Lawful Gambling License of Eagles Aerie 2341, Detroit Lakes, Minn. License No. 00548 v. State Lawful Gambling Control Bd., No. C2-94-2522

CourtCourt of Appeals of Minnesota
Writing for the CourtKLAPHAKE
Citation533 N.W.2d 874
PartiesIn the Matter of the LAWFUL GAMBLING LICENSE OF EAGLES AERIE 2341, DETROIT LAKES, MN LICENSE NO. 00548, Realtor, v. STATE of Minnesota LAWFUL GAMBLING CONTROL BOARD, Respondent.
Decision Date03 July 1995
Docket NumberNo. C2-94-2522

Page 874

533 N.W.2d 874
In the Matter of the LAWFUL GAMBLING LICENSE OF EAGLES AERIE
2341, DETROIT LAKES, MN LICENSE NO. 00548, Realtor,
v.
STATE of Minnesota LAWFUL GAMBLING CONTROL BOARD, Respondent.
No. C2-94-2522.
Court of Appeals of Minnesota.
July 3, 1995.
Syllabus by the Court

Where the Minnesota Lawful Gambling Control Board promulgates a rule defining an "emergency" that would permit the transfer of nongambling funds to a gambling account, it may not deviate from that rule by applying a narrower definition on an ad hoc basis.

Page 875

Kevin P. Staunton, Sheila T. Kerwin, Popham, Haik, Schnobrich & Kaufman, Ltd., Minneapolis, for relator.

Hubert H. Humphrey, III, Atty. Gen., E. Joseph Newton, Asst. Atty. Gen., St. Paul, for respondent.

Considered and decided by HUSPENI, P.J., and NORTON and KLAPHAKE, JJ.

OPINION

KLAPHAKE, Judge.

Eagles Aerie 2342 (relator), a gambling organization, appeals by writ of certiorari respondent Minnesota Lawful Gambling Control Board's (the board) decision to deny its request to transfer gambling funds into its general account. The board decided the transfer was unjustified because it was a reimbursement for a previous transfer of nongambling funds to the gambling account when no "emergency" existed. In making its decision, the board applied a different definition of "emergency" than the definition contained in its own rules. Therefore, we reverse.

FACTS

Relator is a nonprofit organization that has been conducting lawful gambling since 1985. On three occasions, May 28, 1991, February 21, 1994, and March 4, 1994, relator transferred funds from its general account into its gambling account because it had insufficient funds in its gambling account to pay taxes. The total amount transferred was $33,950.61. On August 18, 1993, relator made a $5,000 partial repayment to the general fund from the gambling account.

In March 1994, a committee of the board, "The Compliance Review Group" (the CRG), reviewed relator's gambling operation. The CRG produced a lengthy report detailing violations of the gambling rules, one of which was "fund transfers without board approval." The CRG required that relator reimburse the gambling account from nongambling funds for the $5,000 transfer.

Relator responded to the report, and then the CRG conducted a post-compliance review. In the post-compliance review report, the CRG noted that the $5,000 still had not been repaid to the gambling account; relator had documented the initial $33,950.61 transfers from the general account into the gambling account; relator's reason for these transfers was to pay taxes due; and relator planned to request board permission to reimburse the general account from the gambling account. The CRG ordered that relator discontinue its practice of transferring monies between funds.

After relator and the CRG conferred, they executed a consent order. The order specifically itemized the violations of gambling rules, including the $5,000 transfer from the gambling account into the general account. With regard to that...

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