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HomeMy WebLinkAbout2007 04-16 500 CMW GamblingAGENDA CITY COUNCIL/MANAGER WORKSHOP Monday, April 16, 2007 Council Chambers, City Hall 5:00 P.M. A. CALL TO ORDER B. ROLL CALL C. APPROVAL OF AGENDA D. NEW BUSINESS Revision of Lawful Gambling Ordinance E. ADJOURNMENT I Sec. 22 -1 Sec. 22 -2. Sec. 22 -3. Sec. 22 -4. Sec. 22 -5. Sec. 22 -6. Sec. 22 -7. Sec. 22 -8. Sec. 22 -9. Sec. 22 -10. Sec. 22 -11. Sec. 22 -12. Sec. 22 -13. Sec. 22 -14. Sec. 22 -15. Sec. 22 -16. Sec. 22 -17. Sec. 22 -18. Sec. 22 -19. Sec. 22 -20. Sec. 22 -21. Chapter 22 LAWFUL GAMBLING Article L In General Gambling prohibitions. Article II. Lawful gambling. Adoption of state law by reference. City may be more restrictive than state law. Purpose. Definitions. Lawful gambling permitted. Location. Conditions. Lawful gambling at on -sale establishments Council approval. Application and local approval of premises Local permits. Revocation and suspension of local permit. License and permit display. Notification of material changes to applicat Contribution of net profits to fund administ Designated trade area. Records and reporting. Penalty. Effecti by city. 2 ARTICLE I. IN GENERAL Sec. 22 -I. Gambling prohibitions. (a) Any person engaged in gambling as a participant therein or any person who knowingly permits gambling on his premises, such gambling being defied as gambling within the meaning of Minn. Scats. §§ 609.75 609.762, shall be guilty of a misdemeanor. (b) All kinds and descriptions of gaming, gambling and fraudulent devices and practices in gaming and all playing of dice or other games of chance are hereby prohibited. (c) All roulette tables; all faro banks; all crap tables; all gambling with cards, gaming tables or gambling devices; all descriptions ofgaming and gambling; all houses and places for the purpose of gambling and fraudulent devices and practices; and all playing of cards, dice or other games of chance are hereby prohibited from being set up, used or kept for gaming or gambling purposes in the city. (d) No person shall bet any money or other property table, game or device prohibited by this section. (e) No person shall keep any house or place suffer or allow any gaining table, bank or gars this section to be set up or used for the purpos motel, shop, ward, room, space or garden bel, has no control. (f) If any person shall engage in a equipment prohibited by this section gaming or gambling or used or inter room or place, such tables, instrume any police officer. It is hereby made house, room, tent or booth and seize hold and keep the gaining tables, ins upon or in any gaming or gambling ling nor shall any person g equipment prohibited in e, building, boat, lot, hotel, by him or over which he rbing game or make use of any gambling device or Mall keep tables, furniture, fixtures or instruments for (for use in gaming or gambling, in or out of any house, or equipment may be seized and taken into custody by expressed duty of all police officers to enter any place, gaming tables, instruments, fixtures or equipment and vents, fixtures or equipment. (g) No person shall visit anyplace, hoarse or room used, occupied or in any wad designed for gaming or gambling purposes and there bet any money or valuable thing on any game or device, either played with cards, dice or otherwise. It shall be the duty of the police officers to visit all houses, places, rooms, tents or booths where any such gambling is carried on in violation of this section and to arrest all persons violating this section. (h) No person shall, within the city, whether directly or indirectly, bet or risk any money or other property at or upon any game, device, horse race, contest of any kind whatever or upon the happening of any event whether such event takes place within or without the city limits, or the result of any such event or engage in any gaming or gambling of any kind whatever, in which money or other property is directly or indirectly bet, wagered, staked or risked, or aid or abet, directly or indirectly, any other person in the doing of any such acts. (i) This section shall not apply to the game of bingo, as defined by state law, if such game of bingo is duly licensed pursuant to state law and this Code or other city ordinance. 0) Notwithstanding the other subsections of this section, maternal, religious, veterans' or other nonprofit organization may set up to operate a gambling device or conduct a raffle, as defined in Minn. Stats. § 349.12, if licensed by the city and conducted pursuant to Minn. Slats. 