2. Casinos, Bars and TavernsFlathead Regional Development Office
723 5th Avenue East - Room 414
Kalispell, Montana 59901
Phone: (406) 758-5980
Fax: (406) 758-5781
July 30, 1999
Chris Kukulski, City Manager
City of Kalispell
P.O. Box 1997
Kalispell, MT 59904-1997
Re: Casino Information
Dear Chris:
Enclosed is some information our office compiled on casinos and presented to the
Whitefish planning board and city council. The planning board will hold another
public hearing at their August meeting and forward a recommendation to the city
council. About a month ago I gave Judy a copy of an excerpt from the American
Planning Association's Planning Advisory Service publication called "Gambling,
Economic Development and Historic Preservation." I copied the conclusion and
recommendation section of this document, and asked her to give you a copy so have
not included that with the enclosed paperwork.
As we gather more information on this issue, I will make sure that you get copies of
anything that might be helpful to you and the council in deliberating this matter.
Sincerely,
`00'&&
Narda A. Wilson
Senior Planner
enclosures: as noted
\LETTER\99\CASINOS
Providing Community Planning Assistance To:
• Flathead County • City of Columbia Falls • City of Kalispell • City of Whitefish •
Flathead Regional Development Office
723 5th Avenue East - Room 414
Kalispell, Montana 59901
Phone: (406) 758-5980
Fax: (406) 758-5781
Memorandum
TO: WHITEFISH CITY -COUNTY PLANNING BOARD
FROM: TOM JENTZ, DIRECTOR�,��
DATE: JULY 15, 1999
RE: PUBLIC HEARING - CASINOS
On June 7, 1999 the Whitefish City Council passed an emergency ordinance utilizing
interim zoning for the purpose of reviewing the permitting, review and establishment of
lounges and casinos within the zoning jurisdiction of Whitefish. The interim ordinance
will last for 4 months and can be extended by the Council for a longer period of time if
there has not been adequate time to study the issue. According to the ordinance during
this interim study period, lounges and casinos are to be allowed only through the
conditional use permit process.
The Planning Board was directed to undertake studies, hold public hearings as
necessary and forward a recommendation to the City Council for consideration. A legal
notice was placed in the Whitefish Pilot advertising a hearing for the July 22, 1999
Planning Board meeting as follows:
Consideration of adding provisions to the Whitefish Zoning Ordinance to address
the location, operation, design and impacts associated with bars, lounges and
casinos within the Whitefish zoning jurisdiction. This will also include re-
consideration of which zones they should be allowed in within the zoning
jurisdiction and whether they should be permitted or conditionally permitted uses.
Currently bars, lounges and casinos are defined under the general definition of
"hospitality and entertainment" and are allowed as a permitted use in the WB-2
Secondary Business and WB-3 Whitefish General Business zones and when
associated with and ancillary to an established lodging facility they are permitted
uses in the WRB-1 and WRB-2 Resort Business Districts.
EXISTING SITUATION:
Status under present City Zoning:
Currently bars, lounges and casinos are defined under the general definition of "hospitality
and entertainment" and are allowed as a permitted use in the WB-2 Secondary Business
and WB-3 Whitefish General Business zones and when associated with and ancillary to an
Providing Community Planning Assistance To:
- Flathead County • City of Columbia Falls - City of Kalispell - City of Whitefish •
Whitefish City -County Planning Board
.tune 15, 1999
Re: Public Hearing - Casinos
Page 2 of 4
established lodging facility they are permitted uses in the WRB-1 and WRB-2 Resort
Business Districts. There are no special conditions or locational requirements in the
zoning ordinance.
List of existing lounge/casino establishments in Whitefish:
For you information, I have attached_ a list of 12 business establishments within the
Zoning Jurisdiction of Whitefish which have all beverage state liquor licenses and which
allow some degree of gambling on premises.
State Law limitation and guidelines:
MCA 16-3-306 prohibits the location of on premise retail sales license for alcoholic
beverages when the establishment is located within 600 feet of and on the same street
as a building used exclusively as a church, synagogue or other place of worship or as a
school other than a commercially operated or post secondary school. The line is a
straight line measured from center of the nearest entrance to the school or place of
worship =to the center of the nearest entrance of the licensed establishment.
MCA 23-5-177 requires that any operation which offers gambling enterprises or
gambling operations must be licensed by the state.
An operators license to operate licensed gambling is tied to and requires an on -premise
all beverage liquor license.
MCA 23-5-611 requires that prior to operating any form of video gambling machines, the
operator must have acquired an on -premise alcoholic consumption license. The
maximum number of video gambling devices allowed on premise is 20.
Techniques other Montana communities have utilized to address the review and
approval of lunges, taverns, bars and casinos:
GREAT FALLS
Passed an emergency ordinance on June 15, 1999 which will last for 6 months. The
emergency ordinance places lounges and casinos into the conditional use permit
category while the community reviews the situation. Prior to this emergency ordinance
lounges and casinos were permitted uses in various commercial zones.
HELENA
Passed a new law on February 22, 1999 which established areas within the city for the
sale of alcoholic beverages and casinos. I will summarize the ordinance:
Intent: To identify safe and appropriate locations for establishments selling
alcoholic beverages for on -premise consumption near public school property, identify
safe and appropriate locations for casinos and protect and enhance the safety of public
school students and property near such establishments.
Whitefish City -County Planning Board
June l5, 1999
Re: Public Hearing - Casinos
Page 3 of 4
Definition of Casino: An establishment licensed for on -premise consumption of
alcoholic beverages which is licensed for and has 6 or more video gaming machines or
gambling devices or is licensed for and used to conduct any of the following types of
gambling: Calcutta, pools, live card games, live card game tournaments and live keno.
Definition of Existing Casino: Licensed premise that has a gambling operators license
and operated as a casino or had a pending application before the Montana Department
of Justice prior to April 1, 1999 for a gambling operators license for a casino use.
Summary of regulations:
1. Casinos only allowed to be conditional use permit in selected commercial zones
2. Casinos are prohibited within 300 feet of a residential zone (measured in a straight
line from the licensed premise (lounge, casino property) boundary to the residential
zoning boundary.
--3. Casinos are prohibited within 600 feet straight distance from the closest edge of the
licensed property to school property.
4. Existing casinos are allowed to continue and are exempt from the non -conforming
provisions of the zoning ordinance. This means they are exempt and unaffected by
this ordinance, only new applications are affected.
:• �U*-�1
In 1997 the City adopted new standards for casino development as follows:
Definition of Casino: An establishment whose primary use or activity is gambling
either in the form of gambling machines, card games or other licensed activity. A casino
normally has alcoholic beverages and restaurant facilities available. In all cases an --
establishment will be considered a casino if it is referenced as a casino by signage or
name, has more than one card table or has 15 or more gambling machines on premises.
Casinos are relegated to a casino overlay district. That means anyone who wants to
establish a new casino must apply for a zone change to "casino overlay". A casino
overlay zone is only allowed in light and heavy industrial zones. Finally, a casino overlay
district may not be located within 600 feet in any direction of a lot used for schools,
churches, residences, public parks or other casinos.
MISSOULA
They are in the process of drafting new standards right now. They appear to be taking
the approach that they are currently allowed in commercial zones however, the following
two limiting standards would apply for new casinos:
No new casino or liquor establishment can be located closer than 300 feet from a
residential zone (excluding R/W). Secondly, a new casino or liquor establishment must
have one frontage on either a major or minor arterial except in the central business
district where they are exempt from the arterial street standard. Existing casinos and
liquor establishments are exempt.
