Memo - Lawful Gambling• Memorandum
To: Hopkins City Council
From: Jim Genellie
Date: July 17, 2003
Subject: Lawful Gambling
The City Council adopted a moratorium on new premises permits on April 1, 2003. The moratorium
was extended and is now set to expire on September 2.
The City Attorney was requested to review the current policy on gambling. Staff anticipates the
discussion on July 22 to cover clarifying the existing language in the lawful gambling policy as well
as examining other issues concerning lawful gambling in Hopkins
City staff sent notices of the July 22 meeting to:
Organizations that currently have premises permits;
Owners of facilities that are leasing space for lawful gambling; and
The Hopkins Youth Hockey Association.
The following are the issues that arose during the discussion regarding the permit application from
the Hopkins Youth Hockey Association. A copy of the current City policy on Lawful Gambling,
Legislative Policy 4 -A, is attached.
Four sections of the current policy seem to require clarification:
Department of Administration
1. Section 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.
The words "location" and "office" were interpreted by the City Attorney to be synonymous.
However, this language has been interpreted in other ways. The language should be clarified to
remove any ambiguity.
2. Section 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 voting members.
Several issues were raised regarding this section. First does the requirement that an organization be
engaged in its activities for at least five years also refer back to Section 2.02, that is, does it require
the organization to have an office in Hopkins for at least five years?
\Lawful Gambling Policy Revision 3.doc
Department of Administration
Secondly what is meant by "active voting members ?" State law defines "Active Member" as:
Subd. 2. Active member. "Active member" means a member who has paid all dues to
the organization, who is 18 years of age or older, who has equal voting rights with all other
members, who has equal opportunity to be an elected officer, who has equal right and
responsibilities of attendance at the regularly scheduled meetings of the organization, whose
name and membership origination date appear with the member's knowledge and consent on
a list of members of the organization, and who has been a member of the organization for at
least six months.
Since Section 2.01 of Policy 4 -A adopts state law, Minnesota Statute Chapter 349, City staffs
assumption has been that an "active voting member" in the Hopkins policy is the same as an "Active
Member" in the state statute. The language in this section could be clarified to state this.
3. Section 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 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.
This section has been interpreted to mean that two organizations may share one location if they
either
1) run different types of gambling games, e.g. one runs a paddlewheel and the other sells pull
tabs; or
2) both organizations conduct the same games, e.g. selling pull tabs, but they do it at
separate times.
This language has generated some confusion.
4. Section 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 minutes of a general membership meeting, where a quorum was present,
wherein the organization approved a motion authorizing the gambling activities.
What constitutes a quorum? Is it a quorum as defined in the organization's by -laws? Is it a quorum
of the total membership?
\Lawful Gambling Policy Revision 3.doc
1. PURPOSE
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 voting 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 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 Class A license 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 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.
Legislative Policy Manual -- Chapter 4 -A 1
•
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 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.
2.09 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 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. 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.
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 4/19/94
Revised 12/16/97
City of Hopkins
Legislative Policy Manual -- Chapter 4 -A 2