BY COUNCILOR KRAUSE:
The city of Duluth does ordain:
Section 1. That Chapter 10A, Section 10, of the Duluth City Code, as amended, is hereby amended as follows:
Sec. 10A-10. Procedure for review of state lawful gambling license or premises permit applications.
(a) The alcohol, gambling and tobacco commission established in Division I of Article I of Chapter 8 of this Code shall review and make recommendations and approvals as provided herein with respect to lawful gambling licenses, premises permits, and gambling manager and jar operator licenses;
(b) Each lawful gambling license or premises permit applicant shall file with the clerk a completed, sworn and verified "gambling investigation information" form at the time it delivers a copy of its application form to the clerk. The "gambling investigation information" form shall be available from the clerk. The copy of the lawful gambling license or premises permit application filed with the clerk shall include copies of all required attachments. After receiving these documents, the clerk shall immediately refer the matter to the police department for investigation and, if all documents are received at least five business days before the next regularly scheduled meeting of the alcohol, gambling and tobacco commission, place the item on the commission's agenda. After the investigation, the police department shall indicate its approval or disapproval of the license or permit application to the commission. If it disapproves of the license or permit, it shall make such disapproval in writing together with a statement stating why it disapproves of the applicant receiving a license or permit. This statement shall be served upon the applicant by first class mail or personally as soon as is reasonably possible. Representatives of all the applicants shall appear before the commission at the time and place where their application is to be heard, unless such appearance is waived in advance by the commission. Applicants may be examined by commission members, police representatives and counsel. The commission may require that questions be answered under oath. The applicant may be represented by counsel and may present testimonial and documentary evidence relevant to issues raised. The applicant may examine the police representative concerning any police objections to the license or permit application and may make reasonable inquiries to commission members and staff. After hearing all relevant evidence and arguments concerning the license or permit application, the commission shall recommend that the city council pass a resolution approving or disapproving of the license or permit. If the commission recommends that the city council disapprove of an application, reasons for the recommendation shall be clearly stated on the record;
(c) Any license or permit applicant who receives a recommendation of disapproval from the commission may request a hearing before the city council on its license or permit application. A request for such a hearing must be made in writing to the city clerk within five days after the commission makes its recommendation. If such a request is received, the clerk shall set the matter for hearing before the council within 15 days and in any event at a time no later than five days before the end of the statutory period of time in which the council can take action on the application. The hearing must be held and decided within the period of time in which the council can take action on the license or permit application. At the hearing, the applicant may be represented by counsel, may present any oral and written testimony and arguments relevant to the issues, and may cross-examine adverse witnesses. Testimony taken shall be under oath. At the conclusion of the hearing, the council shall pass a resolution disapproving or approving of the license or permit. Any resolution disapproving of the license or permit shall contain written findings of fact that the council has made which justify disapproval of the license or permit application.
Section 2. That Chapter 10A, Section 11, of the Duluth City Code, as amended, is hereby amended as follows:
Sec. 10A-11. Standards for state lawful gambling license or premises permit disapproval.
The alcohol, gambling and tobacco commission may recommend disapproval of a lawful gambling license or premises permit and the city council may disapprove of a lawful gambling license or premises permit if substantial evidence shows:
(a) That the applicant, its managers or employees violated any ordinance or state or federal statute or regulation which relates to the operation of lawful gambling, or of theft, fraud or bribery;
(b) That the applicant, its managers or employees were convicted of a crime that directly relates to the operation of lawful gambling and have not been rehabilitated within the meaning of Minnesota Statutes, Chapter 364;
(c) That the applicant, its managers or employees have operated lawful gambling games in an unfair manner so as to give some players a better chance of winning than other players;
(d) That the applicant made material misstatements of fact or omissions of fact on its present or past applications or on gambling information investigation form;
(e) That the applicant, its managers or employees refused to answer questions concerning its application or operations asked by the police, the commission or the city council;
(f) That the applicant failed to pay any city gambling tax when due;
(g) A refusal by the applicant or its managers or employees to cooperate with the police or commission in any investigation;
(h) Employment by the applicant of gambling managers or jar operators who are not lawfully qualified to work in their respective positions;
(i) Payment by the applicant of any lease fee or other payment for its operating premises in excess of legal limits;
(j) Participation by the applicant in any conspiracy or scheme to limit the applicant's source of gambling supplies;
(k) Bribery or fraud by the applicant in securing a license;
(l) Incompetence by applicant or its managers in conducting and managing lawful gambling games;
(m) That the applicant failed to keep records of its operation as required by law and consistent with good accounting practices;
(n) That the applicant's gambling operations constitute a public nuisance or result in the excessive commercialization of lawful gambling;
(o) That the applicant or its representative failed to appear for its licensing hearing.
Section 3. That Chapter 10, Section 12, of the Duluth City Code, as amended, is hereby amended as follows:
Sec. 10A-12. Gambling managers and jar operators; license registration required.
(a) No person shall work as a gambling manager or jar operator for any licensed lawful gambling operation in the city unless they have applied for a license from the alcohol, gambling and tobacco commission pursuant to this Article. If a person’s license application is denied by the commission, the person shall immediately cease working as a gambling manager or jar operator. A person licensed as a gambling manager may work as a jar operator without further license; are licensed by the state of Minnesota and have registered such license with the city on forms provided by the city. Each such registration shall include the name, address, criminal history, date of birth and work experience in gambling operations of the licensee.
(b) Applicants for a jar operator's license shall, upon making proper application and paying the license fee, receive a temporary license which shall be valid until the license applicant is acted upon by the alcohol, gambling and tobacco commission;
(c) In cases of death, disability, resignation or dismissal of a gambling manager or other emergencies beyond the control of a lawful gambling licensee, an interim gambling manager, unlicensed by the city, may be appointed under such terms and conditions as are consistent with state law and, provided further, that the interim manager applies for the license required herein for the next regular alcohol, gambling and tobacco commission meeting.
Section 4. That Chapter 10A, Section 13, Section 14, Section 15 and Section 16, of the Duluth City Code, as amended, are hereby repealed in their entirety.
Section 5. That this ordinance shall take effect 30 days after its passage and publication.
STATEMENT OF PURPOSE: The proposed amendments are necessary to reflect changes in state law which prohibits local licensing of gambling operators, managers and jar operators. Local units of government are still authorized to approve premise permits. See Laws of Minnesota 2006, Chapter 205, Section 28.
Section 1 of this ordinance amends Chapter 10A, Section 10, to eliminate the licensing of gambling operators, managers and jar operators. Section 2 amends Chapter 10A, Section 11, to eliminate licensing approval processes but continues to provide for a premise permitting process. Section 3 amends Chapter 10A, Section 12, to provide for the registration of gambling managers and jar operators. Section 4 repeals Chapter 10A, Sections 13, 14, 15, and 16 in their entirety.