Whitefish City -County Planning Board
June 15, 1999
Re: Public Hearing - Casinos
Page 4 of 4
BILLINGS
Billings recently adopted the following development program:
Bars, taverns, lounges and casinos are allowed only by a conditional use permit. Such
property can not be closer than 600 feet measured in a straight line from any school,
playground, public park, public recreation area, churches or other public buildings.
The city council is empowered to grant exceptions during the public review process when
it is found that the strict application of this standards may result in an undue hardship.
SUMMARY OF ZONING TOOLS USED IN MONTANA:
1. The regulation of bars, lounges taverns and casinos is an issue major cities across
the state are facing.
2. Bars, taverns, lounges —and casinos are all regulated as one group.
3. The zoning tool of choice is the conditional use permit
4. Communities use a distance measure of 300 to 600 feet separation from residential
zones, churches, schools, parks, etc. and at least Missoula is looking also to limiting
them to major streets.
5. Existing lounges, taverns, bars and casinos are usually held completely exempt for
the new location standards.
6. Communities such as Bozeman may have effectively prohibited any future expansion
of the industry at this time.
RECO NDATION:
1. Hold the public hearing as advertised seeking general public comment. Staff will
open the hearing by reviewing the above findings for the Board and audience.
2. Staff will present a map of the city showing current commercial zones where casinos
are presently permitted.
3. Staff will present a map that shows the locations of existing 12 lounge -casinos in
Whitefish as well as existing schools, parks, etc.
4. The map will show hypothetical 300 foot radiuses around the school, church and
public park properties such as similar cities have used to give the planning board an
idea of what these standards mean for Whitefish if the City were to use a distance
formula.
5. Close the public hearing, discuss the issue and give the staff direction. If the Board
is ready to act with a final recommendation, so direct the staff and forward a motion
on to City Council.
6. If the Board would like additional time, give direction to the staff to prepare a more
final procedure and direct staff to advertise a second hearing in August on the
proposed regulatory program before making a final recommendation to the Council.
WHITEFISH ZONING JURISDICTION
BARS/CASINO'S
Bulldog Saloon V.F.W. Club
144 Central Ave. Box 506
Whitefish, MT 59937 Whitefish, MT 59937
Casey's Club Bar
101 Central Ave.
Whitefish, MT 59937
Dire Wolf Pub
845 Wisconsin Ave.
Whitefish, MT 59937
Good Medicine/Great Northern Bar
27 Central Ave.
Whitefish, MT 59937
Grouse Mountain Lodge
1205 Hwy 93 W.
Whitefish, MT 59937
Hideout Lounge & Casino
6475 Hwy 93 S.
Whitefish, MT 59937
Hungry Hunter/Jimmy Lee's
6550 Hwy 93 S.
Whitefish, MT 59937
Lucky Lil's Casino
P.O. Box 6000
Butte, MT 59701
Palace Bar
P.O. Box 203
Whitefish, MT 59937
The Best Bet
6592 Hwy 93 S.
Whitefish, MT 59937
The Pin & Cue
6570 Hwy 93 S.
Whitefish, MT 59937
area and since there has been no public comment in opposition
he is in favor of the application.
Cook asked about the requirements for fire windows, etc. due to
the fact that the existing building encroaches in the side yard
setback.
Jentz explained that the site review and building permit
processes will set the requirements. The board isn't required to
look at building code requirements, etc.
Cook stated that he doesn't believe the front yard parking is
best. He likes the rest of the design and the planning board
concurred.
Fisher asked about the signage and Jentz explained that the 10
square foot sign conditions was part of the zoning code.
Sullivan has no problem with the side yard setbacks. He stated
that he would like to see an additional condition; # 14, The
applicants waive protest to the future creation of an SID to
upgrade Second Street including provision of curb, gutter,
sidewalk, and bike path.
The board discussed the petition and conditions and found that
site suitability and immediate neighborhood impact criteria for a
conditional use permit had been met.
MOTION Malmquist moved and Wells seconded to adopt staff report
WUP-99-3 as findings of fact and, based on these findings,
recommend that the Whitefish City Council approve the
conditional use permit to convert the one story with basement
single-family residence into a two-story with basement
professional office subject to 14 conditions as amended by the
board. On a roll call vote all members present voted Aye. The
motion to recommend approval of the conditional use permit
passed unanimously.
WHITEFISH Consideration of adding provisions to the Whitefish Zoning
ZONING Ordinance to address the location, operation, design and
ORDINANCE impacts associated with bars, lounges and casinos within the
PROVISION FOR Whitefish zoning jurisdiction. This also included
CASINOS reconsideration of which zones they should be allowed in within
the zoning jurisdiction and whether they should be permitted or
conditionally permitted uses. Currently bars, lounges and
Whitefish City -County Planning Board
Minutes of Meeting of July 22, 1999
Page 2 of 6
casinos are defined under the general definition of "hospitality
and entertainments and are allowed as permitted uses in the
WB-2 Secondary Business and WB-3 Whitefish General
Business zones and when associated with and ancillary to an
established lodging facility they are permitted uses in the WRB-
1 and WRB-2 Resort Business Districts.
PUBLIC HEARING The public hearing was opened and closed due to the lack of an -
audience.
STAFF REPORT Tom Jentz gave a presentation reviewing the permitting, review
and establishment of lounges and casinos within the zoning
jurisdiction of Whitefish. He explained that the City Council
had passed a four month emergency ordinance, which could be
extended if necessary, to study the issue. The Council directed
the planning board to undertake studies, hold public hearings
as necessary, and forward a recommendation to the City
Council for consideration. Jentz reviewed staff findings in
regard to the status under present City zoning, the State law
limitations and guidelines, and techniques of other Montana
communities and their ordinances. Jentz presented a zone map
which indicated the schools, churches and public parks, with
buffer zones, within the Whitefish zoning jurisdiction. Jentz
suggested that the cabaret license should continue to be allowed
as it is allowed now as there is no bar or gaming license
included with those. Because of the annexations that moved the
City boundaries out to the County on -premise license
boundaries. Therefore the cities of Columbia Falls, Kalispell
and Whitefish licenses can be transferred from one entity to the
other.
BOARD Upon questioning Jentz explained that the other communities in
DISCUSSION the state are generally exempting current bars, lounges, casinos.
As exempt businesses they can be purchased, expanded, etc.,
but if the business stops or changes the use, it would then fall
under the conditional use permit process.
If the ordinance process includes a 300' from the residentially
zoned areas then it would essentially stop new establishments.
It would allow for new establishments along the Highway 93
strip.
Jentz explained that the board's purview is in recommending
the areas in which these types of establishments should be
allowed; what process they should be required to use, permitted
Whitefish City -County Planning Board
Minutes of Meeting of July 22, 1999
Page 3 of 6
or conditionally permitted uses; some standards for this type of
business; and what the definition of this type of establishment
is. The hours of operation, etc. is regulated through other
means.
Fleming stated that she would like to see at least the 300' buffer
from residential zoning, schools, parks and churches.
Malmquist stated that this is somewhat like placing prohibition
standards on gaming. People are going to gamble, therefore new
establishments would open up along the Highway 93 strip if the
regulations aren't clear on that area as well.
