01-14-2004 Council Agenda - Laserfiche WebLink

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515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766 -4029 / FAX: (651) 766 -4048 www.ci.litIle-canada.mn.us MEMORANDUM TO: Mayor Fahey and Members of the City Council FROM: Kathy Glanzer, Deputy Clerk DATE: January 9, 2004 RE: Bingo Hall Compliance Issues MAYOR Michael 1. Fahey COUNCIL Jim LaValle Matt Anderson Rick Montour 8111 Blesener ADtVIINISTRATOR Joel R. Hanson As a result of Canadian Days' request for a Premise Permit at the Little Canada Bingo Hall, staff has conducted some analysis of gambling compliance issues facing the charities operating at the Little Canada Bingo Halt. As you may or may not know, State gambling regulations limit the amount of allowable expenses that a charity can incur in operating a gambling site. The expense limitation differs for expenses incurred in connection with the sale of pull -tabs versus bingo. As you can imagine, the operation of a bingo site is more labor intensive than a pull -tab site, thus more expensive. While the allowable expense limitation is higher for bingo, the charities operating at the Little Canada Bingo Hall (as well as most charities operating at bingo halls around the State as we learned from Tom Barrett, Gambling Control) are having a difficult time keeping expenses below the State's limitation. As a result, these charities are not meeting the State's compliance requirements. This does not mean these charities are not profitable, however. The State audits each charity's compliance situation twice during their two -year license period, and if they are out of compliance, expenses must be reimbursed from the charity's general fund (monies generated from non - gambling activities), or the charity loses its license. Most of the charities at the Little Canada Bingo Hall are currently either out of compliance or are close to it. Therefore, if the Little Canada Bingo Hall is going to continue to operate for the long- term, the compliance issue must be addressed. In meetings held over the past week with representatives of Gambling Control, gambling organizations operating in the City, the Mayor, and City staff the compliance concerns were discussed. The Mayor has suggested that each of the charities review their operation and expenses to determine if there are things that they can do to improve the compliance situation. Some of the specifics discussed included staffing levels, bingo program and payouts, the potential for revenue from the concession operation. There was also discussion relative to the amount of rent that is being paid to the landlord. There was additional discussion the potential for legislation to increase the percentage of allowable expenses, but it is likely that legislation is a couple of years out at this point. Mayor Fahey has suggested the potential for City staff to assist the charities in their efforts to resolve the compliance problem. He will, therefore, discuss this issue further with the Council at Wednesday's meeting.