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Item 3.5 Amendment Lawful Gambling ExemptionsOtkoo MINNESOTA DEPARTMENT INFORMATION Request for City Council Action ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Administration City Clerk Etzel February 22, 2021 PRESENTER(s) REVIEWED BY: ITEM #: Consent City Administrator/Finance Director Flaherty 3.5 — Gambling Ordinance STRATEGIC VISION MEETS: I THE CITY OF OTSEGO: X Is a strong organization that is committed to leading the community through innovative communication. No. Has proactively expanded infrastructure to responsibly provide core services. BACKG RO U N D/J USTI FI CATI ON: Is committed to delivery of quality emergency service responsive to community needs and expectations in a cost-effective manner. X Is a social community with diverse housing, service options, and employment opportunities. outlined in Minnesota Rules 349.166, Subd. 2 Exemptions, which is attached. Is a distinctive, connected community known for its beauty and natural surroundings. AGENDA ITEM DETAILS RECOMMENDATION: City staff recommends approval of an ordinance amendment regarding Lawful Gambling Exemptions. ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? No. No. BACKG RO U N D/J USTI FI CATI ON: City staff has received requests for exempt permit applications, example the LG220 Form. After reviewing ordinance Lawful Gambling 4-7-3, certain exempt types of gambling were not included. City staff reviewed the Minnesota Rules and contacted Minnesota Gambling Control Board. Exempt Permits are allowed as outlined in Minnesota Rules 349.166, Subd. 2 Exemptions, which is attached. This would also allow the City Clerk to sign -off on the exempt permits, avoiding further delay for the applicant to send their request to the Minnesota Gambling Control Board. The Administrative Subcommittee agreed with the recommendation and supported an amendment to Lawful Gambling Section 4-7-3 Exemption of the City Code to provide clarification regarding Exempt Permits and a provision for the City Clerk to sign -off on qualified permits as allowed by Minnesota Rules. SUPPORTING DOCUMENTS ATTACHED: ■ Minnesota State Statue 349.166 Exemptions ■ Draft Ordinance 2021-05 (With Changes) ■ Ordinance 2021-05 (Clean) ■ Summary Ordinance 2021-05 (For Publication) POSSIBLE MOTION PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES: Motion to adopt Ordinance 2021-05 amending the City Code regarding Lawful Gambling Exemptions and approving publication in summary form. BUDGET INFORMATION FUNDING: BUDGETED: N/A N/A MINNESOTA STATUTES 2020 349.166 349.166 EXCLUSIONS; EXEMPTIONS. Subdivision 1. Exclusions. (a) Bingo, with the exception of linked bingo games, may be conducted without a license and without complying with sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4 and 5; 349.18, subdivision 1; and 349.19, if it is conducted: (1) by an organization in connection with a county fair, the state fair, or a civic celebration and is not conducted for more than 12 consecutive days and is limited to no more than four separate applications for activities applied for and approved in a calendar year; or (2) by an organization that conducts bingo on four or fewer days in a calendar year. An organization that holds a license to conduct lawful gambling under this chapter may not conduct bingo under this subdivision. (b) Bingo may be conducted within a nursing home or a senior citizen housing project or by a senior citizen 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, only members of the organization or residents and their guests of the nursing home or housing project are allowed to play in a bingo game, no compensation is paid for any persons who conduct the bingo, and a manager is appointed to supervise the bingo. Bingo conducted under this paragraph is exempt from sections 349.11 to 349.23, and the board may not require an organization that conducts bingo under this paragraph, or the manager who supervises the bingo, to register or file a report with the board. The gross receipts from bingo conducted under the limitations of this subdivision are exempt from taxation under chapter 297A. (c) Raffles may be conducted by an organization without registering with the board if the value of all raffle prizes awarded by the organization in a calendar year does not exceed $1,500 or, if the organization is a 501(c)(3) organization, if the value of all raffle prizes awarded by the organization at one event in a calendar year does not exceed $5,000. (d) Except as provided in paragraph (b), the organization must maintain all required records of excluded gambling activity for 3-1/2 years. Subd. 2. Exemptions. (a) Lawful gambling, with the exception of linked bingo games, may be conducted by an organization without a license and without complying with sections 349.168, subdivisions 1 and 2; 349.17, subdivision 4; 349.18, subdivision 1; and 349.19 if: (1) the organization conducts lawful gambling on five or fewer days in a calendar