Jentz said the board could allow permitted uses in downtown
and conditionally permit uses on the highway strip.
Sullivan questioned the State code of 600' on the same street.
Jentz explained that the City ordinance can be more restrictive
than the State codes.
Sullivan stated that he wants to see public participation in the
process and that there was enough public awareness.
BOARD DIRECTIVE
The board consensus was to direct the staff to write proposed
amendments to the Whitefish regulations for a public hearing at
the regular meeting to be held Monday, August 23rd. The
amendments should include disallowing these establishments in
the WB-2 and WB-3 zones within a 600' boundary of schools,
churches, parks, residential zones, and other casinos; a
a
conditionally permitted use elsewhere; define casinos as any
gaming license, (1 or more machines and or tables); and tie
these regulations to all types of establishments with on -premise
alcohol consumption, (beer and wine or liquor); exempt cabaret
.�
license establishments; and WRB-1 and WRB-2 resort zoned
-`
areas would be included in the conditional use regulation
amendments.
OLD BUSINESS
Fisher talked to the Mayor and he said that the sign ordinance
was not intentionally postponed, but with he budget, etc. they
had pushed it probably to September.
NEW BUSINESS:
PATTERSON A request by the Flathead Land Trust on behalf of the Patterson
CONSERVATION Group for a conservation easement on a 65 acre tract of land
Whitefish City -County Planning Board
Minutes of Meeting of July 22, 1999
Page 4 of 6
�
THURSdAYi
JULY
D'
4
�,1
WHITEFISH CITY -COUNTY
PLANNING BOARD
NOTICE OF PUBLIC HEARING
The regular meeting of the Whitefish
City County Planning Board will be held
on Thursday July 22, 1999, beginning
at 7:00 PM During the meeting, the
Board will hold a public hearing on each
of the items fisted below. Upon the re-
ceipt of the recommendation by the
Planning Board, the Whitefish City
Council will also hold a public %acing at
their regularly scheduled meeting of Au-
gust 2, 1999 beginning at 7:00 PM. The
Planning Board meeting will be held in
the North Valley Hospital Community
Room, 6575 Hwy. 93 S., Whitefish,
Montana.
1. A request by Virgil Weitzel for a con-
ditional use permit to convert an existing
single-family residence into professional
offices for property located at 217 2nd
Street in Whitefish. The property is zon-
ed WR-3 and is further described as Lot
2 of Gojendes Professional Park in Sec-
tion 36, Township 31 North, Range 22
West, PMM, Flathead County.
Consideration of adding provisions to
the Whitefish Zoning Ordinance to ad-
dress the location, operation, design
and impacts associated with bars,
lounges and casinos within the White-
fish zoning jurisdiction and whether they
should be permitted or conditionally per-
mitted uses. Currently bars, lounges
and casinos are defined under the gen-
eral definition of "hospitality and enter-
tainment' and are allowed as a permit-
ted use in the WB-2 Secondary Busi-
ness and WB-3 Whitefish General Busi-
ness zones and when associated with
the ancillary to an established lodging
facility they are permitted uses in the
WRB-1 and WRB-2 Resort Business
Districts.
Documents pertaining to these agenda
items are available for review at the
Flathead Regional Development Office,
723 Fifth Avenue East, Room 414, Ka-
lispell, Montana 59901, and may be re-
viewed during regular office hours.
Interested parties are encouraged to at-
tend the hearing and make known their
views and concerns. Comments in writ-
ing may be fc-marded to the Flathead
Regional Development Office at the
above address prior to the hearing. If
you have any questions regarding this
proposal, please call this office at
(406)758-5980.
WHITEFISH CITY -COUNTY PLAW
NING BOARD Kim Fleming, President
#268 7/01/99
Chapter 3. Conclusions and
Recommendations
This chapter offers some conclustions and
recommendations that should be useful to planners,
preservationists, local officials, and citizens concerned
about gambling's effects on their community.
ECONOMIC EFFECTS
♦ Making projections about gambling visitation, revenues,
and leveraging capacity is an inexact science, whether done
by casinos or consultants. Market sizes have been, in
many cases, grossly underestimated, and, in some cases,
overestimated. Underestimation can result in
unanticipated infrastructure demands, which, when an
exaction system is not in place, may have to be borne by
the local municipality.
♦ In general, gambling market profile projections tend to
anticipate a larger out-of-town market than proves to be the
reality. Exceptions to this rule are twofold: (1) gambling
communities located near a major metropolitan area
(e.g., as Joliet is to Chicago); (2) gambling communities
located in remote areas that lack a sizeable regional
population and/or in which gambling is the only
"industry" (e.g., as in Deadwood). Many gambling
communities, however, end up with a significantly
larger percentage of local patrons than projected.
♦ The ratio of local versus visitor gambling patrons is a
significant determinant of whether gambling is a net
economic benefit to a gambling community. William
Thompson of the University of Nevada at Las Vegas has
publicly stated and reported in an interview with the
authors (1996) that, if approximately 50 percent or more
of the gambling market is not external, gambling is a net
economic drain on a local economy (Abell Foundation,
1995, 16). Davenport's gambling market has turned out
to consist of only approximately 30 percent tourists, and
85 to 90 percent of the Natchez market is from within a
50-mile radius.
♦ In general, gambling works best when a higher percentage
of dollars comes from outside the region. This requires state
legislation that limits and disperses casinos. The dilemma of
this argument is the beggar -thy -neighbor position of
adjacent communities that is encouraged by casinos;
that is, "Chu people are dropping money in their
economy with less to expend in our local economy and
no revenue benefits —we'd better approve gambling
too." One approach to this complaint is a regional
distribution of casino tax revenues that is based on
anticipated impact, with the majority going to the host
community. Massachusetts is advocating such a system.
♦ General retailing is often displaced, and retail sales can
decrease across a broad spectrum of market sectors. Most
retailers believe the sales losses occur because there is
less disposable money in the community for
nongambling activities. People in the food and drink
and entertainment business generally suffer from direct
competition from casinos. Direct competition can be
limited by putting caps on noncasino activity at casino
sites. This stands in direct contradiction to most public
policy, which is aimed at maximizing land -based
investment to ensure tenure and raise the property tax
base.
Businesses that directly serve casinos, however, can
prosper markedly. Such businesses include food
services, liquor sales, printing, advertising, and laundry
services. Local hotels can benefit unless or until the
casinos construct their own hotels, depending on the
percentage of overnight visitors. If the majority of
gamblers are day-trippers, hotels may be losers. Pawn
shops increase but, given ATMs and credit lines, they
are not likely to be as profuse as they once might have
been in gambling areas.
♦ Local ownership results in more of the casino take being
recirculated locally. Deadwood alone achieves local
ownership by sizing its casinos too small to be of
interest to outside chains. On the other hand, the city is
so small that the bulk of goods and services have to be
purchased from the outside.
♦ The gambling industry clearly creates it significant
number of jobs, although generally not enough to measurably
affect local unemployment rates. Studies suggest a degree
of job shifting as opposed to job creation. The 1.35
45
multiplier that most independent consultants (including
the authors of this report) place on indirect job growth
is not borne out by our studies or others of which we
are aware. The few exceptions to this rule are
Deadwood and the Colorado gambling communities,
which have such small populations (2,000 people and
less) that the gambling industry does make a
statistically significant impact on employment figures.
