13. Ordinance amending chp 10 regarding Gambling I *r•
CITY OF _1 3-
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. i cHANBAssEN
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690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
I (612) 937-1900 • FAX (612) 937-5739
MEMORANDUM A,r;re by C.tty Mminil*aM
1 TO: Mayor Don Chmiel is s,,,,
City Council „.='' -----1 Don Ashworth, City Manager .-
FROM: Scott Harr , Public Safety Directot
IDATE: September 6 , 1991 -SUBJ: Proposed Gambling Ordinance
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The purpose of this memo is to provide the ordinance that the City
1 Council directed me to draft .
BACKGROUND ,
ISince the relatively recent conception of lawful charitable gambling
in the State of Minnesota, the City of Chanhassen has primarily relied
I upon State Statutes for controlling gambling within the City. We have
no regulations within our City Code regarding what agencies may
operate lawful gambling, etc.
1 ANALYSIS
1 City Attorney Roger Knutson and I have worked together to draft the
attached proposed ordinance. In it w.e sought to respond to concerns
about keeping lawful gambling operations more local in nature, as well
I as having more control over such operations. - 1 have consulted with
both the Chanhassen American Legion Post and the Chaska Lions, both
of whom have been significant contributors to the City of Chanhassen.
1 Neither group has expressed concerns with the draft .
RECOMMENDATION
1 The Public Safety Commission endorsed this amendment at its August 8,
1991 , meeting, and it is the recommendation of staff that the attached
1 proposed ordinance amendment be adopted.
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1 r PRINTED ON RECYCLED PAPER
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to examine organization °conduct the sale of
pull tabs was more difficult, since
soups like the Chanhassen Chamber
I charitable o1 Commerce and Jaycees were un-
able or unwilling to take on the re-
sponsibility, and other local clubs
gambling ike he Ry��acvm lions
l established
I By Da.id Pedersen
Charitable gambling is Chaahas•
The Chaska Lions made their
application,with the pledge to return
tars will get a thorough study after the 50 percent of the local proceeds to
city eo nci! on Monday placed a Chanhassen Park&Recreation,and
moratorium on the consideration of 50 percent to the Chaska School
any new applications to conduct Districi Endowment Fuad.for sehol-
games such zs pull tabs. arships to students in Chaska,Chan-
The decision Lame as the council bassen and Victoria.Since that time,
was asked to approve a gambling the Chaska lions have donated mote
permit for the"Children's Hun Fund" than 185,000 to Chanhassen Park&
I at the Filly's Nightclub. Recreation,and as much to the school -.
The question about who should endowment fund.
be conducting charitable gambling (The club also donates pQroceeds
existing charitable organizations, from its operations in t'lua1, to the
or private individuals and corpora- endowment fund,which now totals
1 Lions acting as"brokers"for charities newly $250,000 from the cities of
—ausedthecitycouncil torefertbe ChaskaandCLanbusen.)
matter to the Public Safety Commis•. With the Chaska Lions'depar-
ture for its review and the application by the Chil-
Tbc request to sell pull tabs at the drsn's Heat Fund,City Manager Don
nightclub comes a few months after Ashworth urged that the city attempt
I the Chaska lions Club decided to to strengthen the rules for allowing
discontinue its games at that site fol-
l ow nest charitable gambling operations.
mg about a yeas of operation.The said that the applica-
deciston v,as made after a satisfac- Lion submitted by organizations to
tory arrangement was unable to be conduct charitablegambliag does not
I secured with the management of the give a city enough information to
nightclub,a club entlubofficials determine whether an information Tbc club also recently dtscontia- should be allowed to operate the
tied selling pull tabs at Pauly's Sports games.
Bar on west 78th Sweet after ap- He said the Public Safety Com-
' proximately four years That deci-
sion was made when the establish-
mission should look taro such issues
w ether the city can limit the
meat remodeled and revised its for- applications to local or outside non-
mat profit organizations. The city of
The Cha:hzsset American 1,e• Chaska requires that charitable gam-
' gionremarnsasthconls organization Ming licenses be panted only to
that continues to sell p l tabs,at its organizations that have either SO
clubhouse on Hwy 5 percent of its active members living
Tbc last time the issue of char- to Chaska,or which meet regularly at
table gambling was questioned in least once a month in the city of
I Ctrs:asset was soon after it was Chaska
allowed by the state in 3985 Then- Ashworth also said the commis-
mayo Tom Hamilton sought to es- sion should look into whether the city
tabLst rules that would ensure that can require up to 10 percent of the
the money raised from charitable revenues raised from charitable
I gobbling in the city v.ould remain an gambling be returned to the city"Thu
the community would definitely affect the f^h,m►„s-
sen American Legion,"be said. They
have given more than 10 percent to
the city,but that's been more volun-
' tary They should be involved in the
(review)process."
