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City Council Ordinance 130CHAPTER 12 ORDINANCE AMENDMENT NO. 130 AN ORDINANCE OF THE CITY OF MONTICELLO, MINNESOTA, AMENDING CITY CODE TITLE 3 BY ADDING THERETO CHAPTER 12 RELATING TO THE REGULATION, LICENSING AND USE OF GAMBLING DEVICES, AND ADOPTING BY REFERENCE CITY CODE TITLE 1, CHAPTERS 1 THROUGH 4 WHICH, AMONG OTHER THINGS, CONTAIN PENALTY PROVISIONS. THE CITY COUNCIL OF MONTICELLO, MINNESOTA ORDAINS: City Code Title 3 shall be and is amended by adding thereto Chapter 12 which reads as follows: Section 3-12-1. Fizrpose.The purpose of this section is to regulate and control the conduct of certain gambling activities pursuant to the provisions of Minnesota Statutes, Section 349.26. Section 3-12-2. Definitions. For the purposes of this ordinance the terms defined in this ordinance have the following meanings. (1) "Gambling devices" means those gambling devices known as "paddle wheels" or "tip boards", "pull tabs" (or "ticket jars"), or apparatus used in conducting raffles. (b) "Paddle wheel" means a wheel marked off into sections containing one or more numbers, and which, after being turned or spun, uses a pointer or marker to indicate winning chances. (c) "Tip board" means a board, placard or device measuring at least twelve inches square, marked off in a grid or columns, in which each section contains a hidden number or numbers, or other symbol, which determines the winning chances. (d) "Raffle" means a game in which a participant buys a ticket for a chance at a prize with the winner determined by random drawing to take place at a location and date printed upon the ticket. (e) "Pull tabs" (or "ticket jars") means a single folded or banded ticket or a card, the face of which is initially covered, or otherwise hidden from view, to conceal a number or set of numbers or a symbol or set of symbols. A few of the numbers or symbols out of every set of pull tabs (or ticket jars) will have been designated in advance and at random as prize winners. The participant pays a consideration to an operator for the opportunity to obtain a folded or banded ticket or a card, view the numbers or symbols on it and possibly obtain a prize winning pull tab (or ticket jar). - 1 - (f) "Profit" means the gross receipts from the operation of gambling devices and the conduct of raffles, less reasonable sums expended for prizes, local licensing fees, taxes and maintenance costs for the devices. (g) "Gambling manager" means a member who has paid all his dues to the organization and has been a member of the organization for at least two years and has been designated by an organization to supervise gambling activities conducted by it. (h) "Active member" means a member who has paid all his dues to the organization and has been a member of the organization for at least six months. (i) "Organization" means a fraternal, religious, veterans, or other nonprofit organization which is a corporation, fund, foundation, trust, or association organized for exclusively scientific, literary, religious, charitable, educational, or artistic purposes, or for the purpose of making contributions to or for the use of the United States, the State of Minnesota, or any of its political subdivisions for exclusively public purposes, or for any combination of the above enumerated purposes, if no part of the net income of any such corporation, fund, foundation, trust, or association inures to the benefit of any private member, stockholder, or individual, or is a club organized and operated exclusively for pleasure, recreation, or other non- profitable purposes, no part of the net income of which inures to the benefit of any private member, stockholder or individual, which organization has been in existence for at least three years and has at least 15 active members. (j) "Lawful purpose" means one or more of the following: (1) Benefiting persons by enhancing their opportunity for religious or educational advancement, by relieving or protecting them from disease, suffering or distress, by contributing to their physical well being, by assisting them in establishing themselves in life as worthy and useful citizens, or by increasing their comprehension of and devotion to the principals upon which this nation was founded; (2) Initiating, performing, or fostering worthy public works or enabling or furthering the erection or maintenance of public structures; (3) Lessening the burdens born by government or voluntarily supporting, augmenting or supplementing services which government would normally render to the people; or (4) The improving, expanding, maintaining, or repairing real property owned or leased by an organization. "Lawful purpose" does not include the erection or acquisition of any real property, unless the City specifically authorizes the expenditure after finding that the property will be used exclusively for one or more of the purposes specified in this subdivision. (k) Nothing in the City Code shall be construed to authorize any use, possession or operation of: - 2 - (1) Any gambling device which is activated by the insertion of a coin or token; or (2) Any gambling game or device in which the winning numbers, tickets or chances are in any way determined by the outcome of any athletic contest or sporting event. Section 3-12-3. License Requirement. A system for the licensing of organizations to operate gambling devices and to conduct raffles is hereby established. No person shall directly operate a gambling device or conduct a raffle except as authorized by statute and the City Code and unless a license to do so, as provided in this section has first been obtained. Section 3-12-4. Fees and Application Procedure. (a) There are two types of licenses which may be issued by the City for each device or occasion: (1) A single occasion temporary license or (2) An annual license. All single occasion temporary licenses are valid only on the dates specified, which may not exceed 3 consecutive days. Annual licenses shall expire one year after the date of issuance. (b) Action on the application shall be taken in accordance with section 3-8-4 of the City Code, provided however the application shall be acted on within 180 days from the date of application, but a license shall not be issued until at least 30 days after the date of application. (c) The application shall contain an agreement on the part of the applicant that if the license being applied for is granted, the licensee will save the City, its officers and agents harmless against any claims or actions and the cost of defending any claims or actions arising out of or by reason of the granting of the license or the conduct of any of the activities authorized by the license. Section 3-12-5. Issuance of License. An annual license may be issued only to a fraternal, religious or veterans organization. A single occasion temporary license may be issued only to an organization. Section 3-12-6. Profits. Profits from the operation of gambling devices or the conduct of raffles shall be used solely for lawful purposes and as authorized at a regular meeting of the organization, provided, however, except for profits from the conduct of raffles by the holder of a single occasion temporary license, at least 60 percent of the profits must be used for one or more of the purposes