2023-02 Ordinance Amending City Code Chapter 54.1 Video Gaming License

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January 12, 2023 TO: Mayor Julie Moore Wolfe& Decatur City Council Members FROM: Scot Wrighton, City Manager RE: Video Gaming License Temporary Moratorium The City Council is nearly unanimous in its desire to slow, and if possible stop,the growth in local video gaming; but achieving this outcome involves changes to different sections of the code, and it is complicated. For this reason, a six-month moratorium on the issuance of new video gaming licenses (from establishments that have not already submitted applications by January 1, 2023)is requested. The city cannot take video gaming licenses from establishments that are operating lawfully and paying their taxes(without incurring legal liability for a "taking").Some businesses that have video gaming, however,are not operating lawfully, and/or are not paying their taxes.These establishments can be shut down—usually using provisions of the Alcoholic Beverage Code, after a hearing and adjudication by the Liquor Commissioner. In recent months, staff has been much more aggressive in auditing and identifying businesses that are not in compliance with the City Code and/or fail to pay their city taxes. Apart from locations operating illegally and/or not paying their taxes,where we see businesses trying to add video gaming in ways that were not envisioned by the City Code or the City Council occur in two categories: 1) businesses that would like to operate as a video gaming parlor,but cannot because parlor licenses are capped, so instead they try and operate as restaurants, but fail to meet the 51%food and non-alcoholic beverage revenue requirement; and 2)gas stations and convenience marts that believe they can add enough ready-to-eat food to their retail offerings, add a few tables and chairs,call themselves a restaurant,and then apply for a restaurant liquor license so they can add video gaming. Shutting down these and other loopholes require extensive amendments of the city's Alcoholic Beverage Code(since under state law,video gaming can only happen in liquor license businesses).Staff has already submitted to council a summary of the changes we are working on, but more time and study is required to perfect the ordinance changes. I believe a 6-month pause, in the form of a moratorium,on video gaming license issuance is enough time to complete work on ordinance revisions and bring them to the City Council for final action.