10.a Staff report - gambling permit Lions Club
Staff Report
Date of Meeting: January 18, 2022
To: City Council
From: Brenda Eklund, City Clerk
Re: Scandia-Marine Lions Club Application for Lawful Gambling Premises Permit
Background:
Todd Smith, Gambling Manager for the Scandia-Marine Lions Club, has applied for a Lawful
Gambling Premises Permit for the organization to conduct charitable gambling at Thirsty
Buffalo Saloon, 21050 Ozark Avenue. The application was received on January 13, 2022.
Issue:
Should the Council approve a Lawful Gambling Premises Permit for the Scandia-Marine Lions
Club at Thirsty Buffalo Saloon?
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. The Scandia-
Marine Lions Club plans to conduct electronic pull-tabs, paper pull-tabs, and bar bingo
activities. The organization has signed a lease agreement with the owner of Thirsty Buffalo
Saloon. Form LG215, Lease for Lawful Gambling Activity is attached to this report.
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). The Lions Club Foundation is licensed by the MN Gambling Board and is currently in
good standing. The physical site for the organization’s headquarters and where the organization
regularly holds meetings and conducts its activities is located within the city, meeting the
criteria of Section 130.07.
The organization currently conducts charitable gambling at Meister’s Bar & Grill in Scandia and
at Brookside in Marine.
Section 130.08 of the ordinance specifies the qualifications of the personnel/gambling manager
of the organization. Review of the application includes 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 January 13th and is currently pending.
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 100% of proceeds will be donated
within the trade area of Scandia to support the local food shelf, fire department, Scandia
Elementary, and high school scholarships as among examples of where charitable gambling
proceeds from this premise will go.
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.
The ordinance does not allow more than one licensed organization to conduct lawful gambling
activities at one premises. In April 2021, the City approved Hugo Dead Broke Saddle Club to
conduct charitable gambling at Thirsty Buffalo, and the lessor must give the required 30-day
notice to Dead Broke Saddle Club that this lease is being terminated. Mr. Smith reports that the
business owner has initiated a lease termination with Hugo Dead Broke Saddle Club. The Lions
propose an effective date of March 1, 2022 to begin the Club’s charitable gambling activities at
Thirsty Buffalo Saloon.
Fiscal Impact:
The $100 permit fee has been paid.
Options:
1) Approve Resolution No. 2022-04, approving the premises permit effective on March 1, 2022
conditioned on a successful background investigation of the organization and its Gambling
Manager and the termination of the business’s lease with Dead Broke Saddle Club.
2) Amend Resolution No. 2022-04 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 January 13, 2022. Staff recommends Option 1.
MINNESOTA LAWFUL GAMBLING
LG215 Lease for Lawful Gambling Activity 6/15 Page 1 of 2
LEASE INFORMATION
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License/Site Number Daytime Phone
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Address City Stat Zip
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Name of Leased Premises Street Address
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City State Zip: Daytime Phone'
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Name of Legal Owner Business/Street Address:
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Ctty:
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State- Zip Daytime Phone?
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Name of Lesser (if "me as legal owner, write "SAME"') Address
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city State: Zip Daytime Phone
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Qle applicable item: l
New or amended lease. Effective date; i I 2D` 2' -Submit changes at least ten days before the effective date
of the change.
QNew owner. Effective date: Submit new lease wlthin ten days after new lessor assumes ownership.
CHECK ALL ACTIVITY THAT WILL BE CONDUCTmr11 - d f an
Pull -Tabs (paper)
Pull -Tabs (paper) with dispensing device
no ease require or ra es]
Electronic Pull -Tabs
Electronic Linked Bingo
FZ'Bar Bingo FIBingo Electronic games may only be conducted:
1, at a premises licensed for the on -sale of intoxicating liquor
Tipboards or the on -sale of 3.2% malt beverages; or
Paddlewheel FlPaddlewheel with table 2. at a premises where bingo is conducted as the pnmary
business and has a seating capacity of at least 100.
PULL -TAB, TIPBOARD, AND PADDLEWHEEL RENT (separate rent for booth and bar ops)
BOOTH OPERATION: Some or all sales of gambling equipment are conducted by an employee/volunteer of a licensed organization at
the leased premises.
ALL GAMES, induding electronic games: Monthly rent to be paid: %, not to exceed 10% of gross profits for that month.
Total rent paid from all organizations for only booth operations at the leased premises may not exceed ;1,750.
The rent cap does not include BAR OPERATION rent for electronic games conducted by the lessor.
BAR OPERATION: Ali sales of gambling equipment conducted by the lessor or lessor's employee.
ELECTRONIC GAMES: Monthly rent to be paid: /,Z%, not to exceed 150/o of the gross profits for that month from electronic pull -tab
games and electronic linked bingo games.
ALL OTHER GAMES: Monthly rent to be paid: o210 %, not to exceed 20016 of gross profits from all other forms of lawful gambling.
If any booth sales conducted by a licensed organization at the premises, rent may not exceed 100/a of gross profits for that month
and is subject to booth operation $1,750 cap.
BINGO RENT ( for leased premises where bingo is the primary business conducted, such as bingo hall)
Bingo rent is limited to one of the following
Rent to be paid: I&- %, not to exceed 309/6 of the monthly gross profit from all lawful gambling activities held during bingo
occasions, excluding bar bingo.