♦ The majoritu of gambling jobs are relatively low paying
(between $5 to SI1 per hour), depending on the specific job
and market location. As an example, the state
Employment Security Commission office in Natchez,
Mississippi, indicates that current casino employees
comprise a substantial number of those actively seeking
new and better -paying jobs in other local industries
(Frank 1995). With 3,900 workers, the casinos in Joliet
have displaced Caterpillar Tractor as the city's largest
employer. However, Caterpillar pays an average wage
between 70 to 100 percent more than the casinos (Fisher
1995); Shapiro (1996) also reports, however, that some
younger employees see a greater future in casinos due
to their rapid growth and relatively new and young
workforce. There are generally a limited number of
higher -paying, midlevel managerial positions that can
be filled by local residents with little to no specialized
training, as casinos typically provide training. Most
upper -management positions are filled by those with
gambling experience from outside of the community,
although public relations positions are often filled by
long-time local residents.
♦ The ratio of jobs going to local residents versus those
commuting from outside the community to work depends
primarily upon the size of the gambling community. In the
case of communities having a couple of hundred
residents, such as Black Hawk and Central City, the
majority of jobs go to those outside of the community
(i.e., nearby Denver residents). In the case of a
community not located near a major metropolitan area,
such as Deadwood, the vast majority of gambling jobs
are filled by residents of the community and
neighboring towns.
♦ The level of investment by gambling operators in
noncasino facilities/businesses within the communities in
which they have gambling operations varies widely. Land -
based casinos must necessarily, in Colorado and South
Dakota, invest in corollary facilities because of the
limitation on casino gambling as a percentage of their
total floor area or a set number of "positions."
Some riverboats, however, like the Isle of Capri, prefer
to "skim the cream" of early profits and move on when
better opportunities present themselves, leaving behind
either a vacant site (in Bettendorf, Iowa) or a
replacement boat (in Biloxi and Vicksburg, 'Mississippi).
They represent minimal landside investment. Typically,
these types of operations use a stationary barge and a
cruising or stationary riverboat (dependent upon local
law) to capture landside ticketing and holding for cruise
vessels and/or supplemental casino space for stationary
vessels. If more profitable markets appear elsewhere,
the entire operation is mobile. Others invest in minimal
landside food and services —just enough to hold visitors
to their site.
Resort casinos market themselves as a destination
option within a competitive market. Some have golf
courses; Kevin Costner's in Deadwood will have an
Omnimax theater; another in Vicksburg has a Seven
Flags amusement park; the new Lady Luck in Bettendorf
has an outlet mall. A number of these casinos operate
their own hotels. The creation of a hotel is a significant
decision for casinos despite the fact that many of them,
including Promus, Hilton, and Sheraton, are owned by
hotel companies. It is often very difficult to get casinos
to commit to building a hotel and, when they do, it is
because either their high rollers don't have adequate
accommodations within existing city stock or the
percentage of overnight stays cannot be accommodated
by the existing supply. Many cities try to get casinos to
build hotels to jump start their convention centers. Few
casinos accede, and, if they do, they may not be
interested in providing the breakout rooms convention
centers require.
It is important to remember that, in cities the size of
those used in our case studies, ancillary facilities to a
casino are generally not profit centers in themselves.
Their primary purpose is to hold the customer within,
or draw the customer to, the casino complex in hopes of
having that customer spend more time gambling. That
is one of the reasons why, on riverboats, drinks are
often free.
In a number of towns in Mississippi, the requirement
for land -based development was instituted following
the initial wave of casino development in that state. The
purpose was to discourage casino operators from
abandoning gambling communities so quickly when
other markets become more lucrative and attractive.
However, given the profit potential in the gambling
industry, the health of the local gambling market will
still be the overshadowing factor in deciding whether to
leave a particular community.
♦ In cases in which casinos propose substantial
nongambling development, it is important to have fiends
escrowed or bonds posted by the casino to ensure
conformance. Beware of contracts with attendance
triggers. Nongambling investments (e.g., hotels and
other landside facilities) are viewed by the operator as a
necessity in order to make the gambling operation
financially viable. Gambling developers can initially
propose nongambling development only to ultimately
scrap plans because of "changing market conditions," as
was the case in Davenport. Joliet is still coaxing
Harrah's to develop a downtown hotel despite new
hotels being developed outside of downtown near the
Interstate.
♦ States that have required that riverboat casinos cruise
have realized less revenue than those that permit dockside
gambling. The most negative aspect of cruising is lower
public -sector gambling revenues. Contrarily, critics of
dockside gambling claim that gambling is the exclusive
activity in dockside casinos (i.e., gamblers are there only
to gamble, not for shows, food, or other purposes —they
are "heads down" gamblers). Markets are typically
46
smaller with excursions because people are less willing
to commit to a fixed schedule outside their control.
Nevertheless, boats in good markets, such as those in
Joliet, were doing extremely well, despite cruising, until
Iowa changed its laws, shifting the balance of power to
the Davenport and Bettendorf boats, and northwest
Indiana riverboats began drawing on the Chicago
market. Success is relative in this industry and is
measured against comparable activity in alternative
locations, not against typical profit margins in other
business sectors.
♦ The revenues going to most local governments have
exceeded gambling -related public expenditures. There are a
few measurable exceptions to this finding. Some of the
first towns to institute gambling, such as Natchez and
Bettendorf, did not initially negotiate an agreement that
netted them revenues that exceeded their costs. In most
cases, the casino developer has financed the initial costs
for infrastructure at the insistence of the municipality.
While the need for public services in gambling cities has
increased drastically in terms of both capital and
operating needs, the revenues have more than offset
these costs. In not foreseeing these costs, a number of
municipalities have failed to plan ahead. Pre -
implementation planning for gambling should consider
not just a plan of capital construction to control and
leverage casino gambling but also a careful assessment
of public service costs and a phased capital and
operating budget to cover them.
Unlike some forms of development, such as housing,
gambling does not create direct measurable demand on
educational systems —one of the biggest costs for any
local government. Consequently, many communities
are now spending money on luxuries they never
previously envisioned. A balance between general fund
and targeted investments of casino revenues needs to be
thought through carefully. A survey of 25 gambling
communities found that "Most gambling revenue goes
directly into the city's general fund" (George 1995).
The danger of investing in continuing programs that
are not directly affected by gambling is the reliance on a
form of taxation that may not in the long term be
sustainable at projected levels if markets become
saturated or the boat leaves. This is also a problem in
the use of bonds secured by casino revenues.
Direct infrastructure costs need to be financed by
casinos or through up -front exactions. Social service
costs need to be addressed by gambling revenues and/
or impact exactions. A portion of the money should be
invested in quality -of -life capital improvements and in
investments that have the ability to leverage further
investment or revenues in their own right. Financing for
downtown and riverfront streetscape and facade
improvement programs, for convention center
construction or expansion, for projects like the Sci-Port
Discovery Museum in Shreveport, or for the grants
allocated by independently administered foundations in
Rising Sun, Indiana, and Davenport, Iowa, are good
examples of the use of gambling revenues for
community investments with long-term positive
consequences.
Of concern to state community development staff in
Indiana was the potential diversion of moneys into
nonstrategic investments or as means to simply reduce
local income taxes, thus soliciting local political favor.
Few states have the statutory means to prevent this.
South Dakota and, to a lesser degree, Colorado avoid
this problem through directed programmatic funding in
exchange for limiting local control.
