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® ® RSE '_ 41 DORSEY & WHITNEY LLP MEMORANDUM TO: Mayor and Members of the City Council Michael Mornson, City Manager FROM: Jerome P. Gilligan DATE: May-19, 2004 RE: Authority of City to Regulate Charitable Gambling At its meeting on May 11th the City Council gave first recording to an ordinance amending Section 535.02 to permit charitable gambling to be conducted in restaurants in the City holding an on-sale liquor license. At that meeting the Council had various questions concerning the City's authority to regulate this activity. Under Minnesota Statutes, Section 349.213, the City has the authority to adopt more stringent regulation of lawful gambling than provided by Minnesota law, including the prohibition of lawful gambling. The City may not require that an organization licensed by the Minnesota Gambling Control Board obtain a license or permit from the City as a condition for it to conduct charitable gambling in the City. However, before issuing a permit premises allowing lawful gambling at a location in the City, Minnesota law requires the Board to notify the City Council and the City Council must approve the issuance of the premises permit by resolution. . The Minnesota Attorney General has opined that under this authority the City can regulate the following with respect to lawful gambling in its jurisdiction: A. Determine what kind of lawful gambling can take place; B. Specify hours of operation; C. Specify where it can and cannot occur; D. Limit the number of sites where it will be allowed; and E. Prohibit lawful gambling altogether. While Minnesota law requires the approval of the City Council before the Gambling Control Board can issue a premises permit for a licensed organization to conduct gambling in the City, the statute does not offer any guidance with respect to reasons that the City Council may disapprove an organization's application. If it wished to do so the City Council could develop criteria on which to base its decision. However, this criteria should probably not limit approval to only locally based organizations as the Minnesota Attorney General has opined that a city limiting approval of lawful gambling to only locally based organizations may be a possible violation of the equal protection clause of the Minnesota and United States Constitution. While the City may not be able to adopt an ordinance which would limit charitable gambling in the City to only locally based organizations, I believe that the City could include in DORSEY&WHITNEY LLP