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Lake Elmo adopts updated lawful-gambling ordinance but declines to allocate proceeds to sheriff
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Summary
The Lake Elmo City Council adopted an updated lawful-gambling ordinance that aligns local rules with state statute and authorized publication of the ordinance summary, but after debate the council declined to immediately allocate gambling proceeds toward the Washington County law-enforcement contract; the funds will remain in a dedicated gambling fund until a use is selected.
The Lake Elmo City Council on Monday adopted an update to its lawful-gambling ordinance, aligning the city code with state regulations and adding a clearer "trade area" definition, but the council stopped short of dedicating proceeds to the Washington County Sheriff's Office.
Finance Coordinator Kramer told the council the city's ordinance dated from 1997 and contained antiquated, more restrictive language than state statute. Kramer said the city has created a gambling fund as required by state law, will report receipts and uses, and tentatively budgeted $20,000 in gambling revenues for 2026; the city has collected roughly $6,500 so far from organizations including the Oakdale Athletic Association. Kramer said, "It's not their money. They wouldn't enforce them to send us that money. It's on us to enforce those regulations and ordinances, and we did not do that." (Kramer)
Councilmember discussion focused on two competing priorities: using the funds to reduce the city's law-enforcement contract costs or directing proceeds to community programs such as youth sports and seasonal events. Speaker 3 argued that the money largely comes from fundraisers run by sports associations and cautioned against taking revenue that benefits youth programs: "I just if it's a sports associations for youth sports, I don't think we need to take $20,000 from the youth sports." (Speaker 3)
Procedurally, Speaker 1 moved to adopt ordinance 2025-017 amending Lake Elmo City Code Chapter 11.04; the council approved the ordinance by voice vote. The council also adopted resolution 2025-081 to publish a summary of the ordinance. A subsequent motion to authorize staff to budget gambling receipts in fund 210 and allocate the proceeds to the city's law-enforcement contract was debated and then failed on a voice-counted result described in the meeting as "Motion fails 1 2 3." The council then considered and rejected a motion to reconsider the ordinance, leaving the 10% provision in the ordinance but with no immediate allocation for fund 210.
Kramer and others explained that the city is required to create and track uses of the gambling fund but need not spend collected funds immediately: Kramer said the city can let the money "sit in that fund" until a purpose that fits statutory requirements is identified and approved. Kramer noted one permissible use example: "You can use it for the Fourth of July parade, actually. Oakdale uses theirs for their summer fest a lot of times." (Kramer)
What happens next: the ordinance is adopted and its summary will be published; council members may bring a future motion to designate a specific use for the gambling fund or to amend the ordinance if they decide to change the 10% language. At the end of the meeting the council left the proceeds undesignated and will retain funds in the gambling fund pending a later decision.
