4.7 SR 12-02-2024The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
City Council
Item Number
4.7
Meeting Date
December 2, 2024
Prepared By
Joe Stremcha, Business Services Director/Assistant
City Administrator
Item Description
FT Center Lease for Lawful Gambling Activity
Reviewed by
Cal Portner
Tina Allard
Action Requested
Approve, by motion, a lease agreement with ERYHA for lawful gambling activity.
Background/Discussion
Elk River Youth Hockey Association has expressed interest in operating a pull tab operation at the Overlook
lounge within the FT Center. ERYHA will apply for an additional pull tab location within the City of Elk River
upon agreement for the lease space at the maximum allowable rate per state statute.
ELECTRONIC GAMES: Monthly rent to be paid: 15%, not to exceed 15% of the gross profits for that month
from electronic pull-tab games and electronic linked bingo games. ALL OTHER GAMES: Monthly rent to be
paid: 20%, not to exceed 20% of gross profits from all other forms of lawful gambling.
▪ If any booth sales are conducted by a licensed organization at the premises, rent may not exceed 10%
of gross profits for that month and is subject to the booth operation's $1,750 cap.
Financial Impact
ERYHA has an established gambling operation. The Minnesota Gambling Control Board's FY2024
Organization Annual Report Summary (November 12, 2024) shows ERYHA's gross receipts totaled
$20,905,863 with prizes paid totaling $18,333,434 and net receipts in the amount of $2,572,429.
Mission/Policy/Goal
Together we win
Attachments
1. Pull Tabs LG 215 RInk Permit - FT Center
2. MN Gambling Control Board FY2024 Organization Annual Report Summary
Page 137 of 211
MINNESOTA LAWFUL GAMBLING
LG215 Lease for Lawful Gambling Activity
LEASE INFORMATION
Organization: License/Site Number: Daytime Phone:
Address: City: State: Zip:
Name of Leased Premises: Street Address:
City: State:
MN
Zip: Daytime Phone:
Name of Legal Owner: Business/Street Address:
City: State: Zip: Daytime Phone:
Name of Lessor (if same as legal owner, write “SAME”): Address:
City: State: Zip: Daytime Phone:
Check applicable item:
___ New or amended lease. Effective date: _______________. Submit changes at least ten days before the effective date
of the change.
___ New owner. Effective date: _______________. Submit new lease within ten days after new lessor assumes ownership.
CHECK ALL ACTIVITY THAT WILL BE CONDUCTED (no lease required for raffles)
___ Pull-Tabs (paper)
___ Pull-Tabs (paper) with dispensing device
___ Bar Bingo ___ Bingo
___ Tipboards
___ Paddlewheel ___ Paddlewheel with table
___ Electronic Pull-Tabs
___ Electronic Linked Bingo
Electronic games may only be conducted:
1.at a premises licensed for the on-sale of intoxicating liquor
or the on-sale of 3.2% malt beverages; or
2.at a premises where bingo is conducted as the primary
business and has a seating capacity of at least 100.
PULL-TAB, TIPBOARD, AND PADDLEWHEEL RENT (separate rent for booth and bar ops)
BOOTH OPERATION: Some or all sales of gambling equipment are conducted by an employee/volunteer of a licensed organization at
the leased premises.
ALL GAMES, including electronic games: Monthly rent to be paid: ____%, not to exceed 10% of gross profits for that month.
Total rent paid from all organizations for only booth operations at the leased premises may not exceed $1,750.
The rent cap does not include BAR OPERATION rent for electronic games conducted by the lessor.
BAR OPERATION: All sales of gambling equipment conducted by the lessor or lessor’s employee.
ELECTRONIC GAMES: Monthly rent to be paid: _____%, not to exceed 15% of the gross profits for that month from electronic pull-tab
games and electronic linked bingo games.
ALL OTHER GAMES: Monthly rent to be paid: _____%, not to exceed 20% of gross profits from all other forms of lawful gambling.
If any booth sales conducted by a licensed organization at the premises, rent may not exceed 10% of gross profits for that month
and is subject to booth operation $1,750 cap.
BINGO RENT (for leased premises where bingo is the primary business conducted, such as bingo hall)
Bingo rent is limited to one of the following:
Rent to be paid: ______ %, not to exceed 10% of the monthly gross profit from all lawful gambling activities held during bingo
occasions, excluding bar bingo.
- OR -
Rate to be paid: $ ___________ per square foot, not to exceed 110% of a comparable cost per square foot for leased space, as
approved by the director of the Gambling Control Board. The lessor must attach documentation, verified by the organization, to
confirm the comparable rate and all applicable costs to be paid by the organization to the lessor.
Rent may not be paid for bar bingo.
Bar bingo does not include bingo games linked to other permitted premises.
LEASE TERMINATION CLAUSE (must be completed)
The lease may be terminated by either party with a written _______ day notice. Other terms:
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Page 138 of 211
LG215 Lease for Lawful Gambling Activity
Lease Term: The term of this agreement will be concurrent
with the premises permit issued by the Gambling Control Board
(Board).
