Fixing the Liquor License Laws

By Beacon Staff

In response to Kellyn Brown’s column in the Feb. 13 Beacon, “Unfair Playing Field” – interesting, but you’re missing a few important points:

  • When the all-beverage and beer/wine license “with gaming“ were developed, it was done so with a few caveats. The original intention was to allow only one license per family. This was to make sure there would be no hoarding or monopolies and everyone would have a fair chance of getting a license, if they qualified. The law was so poorly written that numerous families and corporations have multiple licenses.
  • The quota system is stacked heavily against small businesses that would like to open a restaurant or bar without the gaming. But with all the amenities of an all-beverage licenses, that’s close to impossible. Famous Dave’s and Applebee’s are examples. The large chains like Red Lobster and Olive Garden have been hovering over the Flathead Valley for years but have refused to buy into the licensing procedures due to the prohibitive cost.
  • The Montana Tavern Association is a good-old-boy network and it lobbies heavily to not allow further competition. The ironic thing is that it is so comfortable with the status quo that the vast majority of bars and casinos in the state would be classified as dive bars. Little class, no substance and places that do their utmost to separate their clients from their money without give anything in return.
  • One of the biggest problems with changing the liquor laws is the banks who have loaned up to 90 percent on these liquor license. So the collateral on a $1 million dollar license might be $900,000. If you flooded the market with a bunch of new beverage license with gaming the value of the present licenses would drop drastically, and lawsuits against the state would follow. So the banks play a huge role in not changing these liquor laws.
  • Last, but most important, is your assertion that changing the system is near impossible now and that “the complex rules cannot simply be undone.” Not so. The vast majority of the establishments get their income from gaming. In fact, if you’re gambling, the liquor is often free. Simply stated, if the state were to create a new class of liquor license that was for restaurants and bar/nightclubs, that allowed for a full liquor license (spirits, beer and wine) without the gaming it wouldn’t upset the applecart. The number of gaming licenses would remain the same (one license for every 1,500 people), which means the value placed on them remains the same, and over time they would continue to increase in value. Banks are happy because their loans stay collateralized; casino owners are happy because the value of their license stay solid; the state is happy because they not only don’t get sued but allow new businesses to open and thrive (more tax revenue); and those who want to open and operate restaurants and entertainment venues are happy because they get a licenses at a fair value (perhaps $25,000 to $100,000), like similar businesses in most other states throughout the country.

The solutions are not that difficult. It would only take people to have the will to think of what’s right and fair for all rather than a select handful.

Tom Thomas lives in Whitefish.

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