♦ Treat gambling as part of an overall economic
development strategy —not as an end in itself. The economic
leveraging strategies of Davenport and Deadwood are
good examples. Planning commenced before gambling
and was supplemented by gambling revenues. While
casino revenues did not pay for the convention center,
new office tower, or hotel in Davenport, its presence
was at least a security blanket for public and private
developers that enabled the convention center and hotel
to proceed. In Deadwood, the quality of the preserved
buildings are an attraction in their own right. Unless the
South Dakota enabling legislation is altered, Deadwood
will continue to prosper in a monopolistic market. In
order for gambling to be a net benefit to a community,
the scale and magnitude of gambling should be
controlled.
♦ In the case of riverboat casinos, very few spin-off benefits
are generally leveraged to existing businesses because of the
relatively large scale and physical separation of riverboat
casinos from supporting uses. In many cases, gambling has
actually harmed local businesses. Even in the case of land -
based casinos in which floor area limits are placed on
casinos, as was done in Colorado, the scale of casinos
and their lack of physical compatibility with their
context has clearly been harmful to historic preservation
efforts and most local businesses.
Deadwood is the sole exception that seems to bring
net benefits to all key aspects of a community, including
economic benefits, quality development, and the
preservation of historic buildings. It must also be noted
that the state historic preservation officer had the
authority to review all the gambling projects in South
Dakota and that the historic preservation staff in
Deadwood was headed by a lawyer and preservationist.
Even in Deadwood, the development of the Costner
resort nearby could radically change the town's success.
While Deadwood does not attempt to control the
overall number of gambling establishments, it limits
each to no more than 30 gambling devices, thereby
encouraging the sympathetic integration of gambling
into the existing architecture. In addition to the
adaptive use of historic buildings, this approach also
allows for the industry to grow and contract in small
increments as the demand for gambling grows and
contracts. This approach is in contrast to the closing of a
large casino and the accompanying loss of hundreds of
jobs.
The experience of Central City, Colorado, where a
moratorium was placed on new casino construction to
alleviate strain on the city's infrastructure, highlights
the importance of paying attention to scale early on.
Like so many other aspects of gambling, scale is in this
case dictated by state legislation.
47
♦ The' recomimendation to limit ancillary uses hi casinos is
inte°ncicrl to limit the casino's conrpetitwcncss zcith cxistm
local restaurants, shops, and other sources of entertainment.
This study has not identified any gambling community
that has limited, through formal policy, the amount and
location of a casino's ancillary uses. While consultants
recommended that Natchez limit the amount of
ancillary uses to 25 percent of the casino's floor area,
that proposed policy was never adopted. The aborted
New Orleans land -based casino model, which would
have severely limited_nongambling ancillary uses in the
casino in an effort to leverage them out into the
community, would have been a realization of this
strategy. The early Vicksburg model posed by the
casino -only Isle of Capri illustrates the possible
leveraging effects of such a strategy. In contrast, the
Colorado state law achieves the opposite approach by
limiting the amount of casino floor area. The result is
that nongambling space is filled with gift shops and
restaurants that encourage gambling patrons to spend
extended periods of time there, while traditional
retailing has been displaced to neighboring
communities.
♦ Most communities do not have to make concessions to
secure gambling developments, when in fact, some form of
exactions can usually be negotiated from gambling
developers. Few cities understand this, and most negotiate
from a position of perceived weakness. Gambling
communities are generally negotiating from a position
of strength and can select, or influence the selection of,
the gambling operators of their choice. That situation
exists because gambling is generally limited to specific
political jurisdictions per the state law, and, in most
cases, there is enough gambling market strength to
justify at least one casino for each of the approved
locales. In the earliest days of the gambling industry's
spread across America, some communities
understandably did not realize the extent of their
position of strength, and out of economic desperation
and fear of "blowing the deal," they did not demand
significant concessions. As the gambling industry
evolved, however, there were more towns, like
Shreveport, Louisiana, which finally selected a
gambling operator that offered them a new city hall
building. Davenport set restrictions that resulted in only
2 of 12 potential operators making bids for the city -
owned site. In addition to the standard gambling taxes
and land -lease revenues, many communities charge an
annual fee per gambling device (e.g., Deadwood), and
public improvements are often mandated or negotiated,
such as the $1.2 million public riverwalk developed in
Joliet by Harrah's.
LAND USE AND DEVELOPMENT PATTERNS
♦ The impact that gambling will have on land -use patterns
and development characteristics is determined most by the
form of gambling permitted by state law. The land -based
Rocky Mountain gambling model has resulted in
dramatic land -use changes because gambling has
usurped retail and similar uses. Some small gambling
communities now lack the most basic retail and service
uses. Likewise, many upper -floor apartments have been
lost in Deadwood because of gambling's impact on real
estate values and rent structures.
♦ The advent of gambling typically prompts a serious
planning and regulatory effort per with the assistance
of consultants. There is generally support for and public
participation in such a process. Decisions, however, are
often made by politicians outside the framework of that
process.
♦ The experience of most gambling communities is that,
although planning is not performed in advance, as it should
be, it does begin on a large scale once gambling has been
approved for a particular community. Exceptions would be
communities, such as Joliet, which prepared a City
Center Plan just prior to the consideration of gambling,
and Davenport, which had a waterfront plan in place
and has since commissioned a downtown plan. Outside
consultants are usually hired to work with in-house
planning staff, if they exist, to develop a comprehensive
plan for the area to be most affected by gambling
(downtown, waterfront, etc.). The pianning.and
subsequent adoption of needed zoning regulations are
held in public forums, and they are typically well
attended. Again, exceptions to this rule include
Davenport and Joliet, where development agreements
specified details that might have otherwise been
addressed in a special waterfront ordinance. In both
Deadwood and Black Hawk, consultants were hired to
rewrite comprehensive plans, zoning ordinances,
historic district ordinances, and other land -use
regulations. After some initial disinterest, extensive
public participation was obtained, and, in both
communities, the resulting documents have strong local
support.
♦ The down side of planning processes initiated after the
approval of gambling is that decisions relating to the location
of casinos and other major issues are often already decided in
the minds of gambling developers and politicians and/or are
planned for without regard to a larger economic development
strategy. Consequently, the public participatory process
is often relatively meaningless. For example, the
preservation commission in Davenport approved the
demolition of several historic buildings in part because
its members felt they had no alternative as a result of
previous agreements made between the casino operator
and the city council. Agreements between casinos and
municipalities are often made behind closed doors,
particularly since the laws of many states allow for
closed meetings in matters relating to real estate
transactions.
♦ Where casino gambling is seen as part of a larger economic
development strategy, it seems to leverage larger benefits to
the host community. Deadwood and Davenport to date
seem to be the best examples of this. Joliet has
distributed its funds more broadly but is operating
within its plan. Davenport is linking casino
development with parallel efforts along and
perpendicular to the waterfront. The casino is but one
part of a restored waterfront that includes a minor
league baseball stadium, a regional sports complex, a
48
restored park and bandstand, and a waterfront
restaurant. The skvwav ties the waterfront to the new
I0-story Mid -America Energy office building and 7 50-
space garage, the 250-room Radisson Quad -City Plaza
hotel, the convention center, and the Blackhawk hotel.
New boutiques have opened parallel to this spine,
which is 1.5 blocks from Main Street, the primary axis of
the city linking the casino to the historic downtown.
