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CR 2013-022 approve Resolution Amending Legislative Policy 4-A Lawful Gambling Policy....- is :d March 5, 2013 Council Report 2013-022 APPROVE RESOLUTION AMENDING LEGISLATIVE POLICY 4-A LAWFUL GAMBLING POLICY Proposed Action Staff recommends approval of the following motion: Move to adopt Resolution 2013-013 amending the Legislative Policy 4-A Lawful Gambling Policy. Approval of this motion will amend the Legislative Policy concerning Lawful Gambling in the City of Hopkins. Overview On November 20, 2012, the Hopkins City Council received a request for 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. In order for the request to be granted the Legislative Policy for Lawful Gambling in the City of Hopkins would need to be amended. Currently, section 2.06 states that an organization can only conduct bingo on premises that it owns. The City Council met on January 15, 2013 with the local charitable gambling organizations and the establishments where the charitable gambling occurs to discuss the issue. Based on the discussion, the City Council directed staff to rewrite the policy to allow electronic bingo devices by charitable organizations that conduct gambling on premises that they do not own. This amendment to the policy would be for electronic bingo devices only, traditional paper bingo would still be conducted by gambling organizations on their own premise. Primary Issues to Consider Does the City Council want to allow the use of electronic bingo devices, by licensed charitable gambling organizations, which do not conduct gambling on their own premises? Supporting Information • Request from the Hopkins Youth Hockey Association • Excerpt from the City Council Work Session Minutes of January 15, 2013 • Memorandum send to Charitable Organizations and the Establishments were it is held • Resolution 2013-013 • Legislative Policy 4-A, with revisions shown Kristine A. Luedke, City Clerk Council Report 2013-022 Page 2 Primary Issues to Consider Should changes be made to section 2.06 of the Lawful Gambling Policy to allow electronic bingo device at a location not owned by the charitable gambling organization? At the January 15, 2013 Work Session the City Council instructed staff to rewrite the Legislative Policy to allow electronic bingo devices and to have the City Attorney review the proposed amendment. Also, staff was instructed to allow the charitable gambling organizations an opportunity to review the proposed wording prior to the policy change Staff proposed the following change to the policy and has had the City Attorney review it: 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 lawful gambling on premises that it owns and operates. This section shall not apply to the use of electronic bingo devices as defined in Minnesota Statute, section 349.12. Staff has provided a memorandum to the organizations and establishments with the proposed language change. An Electronic Bingo Device is defined in Minnesota Statute section 349.12 as a handheld and portable electronic device that: (a) is used by a bingo player to: (1) monitor bingo paper sheets or a facsimile of a bingo paper sheet purchased and played at the time and place of an organization's bingo occasion, or to play an electronic bingo game that is linked with other permitted premises; (2) activate numbers announced or displayed, and to compare the numbers to the bingo faces previously stored in the memory or the device; (3) identify a winning bingo pattern or game requirement; and (4) play against other bingo players; (b) limits the play of bingo faces to 36 faces per game; (c) requires coded entry to activate play but does not allow the use of a coin, currency, or tokens to be inserted to activate play; (d) may only be used for play against other bingo players in a bingo game; (e) has no additional function as an amusement or gambling device other than as a electronic pull - tab game defined under section 349.12, subdivision 12c; (f) has the capability to ensure adequate levels of security internal controls; (g) has the capability to permit the board to electronically monitor the operation of the device and the internal accounting systems; and (h) has the capability to allow use by a player who is visually impaired. With the electronic bingo there are a limited number of devices that can be in play at one time at one location. 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. Alternates 1. Approve Resolution 2013-013 amending Legislative Policy 4-A Lawful Gambling Policy 2. Do not approve Resolution 2013-013 Staff recommends Alternate #I Council Report 2013-022 Page 3 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 NOV 2 0 2012 Council Report 2013-022 Page 4 Excerpt from the City Council Work Session Minutes of January 15, 2013: The meeting was started at 6:31 p.m. Present were Mayor Maxwell and Council members Molly Cummings, Jason Gadd, Kristi Halverson, Cheryl Youakim, City Manager Mike Mornson, Director of Planning & Economic Development Kersten Elverum, Assistant City Manager Jim Genellie, City Clerk Kris Luedke, Tim Tuttle & Mike Tuttle of Tuttle's Eat Bowl Play, Pete Colarich of Hopkins Jaycees, Susie Normandin of Hopkins Raspberry Festival, Bill Stump of Hopkins American Legion, Angela Quale of Hopkins Youth Hockey, Bob Byer of Mainstreet Bar & Grill and Metro Transit representative Steve Mahowald. New business: Charitable Gambling Discussion Ms. Luedke gave an overview of the City's policy for lawful gambling and the request that the policy be amended so local organizations would be permitted to conduct electronic bingo where they currently are licensed to conduct pull -tabs sales. Currently, section 2.06 states that the organization where the bingo is being operated must own the