside individuals. In the past, the Hopkins City Council has maintained control of charitable gambling. We feel it would be appropriate for the City to regulate Bar Bingo to avoid the above situation. Respectfully submitted: ez ,L__. . Paula R. Cayemberg Charitable Gambling Manager Hopkins Area Jaycees ,e.4.14_,CAek r Established 1951