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Electronic Bingo Request (Memo)CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members From: Kris Luedke, City Clerk Copy: Mike Mornson, City Manager Date: January 15, 2013 Subject: Electronic Bingo Request City Clerk A discussion is scheduled for the January 15, 2013 work session to discuss the request from the Hopkins Youth Hockey Association for a permit to conduct electronic bingo at Tuttle's Bowling, Bar & Grill and Mainstreet Bar & Grill where they currently are licensed to conduct pull tabs sales. In order for this request to be granted, the Hockey Association is asking that the City's policy for lawful gambling be amended. Currently, section 2.06 states that the organization where the bingo is being operated must own the premise. In the request from the Hockey Association, they felt that this refers to traditional bingo and that there is a distinction between playing traditional bingo and electronic bingo. Staff has included information from the League of Minnesota Cities (LMC) regarding electronic "linked" Bingo. The League lists electronic bingo as: "A bingo game played simultaneously with other sites and players in Minnesota. The number of players and number of bingo cards played for each game will determine the prize amount to be won." It is played on a small, hand-held electronic device that cannot accept currency but allows players to play credits. With electronic linked bingo there are a limited number of devices that can be in play at one time. The number of devices is limited to: • No more than 6 devices in play for permitted premises with 200 seats or less. • No more than 12 devices in play for permitted premise with 201 seats or more. • No more than 50 devices in play for permitted premised where bingo is the primary business. Attachments: Request from Hopkins Youth Hockey Association Charitable Gambling Organizations and Establishment Copy of Letter sent on December 11, 2012 Information from the League of Minnesota Cities 1010 First Street South Hopkins, MN 55343 Hopkins City Council RE: Electronic Bingo On behalf of Hopkins Youth Hockey Association, I would like to request a permit to conduct electronic bingo at Tuttle's Bowling and Mainstreet Bar & Grill. Hopkins Youth Hockey Association is licensed at both sites to conduct the sale of pull tabs. The State of Minnesota has introduced electronic pull tabs/bingo as part of the Viking Stadium tax referendum. I have met with the bar owners and the distributor of electronic bingo equipment, and after researching the products available, both bar owners are interested in installing electronic bingo, but only if they can so in conjunction with the electronic pull tabs. The equipment that must be installed to operate electronic gambling is very expensive, and it would cost prohibitive if both electronic pull tabs and electronic bingo were not available. Currently, the City has a policy that prohibits an organization from operating traditional bingo unless it owns the premises. Since there is a big distinction between the playing of traditional bingo and electronic bingo, the City's policy should be amended to allow an organization that does not own the premises to operate electronic bingo. Electronic bingo would not affect the VFW's and American Legions' traditional bingo games because those games are much more socially motivated, as opposed to playing electronic bingo with people with whom the player cannot interact. Electronic bingo can be played anytime, and it is played simultaneously with all organizations that feature the game. Furthermore, the VFW and American Legion are able to introduce the electronic bingo if they desire. If the City Council sticks with its current policy, it will greatly harm the ability of Tuttles and Mainstreet to be competitive with other establishments in Bloomington and St. Louis Park which will be able to offer electronic gambling. The current customers will simply go to the surrounding communities to play, taking business away from Hopkins. As it is, we must constantly change the paper pull tab games to stay in line with games that are being played in St Louis Park and Bloomington. If we are not able to conduct electronic bingo, we will lose business to the surrounding establishments which feature electronic gambling. Respectfully submitted by, Angela Quale Hopkins Youth Hockey Charitable Gambling Manager EC E IVE F NOV 2 0 2012 BY: List of Charitable Gambling Organizations and the Establishments where Gambling is held Organization Gambling/Liquor Manager American Legion Post 320 Ken Gram Elks Lodge 2221 Hopkins Area Jaycees in Hopkins Tavern on Main and Lindees Hopkins Hockey Association in Tuttle's Bowling, Bar & Grill and Mainstreet Bar & Grill Raspberry Festival in Wild Boar VFW Post 425 Harriet Lodermeier Meredith Black Mike Christenson Robert Lindee Angela Quale Tim Tuttle Mary Gargaro Sue Normandin James O'Meara Larry Sorenson December 11, 2012 City of q%pkins 1010 first Street South • Hopkins, MN 55343-7573 • Phone: 952-935-8474 e fax• 952-935-1834 Web address: www.hopkinsmn.com December 11, 2012 Hopkins Area Jaycees Meredith Black, Gambling Manager 5 7th Ave N Hopkins, MN 55343 Regarding: Electronic Bingo Request On November 20, 2012, the Hopkins City Council received a request from the Hopkins Youth Hockey Association to conduct electronic bingo at Tuttle's Bowling, Bar & Grill and Mainstreet Bar & Grill where the Hockey Association currently sells pull tabs. Hopkins's Legislative Policy 4-A Lawful Gambling Regulations states: 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. The Hopkins City Council would like to invite the charitable gambling organizations and the establishments where they operate to attend the January 15th, 2013 Worksession to discuss this issue. The City Council would like input regarding any changes to the City's Legislative Policy. If you are unable to attend, you are welcome to send your comments to me at kluedkekhopkinsmn.com or call 952-548-6304. Enclosed for you review is the request from Hopkins Youth Hockey Association, general information from the League of Minnesota Cities and the current City's Legislative Gambling Policy. If you have any questions, please give me a call at 952-548-6304. Thank you. Sincerely,r Kris Luedke City Clerk 952-548-6304 kluedkekhopkinsmn.com Enclosure Partnering with the Community to Enhance the Quality of Life • Inspire • Educate • Involve • Communicate • 6�� j,EAoil of CONNECTING & INNOVATING MINNESOTA SINCE 1913 CITIES Frequently Asked Questions Regarding Electronic Pull Tabs and Electronic Linked Bingo May 2012 The Legislature recently authorized the use of electronic pull -tabs and electronic linked bingo by licensed lawful gambling organizations. The changes, enacted as part