premise. Ms. Luedke gave an overview of the electronic bingo rules and limitation of hand-held electronic devices depending on the size of the establishment. Mr. Genellie discussed the difference between traditional bingo and electronic bingo. The charitable gambling organization representatives discussed with the Council the benefits of offering electronic bingo to patrons, the fear of losing business to surrounding communities if unable to offer electronic bingo, the number of devices that can be used for pull tabs and electronic bingo at any one time, electronic devices are leased and that the state receives a percentage based on revenue. Mr. Genellie explained regulations 2.05 and 2.06 of the Lawful Gambling Policy. The regulations were put in place to ensure that a good amount of gambling proceeds would remain in Hopkins and to prevent stand-alone bingo halls in Hopkins. There was much Council discussion about what other cities are doing, assuring a level playing field for area charitable organizations, organizations who own their building can continue to hold traditional paper bingo events, state ordinances and the slow start to electronic pull tabs. Council directed staff to rewrite the policy and have it reviewed by the City Attorney. The wording changes to the policy will include that paper bingo will only be allowed at establishments that own their building and that organizations that currently have paper pull tabs will be allowed to offer electronic pull tabs and electronic bingo. The Charitable Organizations will have an opportunity to review the proposed wording prior to the policy change. The policy change will need a resolution but will go into effect after the first reading. Electronic Bingo is still not out yet so Council wants to have enough time to thoroughly review the policy before it goes to the first reading at a City Council meeting in March. Council Report 2013-022 Page 5 4W� CITY OF HOPKINS Memorandum To: Charitable Organization and Establishments were it is held From: Kris Luedke, City Clerk Date: February 25, 2013 Subject: Update for the Electronic Bingo Request City Clerk The item: "Approve Resolution amending Legislative Policy 4-A Lawful Gambling Policy" will be considered at the March 5, 2013 City Council meeting which begins at 7:00 pm. In January, the City Council met with local charitable gambling organizations and the establishments where the gambling is held to discuss the request from Hopkins Youth Hockey Association to be able to offer electronic bingo where they currently are licensed for pull tabs. Based on the discussion, Council directed staff to rewrite the policy to allow electronic bingo devices by charitable organizations that conduct gambling on premises that they do not own (section 2.06). This change would be for electronic bingo devices only, traditional paper bingo would still be conducted by gambling organizations that are on their own premise. The proposed amendment to the Legislative Policy 4-A Lawful Gambling section 2.06 is below: 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 lawful gambling on premises that it owns and operates. This section shall not apply to the use of electronic bingo devices as defined in Minnesota Statute, section 349.12. If you have any questions or comments, please let me know to kluedkekhopkinsmn.com or call 952-548-6304. Thank you, Kris Luedke City Clerk CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOUTION 2013-013 RESOLUTION APPROVING AMENDMENT TO LEGISLATIVE POLICY 4-A LAWFUL GAMBLING WHEREAS, the City of Hopkins has approved a document entitled "The Legislative Policy Manual" to perform uniform guidelines and City policy 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 received a request for the Hopkins Youth Hockey Association to be permitted to conduct electronic bingo at the locations where they are currently licensed for sales of pull tabs; and WHEREAS, the City Council has determined that the Legislative Policy 4-A Lawful Gambling section 2.06 should be amended to not apply to electronic bingo devices; and NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby adopts the following amendments to the Legislative Policy 4-A, Lawful Gambling section 2.06 to read: 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 lawful gambling on premises that it owns and operates. This section shall not apply to the use of electronic bingo devices as defined in Minnesota Statute, section 349.12. EFFECTIVE DATE: This amendment will go into effect on March 5, 2013. Adopted by the City Council of the City of Hopkins this 5t' day of March, 2013. Eugene J. Maxwell, Mayor ATTEST: Kristine A. Luedke, City Clerk POLICY 4-A LAWFUL GAMBLING 1. PURPOSE 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 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 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 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 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 lawful gambling on premises that it owns and operates. This section shall not apply to the use of electronic bingo devices as defined in Minnesota Statute, section 349.12. 2.07 Only one organization, as defined in Section 2.02, may conduct gambling within a single owned, occupied or leased premise. 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 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. 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 liquor 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 An investigation 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. (The City never adopted an ordinance enacting this provision as required by MN Statute 349.213, Subd. I (f) (2).) Established 11/19/85 by Resolution 85-3218 Revised 10/5/1993 Revised 4/19/94 Revised 12/16/97 Revised 8/19/2003