Casino revenues are directly tied only to the convention
center and Blackhawk Hotel projects, but the casino's
presence is credited by many with providing a sense of
security in the other investments.
Most gambling communities are using a portion of
their casino revenues to rejuvenate their downtowns
through streetscape improvements and facade loans.
The cities of Davenport, Deadwood, and Black Hawk
have grants or low -interest loan programs for facades.
Natchez's revenues on a per capita basis are the lowest
of the towns studied, in large part because of the
unfavorable negotiation terms entered into with the
casino operator. Streetscape improvements have
occurred to some degree through other funding
services.
♦ At any point in time in a community's life, the casino
"pie" is of a constant size irrespective of the number of
casinos. More boats simply mean more smaller pieces of
the pie and less financial stability and staying power.
Generally, smaller facilities yield less net area per
patron, resulting in a more crowded, less ambient
visitor experience. In both Biloxi and Tunica,
Mississippi, smaller facilities have been displaced by
larger ones, and all cities with multiple casinos seem to
go through three stages of development: (1) exploration,
(2) development, and (3) saturation. Meyer -Arendt
(1995) maps the saturation phase and characterizes it by
three factors: (a) some casinos are too small to compete
against bigger, flashier casinos, (b) too many casinos are
drawing from the same market area, and (c) casinos
with remote locations relative to other casinos in the
general area are vulnerable. Deadwood believes that
Kevin Costner's destination resort casino will extend
the peak season without competing with the
concentration of casinos in town. While Deadwood
limits betting to 30 machines per building, carefully
crafted designs and construction methods will
ultimately give Costner about 450.
♦ The location of casinos in relation to other casinos, the
historic downtown, and other spatial landmarks within the
community is determined by numerous variables and often
differs between communities. The most significant factor in
casino location is the state enabling legislation. There is
clearly a big difference between locating on a historic
Main Street, as in the Rocky Mountain gambling towns,
and locating on a river bank, as is done in Iowa, Illinois,
and Mississippi. Location is determined entirely by
state legislation. Beyond the issue of land -based versus
water -based gambling, states such as Colorado limit
gambling to existing commercial zones, while states
such as Mississippi leave that decision up to local
discretion so long as there is nothing glaringly
objectionable, such as gambling within residential areas.
♦ In a rc,LZional destination casino, market size and
clusterint lkattc rn�, rather thnn numher �f ca<inos 17ffect t(re
success or ';tilurc oCgambling oprations. While visitation
and win projections in the early days of dispersed
casinos often proved low, they are becoming more
accurate. In South Dakota and Colorado, casinos have
achieved critical destination mass through clustering —a
small town analogy of the Las Vegas strip, Atlantic City
Boardwalk, or Biloxi Recreational Business District. In
Tunica, Mississippi, the pattern of development has
shifted over time. All four casinos at the original Moon
Landing site (1992) suffered from difficult access and
have closed or relocated. Casino Center on Black Lake
to the north provided a site in 1993-94 and is home to
four casinos. Commerce Landing, a third cluster,
opened in 1994 with three casinos. A 1995 study by the
University of Nevada -Las Vegas suggests that
ultimately the area between the two remaining clusters
should fill, creating a Las Vegas -like Recreational
Business District Strip and central focus for gambling in
the county, thus transforming the area from a series of
"casinos for convenience" to an exotic casino
destination (Eadington 1995).
A similar proposal was made by consultant planners
in Vicksburg in an effort to build off the initial
downtown Harrah's. Harrah's had room to double its
capacity, and a second casino entity held an abutting
property. The proposal was to concentrate casinos
downtown. Such a scenario would have increased city
revenues through their lease agreement with Harrah's
and concentrated impacts in the downtown. The city
decided instead to create a first -come, first -served
competitive market. As a result, four midsize rather
than two large adjacent casinos are dispersed over a six -
mile stretch of riverfront, with Harrah's having the
most disadvantageous position from an access
perspective. Its revenues are reportedly running below
the casino's projections. The Vicksburg market is now
saturated. The Quad Cities area, where each of three
abutting cities has a simple boat that competes for the
same market, offers an analogous case.
♦ Most casinos not subject to size restrictions would prefer
to locate away from downtowns where parking is readily
available, where they are less constrained by historic
buildings, and where design solutions are less challenging.
Access to regional transportation is of primary concern
in positioning a casino relative to its competitors. There
is increasing interest in casinos as destination resorts.
The Costner casino in Deadwood is an example, as is
the Empress in Joliet on a smaller scale. The latter's
dependency on day trippers from Chicago mitigates
against its status as a full-fledged destination resort.
Where Deadwood's stringent restrictions keeping
gambling on a small scale and strong historic
preservation regulations govern quality, downtown is
the optimal location in which to establish the critical
mass necessary for a destination attraction. Ownership
by a public entity of casino sites increases control over
product and yields additional revenues. In those cases
when public waterfronts have been used, the local
government usually keeps control by retaining
ownership and entering into an advantageous lease
49
agreement with the casino. Natchez's example of selling
a needed piece of precious waterfront land as part of an
assemblage for gambling is the exception ra
♦ In the case of riverboat gambling communities, where
market or regulatory restrictions have limited the city to one
boat, gambling has had less impact on overall land -use
patterns and development characteristics. The exceptions are
sites that compete openly with downtown for entertainment,
hospitality, and retail share, or where casino parking needs
result in the demolition of adjacent city fabric. In cities with
riverboat gambling, the primary land -use changes occur
at or immediately adjacent to the previously water -
dependent uses and as a short-term result of land
speculation. In Natchez, the Delta Queen and Mississippi
Queen (two touring boats) were displaced, a long-time
waterfront restaurant was relocated to make way for a
new restaurant, and a historic fort site previously
targeted for National Park Service acquisition was
developed for casino parking. In Peoria and Davenport,
waterfront plans were reinforced with little
displacement, except for parking demands. In
Shreveport, public parkland was usurped along with
some public parking and festival grounds in exchange
for a new city hall, the indirect benefit of a revitalized
warehouse district, and partial funding for a new
Discovery Museum. In cities where riverboats are not
limited by law or market conditions to a simple venue
per city, the impacts, assuming market demand, may be
greater.
♦ Land speculation has had a short-term impact on land uses
in cities with riverboat gambling and a long-term one in
communities with land -based casinos. In South Dakota and
Colorado, where every commercial building has the
potential to be a casino, owners of noncasino uses have
generally been forced out of town by increases in rents
or encouraged to sell to reap a real estate windfall. In
riverboat towns, land speculation around casinos has
been rampant early on. For the most part, experience
has shown that the anticipated commercial -sector
leveraging in riverboat towns has not occurred and that
existing vacancies or vacancies caused by land
speculation have not been filled. At that point, rent
levels have returned to near pregambling levels.
♦ Preventing surface parking immediately adjacent to the
casinos has proven difficult. The consequence has been that
historic structures have been endangered and pedestrian
continuity between casinos and downtowns in riverboat
locates has proven difficult to achieve. Davenport and
Shreveport yielded a portion of their waterfront parks
when casinos made adjacent parking for favored
patrons a linchpin of the overall deal. Vicksburg altered
a newly adopted zoning law for the same reason.
