Lake Elmo officials on Tuesday adopted updates to the city’s lawful-gambling ordinance to align local rules with state law and industry guidance, but stopped short of committing gambling receipts to law enforcement.

Finance Coordinator Kramer told the council the ordinance, originally adopted in 1997, contained outdated provisions and stricter local limits than state statute. Kramer said staff revised definitions (including the ordinance’s “trade area”), removed antiquated liquor-gambling language and a 3% grocery-suites requirement, and eliminated a premise-permit fee the city had not been enforcing. Kramer also said the city has created a dedicated gambling fund and tentatively budgeted $20,000 in gambling revenue for 2026; to date the city has received about $6,500, including a recent check from the Oakdale Athletic Association.

Kramer recommended that proceeds be used to offset the city’s law enforcement contract with the Washington County Sheriff’s Office, a use Kramer said is permitted under state statute. After discussion, one councilmember said diverting a projected $20,000 from events that raise money for youth sports ‘‘would be taking it from the kids,’’ while the acting mayor said directing the funds to the sheriff would effectively reduce the city’s general fund contribution for policing.

Council voted to adopt ordinance 2025-017 (the updated lawful-gambling code) and approved resolution 2025-081 authorizing publication of the ordinance summary. When a separate motion to authorize staff to budget the gambling proceeds in fund 210 and dedicate them to the law‑enforcement contract was put to a vote, the motion failed on a divided voice vote and council left no specific allocation in place for fund 210.

Kramer said the city will report gambling contributions and uses in required filings and include the fund in next year’s budget. He estimated the paperwork and processing would take roughly an hour of staff time per reporting cycle and said staff would coordinate collection procedures while a colleague (Julie) is on medical leave.

The ordinance update affects current premise permit holders in the city — Kramer said there are three charitable gambling organizations operating within city limits (examples named during discussion included Oakdale Athletic Association and the Stillwater Area Hockey Association) and that new operators must apply for premise permits. Kramer added that state regulators (the Minnesota Gambling Board and Department of Revenue) oversee gambling regulation but do not enforce local revenue-sharing provisions; local enforcement of any revenue-share requirement is the city’s responsibility.

The ordinance retains a 10% contribution provision in its text; council discussed but did not pass a motion to reconsider and remove or amend that provision. Because no dedication was approved for fund 210, the city will hold collected gambling receipts in the dedicated fund until council decides on an allowable use that fits statutory requirements.

The council moved on to subsequent agenda items after approving the ordinance and publication summary; no changes to the law‑enforcement contract were enacted at this meeting.