340.12, and a person may manufacture, sell or offer for sale a gambling device to such organization. ARTICLE 11. LAWFUL GAMBLING Sec. 22 -2. Adoption of state law by reference. The provisions of Minnesota Statutes, Chapter 349, as they may be amended from time to time, with reference to the definition of terms, conditions of operation, provisions relating to sales, and all other matters pertaining to lawful gambling are hereby adopted by reference and are made a part of this ordinance as if set out in full. It is the intention of the Council that all future amendments of Minnesota Statutes, Chapter 349, are hereby adopted by reference or referenced as if they had been in existence at the time this ordinance was adopted. Sec. 22 -3. City may be more restrictive than state law. The council is authorized by the provisions of Minnesota Statutes, Section 349.213, as it may be amended from time to time, to impose, and has imposed in this ordinance, additional restrictions on gambling within its limits beyond those contained in Minnesota Statutes, Chapter 349, as it may be amended from time to time. Sec. 22 -4. Purpose. The purpose of this ordinance is to regulate lawful gambling within the City of Maplewood, to prevent its commercialization, to insure the integrity of operations, and to provide for the use of net profits only for lawful purposes. Sec. 22 -5. In addition to the definitions contained in Minnesota Statutes, Section 349.12, as it may be amended from time to time, the following terms are defined for purposes of this ordinance: in this ordinance, means the State of Minnesota Gambling Control Board. CITY, as used in this ordinance, means the City of Maplewood. COUNCIL, as used in this ordinance, means the City Council of the City of Maplewood. LICENSED ORGANIZATION, as used in this ordinance, means an organization licensed by the Board. LOCAL PERMIT, as used in this ordinance, means a permit issued by the city. TRADE AREA, as used in this ordinance, is defined as the City of Maplewood and each city and township contiguous to the City of Maplewood. 4 Sec. 22 -6. Lawful gambling permitted. Lawful gambling is permitted within the city provided it is conducted in accordance with Minnesota Statutes, Sections 609.75- 609.763, inclusive, as they may be amended from time to time; Minnesota Statutes, Sections 349.11- 349.23, inclusive, as they may be amended from time to time; and this ordinance. Sec. 22 -7. Location. (a) Lawful gambling under license issued by the state lawful gambling board may be conducted only at the following locations: (1) In the licensed organization's hall where it has its regular meetings. No organization shall rent, lease, or occupy, directly or indirectly, any other property for,the purpose of conducting gambling, except an on -sale establishment as permitted in this division. (2) In licensed on -sale liquor, wine, and beer establishments. (3) Notwithstanding subsections (a) (1) and (2) of this section, raffle only licenses may be approved for any proper location. (b) No location shall be approved for gambling unless it complies with the applicable zoning, building, fire, and health codes of the city. Sec. 22 -8. Conditions. The conduct of lawful gambling under license issued by the state lawful gambling control board shall be subject to the following conditions in the city: (1) No sale, consumption, or possession of liquor, wine, 3.2 percent malt liquor shall be permitted during gambling conducted by a licensed organization, except as permitted under a valid on -sale liquor, wine, or 3.2 percent malt liquor license or a bottle club permit, provided, further, that no sale, consumption, or possession of liquor, wine, or 32 percent malt liquor shall be permitted in the room where a bingo session is taking place. (2) aDalieation as a registered Minnesota nonarobt coraoration or as an orzanization (3) Before any person may serve as gambling manager for any organization licensed to conduct gambling in the cit1), that person must have satisfactorily completed a course of instruction conducted by the state lawful gambling control board on the duties and responsibilities of the gambling manager. Sec. 22 -9. Lawful gambling at on -sale establishments. Lawful gambling at on -sale liquor, wine, and 3.2 percent malt liquor establishments shall be Conducted in compliance with the following: (�) Only licenses for lawful gambling and raffles may be issued, except where the licensed gambling organization also holds the on -sale liquor, wine, or 3.2 percent malt liquor licenses for the premises, in which case any gambling license may be issued. (2) On -sale establishments shall be limited to one licensed gambling organization at any one time in the licensed premises and any rooms adjoining the premises under the same management No lease shall be made with one organization while another lease is in effect for the same on -sale establishment. (3) Every agreement between a nonprofit organization and an on -sale premises for gambling shall be in the form of a written lease. The written lease shall be the complete agreement between the parties, and there shall be no unwritten terms or conditions. The lease shall specifically provide that the lessee shall operate only after issuance of a license and shall be subject to the terms of this division. (4) A copy of any lease agreement between a nonprofit organization and an on -sale licensee shall be filed with the city clerk and the police chief with the gambling license application. (5) A lease agreement between a nonprofit organiz not provide for rental payments based on a per gambling. There shall be no other compensatio directly or indirectly, other than the rental fee) maximum rental fee shall be according to state vz on -sale establishment shall of receipts of profits from lawful to the on -sale establishment, d in the lease agreement. The (6) All gambling