4.8. SR 12-16-2019 Eclty1� ,.,�� Request for Action
River
To Item Number
Mayor and City Council 4.8
Agenda Section Meeting Date Prepared by
Consent December 16, 2019 Tina Allard, City Clerk
Item Description Reviewed by
Gambling Ordinance Amendment Cal Portner, City Administrator
Reviewed by
Peter Beck, City Attorney
Action Requested
Adopt,by motion, an ordinance amending Chapter 38,Article V,regarding gambling.
Background/Discussion
Council met with various stakeholders and held three work sessions to discuss changes to the gambling
ordinance.
At the last meeting direction was to make the following changes to the ordinance:
■ Limit permits to organizations located in Elk River.
■ Grandfather the VFW and Zimmerman Fire Relief so they can keep their current permitted
locations.
■ Grandfather the VFW and Zimmerman Fire Relief so they are able to include the cities of Rogers
and Zimmerman in meeting the city's 75% lawful purpose expenditure requirement.
■ Keep the number of permits limited to up to 3 per organization,but allow for a waiver process if
an organization would like additional permits.
These changes have been incorporated into the ordinance. For the waiver process, there is a 30-day wait
period before an organization could ask the Council for a fourth permit. City staff would send
notification to all current organizations located in the city during the waiting period.
Financial Impact
N/A
Attachments
■ Ordinance
The Elk River Vision
A PehoMing community Pitb revolutionary and spirited resourcefulness, exceptional P,`01 W E H E 8 6 T
service, and community engagement that encourages and inspires prosperity INAMIRE1
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Ordinance 19-___
An Ordinance Amending Chapter 38, Article V. Legalized Gambling, of the City of
Elk River, Minnesota, City Code
The City Council of the City of Elk River does hereby ordain as follows:
SECTION 1. The following sections of the city code shall be amended as follows:
Sec. 38-161. - Definitions.
The following words, terms and phrases, when used in this article, shall have the meanings
ascribed to them in this section, except where the context clearly indicates a different meaning:
Gambling control division means the state agency that licenses and regulates gambling.
Lawful gambling means the operation, conduct, or sale of bingo, raffles, paddlewheels, tipboards,
and pull-tabs.
Lawful purpose means any expenditure by, or contribution to, a 501(c)(3) organization, provided
that the organization and expenditure or contribution are in conformity with standards prescribed by
the gambling control board under Minn. Stats. § 349.154.
Net profit means gross profit less reasonable sums actually expended for allowable expenses.
Organization means a religious, fraternal, veterans', or other nonprofit entity which has been in
existence for at least three years, has at least 15 active members and is not in existence solely for the
purpose of conducting gambling.
Premises permit means a permit granted by the state gambling control board for each premises
where lawful gambling is to be conducted.
Trade area means the following cities and townships: the City of Elk River, the City of Otsego,
the City of Rogers, the City of Ramsey, the City of Nowthen, the City of St. Francis, the City of
Dayton, the City of Zimmerman, Big Lake Township, Livonia Township, and Orrock Township.
Existing organizations and their premise permit locations that have been approved by the Elk River
City Council prior to December 16, 2019, may continue to spend lawful purpose expenditures in the
City of Rogers and the City of Zimmerman as long as there is no lapse in their premise permit.
Sec. 38-162. - Purpose of article.
It is the stated policy of the city council that, to the extent lawful regulated gambling is
permitted within the city, the net profits and proceeds of gambling shall directly benefit the citizens
of the city.
Sec. 38-163. - Licenses and permits generally.
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(a) It shall be unlawful to operate lawful gambling without a license issued by the state gambling
control division.
(b) Licenses to operate gambling devices or to conduct raffles shall be issued only to a fraternal,
religious, veterans', or other nonprofit organization covered by Minn. Stats. § 349.16.
(c) The organization desiring a gambling license must obtain an application from the state
gambling control division.
