§ 109-1. Purpose.

The purpose of this chapter is to closely regulate and control the conduct of gambling.

§ 109-2. Provisions of state law adopted.

The provisions of Minnesota Statutes Chapter 349 and Laws of Minnesota, 1978, Chapter 507, relating to the definition of terms, licensing, and restrictions of gambling are adopted and made a part of this chapter as if set out in full. Editor's Note: See Minn. Stat. § 349.11 et seq.

§ 109-3. License requirement.

No person shall directly or indirectly operate a gambling device or conduct a raffle without a license to do so as provided in this chapter.

§ 109-4. Persons eligible for license.

Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I). Licenses shall be issued only to fraternal, religious, and veterans organizations, or any operation, trust, or association organized for exclusively scientific, literary, charitable, educational, or artistic purposes, or any club which is organized and operated exclusively for pleasure or recreation. Such organization must have been in existence for at least three years and shall have at least 30 active members.

§ 109-5. Fees.

Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I). The annual fee for a gambling license shall be set by resolution of the City Council.

§ 109-6. Application procedure.

Application for a license shall be made upon a form prescribed by the Council. No person shall make a false representation in the application. The Council shall act upon said application within 180 days from the date of application, but shall not issue a license until at least 30 days after the date of application.

§ 109-7. Use of profits.

Profits from the operation of gambling devices or the conduct or raffles shall be used for proper purposes only.

§ 109-8. Designation of gambling manager; responsibilities.

All operation on gambling devices and the conduct of raffles shall be under the supervision of a single gambling manager to be 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 be responsible for using profits for a proper purpose.

§ 109-9. Bond.

The gambling manager shall provide a fidelity bond in the sum of $1,000 in favor of the organization conditioned on the faithful performance of his duties; provided, however, that upon the application of the licensee the City Council may by unanimous vote waive or reduce the fidelity bond herein provided for.

§ 109-10. Qualifications of gambling manager.

The gambling manager shall be an active member of the organization and shall qualify under state law.

§ 109-11. Compensation.

No compensation shall be paid to any person in connection with the operation of a gambling device or the conduct of a raffle by a licensed organization. No person who is not an active member of an organization, 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.

§ 109-12. Gross receipts.

Each organization licensed to operate gambling devices shall keep records of its gross receipts, 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, a 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.

§ 109-13. Separation of funds.

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. The person who accounts for gross receipts, expenses and profits from the operation of gambling devices or the conduct of raffles shall not be the same person who accounts for other revenues of the organization.

§ 109-14. Monthly reports.

Each organization licensed to operate gambling devices or to conduct raffles shall report monthly to its membership, and to the City Clerk/Treasurer, its gross receipts, expenses and profits from gambling devices or raffles and the distribution of profits. The licensee shall preserve such records for three years.

§ 109-15. Eligible premises.

Gambling devices shall be operated and raffles conducted by a licensed organization only upon premises which it owns or leases, except that tickets for raffles may be sold off the premises. Leases shall be in writing and shall be for a term of at least one year. No lease shall provide that rental payments be based on a percentage of receipts. A copy of the lease shall be filed with the City Clerk/Treasurer. The Council may in its discretion waive any lease requirement as set forth herein.

§ 109-16. Prizes.

Total prizes from the operation of paddle wheel and tipboards awarded in any single day in which they are operated shall not exceed $500. Total prizes resulting from any single spin of a paddle wheel or from any single tipboard shall not exceed $100. Total prizes awarded in a calendar year from the operation of paddle wheels and tipboards and the conduct of raffles shall not exceed $15,000. Merchandise prizes shall be valued at fair-market retail value.

§ 109-17. Requirement for charitable gambling licensees; waiver.

All charitable gambling licensees under Minnesota Statutes, Chapter 349, shall pay quarterly 10% of its net profits to the City of Kellogg or its designated recipient. The City of Kellogg may elect to waive this requirement after taking into account all factors, including but not limited to whether or not the charitable gambling licensee has expended or spent a substantial portion of its net profits for various charitable activities in and around the area of Kellogg, Minnesota.

§ 109-18. Violations and penalties.

Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I). Violation of any provision of this chapter shall be a misdemeanor punishable as provided in Chapter 1, Article III, General Penalty.

§ 109-19. License suspension or revocation.

A. Suspension and revocation of license. Any license may be suspended or revoked for any violation of this chapter. A license shall not be suspended or revoked until the procedural requirements of Subsection B below have been complied with.

B. Procedure. A license shall not be revoked under Subsection A above until notice and an opportunity for a hearing have first been given to the licensee. The notice shall be personally served and shall state the ordinance provision reasonably believed to be violated. The notice shall also state that the licensee may demand a hearing on the matter, in which case the license will not be suspended until after the hearing is held if the licensee requests such hearing. A hearing shall be held not sooner than one week after such request. If, as a result of the hearing, the Council finds that an ordinance violation exists, then the Council may suspend or terminate the license.