year; (2) the organization does not award more than $50,000 in prizes for lawful gambling in a calendar year; (3) the organization submits a board -prescribed application and pays a fee of $100 to the board for each gambling occasion, and receives an exempt permit number from the board. If the application is postmarked or received less than 30 days before the gambling occasion, the fee is $150 for that application. The application must include the date and location of the occasion, the types of lawful gambling to be conducted, and the prizes to be awarded; (4) the organization notifies the local government unit 30 days before the lawful gambling occasion, or 60 days for an occasion held in a city of the first class; (5) the organization purchases all gambling equipment and supplies from a licensed distributor; and Official Publication of the State of Minnesota Revisor of Statutes 349.166 MINNESOTA STATUTES 2020 2 (6) the organization reports to the board, on a single -page form prescribed by the board, within 30 days of each gambling occasion, the gross receipts, prizes, expenses, expenditures of net profits from the occasion, and the identification of the licensed distributor from whom all gambling equipment was purchased. (b) No more than one organization exempted or excluded from licensing requirements may conduct an individual raffle. (1) Exempted or excluded organizations may not combine the use of raffle tickets. (2) Raffle tickets must not be attached to or combined with other exempted or excluded organizations' raffle tickets and must be sold separately from other exempted or excluded organizations' raffle tickets. (c) If the organization fails to file a timely report as required by paragraph (a), clause (6), the board shall not issue any authorization, license, or permit to the organization to conduct lawful gambling on an exempt, excluded, or licensed basis until the report has been filed and the organization may be subject to penalty as determined by the board. The board may refuse to issue any authorization, license, or permit if a report or application is determined to be incomplete or knowingly contains false or inaccurate information. (d) Merchandise prizes must be valued at their fair market value. (e) Organizations that qualify to conduct exempt raffles under paragraph (a) are exempt from section 349.173, paragraph (b), clause (2), if the raffle tickets are sold only in combination with an organization's membership or a ticket for an organization's membership dinner and are not included with any other raffle conducted under the exempt permit. (f) Unused pull -tab and tipboard deals must be returned to the distributor within seven working days after the end of the lawful gambling occasion. The distributor must accept and pay a refund for all returns of unopened and undamaged deals returned under this paragraph. (g) The organization must maintain all required records of exempt gambling activity for 3-1/2 years. Subd. 3. [Repealed, 2009 c 124 s 60] Subd. 4. [Repealed, 1994 c 633 art 2 s 21] History: 1989 c 334 art 2 s 51; 1990 c 590 art I s 24; 1991 c 199 art 2 s 1; 1994 c 633 art 2 s 19; art 5 s 57-59; 1996 c 467 s 4,5; 1999 c 128 s 1; 2003 c 110 s 21,22; ISp2003 c 1 art 2 s 98,99; 2005 c 166 art I s 22,23; 2006 c 205 s 15,16; 2009 c 124 s 34; 2012 c 187 art I s 58; 2013 c 143 art 5 s 21; 2015 c 52 s 10; 2015 c 77 art 2 s 75 Official Publication of the State of Minnesota Revisor of Statutes ORDINANCE NO.: 2021-05 CITY OF OTSEGO COUNTY OF WRIGHT, MINNESOTA AN ORDINANCE AMENDING THE CITY CODE REGARDING LAWFUL GAMBLING EXEMPTIONS. THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN: Section 1. Section 4-7 of the City Code (Lawful Gambling - Exemptions) is hereby amended to read as follows: 4-7-3: APPLICATION OF PROVISIONS; EXEMPTIONS: This chapter shall be construed to regulate all forms of lawful gambling within the City except the following as provided for by Minnesota Statutes allowed by Minnesota Statutes 349.166. Subd. 2: A Bingo, if it is conducted: 1 By an organization in connection with a county fair, the state fair, or a civic celebration and is not conducted for more than 12 consecutive days and is limited to no more than four separate applications for activities applied for and approved in a calendar year: or (2) By an organization that conducts bingo on four or fewer days in a calendar year. (3) An organization that holds a license to conduct lawful gambling under this chapter may not conduct bingo under this subdivision. AB. Bingo conducted within a nursing home or a senior citizen housing project or by a senior citizen organization if the prizes for a single bingo game do not exceed ten dollars ($10.00), total prizes awarded at a single bingo occasion do not exceed two hundred dollars ($200.00), no more than two (2) bingo occasions are held by the organization or at the facility each week, only members of the organization or residents of the nursing home or housing project are allowed to play