(d) The gambling control division may not issue a premises permit or bingo hall license unless the
organization submits a resolution from the city council approving the premises permit or bingo
hall license. The resolution must have been adopted within 90 days of the date of application
for the new or renewed permit or license.
(e) Reserved.
Sec. 38-164. - Restrictions on issuance of premises permit.
(a) The city reserves the right to disapprove a premises permit application for individual bingo
occasions, raffle games, and pull-tab operations for any of the following reasons:
(1) Violation by the applicant of any statute, rule, regulation or ordinance relating to
gambling.
(2) Failure to make reports required by any applicable ordinance, rule, regulation or statute.
(3) Any reason which would justify the state gambling control board in denying an
application for a license.
Sec. 38-165. – Organizations and Premises Eligible
(a) No premises permit will be approved unless:
(1) The organization meets the definition of organization set forth in this Article and is
conducting the lawful gambling on the premises of a church or a fraternal, veterans', or
other nonprofit organization, or on the premises of anlicensed for on-sale liquor license
ofsales by the city.
(2) The physical site for the organization's headquarters or the registered business office of
the organization is located within the city's trade areaCity of Elk River. Post Office box
numbers do not qualify as the main physical office location. Existing organizations and
their premise permit locations that have been approved by the Elk River City Council prior
to December 16, 2019, are exempt from this requirement as long as there is no lapse in
their premise permit.
(3) Preference shall be given to organizations located in the City of Elk River that meet all
the requirements of the state and city gambling laws.
(b) Only one premises permit shall be allowed per premises for lawful gambling operations. Up to
three premises permits shall be allowed per organization for lawful gambling operations in the
city
(c) Up to three premises permits shall be allowed per organization for lawful gambling operations
in the city.
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(d) If more than one organization having two or less premises permits applies for a premises
permit for the same location, priority shall be given to the application submitted first.
(e) Applications for premises permits that are not eligible due to the limit on permits set forth in
Section 13-165 (c), may be granted a waiver from the City Council if, within (30) days from the
date of submittal of the premise permit application to the City, no other eligible organization
has submitted to the City an application to operate gambling activities at the premises applied
for by the ineligible organization.
(1) Upon receipt of an application for a waiver to allow a premises permit that would
exceed the limit set forth in Section 38-165 (c), the city will give notice of the application to
all organizations currently holding a premises permit which could meet the requirements of
Section 38-165.
(2) If an application for a premises permit which meets all of the requirements of
Section 38-165 is received within 30 days after an application for a waiver is submitted for
the same location, preference shall be given to the application which does not require a
waiver.
(3) If no other applications are received and a waiver is approved, the waiver will be
granted only for the specific location set forth in the premise permit application and will
remain in effect for the duration of the original premise permit license.
Sec. 38-165166. - Lawful purpose expenditures by organizations conducting gambling.
(a) Any organization holding a premises permit to conduct lawful gambling within the city shall be
required to expend 75 percent of its lawful purpose expenditures on lawful purposes conducted
or located within the city's trade area.
(b) An organization that conducts gambling on fewer than five days in a calendar year is exempt
from the requirements of this section.
Sec. 38-1676. - Reporting requirements.
(a) Every organization licensed to conduct gambling in the city shall file with the city clerk copies
of the monthly state gambling report and schedule C required to be filed with the state lawful
gambling control board pursuant to Minn. Stats. ch. 349. The records and reports shall be due
at the same time they are due to the gambling control board.
(b) Every organization licensed to conduct gambling in the city shall file with the city clerk an
annual summary report of the expenditures for lawful purposes within the trade area.
(c) Organizations conducting gambling activities in other communities as well as the city shall
segregate the gross receipts, expenses, profits and expenditure of profits from the Elk River
operation.
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SECTION 2.
This Ordinance shall be in full force and effect from and after its passage and publication.
Passed and adopted by the City Council of the City of Elk River this 16th day of December, 2019.
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John J. Dietz, Mayor
ATTEST:
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Tina Allard, City Clerk