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04. LARA Gambling Premises Permit Staff Report Date of Meeting: May 1, 2024 To: City Council From: Brenda Eklund, City Clerk Re: Chisago Lakes Area Recreation Association (dba L.A.R.A.) Application for Lawful Gambling Premises Permit Background: Cory Lindgren, Gambling Manager for the Chisago Lakes Area Recreation Association (L.A.R.A.), has applied for a Lawful Gambling Premises Permit for the organization to conduct charitable gambling at The Ozark Tavern, 21050 Ozark Avenue. The application was received on April 25, 2024. Chisago Lakes Area Recreation Association provides the opportunity for area school-age children to experience affordable, supervised sports activities. It is a volunteer-based, nonprofit organization. All proceeds go directly to sports programs for kids. Expenses include equipment, umpires, referees, field maintenance, new field construction and insurance. Issue: Should the Council approve a Lawful Gambling Premises Permit for the Chisago Lakes Area Recreation Association to conduct charitable gambling at The Ozark Tavern, 21050 Ozark Avenue? Proposal Details: City of Scandia Code of Ordinances, Chapter 130: Gambling Regulations governs lawful gambling within the city. The purpose of the ordinance is to “regulate lawful gambling within the City, to prevent its commercialization, to ensure the integrity of operations, and to provide for the use of the net profits only for lawful purposes.” The ordinance establishes the qualifications that must be met by organizations and premises for gambling. L.A.R.A. plans to conduct electronic pull-tabs, paper pull-tabs, bar bingo, tipboards, and paddlewheel activities. The organization has signed a lease agreement with the owner of The Ozark Tavern. Form LG215, Lease for Lawful Gambling Activity, is attached to this report. The organization currently conducts charitable gambling at the Northern Tap and Grill in Chisago City. Only certain organizations are authorized to conduct lawful gambling in Scandia. They must be licensed by the State and also meet at least one of five criteria in the ordinance (Section 130.07). L.A.R.A. is licensed by the MN Gambling Board and is currently in good standing. L.A.R.A. does not meet criteria (B) through (E), but appears to meet criteria (A)—at least 15 members that are residents of Scandia. The organization sponsors athletic programs for children attending schools in the Chisago Lakes (ISD 2144) district, which includes area in the northwest portion of Scandia. According to their bylaws, a parent who enrolls their child in one of their sponsored programs is considered to be a member of the organization. L.A.R.A. provided that there are approximately 30 Scandia families participating in their programs. Section 130.08 of the ordinance specifies the qualifications of the personnel/gambling manager of the organization. Review of the application include s a background check on the gambling manager and a review of the state licensing information by the Washington County Sheriff’s office. The inspection was requested on April 25th and a report returned with no occurrences that would prevent the city from approving the gambling premises permit application. Section 130.10 of the ordinance allows for on e licensed organization to be permitted to conduct lawful gambling activities at one premises. The Scandia-Marine Lions Club is currently conducting charitable gambling activities at The Ozark Tavern. The Lions Club has provided notice to the establishment that they are ending gambling activities effective June 3, 2024. L.A.R.A. plans to begin operations immediately afterwards on June 4, 2024, pending approval by the State Gambling Board. Section 130.14 requires that a licensed organization shall spend 75% of its lawful purpose expenditures derived from gambling conducted at the premises within the city’s trade area. The trade area is defined as Scandia, contiguous cities and townships and any portion of the Forest Lake School District. The organization reports that gambling proceeds will be used to purchase an insurance policy from a local business, towards financial support for maintenance and improvements to City of Scandia ballfields, allocation of sports expenses to athletes in the trade area, and purchasing of equipment, uniforms, or other items from within the required trade area whenever possible. Section 130.15 requires the organization to file a report with the city proving compliance with the trade area spending requirements on an annual basis. Once approved, a premises permit runs concurrently with the organization’s gambling license on a perpetual basis, unless the permit is suspended or revoked by the Gambling Control Board or is voluntarily terminated by either party. Fiscal Impact: The $100 permit fee has been paid. Options: 1) Adopt Resolution No. 05-01-24-02 approving the Lawful Gambling Premises Permit. 2) Amend Resolution No. 05-01-24-02 with conditions. 3) Do not approve. A resolution to deny must be acted on. Recommendation: Action to either approve or deny must be taken by the Council within 60 days after receipt of the application which was made on April 25, 2024. Staff recommends Option 1. Attachments: Resolution No. 05-01-24-02 Approving a Lawful Gambling Premises Permit for L.A.R.A. Application for a Lawful Gambling Premises Permit LG215 Lease for Lawful Gambling Activity RESOLUTION NO. 05-01-24-02 CITY OF SCANDIA, MINNESOTA RESOLUTION APPROVING LAWFUL GAMBLING PREMISES PERMIT FOR CHISAGO LAKES AREA RECREATION ASSOCIATION WHEREAS, the Chisago Lakes Area Recreation Association, dba Lakes Area Recreation Association (L.A.R.A.), has made application for a Lawful Gambling Premises Permit to conduct lawful gambling at The Ozark Tavern, 21050 Ozark Ave. N.; and WHEREAS, L.A.R.A has been found to meet the criteria for approval of a premises permit, as specified by City of Scandia’s Code of Ordinances Subchapter 130.01 adopted on March 6, 2007; and WHEREAS, an investigation has been conducted, and L.A.R.A and the premises have been found to meet the qualifications of the ordinance provided that the conditions of approval are met; NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that the application of the Chisago Lakes Area Recreation Association for a Lawful Gambling Premises Permit shall be and hereby is approved. Adopted by the Scandia City Council this 1st day of May, 2024. ________________________________ Christine Maefsky, Mayor ATTEST: ___________________________________ Kyle Morell, City Administrator May 1, 2024 $100 paid 4/26/2024 The Ozark Tavern, LLC 04/25/2024 04.25.2024 Cory R Lindgren - Gaming Manager