The Lake Elmo City Council on the regular agenda adopted ordinance 2025-017 updating the city's lawful gambling code and authorized publication of the ordinance summary by resolution 2025-081.

Finance staff presented the ordinance changes as a modernization of a 1997 code, adding up-to-date definitions (including a clarified "trade area" outlining where proceeds may be spent), aligning local language with state rules and the Gambling Board, and establishing a dedicated gambling fund. Staff said the city has three charitable gambling organizations operating in city limits and has begun receiving checks; the city tentatively budgeted $20,000 in gambling revenue for 2026 and has deposited receipts into a new fund.

After the ordinance adoption, a separate motion would have directed staff to budget lawful gambling revenues into fund 210 and allocate proceeds to the city's law enforcement contract (the Washington County Sheriff's Department). Supporters described the allocation as an allowed use under state law and as a way to reduce the general fund cost of the sheriff contract. Opponents said the proceeds are largely raised by local youth and athletic associations and could instead support community events, parades or help youth programming; one councilor said he preferred to "continue with what we've been doing" for local associations. Acting leadership cautioned that dedicating the revenue to law enforcement would effectively add $20,000 in constrained revenue that still might free up general fund spending elsewhere.

The motion to allocate proceeds to the city's law enforcement contract failed on the floor (transcript record: "Motion fails 1 2 3"). Council later moved to reconsider the ordinance's 10% provision but that motion resulted in a tie and did not pass, leaving the updated ordinance on the books (including the 10% language) but without an immediate, designated spending allocation or enforcement action.

What happens next: the ordinance summary will be published as authorized, the city will continue to collect gambling receipts into the newly created fund, and council can bring a future motion to designate a specific use or amend the ordinance language. Staff said collection and the required annual paperwork are administratively manageable but will require coordination while key staff are on leave.

Quotes

"We would like to enforce it for those three entities that are currently operating within city limits," finance staff said when describing the code updates and collection.

"It's kind of a, you know, sleight of hand in some ways," the acting mayor said when arguing that allocating the $20,000 to law enforcement could simply shift where revenue and spending appear in the budget.

"If it's a sports association for youth sports, I don't think we need to take $20,000 from the youth sports in this situation," one councilor said during debate.

Ending

With the ordinance adopted and the publication summary authorized, the council left the 10% allocation in place in the code but did not approve a formal dedication of proceeds; council members may bring future motions to dedicate or amend how those funds are used.