In addition, Ashworth said the
city should attempt to requite more
reporting of the teats, revenues,
management fee,and the general track
record of any organization or indi-
viduals that might apply to conduct
charitable gambling on behalf of a
charity.
'We should move to have a local
I organization,"said eouacil member
Tom Workman."We've been lucky
that the Chaska Lions have been so
generous with us
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CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
ORDINANCE NO.
AN ORDINANCE AMENDING CHAPTER 10 OF THE
CHANHASSEN CITY CODE BY ADDING ARTICLE 5
REGULATING LAWFUL GAMBLING
THE CITY COUNCIL OF THE CITY OF CHANHASSEN ORDAINS: 1
Section 1. Chapter 10 of the Chanhassen City Code is
amended by adding Article V to read as follows: _ ,
ARTICLE V.
REGULATION OF GAMBLING '
Sec. 10-150. Lawful Gambling Permitted.
Lawful gambling conducted pursuant to Minnesota Statutes, 1
Chapter 349, is authorized within the City and shall be operated
in accordance with the terms and conditions specified in this
Article, other applicable provisions of the City Code, and state•
and federal laws and regulations. - _ .
Sec. 10-151. Authorized Organizations.
An organization shall not be eligible to conduct lawful
gambling in the City of Chanhassen unless it meets the qualifi-
cations in Minn. Stat. § 349.16, Subd. 2, and also meets at least
one of the following conditions:
a. The organization has at least fifteen (15) members that
are residents of the City of Chanhassen; or
b. The physical site for the organization's headquarters or
the registered business office of the organization is
located within the City of Chanhassen or a city
contiguous to the City of Chanhassen and has been
located within the City or a city contiguous to the City
of Chanhassen for at least two (2) years immediately
preceding application for a license; or
c. The organization owns real property within the City of
Chanhassen and the lawful gambling is conducted on the
property owned by the organization within the City; or
d. The physical site where the organization regularly holds 1
its meetings and conducts its activities, other than
lawful gambling and fund raising, is within the City of
Chanhassen and has been located within the City for at
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least two (2) years immediately preceding application
for a license.
Sec. 10-152 . Distribution of Proceeds.
a. Any nonprofit organization licensed to conduct gambling
within the City of Chanhassen shall contribute to the
City, for distribution by the City for lawful purposes,
' an amount equal to ten percent (10%) of the organi-
zation's net profits derived from lawful gambling. For
purposes of this Section, net profits are profits less
amounts expended for allowable expenses.
b. Each organization conducting lawful gambling within the
City must expend at least seventy-five percent (75%) of
its net profits derived from lawful gambling on lawful
purposes conducted or located within the City of
Chanhassen or any municipality contiguous to the City of
' Chanhassen. The ten percent (10%) contribution required
in subsection (a) above shall be considered as part of
the seventy-five percent (75%) expenditure.
c. Any organization conducting lawful gambling within the
City must expend at least seventy-five percent (75%) of
its net profits derived from lawful gambling on lawful
purposes prior to the expiration of its premises permit.
Sec. 10-153. Filing of Records; Investigations.
a. Every organization licensed to conduct gambling in the
City of Chanhassen shall file with the City's Public
Safety Director all records and reports required to be
filed within the State Gambling Control Board pursuant
to Minnesota Statutes, Chapter 349, and the rules and
regulations promulgated thereunder. The records and
reports shall be submitted to the City at the same time
they are filed with the Gambling Control Board.
' b. Each organization licensed to conduct gambling in the
City shall complete the City's investigation form and
submit any additional information required by the City.
' c. Any organization leasing premises for the conducting of
lawful gambling shall file with the City a copy of the
lease within one (1) week after execution of the lease.
The lease shall not provide for rental payments based on
a percentage of receipts or profits from lawful
gambling.
' d. Every gambling event in theXity of Chanhassen conducted
by an organization under state license shall be open to
inspection by City employees and the County Sheriff's
Department.
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e. The City may inspect, at any reasonable time without
notice or search warrant, all records of a licensed
organization required to be maintained by the State
Gambling Control Board.
Sec. 10-154. Qualifications. 1
The City Council shall not adopt a resolution approving a
premises permit or bingo hall license from any applicant which
has an officer, director, or other person in a supervisory or
management position, who:
a. has ever been convicted of a felony; . - 1
b. has ever been convicted of a crime involving gambling;
c. is not of good moral character and repute;
d. has ever been convicted of (i) assault, (ii) a criminal
violation involving the use of a firearm, or (iii)
making terroristic threats; or
_ e. owes delinquent local, state, or federal taxes, or is
delinquent on any other City bill.
f. is in violation of any land use or zoning ordinance 1
including the premise proposed to be licensed.
Section 2. This ordinance shall be effective immediately .
upon its passage and publication.
PASSED AND ADOPTED by the Chanhassen City Council this 1
day of , 1991.
ATTEST: 1
Don Ashworth, Clerk/Manager Donald J. Chmiel Mayor
(Published in the Chanhassen Villager on , 1991. )
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