of the Vikings stadium legislation, became effective on May 15, 2012. This document, compiled with information provided by the Gambling Control Board, briefly answers some basic questions about the new law and the impact that it may have on cities. What are electronic pull tabs? Electronic pull tabs are facsimiles of paper pull tab tickets, but are played on electronic devices. An electronic pull tab game follows the same play style as paper pull tabs: players must activate or open each electronic ticket and each line, row, or column of each ticket. What is an electronic pull tab device? It is a small, portable, hand-held electronic device used to play electronic pull tab games. The device cannot accept any coin or currency but allows the player to play "credits" from previous winning tickets. These devices must be activated from a central sales location. What is "linked" bingo? It is a bingo game that is played simultaneously with other sites and players in Minnesota. The number of players and the number of bingo faces (cards) played for each game will determine the prize amount to be won. Players will be given a time period to determine how many bingo faces to play and once the sale period has ended, the prize amount will be announced prior to drawing any bingo numbers. Major prize winners will be given a receipt for their prize winnings and receive a check within three business days. Consolation prize winners may be paid on the spot. What is an electronic "linked" bingo device? It is a small, portable, hand-held electronic device used to play linked bingo. The device cannot accept any coin or currency but allows the player to play "credits" from previous winning bingo play. 145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAx: (651) 281.1299 ST. PAUL, MN 55103-2044 TOLL FREE: (800) 925-1122 WEB: www.LMGOAG Page 2 Does a bar that currently has a premises permit need an additional permit to conduct electronic games? No. If a lawful gambling organization has a premises permit it will be able to conduct electronic games there, if the location meets the following requirements: • The premises must be licensed for on -sale or off -sale of intoxicating liquor or 3.2 percent malt beverages(excluding general food stores or drug stores permitted to sell alcoholic beverages under Minn. Stat. § 340A.405, Subd. 1); or • The primary business of the premises is as a bingo hall with a seating capacity of at least 100. Does the city need to approve the use of electronic pull tabs at existing sites? No. The method for obtaining premises permits remains the same. Organizational licenses and premises permits are perpetual. Once a city has provided a resolution of support for the initial premises permit as required by Minn. Stat. § 349.213, subd. 2, no further local approvals are required. Does the city need to approve the use of electronic pull tabs at new sites? Yes—although the process is not specific to electronic gaming. Any applications to conduct lawful gambling at new locations will be handled in the same manner as current law. A city will need to provide a resolution of support before the Gambling Control Board will approve a license application. Can a city pass an ordinance prohibiting lawful gambling? Yes. Minn. Stat. § 349.213, subd. 1, gives cities the power to regulate and prohibit lawful gambling within its jurisdiction. This power is unchanged by the stadium legislation. However, city regulations must generally apply equally to all forms of lawful gambling. Can a bar only offer electronic pull tabs? No. If an organization wants to offer electronic pull tabs, it must also offer paper pull tabs. How many electronic devices can there be in a bar? It depends on the size of the premises. The number of electronic pull tab or electronic bingo devices is limited to: • No more than 6 devices in play for permitted premises with 200 seats or less. • No more than 12 devices in play for permitted premises with 201 seats of more. • No more than 50 devices in play for permitted premises where bingo is the primary business. The law allows for devises that can be used for both pull -tab and linked bingo games, although limitations would still apply. For instance, a lawful gambling organization operating at a location with 200 seats or less could have 12 "combo' devices, but at any given time only 6 could be "in play" for electronic pull tabs and only 6 could be in play for electronic linked bingo. Page 3 Our city passed an ordinance creating a 10 percent contribution fund. Is there any impact to the contribution fund? No. Minn. Stat. § 349.213, subd. l (f)(2) authorizes cities to require that gambling organizations to contribute 10 percent of their net profits from lawful gambling premises within the jurisdiction to a city -administered fund. The proceeds of the fund can be used for lawful purposes defined in Chapter 349, or for police, fire, or public safety purposes. The bill will have no impact on how the fund is administered. Our city imposes a local gambling tax to offset the cost of regulating local gambling in our jurisdiction. Will electronic gaming impact to the administration of this tax? Not directly. Minn. Stat. § 349.213, subd. 3 authorizes cities to impose a tax of up to 3 percent on the gross receipts of a licensed organization from all lawful gambling, less the prizes actually paid out by the organization. The taxes collected can only be used for actual costs of gambling regulation, and the city must annually file a report with the Gambling Control Board. If, however, electronic gaming brings in new revenues that significantly exceed a city's administrative costs, the tax imposed may have to be decreased. Cities that impose the regulatory tax should contact the Gambling Control Board directly with any questions regarding the oversight of electronic pull -tab devises or linked bingo. Are sports boards now legal? Not yet. The stadium legislation allows the Gambling Control Board to adopt rules to allow sports - themed tip boards, although federal law prohibits tip boards. The Board has indicated it is seeking to clarify the law to determine whether it can move forward with tip boards. When will organizations begin using these electronic devices? The Gambling Control Board estimates that the devices will not be available for play until September 2012. Need more information? Cities with questions on these recent changes to lawful gambling should contact the Minnesota Gambling Control Board (www.gcb.state.mn.us) at (651) 639-4000. The League of Minnesota Cities provides this publication as a general informational memo. It is not intended to provide legal advice and should not be used as a substitute for competent legal guidance. Readers should consult with an attorney for advice concerning specific situations.