shall be conducted from a booth o. rest of the licensed premises. The physical layoff be subject to approval of the police department. ether area properly segregated from the of the area set aside for gambling shall (7) The gambling booth shall be constructed and maintained by the organization licensed to conduct gambling and shall be under the exclusive control of that organization. The organization licensed to conduct gambling shall prominently display its name and license number at its gambling booth and shall indicate that all profits from gambling are for the benefit of the organization. (8) No employees or agents of the on -sale establishment shall handle gambling devices, gambling money, prizes, or gambling records; nor shall they record winners, replays, or free games; nor shall they otherwise conduct or assist the licensed gambling organizations in conducting the gambling operation. (9) No person shall be jointly employed by both the nonprofit organization and the on -sale establishment. (1 Q) The gambling booth shall be separate from the liquor service bar. No gambling shall be conducted from the liquor service bar. (11) The organization licensed to conduct gambling shall have exclusive control over all gambling devices, money, and records. Whenever the organization is not present, all gambling devices, money, and records shall be securely locked and shall be inaccessible to employees of the on -sale establishment. (12) No gambling, funds shall be commingled with funds of f the on -sale establishment. (13) No, food, drink, or entertainment discounts or other promotions shall be offered in conjunction with the sale ofgambling devices or chances. (14) The on -sale establishment shall allow the organization to conduct gambling at any time during its lawful business hours and shall prohibit gambling at any time other than its lawful business hours. (1 S) The on -sale licensee shall make no agreements with any gambling equipment distributor requiring the use of his gambling equipment in the establishment. (16) Subsections (6), (7), (8), (9), (10), and (11) of this section shall not apply when the licensed gambling organization is also the holder of the on -sale license for the establishment where the gambling is conducted. (17) The city council may disapprove a gambling license application for an on -sale establishment in which gambling violations have previousljr occurred. Section 22 -14. Council approval. Lawful gambling authorized by Minnesota Statutes, Sections 349.11 - 349.23, inclusive, as they may be amended from time to time, shall not be conducted unless approved by the council, subject to the provisions of this ordinance and state law. Section 22 -11. Application and local approval of premises permits. (a) Any organization seeking to obtain a premises permit or bingo hall license, or renewal of a premises permit or bingo hall license from the Board shall file with the city clerk an executed, complete duplicate application, together with all exhibits and documents accompanying the application as filed with the Board. The application and accompanying exhibits and documents shall be filed not later than three (3) days after thev have been filed with the Board. (b) Upon receipt of an application for issuance or renewal of a premises permit or bingo hall license, the city clerk shall transmit the application to the chief of police for review and recommendation. (c) The chief of police shall investigate the matter and make its review and recommendation to the city council as soon as possible, but in no event later than 45 days following receipt of the notification by the city. (d) Organizations or bingo halls applying for a state issued premises permit shall pay the city an investigation fee as set by State Statute for cities of the second class. This fee shall be refunded if the application is withdrawn before the investigation is commenced. (e) The applicant shall be notified in writing of the date of which the council will consider the recommendation. (f) The council shall receive the police chiefs report and consider the application within 45 days of the date the application was submitted to the city clerk. N (g) The council shall, by resolution, approve or disapprove the application within 60 days of the receipt of the application. (h) The council shall disapprove an application for issuance or renewal of a premises permit for any of the following reasons: (1) Violation by the gambling organization of any state statute, state rule, or city ordinance relating to gambling within the last 3 years. (2) Violation by the on -sale establishment, or organization leasing its premises for gambling, of any state statute, state rule, or city ordinance relating to the operation of the establishment, including, but not limited to, laws relating to alcoholic beverages, gambling, controlled substances, suppression of vice and protection of public safety within the last 3 years. (3) Lawful gambling would be conducted at premises other than liquor license has been issued. (4) ( Lawful gambling would be conducted at more than the city. on -sale Failure of the applicant to pay the investigation fee within the prescribed time limit. (6) Operation of gambling at the