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Information <br />giver <br />TO: City Council <br />FROM: <br />DATE: <br />MEMORANDUM <br />Tina Allard, City Clerk <br />June 8, 2009 <br />SUBJECT: Gambling Fund Expenditures <br />As you may recall from the May 18 Council meeting, Councilmember Moon questioned how <br />much gambling organizations can keep each year of their profits. <br />Per current state statute, there is no limit on the amount of funds an organization could keep <br />in an account. Starting July 1, 2009, due to new legislation, organizations will be required to <br />spend at least 30% of their net profits on lawful purpose expenditures in a 12-month period. <br />If an organization fails to spend a minimum of 30% of net profits on lawful purposes each <br />year, they are automatically put on probation for one year. The organization must increase <br />their rating to a minimum of 30% or be subject to sanctions by the Gambling Control <br />Board. The Board may suspend the organization's license or impose a civil penalty up to <br />$10,000 if they fail to meet the minimum requirements. <br />New Rating System to be implemented on July I <br />Spent on Lawful Purpose Rating <br />More than 50% 5 stars <br />More than 40% <br />More than 30% <br />4 stars <br />3 stars <br />More than 20% <br />Less than 20% <br />2 stars <br />1 star Probation, suspension, or <br />penalty may be imposed <br />S:\Administration\Council RCA\Licensing\Gamb6ng\2009\Gambling Org Funds.doc <br />