Local Units of Government

  1. The city or county may not require an organization to make a contribution to the city or county as a condition to operate within that city or county, except for an investigation fee or a local gambling tax, and contributions to a 10% fund.
  2. The city or county may not require a license or fee for a license or permit to conduct gambling for licensed organizations, gambling managers, gambling employees, distributors, or linked bingo game providers.  The Minnesota Gambling Control Board is the licensing authority.

Lawful gambling regulatory (local) tax

A lawful gambling regulatory tax, up to 3% per year, may only be imposed if the amount is necessary to cover the costs to regulate gambling in a city's or county's jurisdiction.  Regulating lawful gambling includes site inspections, compliance reviews, and corrective action.  Regulating lawful gambling does not include monitoring that tax payments are made to the city or providing for potential future lawful gambling regulation.  Overages should be returned to the lawful gambling organizations that paid the lawful gambling regulatory tax.  A city or county may impose a local gambling tax only if it does not charge an investigation fee or other local tax on lawful gambling.

 

Form LG500 City or County Annual Report, Lawful Gambling Regulatory Tax (coming soon)

 

This form must be submitted to the Minnesota Gambling Control Board by March 15 of each year.

 

In addition to the LG500, city documents pertaining to site inspections, fines, penalties, or other corrective action involving local lawful gambling regulation must be provided to the Gambling Control Board within 30 days.

 

Ten percent contribution fund (up to 10%)

As established by ordinance, a city or county may require an organization to contribute up to 10% per year of net profits, less taxes assessed on lawful gambling, to a fund that the city or county administers and regulates.  The 10% contribution requirement may only be applied to net profits derived from lawful gambling conducted at premises within the city or county’s jurisdiction.

  1. Organizations must make 10% fund checks payable to the city requiring the funds, and not to any other payee.
  2. The funds may only be spent by the city or county for charitable contributions as defined in section 349.12, subdivision 7a, or for police, fire, and other emergency or public safety-related services, equipment, and training.
  3. The fund may not be used for the payment of pension obligations or general city functions.
  4. A licensed organization that contributes to the 10% fund may not be the beneficiary of that fund.

 

This form must be submitted to the Gambling Control Board by March 15 of each year.

Investigation fee

A city or county may assess an investigation fee on organizations applying for or renewing a premises permit issued by the Gambling Control Board.  The investigation fee may not exceed the following limits:

 

  1. $500 for cities of the first class;
  2. $250 for cities of the second class;
  3. $100 for all other cities; and
  4. $375 for counties.

 

The investigation fee must be used for regulation of lawful gambling in that jurisdiction.

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Trade Area

By ordinance, a city or county may require that a licensed organization conducting lawful gambling within its jurisdiction spend all or a portion of its lawful purpose expenditures on lawful purposes conducted or located within the city's or county's trade area.

 

The ordinance is limited to the following:

  1. lawful purpose expenditures are limited to gross profits derived from lawful gambling conducted at premises within the jurisdiction of the city or county;
  2. the ordinance must define the city or county trade area.  A trade area defined by a city must include each city and township contiguous to the defining city; and
  3. the ordinance must specify the percentage of lawful purpose expenditures that must be expended within the trade area.

 

The city or county does not have authority on what specific lawful purpose expenditures must be made.  That authority rests with the organization and its membership.

Questions? Call Board staff at 651-539-1951 or email.