Shreveport also ceded a key site for its many festivals to
a parking structure and sold another city -owned
property for employee parking. Davenport has yielded
the sites bounding the connecting street to the
downtown to casino parking at the cost of several
historic buildings. Natchez's topography prevented
abutting parking but, rather than shuttle visitors to the
top of an adjacent bluff, the site of a proposed national
park half -way up the bluff was used. Joliet successfully
convinced Harrah's to build a 750-car parking garage
that reinforces the city grid, but Harrah's is now
fighting to use other historic structures for proposed
parking lot additions. Because of difficult terrain,
Deadwood has attempted to limit road and parking
expansions by providing trolley service to shuttle
visitors from off -site parking areas. Visitors tend to
cruise the centrally located parking areas and depart if a
space isn't available, although the more distant lots are
rarely full and those who park there typically use the
trolleys. In Black Hawk, Colorado, the city originally
constructed a 3,000-space lot with a shuttle -bus system.
But the lot, built on top of a hill and accessible only by
switchback roads, has never been full.
♦ In those cases in which planning and regulatory measures
have been proposed or adopted in an attempt to control the
location and quality of gambling -related development, they
have usually been only partially successful at best. Riverboat
gambling states give the most discretion to communities as
regards casino location. Some communities, such as
Natchez, encouraged but did not mandate a downtown
site from the beginning. Joliet, on the other hand,
mandated a downtown location for Harrah's. Similarly,
Bay St. Louis, Mississippi, controlled the location of its
casino, but opted for a relatively remote location out of
fear of negatively affecting the downtown area.
HISTORIC PRESERVATION
♦ The impacts of gambling on historic buildings have varied
widely from community to community. As a direct result of
gambling, most historic buildings in Deadwood have
been restored, preservationists speak positively of
gambling, and average citizens speak positively of
preservation. At the other end of the spectrum is
Evansville, Indiana, which lacks the legislative teeth by
way of historic zoning to prevent the demolition of
historic buildings, such as the riverfront warehouse
approved for demolition to accommodate temporary
casino parking. The experience of most gambling
communities has fallen somewhere in between those
two extremes. In Davenport, for example, its
preservation commission decisions were overturned by
the city council. Preservationists were cast as
obstructionists to progress. Black Hawk has historic
zoning in place and has done a good job of saving
historic buildings, but the zoning still permits the
development of inappropriately large casinos as infill
development, which has eroded the overall character of
the city's historic downtown.
♦ Regardless of the form of gambling permitted by state laws,
gambling provides new opportunities to preserve historic
buildings for virtually any community with the political will
to make it happen. In Deadwood, gambling allows
economic forces to leverage benefits to historic buildings
by making them functionally viable resources for the
gambling industry. Even in the riverboat communities,
local governments have taken advantage of their position
of strength in negotiating with gambling operators by
mandating preservation investments or by earmarking
gambling revenues for preservation.
50
♦ Mang gambling communities have an organized
dorentowu re.>italization or historic preser��ation entiti/,
and the gambling industry can hate aIt Affect on those
etforts in either positive or negative ways. While many
casinos give at least small donations to downtown
and preservation groups, in reality some see
themselves in competition with any other competing
attractions, including the local downtown. Evansville,
Indiana, has an agreement provision that the casino
provide a person whose sole function is to coordinate
downtown marketing and promotional activities with
the Center City Corporation and other key downtown
players. The consultant team in Vicksburg proposed
that impact fees be applicable not just to
infrastructure systems servicing casinos but to
repositioning the downtown as a competitive entity.
It further recommended that the state's landside
investment requirement be met within a designated
downtown investment zone. Criticized by casinos,
neither measure was adopted.
♦ There have been extremes relative to the quality of
gambling -related development. Many communities, such
as Vicksburg, Mississippi, chose to not exercise
design review for gambling vessels, even though they
had the legal ability to do so if desired. Natchez, on
the other hand, developed very prescriptive design
guidelines requiring that historic prototypes be used
in riverboat designs. Despite such guidelines,
however, the preservation commission waived some
key provisions after months of pressure from the
gambling developer and gambling advocates in the
community.
♦ Where design guidelines are in place before gambling
commences and where review and enforcement occurs, the
end product will be of greater benefit to the community. This
pertains to urban design and architectural guidelines
for private property within a historic or designated
downtown or waterfront district and/or on lands
owned by the city. The problem for architectural review
in gambling communities is the speed with which the
development process occurs and the polarized political
presence casinos can bring to bear. Members of local
architectural review boards in small cities are generally
not used to dealing with development of this
magnitude, in a compressed timetable, with politically
and/or professionally mobilized constituencies. Most
often, they abstain.
♦ Most casinos make no voluntary attempt to develop
facilities that architecturally fit with the indigenous local
character or respect the historic past. Virtually all casinos
choose some vivid theme on which to base their entire
operation, including the casino's architectural design. The
psychological basis for this approach is to separate the
gambling patron from reality, thereby softening the
reality of money being wagered and lost. In Tunica,
Mississippi, for example, going from one casino to
another is somewhat like visiting Disney World's
EPCOT Center. The Joliet's Empress casino is based
upon an Egyptian theme having absolutely no relevance
to Joliet's past or present.
♦ Within historic districts, casino developers seem to be
more sensitize to,card their context, but there are ofh'n still
problems. In Black Hawk, infill casinos are out of scale
with the historic downtown. In Natchez there was a
continuous battle to make the riverboat design
consistent with the city's adopted design guidelines. In
Vicksburg, Harrah's was pressured to conform to the
city's grid pattern and build -to lines, to remove cut-out
Victorian figures from fire stair windows, to alter the
bay system, to reconfigure hotel windows to make them
more proportionately consistent with historic building
patterns, and to withdraw their designs for a baroque
theme park at the foot of the primary street leading to
the casino. The casino, in return, refused to activate city
sidewalks, insisting that all pedestrian traffic pass
through the hotel on the way to the casino, insisted on
oversize brick to cut costs, would not limit the size of
their food court to leverage benefits to city eateries, and
finalized all design review in a closed session with the
mayor, corporation counsel, and consultant.
♦ Casinos are not interested in an elongated public review
process. Time is money. Agreements tend to occur swiftly or
not at all. The Vicksburg hotel went from concept
drawing to completed construction documents in
approximately 10 weeks. Most casino architectural and
design departments work 16 or 24 hours per day. The
Kansas Citv Port Authority process was a notable
exception. Developers met with Port Authority staff
every week from inception to completion of the project
to review progress and ensure conformance with
agreements. The City of Vicksburg's Architectural
Review Board chose not to exercise its prerogative of
further design review. While some preservationists have
misgivings over the ultimate design of the Vicksburg
Harrah's, by and large, the developers, after negotia-
tions, made an effort to fit into the context of downtown.
OTHER ISSUES
♦ Impacts on local services need to be planned for prior to
the introduction of gambling to ensure a smooth transition.
To accurately project increases in services, cities need to
estimate potential visitation correctly and look seriously at
comparables in other cities and counties. Cripple Creek,
Colorado, undertook such a study at the outset of its
planning process. It projected anticipated needs for
capital expenditures and operating costs in 10
categories for Cripple Creek and another 18 categories
for Teller County over a four-year start-up period.
Services ranged from police and fire to tax assessor to
emergency medical and vehicle maintenance.
Because of the fiscal benefits of gambling, the
experience of most communities has been a significant
increase, rather than a decrease, in public services.
However, the increase in municipal resources,
especially staffing, generally does not occur until after
the initial wave of casino development. Deadwood did
not even have a planning department prior to gambling.