in a bingo game, no compensation is paid for any persons who conduct the bingo, and a manager is appointed to supervise the bingo. C. R-affle-S Of the value of all prizes awarded by the erganization in a ealendar yeaF does not e)(Ge ene +h el five hundred d llars ($ 500 00)Raffles may be conducted by an organization if the value of all raffle prizes awarded by the organization in a calendar year does not exceed one thousand five hundred dollars ($1.500) or, if the organization is a 501(c)(3) organization, if the value of all raffle prizes awarded by the organization at one event in a calendar year does not exceed five thousand dollars (55.0001. D. The City Clerk is authorized to approve the following lawful gambling as exempt from the requirements for a City license under this section: a. An organization that conducts lawful gambling on five (5) or fewer days in a calendar year. b An organization that does not award more than fifty thousand dollars (550.000) in prizes for lawful gambling in a calendar year: Section 2. This Ordinance shall become effective immediately upon its passage and publication. MOTION BY: SECOND BY: ALL IN FAVOR: THOSE OPPOSED: ADOPTED by the City Council of the City of Otsego this 22nd day of February, 2021. CITY OF OTSEGO BY: Jessica L. Stockamp, Mayor ATTEST: Audra Etzel, City Clerk 2 ORDINANCE NO.: 2021-05 CITY OF OTSEGO COUNTY OF WRIGHT, MINNESOTA AN ORDINANCE AMENDING THE CITY CODE REGARDING LAWFUL GAMBLING EXCEMPTIONS. THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN: Section 1. Section 4-7 of the City Code (Lawful Gambling - Exemption) is hereby amended to read as follows: 4-7-3: APPLICATION OF PROVISIONS; EXEMPTIONS: This chapter shall be construed to regulate all forms of lawful gambling within the City except the following as allowed by Minnesota Statutes 349.166, Subd. 2: A. Bingo, if it is conducted: 1. By an organization in connection with a county fair, the state fair, or a civic celebration and is not conducted for more than twelve (12) consecutive days and is limited to no more than four (4) separate applications for activities applied for and approved in a calendar year; or 2. By an organization that conducts bingo on four or fewer days in a calendar year. 3. An organization that holds a license to conduct lawful gambling under this chapter may not conduct bingo under this subdivision. B. Bingo conducted within a nursing home or a senior citizen housing project or by a senior citizen organization if the prizes for a single bingo game do not exceed ten dollars ($10.00), total prizes awarded at a single bingo occasion do not exceed two hundred dollars ($200.00), no more than two (2) bingo occasions are held by the organization or at the facility each week, only members of the organization or residents of the nursing home or housing project are allowed to play in a bingo game, no compensation is paid for any persons who conduct the bingo, and a manager is appointed to supervise the bingo. C. Raffles may be conducted by an organization if the value of all raffle prizes awarded by the organization in a calendar year does not exceed one thousand five hundred dollars ($1,500) or, if the organization is a 501(c)(3) organization, if the value of all raffle prizes awarded by the organization at one event in a calendar year does not exceed five thousand dollars ($5,000). D. The City Clerk is authorized to approve lawful gambling as exempt from the requirements for a City license under this section: a. An organization that conducts lawful gambling on five (5) or fewer days in a calendar year. b. An organization that does not award more than fifty thousand dollars ($50,000) in prizes for lawful gambling in a calendar year. Section 2. This Ordinance shall become effective immediately upon its passage and publication. MOTION BY: SECOND BY: ALL IN FAVOR: THOSE OPPOSED: ADOPTED by the City Council of the City of Otsego this 22nd Day of February, 2021. CITY OF OTSEGO BY: Jessica L. Stockamp, Mayor ATTEST: Audra Etzel, City Clerk 2 SUMMARY ORDINANCE NO.: 2021-05 CITY OF OTSEGO COUNTY OF WRIGHT, MINNESOTA AN ORDINANCE AMENDING THE CITY CODE REGARDING LAWFUL GAMBLING EXEMPTIONS. THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN: Section 1. Section 4-7-3 of the City Code (Lawful Gambling - Exemptions) is hereby amended to provide for exemptions as allowed by Minnesota Statutes 349.166, Subd. 2. Section 2. This Ordinance shall become effective immediately upon its passage and publication. MOTION BY: SECOND BY: ALL IN FAVOR: THOSE OPPOSED: ADOPTED by the City Council of the City of Otsego this 22nd day of February, 2021. CITY OF OTSEGO BY: Jessica L. Stockamp, Mayor ATTEST: Audra Etzel, City Clerk Pursuant to Minnesota Statutes 412.191, Subd. 4 and 331A.01, Subd.10, this Ordinance is published in summary form. Complete copies of the ordinance are available for inspection by contacting the City Clerk, Otsego City Hall, 13400 90th Street NE, Otsego, Minnesota 55330 during regular office hours.