Management: The owner of the premises or the lessor will not
manage the conduct of lawful gambling at the premises. The
organization may not conduct any activity on behalf of the lessor
on the leased premises.
Participation as Players Prohibited: The lessor will not par-
ticipate directly or indirectly as a player in any lawful gambling
conducted on the premises. The lessor's immediate family and
any agents or gambling employees of the lessor will not partici-
pate as players in the conduct of lawful gambling on the premis-
es, except as authorized by Minnesota Statutes, Section
349.181.
Illegal Gambling: The lessor is aware of the prohibition
against illegal gambling in Minnesota Statutes 609.75, and the
penalties for illegal gambling violations in Minnesota Rules
7865.0220, Subpart 3. In addition, the Board may authorize the
organization to withhold rent for a period of up to 90 days if the
Board determines that illegal gambling occurred on the premises
or that the lessor or its employees participated in the illegal
gambling or knew of the gambling and did not take prompt
action to stop the gambling. Continued tenancy of the organiza-
tion is authorized without payment of rent during the time period
determined by the Board for violations of this provision, as
authorized by Minnesota Statutes, Section 349.18, Subd. 1(a).
To the best of the lessor's knowledge, the lessor affirms that any
and all games or devices located on the premises are not being
used, and are not capable of being used, in a manner that
violates the prohibitions against illegal gambling in Minnesota
Statutes, Section 609.75.
Notwithstanding Minnesota Rules 7865.0220, Subpart 3, an
organization must continue making rent payments under the
terms of this lease, if the organization or its agents are found to
be solely responsible for any illegal gambling, conducted at this
site, that is prohibited by Minnesota Rules 7861.0260, Subpart 1,
item H, or Minnesota Statutes, Section 609.75, unless the
organization's agents responsible for the illegal gambling activity
are also agents or employees of the lessor.
The lessor must not modify or terminate the lease in whole or in
part because the organization reported, to a state or local law
enforcement authority or to the Board, the conduct of illegal
gambling activity at this site in which the organization did not
participate.
Other Prohibitions: The lessor will not impose restrictions on
the organization with respect to providers (distributor or linked
bingo game provider) of gambling-related equipment and ser-
vices or in the use of net profits for lawful purposes.
The lessor, the lessor's immediate family, any person residing in
the same residence as the lessor, and any agents or employees
of the lessor will not require the organization to perform any
action that would violate statute or rule. The lessor must not
modify or terminate this lease in whole or in part due to the
lessor's violation of this provision. If there is a dispute as to
whether a violation occurred, the lease will remain in effect pend-
ing a final determination by the Compliance Review Group (CRG)
of the Board. The lessor agrees to arbitration when a violation of
this provision is alleged. The arbitrator shall be the CRG.
Access to Permitted Premises: Consent is given to the Board
and its agents, the commissioners of revenue and public safety
and their agents, and law enforcement personnel to enter and
inspect the permitted premises at any reasonable time during the
business hours of the lessor. The organization has access to the
premises during any time reasonable and when necessary for the
conduct of lawful gambling.
Lessor Records: The lessor must maintain a record of all
money received from the organization, and make the record
available to the Board and its agents, and the commissioners of
revenue and public safety and their agents upon demand. The
record must be maintained for 3-1/2 years.
Rent All-Inclusive: Amounts paid as rent by the organization
to the lessor are all-inclusive. No other services or expenses
provided or contracted by the lessor may be paid by the organi-
zation, including but not limited to:
- trash removal
- electricity, heat
- snow removal
- storage
- janitorial and cleaning services
- other utilities or services
- lawn services
- security, security monitoring
- cost of any communication network or service required to
conduct electronic pull-tabs games or electronic bingo
- in the case of bar operations, cash shortages.
Any other expenditures made by an organization that is related
to a leased premises must be approved by the director of the
Board. Rent payments may not be made to an individual.
ACKNOWLEDGMENT OF LEASE TERMS
I affirm that this lease is the total and only agreement between the lessor and the organization, and that all obligations and
agreements are contained in or attached to this lease and are subject to the approval of the director of the Gambling Control Board.
Other terms of the lease:
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Signature of Lessor: Date: Signature of Organization Official (Lessee): Date:
Print Name and Title of Lessor: Print Name and Title of Lessee:
Questions? Contact the Licensing Section, Gambling Control Board, at
651-539-1900. This publication will be made available in alternative format (i.e.
large print, braille) upon request. Data privacy notice: The information requested
on this form and any attachments will become public information when received by
the Board, and will be used to determine your compliance with Minnesota statutes
and rules governing lawful gambling activities.
6/15 Page 2 of 2
Mail or fax lease to:
Minnesota Gambling Control Board
1711 W. County Road B, Suite 300 South
Roseville, MN 55113
Fax: 651-639-4032
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