site would be detrimental to health, safety, and welfare of the community. Otherwise the council shall pass a resolution approving the application. Sec. 22 -12. Local permits. (a) No organization shall conduct lawful gambling excluded or exempted from state licensure requirements by Minnesota Statute, Section 349.166, as it may be amended from time to time, without a valid local ,permit. (b) ci (1 (2 or renewal of a local permit shall be on a form prescribed by the stain the following information: of the organization requesting the permit. address of the officers and person accounting for receipts, expenses, and the event. (3) Dates of gambling occasion for which permit is requested. (4) Address of premises where event will occur. (5) Copy of rental or leasing arrangement, if any, connected with the event including rental to be charged to organization. (6) Estimated value of prizes to be awarded. (c) When filing an application for the issuance of a local permit under this division, the applicant must pay to the city clerk, in full, the amount of the permit fee as imposed, set, established and fixed by the city council. (d) Upon receipt of an application for issuance or renewal of a local permit, the city clerk shall transmit the notification to the chief of police for its review and recommendation. (e) The chief of police shall investigate the matter and make review and recommendation to the city council as soon as possible, but in no event later than 45 days following receipt of the notification by the city. (f) The applicant shall be notified in writing of the date on which the council will consider the recommendation. (g) The council shall receive the public safety department's report and consider the within 45 days of the date the application was submitted to the city clerk. (h) The council shall disapprove an application for issuance or renewal of a premises permit for any of the following reasons: (1) Violation by the gambling organization of any state statute, state rule, or city ordinance relating to gambling within the last 3 years. (2) Violation by the on -sale establishment, or organization leasing its premises for gambling, of any state statute, state rule, or city ordinance relating to the operation of the establishment, including, but not limited to, laws relating to the operation of the establishment, laws relating to alcoholic beverages, gambling, controlled substances, suppression of vice and protection of public safety within the last 3 years. (3) The organization has not been in existence for at least 3 consecutive years prior to the date of application. (4) The organization does not have at least 15 active members. (5) Exempted or excluded lawful gambling will not take place at a premises the organization (6) Exempted or excluded lawful gambling will not be limited to a premises for which an on- sale liquor license has been issued. (7) Exempted or excluded lawful gambling will occur at more than 4 premises within the City. (8) More than one licensed, qualified organization will be conducting exempted or excluded lawful gambling activities at any one premises. (9) Failure of the applicant to pay the permit fee within the prescribed time limit. (10) Operation of gambling at the site would be detrimental to health, safety, and welfare of the community. E Otherwise the council shall approve the application. Sec. 22 -13. Revocation and suspension of local permit. (a) A local permit may be revoked, or temporarily suspended for a violation by the gambling organization of any state statute, state rule, or city ordinance relating to gambling. (b) A license shall not be revoked or suspended until notice and an opportunity for a hearing have first been given to the permitted person. The notice shall be personally served and shall state the provision reasonably believed to be violated. The notice shall also state that the permitted person may demand a hearing on the matter, in which case the permit will not be suspended until after the hearing is held. If the permitted person requests a hearing, the council shall hold a hearing on the matter at least one week after the date on which the request is made. If, as a result of the hearing, the council finds that an ordinance violation exists, then the council may suspend or revoke the permit. Sec. 22 -14. License and permit display. All permits issued under state law or this ordinance sha permit year at the premises where gambling is conduct Sec. 22 -15. Notification of material changes to'appli An organization holding a state issued premises permit writing whenever any material change in the informatic within ten days of the change. displayed during the permit shall notify the city in ed in the application occurs Sec. 22 -16. Contribution of net profits to fund administered by city. (a) Each organization licensed to conduct lawful gambling within the city pursuant to Minnesota Statute, Section 349.16, as it may be amended from time to time, shall contribute ten percent of its net profits derived from lawful gambling in the city to a fund administered and regulated by the city without cost to the fund. The city shall disburse the funds for lawful purposes as defined by Minnesota Statutes Section 