OR-
Rate to be paid: ; per square foot, not to exceed 110% of a comparable cost per square foot for leased space, as
approved by the director of the Gambling Control Board, The lessor must attach documentation, verified by the organization, to
confirm the cnrnparable rate and all applicable costs to be paid by the organization to the lessor.
Rent may not be paid for bar bingo.
Bar bingo does not include bingo games linked to other permitted premises.
VASE TERMINATION CLAUSE (must be completed)
I The Kase may be terminated b either art with a written —3IYYparty _a day notice. Other terms -
LG215 Lease for Lawful Gambling Activity
Lease Term: The term of this agreement will be concurrent
with the premises permit Issued by the Gambling Control Board I
Board). I I
Management: The owner of the premises m the lessor will not
manage the conduct of lawful gambling at the premises. The
organization may not conduct any activity on behalf of the lessor
on the leased premises.
Participation as Players Prohibited: The lessor will not par-
ticipate directly or indirectly as a player- in any lawful gambling
conducted on the premises. The lessor's Immediate family and
any agents or gambling employees M the lessor will not particl
pate as players in the conduct of lawful gambling on the premis-
es, except as authorized by Minnesota Statutes, Section
349.181.
111e"ll Gambling: The lessor is aware of the prohibition
against illegal gambling in Minnesota Statutes 609,75, and the
penalties for +tlecial ganlbirng violations in Minnesota Rules
7865.0220, Subpart 3. In addition, the Board may authorize the
organization to withhold rent for a period of up to 90 days if the
Board determines that illegal gambling occurred on the premises
or that the lessor or its employees participated in the illegal
gambling or knew of the gambling and did not take prompt
action to stop the gambling. Continued tenancy of the organiza-
tion is authonzed without payment of rent during the time period
determined by the Board for violations of this provision, as
authorized by Minnesota Statutes, Section 349.18, Subd. 1(a).
To the best of the lessor's knowledge, the lessor affirms that any
and all names or devices located on the premises are not being
used, and are not capable of being used, in a manner that
violates the prohibitions against illegal gambling in Minnesota
Statutes, Section 609.75.
Notwithstanding Minnesota Rules 7865.0220, Subpart 3, an
organization must continue making rent payments under the
terms of this lease, if the organization or its agents are found to
be solely responsible for any illegal gambling, conducted at this
site, that is prohibited by Minnesota Rules 7861.0260, Subpart 1
Rem H, or Minnesota Statutes, Section 609.75, unless the
organization's agents responsible for the illegal gambling activity
are also agents or employees of the lessor.
The lessor must not modify or terminate the lease in whole or in
part because the organization reported, to a state or local law
enforcement authority or to the Board, the conduct of illegal
gambling activity at this site in which the organization did not
participate.
OF LEASE TERMS
6/15 Page 2 of 2
nher Pronlinimons: Ine lessor w... not impose rexnruons on
he organization with respect to providers (distributor or linked
nnga gafne provider) of gambling -related equipment and ser-
lces b, In the use of net profits for lawful purposes.
he lessor, the lessor's immediate family, any person residing in
he same residence as the lessor, and any agents or employees
A the lessor will not require the organization to perform any
i'ction that would violate statute or rule. The lessor must not
nodify or terminate this lease in whole or in part due to the
rssor's violation of this provrslon. If there is a dispute as to
whether a violation occurred, the lease will remain in effect pend -
ng a final determination by the Compliance Review Group (CRG)
of the Hoard. The lessor agrees to arbitration when a violation of
this provision is alleged. The arbitrator shall be the CRG.
Access to Permitted Premises: Consent is given to the Board
and Its agents, the commissioners of revenue and public safety
and their agents, and law enforcement personnel to enter and
inspect the permitted premises at any reasonable time during the
business hours of the lessor. The organization has access to the
premises during any time reasonable and when necessary for the
conduct of lawful gambling.
Lessor Records: The lessor must maintain a record of all
money received from the organization, and make the record
available to the Board and its agents, and the commissioners of
revenue and public safety and their agents upon demand. The
record must be maintained for 3-1/2 years.
Rent All -Inclusive: Amounts paid as rent by the organization
to the lessor are all-inclusive. No other services or expenses
provided or contracted by the lessor may be paid by the organi-
zation, including but not limited to:
trash removal
electricity, heat
snow removal
storage
janitorial and cleaning services
other utilities or services
lawn services
security, security monitoring
cost of any communication network or service required to
conduct electronic pull -tabs games or electronic bingo
in the case of bar operations, cash shortages.
Any other expenditures made by an organization that is related
to a leased premises must be approved by the director of the
Board. Rent payments may not be made to an individual,
I affirm that this lease is the total and only agreement between the lessor and the organization, and that all obligations and
agreements are contained in or attached to this lease and are subject to the approval of the director of the Gambling Control Board.
Other terms of the lease:
re of Lessor; Date: Signature of Giga ization Gfflc al (Lesse ; D te:
Wntame and Title of Lessor: print Name and Title of Lessee:
T 0VN1 ,X o-ooA LA TW
Qr+ 7 Antatt the Licensing Section, Gambling Control Board, at Mail or fax'lease to:
651-539.1900. This publication will be made available In alternative format (i.e. Minnesota Gambling Control Board
IarQa print, braille] upon request. Data privacy notice: The information requested 1711 W. County Road B, Suite 300 Southonthisform0ridanyattachmentswillbecomepublicInformationwhenreceivedbyRoseville, MN 55113
the Boafd. sod will be used to determine your compliance with Minnesota statutes Fax: 651-639-4032
and rule gorarning lawful gambling activities.