enumerated in (1) , (2) , or (3) , subparagraph (j) , Section 3-12-2 for persons or objects within the City. - 3 - Section 3-12-7. Conduct of Gambling. All operation of gambling devices and the conduct of raffles shall be under the supervision of a single gambling manager designated by the organization. The gambling manager shall be responsible for gross receipts and profits from gambling devices and raffles and for their operation. The gambling manager shall give a fidelity bond in the sum of $10,000 in favor of the organization conditioned on the faithful performance of his duties. A gambling manager for a single organization shall not act as a gambling manager for any other organization. A gambling manager for an organization shall be an active member of the organization. Section 3-12-8. Compensation. No compensation in excess of $25 a week, shall be paid in connection with the operation of a gambling device or the conduct of a raffle by a licensed organization except a licensed organization may elect to pay a percent of raffle ticket sales to nonprofit organizations selling for the licensed organization. No person who is not an active member of an organization, or its auxiliary, or the spouse or surviving spouse of an active member may participate in the organization's operation of a gambling device or conduct of a raffle except the licensed organization may utilize nonmember nonprofit organization in raffle ticket sales. Section 3-12-9. Reporting Requirements. (a) Each organization licensed to operate gambling devices shall keep records of its gross receipts, quantity of free plays, if any, expenses and profits for each single gathering or occasion at which gambling devices are operated or a raffle is conducted. All deductions from gross receipts for each single gathering or occasion shall be documented with receipts or other records indicating the amount, the description of the purchased item or service or other reason for the deduction, and the recipient. The distribution of profits shall be itemized as to payee, purpose, amount and date of payment. (b) Gross receipts from the operation of gambling devices and the conduct of raffles shall be segregated from other revenues of the organization and placed in a separate account. Each organization shall have separate records of its gambling operations. The person who accounts for gross receipts, expenses and profits from the operation of gambling devices or the conduct of raffles may be the same person who accounts for other revenues of the licensed organization. (c) Each organization licensed to operate gambling devices or to conduct raffles shall report monthly to its membership and annually to the City Administrator its gross receipts, expenses and profits from gambling devices or raffles, and the distribution of profits itemized as required in this section. (d) Records required by this ordinance shall be preserved for three years, and organizations shall make available their records relating to operation of gambling devices and the conduct of raffles for public inspection at reasonable times and places. - 4 - (e) The City Administrator may require a license at its expense to cause a review and examination by a licensed certified public account or other qualified person approved by the City Administrator of the books and records of the organization holding a license relating to the gambling activities conducted by it pursuant to such license and a report thereon by such person to such extent and in such form as the City Administrator may require. Section 3-12-10. Eligible Premises. Gambling devices shall be operated and raffles conducted by an organization (a) holding an annual license only upon premises which it owns and (b) holding a single occasion temporary license only upon premises which it owns or leases, except that tickets for raffles conducted in accordance with this section may be sold off the premises by an organization holding either type of license. The City Administrator, upon approval by the City Council, may authorize raffles to be conducted by a licensed organization on premises not owned or leased by the organization. Leases shall be for a period of not less than one year and shall be in writing. No lease shall provide that rental payments be based on a percentage of receipts or profits from gambling devices or raffles. A copy of each lease shall be filed with the City Administrator at the time of the application for license and shall comprise a part of the application. Section 3-12-11. Prize Award Limits. (a) Total prizes from the operation of paddle wheels, tip boards and pull tabs (or ticket jars) awarded in any single day in which they are operated shall not exceed $1,000. Total prizes resulting from any single spin of a paddle wheel, or from any single seal of a tip board, each tip board limited to a single seal, or from a single pull tab (or ticket jar), shall not exceed $150. Total prizes awarded in any calendar year by any organization from the operation of paddle wheels, tip boards and pull tabs (or ticket jars) and the conduct of raffles, except as provided in clause (b) of this section shall not exceed $35,000. Merchandise prizes shall be valued at fair market retail value. (b) (1) An organization which directly or under contract to the state or a political subdivision delivers health or social services and which is exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1954, as amended through December 30, 1981, may award prizes in a calendar year from the conduct of raffles, in excess of the limitation provided in this section, provided the prizes consist of real or personal property donated to the organization by an individual, corporation, or other organization and, except as provided in clause (2), provided the organization complies with the other requirements and restrictions of this ordinance. (2) For the purposes of this subdivision, an organization covered by clause (1) is not subject to the membership limitations nor to the compensation limitations of this ordinance. Section 3-12-12. City Code Title 1; Chapters 1-4 entitled "Official Code" are hereby adopted in their entirety, by reference, as though repeated verbatim herein. - 5 - Section 3 - 12-13. Fees. The annual license fee shall be adopted by the City Council. The fee for a temporary, single occasion license shall be adopted by the City Council. Section 3-12.-14. Termination Provision. This Chapter 3- 12 shall terminate and cease to be effective on December 31, 1986, unless prior thereto the Council shall adopt an ordinance amending this Chapter 3-12 to extend its effective duration beyond such termination date. Any and all permits, licenses, privileges, or rights of whatever nature issued, extended or granted in any manner by virtue of this section will terminate and become void on the date this section terminates. Section 3-12-15. This ordinance shall become effective from and after its passage and publication. FIRST READ at a regular meeting of the City Council of the City of Monticello on the 14th day of November, 1983, and adopted and ordered published at a regular meeting of the City Council of said City on the 14th day of November, 1983. ATTEST: l 1 Ott, f _ City Administrator Mayor A PUBLISHED in the Monticello Times on the 8th day of December , 1983.