Coon Rapids might tap gambling profits to pay its bills

Still scrambling to raise money for this year's July 4th celebration, Coon Rapids is working on a plan to support future community events with proceeds from charitable gambling.

The City Council voted Tuesday to introduce an ordinance -- effective Sept. 1 -- requiring organizations that conduct charitable gambling to contribute 5 percent of net profits to a city-run fund. The organizations now are required to spend 10 percent of net profits in the city; the allocation will be deducted from that sum.

Cities have the right, by state law, to require contributions of up to 10 percent of net profits from charitable gambling operations, said Tom Barrett, executive director of the state Gambling Control Board. Many take the maximum amount, using it for playground and emergency equipment, summer youth programs and other projects.

In past years, the Coon Rapids Lions have bankrolled the city's fireworks display at a cost of about $25,000, but the organization first cut back, then withdrew this year because of dramatic decreases in gambling revenue and concerns about the club's ability to provide donations for basic needs in the community.

The city has raised about $11,000 in private contributions, including a $10,000 Cub Foods grant, toward the $20,000 due next month for this year's scaled-back display.

The Minnesota Gambling Control Board regulates 1,363 organizations statewide that raise money mostly through pull tabs, but also with raffles, bingo games, paddlewheels and tip boards. Statewide, charitable gambling receipts were down from 2007 to 2008. Organizations cite the statewide ban on smoking and general economic malaise.

Coon Rapids has granted charitable gambling licenses to six organizations, including the American Legion Post 334, the Coon Rapids Lions, the Mat Bandits Wrestling Club, the National Little League and the Coon Rapids Youth Hockey Association.

Most Coon Rapids organizations said their revenues from charitable gambling are down 10 to 40 percent from 2007.

Still, leaders generally said they can support the concept.

"This is going to come back to the community, and I'm OK with that," said John Keller, president of the Youth Hockey Association.

Some noted, however, that with the dip in receipts, the allocation will come out of the sum they can give to other community organizations.

"The bottom line is, what it's going to do is it's going to force us to focus primarily on ourselves," said Bob Adams, gambling manager for Mat Bandits, "because now all those other charities we've been giving to over the years outside our sport, we're not going to be able to do that anymore."

"One of the struggles even within our club is that people have different feelings about whether we should be, even if we had money, giving to things like fireworks," she said.

Howe has a different take.

"Actually, it's the right time because it's something that doesn't cost families anything to go to," he said. "It's entertainment for people who don't have the discretionary dollars."

The council will vote on the measure Aug. 4.