Gambling Control Board refers three groups to compliance review, fines two charities and grants probation to one

The Gambling Control Board on Feb. 17 referred three absent organizations to its Compliance Review Group for further investigation and resolved enforcement actions for three charities that failed to meet the statutory 30% expenditure requirement.

The board voted to send Alliance International, Badgers JC and Duluth Curling Club to the Compliance Review Group (CRG) for additional review so staff and CRG investigators can question the groups and gather more information before a final determination. The motion to refer the absent organizations was made during new business and passed by voice vote.

Why it matters: Minnesota Statute 349.15, subd. 1(c), requires organizations that conduct lawful gambling to spend a minimum percentage of gross receipts on lawful purposes; failure to meet that floor can lead to probation, civil penalties or suspension. The board said referrals to CRG give organizations an opportunity to provide extenuating circumstances in a structured review.

Barnesville Booster Club

John Kashke, who identified himself as president of the Barnesville Booster Club, told the board his group has gone through a leadership transition and has implemented corrective steps, including more frequent reporting by the gambling manager, more board oversight, and increased attention to charitable expenditures. "We're right with the state," Kashke said, and asked the board to weigh the club's corrective actions in any sanction.

Staff informed the board that Barnesville's gross receipts rose from about $543,000 in FY24 to $928,000 in FY25 and that the organization improved its donation percentage from 20.4% in FY24 to 27.1% in FY25 and was at 40.5% through December 2025. Executive Director Wade presented a staff recommendation of a $2,500 civil fine to hold the organization accountable while avoiding a punitive maximum fine.

After discussion about consistency and proportionality of fines, a board member moved to adopt the staff recommendation. The motion passed; one board member (English) recorded an abstention. The board instructed that any civil penalty be paid from non-gambling funds per the assistant attorney general's advice.

Lake Sullivan Association

Staff told the board Lake Sullivan (license 03118) experienced a fire at its most profitable site, which the staff flagged as a possible extenuating circumstance. Executive Director Wade said the group had been close to the 30% threshold in the first year and that staff recommended either a $2,500 fine or redoing the probation year to give the organization another opportunity to comply.

Ron Peterson, president of Lake Sullivan Association, said the group had restructured operations and expected upcoming donations to raise their LPE percentage. "We will no longer go into sites, dual sites with other clubs... we're trying to run it now as a business," Peterson said, and asked the board for probation rather than a fine. The board voted to grant an additional year of probation for license 03118.

Hanley Falls Firemen's Relief Association

Staff reported Hanley Falls increased its LPE from 28.1% (FY24) to 29.3% (FY25) but remained under 30% through the reported periods. Wade recommended a $2,500 civil penalty; the board approved the fine to be paid from non-gambling funds. Assistant Attorney General Leah Hedman advised the board on statutory options, noting the board may suspend a license or impose a civil penalty and must consider unique or extraordinary circumstances.

Votes at a glance

- Motion to refer Alliance International, Badgers JC and Duluth Curling Club to the Compliance Review Group: approved (voice vote). - Barnesville Booster Club: $2,500 civil fine adopted (motion passed; one abstention recorded by English). - Lake Sullivan Association (license 03118): one-year probation in lieu of a $2,500 fine (motion passed). - Hanley Falls Firemen's Relief Association (license 02791): $2,500 civil fine adopted (motion passed).

What the board said: Assistant Attorney General Leah Hedman read and summarized the statutory standard, saying the board must consider "unique factors or extraordinary circumstances" when deciding suspension or civil penalties and that civil penalties may be imposed up to the statutory cap.

Next steps: Organizations referred to CRG will receive follow-up from staff and CRG investigators; groups given fines must pay from non-gambling funds or follow any scheduling the board sets; Lake Sullivan will be monitored through its additional probation year. The board set its next meeting for March 16, 2026, at 10:00 a.m. in Roseville.