Depending on your perspective, you may see provisions in the 2009 omnibus gambling bill (2009 Chapter 124, SF 1284) as either welcome mandate relief or as an unwanted reduction of city authority over lawful gambling-the only type of gambling subject to municipal regulations.

Lawful gambling is the operation, conduct, or sale of bingo, raffles, paddlewheels, tipboards, and pull-tabs. Nonprofit organizations conduct lawful gambling and use their profits on "lawful purposes" as provided in state law.

Cities may, through ordinance, adopt gambling regulations more stringent than state law or prohibit lawful gambling altogether. They may require organizations to contribute a percentage of their net profits to a fund administered by the city and require all or a portion of its expenditures be spent within the cities' trade area. Cities may even charge an investigation fee or gambling tax on organizations conducting lawful gambling within the city.

An eligible organization must be licensed by the Minnesota Gambling Control Board (Board) to conduct most types of lawful gambling. In addition, an organization is also required to obtain a state-issued premises permit to conduct lawful gambling at any specific location. The Board may not issue a premises permit unless the permit application includes approval from the home rule or statutory city where the premises is located. While cities do not have the authority to suspend or revoke state-issued gambling licenses or permits (or even require an additional local license or permit), the ability to withhold approval on a permit renewal had been seen by some as a strong incentive for an organization to comply with local regulations.

Organizational licenses and premises permits-once issued for two-year terms-are now perpetual and valid unless revoked or suspended by the Board, terminated by the organization, or are otherwise considered lapsed. Following approval of the initial permit application, cities have no ongoing or direct role in an organization's premise permit eligibility. City officials may pursue violations of any local regulations and can (and should) bring concerns regarding the conduct of lawful gambling to the Board's attention, but any decision regarding a state-issued permit will be made by the Board alone. 

Some city officials have voiced concerns over these legislative changes. The League of Minnesota Cities (LMC) would like to hear from more member cities to determine if these concerns are widely shared and whether amendments to the gambling statutes will need to be pursued during the 2010 legislative session.   

This subject is addressed in more detail in the League's information memo, Lawful Gambling.

For more information or to provide feedback on the legislative changes, contact Jennifer O'Rourke, LMC, at jorourke@lmc.org or (651) 281-1261; or Scott Kelly, LMC, at skelly@lmc.org or (651) 281-1224.

 

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