Lake Elmo updates gambling ordinance but council stops short of dedicating proceeds to sheriff

Lake Elmo's City Council on May 20 adopted an update to the city's lawful gambling ordinance and approved a publication summary, but declined to commit collected proceeds to the county sheriff's contract.

Finance coordinator Kramer told the council the ordinance, originally adopted in 1997, required modernization and added a "trade area" definition describing where gambling proceeds may be spent. Kramer said the city has created a gambling fund and will report receipts and uses; staff tentatively budgeted $20,000 in gambling revenues for 2026 and said they had collected about $6,500 to date from organizations including the Oakdale Athletic Association.

"It is the operation, conduct, or sale of bingo, raffles, paddle wheels, tip boards and pull tabs," Kramer said when explaining what lawful gambling covers. Kramer recommended allocating proceeds to the Washington County Sheriff's Office because the use is allowed by statute and would benefit residents.

Council moved to adopt Ordinance 2025-017 amending chapter 11.04 of the Lake Elmo City Code; the ordinance was adopted by voice vote with no opposition. The council then approved Resolution 2025-081 to publish a summary of the ordinance.

A separate motion to authorize staff to budget gambling revenues in Fund 210 and allocate the proceeds toward the city's law enforcement contract prompted debate. Some council members said proceeds should help youth sports and other community events, noting many charitable gambling operations raise funds for local associations. One councilor said the city was "adding $20,000 general to our revenues" and cautioned against simply using the money to reduce the levy. Another argued staff time to track the funds would be minimal and collecting the proceeds was feasible.

When the allocation motion was put to a vote it failed on a 1-3 tally (one yes, three no), leaving the 10% dedication language in the ordinance but no immediate enforcement or specific allocation. A subsequent motion to reconsider the ordinance tied 2-2 and failed, so the ordinance remained adopted as written.

Staff clarified that collected funds will sit in Fund 210 until the council approves expenditures; there is no statutory deadline to spend the money. Council members said they could bring a future motion to dedicate funds to a specific purpose if desired.

The ordinance update also removed antiquated language, eliminated a premise permit fee and renewal requirement the city had not been enforcing, and aligned local rules with state law and guidance from the Minnesota Gambling Board and the League of Minnesota Cities.

The council moved on after the votes; no enforcement action to collect the 10% was finalized at the meeting.