349.12, Subdivision 25, as it may be amended from time to time. An organization's receipts from lawful gambling that is exempt from licensing under Minn. Stats. § 349.166 are not subject to ten - percent contribution imposed by this section. (b) The ten percent contribution imposed by this section shall be paid to a fund administered and regulated by the city, without cost to the city, for disbursement for lawful purposes on a monthly basis and shall be reported on a duplicate copy of the gambling tax return f led with the state lawful gambling control board each month. The report shall be an exact duplicate of the report filed with the state lawful gambling control board, without deletions or additions, and must contain the signatures of organization officials as required on the report form. At the time of submitting a copy of the gambling tax return, each organization shall also file a computation of charitable contribution form. The gambling tax return and payment of the contribution due must be postmarked or, if hand- delivered, received in the office of the finance director on or before the last day of the month following the month for which the report is made. IN An incomplete gambling tax return will not be considered timely unless corrected and returned by the due date for filing. Delays in the mailing, mail pickups, and postmarking are the responsibility of the organization. The tax return and contribution shall be delivered to: Finance and Administration Manager City of Maplewood 1830 East County Road B Maplewood MN 55109 Checks shall be made payable to the ciiy. (c) There shall be an interest charge of eight percent per annum on the unpaid balance of all overdue contributions owed by an organization under this section. (d) The ciiy council shall disapprove any pending application for renewal or the original issue of a lawful gambling license for any organization which owes delinquent contributions to the city. Further, the police chief may notify the state lawful gambling board of any organization owing delinquent contributions to the city and may request that the board revoke or suspend the organization's license during the license year. The city council shall not issue or renew any on- sale or off-sale alcoholic beverage license, bottle club permit, or food license to any organization which owes delinquent contributions to the city. The remedies to this subsection are not exclusive and shall be in addition to any other powers and remedies provided by law. Sec. 22 -17. Designated trade (a) Each organization licensed to conduct gambling within the city shall expend 51 percent of its lawful purpose expenditures on lawful purposes conducted within the city's trade area. (b) This section applies only to lawful purpose expenditures of gross profits derived from gambling conducted at a premise within the city's jurisdiction. Sec. 22 -18. Records and reporting. (a) Organizations conducting lawful gambling shall file with the city clerk one copy of all records and reports required to be filed with the Board, pursuant to Minnesota Statutes, Chapter 349, as it may be amended from time to time, and rules adopted pursuant thereto, as they may be amended from time to time. The records and reports shall be filed on or before the day they are required to be filed with the Board. (b) Organization licensed by the Board shall file a report with the city proving compliance with the trade area spending requirements imposed by Section 16. Such report shall be made on a form prescribed by the city and shall be submitted annually and in advance of application for renewal. Sec. 22 -19. Penalty. Any person who violates (1) any provision of this ordinance; 11 (2) Minnesota Statutes, Sections 609.75 - 609.763, inclusive, as they may be amended from time to time; or (3) Minnesota Statutes, Sections 349.11- 349.21, as they may be amended from time to time or any rules promulgated under those sections, as they may be amended from time to time shall be guilty of a misdemeanor and shall be subject to a fine of not more than S 1,000 or imprisonment for a term not to exceed 90 days, or both, plus in either case the costs of prosecution. Sec. 22 -20. Severability. if any provision of this ordinance is found to be invalid for any jurisdiction, the validity of the remaining provisions shall not b Sec. 22 -21. Effective date. This ordinance becomes effective on the date of its publication, or upon 1 summary of the ordinance as provided by Minnesota Statute, Section 41 may be amended from time to time, which meets the requirements of Mi_ 331A.01 Subdivision. 10, as it may be amended from time to time. Passed by the Council this day of , Mayor Attested: nubiication of a 1, Subdivision 4, as it ;ota Statute Section TO: Greg Copeland, City Manager FROM: Karen Guilfoile, Citizen Services Manager DATE: April 13, 2007 SUBJECT: Lawful Gambling Ordinance Chapter 22 of the City Code of Ordinances pertaining to Gambling and Bingo was inserted into the code in 1982. Since that date there have been numerous revisions in State Statute 349 that governs Lawful Gambling and Gambling Devices. Specifically, there were major changes in the 2005 and 2006 Legislative Sessions. After review of our current code, it was determined that it would be more efficient to remove the entire chapter and start over with a more comprehensive and significantly reduced in size ordinance. The proposed code is attached for your review. Items in italics are included in the current code. Underlined items are proposed changes. In 2005 lawful gambling changes went to affect that contain many positive changes for the lawful gambling industry. Significant changes were made for the conduct of bingo and the definition of raffles. Some of the significant changes that we have made follow: The current code requires that an organization shall be not eligible for a license unless the organization conducts their meetings in Maplewood. This requirement has been removed. This will allow organizations that are licensed by other cities to conduct raffles and have premise permits in our city. Currently we restrict a licensee to only two premises permits in the city. Many our license holders have requested that we increase this number; we are proposing up to four premise permits per licensee. Currently we require the resolution approving the application for a premise permit within 180. The proposed ordinance requires approval of the resolution within 60 days of receipt of the application. Statute 349 allows up to 90 days. We are suggesting the 60 days to ensure that the resolution will be passed and returned to the Gambling Control Board well before the statutory deadline. Since there have been so many changes to Statute 349 over the last few years I have included the following types of gambling that are excluded from state licensing requirements: (1) Bingo (with the exception of linked bingo) conducted by an organization in conjunction with a county fair, state fair or a civic celebration for less than 12 consecutive days in a year. The organization can make no more than four separate applications for activities applied for and approved per year. (2) Bingo (with the exception of linked bingo) conducted by an organization on four or fewer days a year. (3) Raffles conducted by an organization that does not award raffle prizes in excess of a total value of $1500 in a calendar year. (4) Bingo conducted within a nursing home or senior citizens housing project, or by a senior citizens organization, if: • The prizes for a single bingo game do not exceed $10. • Total prizes awarded at a single bingo occasion do not exceed $200. • No more than two bingo occasions are held by the organization or at the facility each week. • Only members of the nursing home or housing project are allowed to play. • No compensation is paid to any people who conduct the bingo game. • A manager is appointed to supervise the bingo. "Linked bingo" is a bingo game played at two or more locations where licensed organizations are authorized to conduct bingo, where there is a common prize pool and a common selection of numbers or symbols conducted at tone location, and where the results of the selection are transmitted to all participating locations by satellite, telephone or other means by a linked bingo game provider. An organization that conducts excluded bingo or raffles must register with the board before conducting lawful gambling. An organization that conducts the first two types of excluded bingo must obtain prior approval by the local governing body. Cities may require a local permit for organizations that conduct the first two types of excluded bingo. Cities probably may not require a local permit to conduct senior citizen or nursing home bingo, or raffles with prizes under $1500 in a calendar year, although the law is open to interpretation. In preparation of making revisions to Chapter 22, a survey of 17 surrounding cities was conducted to see how they handle different questions. The study worksheet is attached and the summary follows: Question 9. How many premises can your licensees have? Survey — none to no restrictions Question 2. Do you allow charitable gambling license holders from other cities to hold a premise permit in your city? Survey — 6 no and 11 yes Question 3. How many temporary permits do you allow your license holders to have on an annual basis? Survey— one to no limits (most cities follow Statute 349) Question 4. Do you do a background investigation on your charitable gambling managers? If so, how much do you charge for the investigation? Survey — 14 yes and 3 no. By statute a city of the second class can not charge in excess of $250 for the investigation. Question 5. What are your fees for annual and temporary licenses? Survey — No fee to $100 Question 6. Where do you allow gambling to be held? Survey — For temporary licenses mostly churches and schools. For annual licenses, any on -sale liquor license holder. Finally, the city currently does not have an investigation fee for lawful gambling background investigations or for lawful gambling change of manager investigations. We are suggesting the fee amount of $250 as is permitted by Statute 349. CONSIDERATION Staff is requesting input from council on the proposed changes to Chapter 22 pertaining to Lawful Gambling and approval of the investigation fee of $250. This Chapter will then be submitted to council for first reading at a future council meeting.