Gambling allowed Deadwood not only to hire a
planning staff, but to triple its entire municipal staff.
Gambling in Natchez, which affected far fewer
properties, required the addition of a third person to the
planning office.
51
♦ Impacts on housing markets ill host cities are dependent
110071 the rtct re,�1011al gain in employment, the si_c Of the host
citil, the pre -gambling vacancy rate in rental liousinS, and
regional for -sale housing supplies. These impacts mriy
sharply from city to city. Where emplovment has
increased substantially because of gambling, housing
costs have increased dramatically. Strains on the
housing market can have predictable and unwelcome
effects. In Tunica, Mississippi, for instance, steep
increases in housing prices led to the creation of trailer
villages and forced a high percentage of casino workers
to commute from the Memphis market, creating strains
on local roads (Meyer -Arendt 1995, 31). In cities in
states like Mississippi, Louisiana, Iowa, and Illinois,
rental vacancy levels and housing starts have not been
as significant as anticipated because overall
employment has not risen regionally by more than a
small percentage of the number of direct casino jobs.
The relatively low wages for most casino jobs are not
likely to turn employees who are renters into home
buyers. Employees for upper -management positions
paying good salaries are, to a significant degree, people
with casino experience who are brought in from other
locales. Thev often live in the gambling community just
long enough to get the casino in operation. To the extent
that upper -management gambling jobs do result in
either nonresidents moving to the community for an
extended time or natives landing jobs, the impact on the
residential real estate market seems to be limited based
on the case study work done for this report. There has
been no conversion of upper floors in commercial
buildings to residential usage. In fact, in Deadwood and
Colorado, the upper stories of buildings were used for
entertainment and related commercial usage.
♦ In order to accommodate increased traffic loads from
gambling, most communities must expand key roads and/or
intersections to some degree. Such efforts are generally
successful in meeting traffic demand, and improvements are
usually paid for by the casinos either directly or indirectly.
Key traffic improvements include the addition of traffic
lights and/or turn lanes, as well as the addition of
driving lanes by either developing new lanes or by
converting on -street parking to driving lanes. Although
the traffic impacts of gambling are not always
accurately projected because of the underestimation of
the market sizes, improvements generally handle peak -
hour loads. Exceptions include Tunica, which
developed before Route 61 could be improved, and
Deadwood and Black Hawk, where residents express
displeasure with traffic congestion. Vicksburg's impact
fee exaction is an attempt to deal with infrastructure
deficiencies before they become problems. It is evident
that the amounts of traffic generated by gambling
facilities can change the character of communities not
equipped or used to dealing with it.
♦ In general, environmental regulatory statutes and
enforcement have minimized impacts on the natural
environment. While gambling has clearly had a noticeable
impact wl the built environment, impacts on the natural
environment have generally been controlled. While
gambling generates automobile traffic, which in turn
degrades air quality, air pollution has not been
articulated a-z a serious concern. Similarlv, -ambling
activity generates more solid waste, but that is a
byproduct of many other types of increased business
activity. Black Hawk, Colorado, found that a significant
component of their solid waste management flow
became glass beer bottles. The community then
instituted a recycling program that reduced the amount
of waste going into their landfill and cut down on the
number of trips being made to the landfill by waste
management trucks.
The most significant potential environmental impacts
relate to riverboat gambling and its impacts on
estuaries. Development approvals for riverboat
gambling require Army Corps of Engineers permitting,
which in turn involves environmental review through
the U.S. Fish and Wildlife Service. In Mississippi,
jurisdiction over "tidelands" was assigned to the office
of the Secretary of State, who limited casinos to
nonsand beach portions of the shorefront. This had
immediate impacts on the Gulf Coast and resulted in a
redefinition of waterfront to include tidal navigable
tributaries. The existence of tidal wetlands has been a
factor in determining where casino developments may
and may not locate along the Mississippi Gulf Coast.
One casino is presently on hold in Biloxi because of
wetlands concerns.
♦ Gambling has increased nonviolent crime in most
communities, although one can argue that it has not
increased crime on a per capita basis if tourists are included
in the count. Because of the investigative role of state
gambling commissions during casino licensing,
organized crime has not surfaced as a problem, and
casinos typically provide their own on -site security.
Some communities, such as Joliet, have actually had a
significant decrease in crime since gambling. Although
Joliet's 40 percent decrease appears to be attributed
mainly to a new neighborhood policing program, some
communities believe crime has either decreased or
relocated when derelict urban waterfronts are energized
with the physical improvements and activity of
gambling.
There is significant debate on the meaningfulness of
the casino argument concerning per capita crime
counts. Other forms of tourism are not included in per
capita counts, and a sizable percentage of casino
visitation is multiple visitation by local or regional
residents.
Certain social problems associated with gambling
have statistically increased. The Iowa program to
counsel gambling -addicted people has reportedly
grown from 40 participants to 300 since the introduction
of legalized gambling (G. Foster 1995).
♦ Opinions on whether gambling has enhanced or harmed
the quality of life in gambling communities varies from
community to community. The Aspen study of South
Dakota and Colorado towns provides the best statistical
evidence of sentiment before and after gambling's
introduction (Long, Clark, and Liston 1994). In
Deadwood, 68 percent of the town originally voted for
gambling. In 1994, only 34 percent of Deadwood
5?
residents would have advised other towns not to adopt
gambling, suggesting an approval rate of do percent —in
essence, the same percentage that approved gambling in
the first place. Only 10 percent actually recommended
that other towns adopt gambling; the balance were
neutral and noted that whether a community should
adopt gambling depended on whether it understood the
consequences and was adequately prepared. In
Colorado, the three towns of Black Hawk, Cripple
Creek, and Central City approved gambling by 54
percent in their statewide referenda. In 1994, 59 percent
recommended other towns not follow in their
footsteps —a drop in the approval rating to 41 percent.
Statistical comparisons were not available from the
other case study communities, but observations made
by Mel Foster, Jr., president of Mel Foster Co., Inc., a
real estate insurance and development company in
Davenport and a key early supporter of gambling, were
repeated in other conversations we had. Supportive of
Iowa's original limited -stakes betting and the
recreational/entertainment aspect of cruise gambling,
he has been disappointed in the economic leveraging
the casino has brought. He credits Davenport's
resurgence to parallel economic development initiatives
(while crediting the casino presence for the decision by
an independent hotelier to build the Radisson Quad
City Plaza, which supports both the Convention Center
and casino). He is concerned both by the changes in
Iowa legislation and the market's regionalization, which
turns over local moneys rather than leveraging outside
dollars into the local economy. He is dismayed by the
unlimited betting, 24-hour access to stationary vessels,
and the presence of check cashing and ATMs on the
boat. Whereas he saw the initial passage as locally
benign and an economic development tool, he sees it
increasingly as attempting to draw out every possible
dollar from the local citizenry with negative
consequences on local family and community structure.
Based on interviews with private citizens, this is an
increasingly pervasive view.
In the interviews for the case studies, no public
officials elected or appointed —expressed this feeling
that gambling had become something other than what
they thought it would be and was having effects on the
quality of life in their community that were not benign.
But some public officials elsewhere are echoing Mel
Foster, Jr.'s, concerns. Former State Representative
George Sacoo of Massachusetts, who introduced the law
creating that state's lottery nearly 25 years ago, is one.
He now speaks out against the $3 billion enterprise he
helped create. He told the Boston Globe (March 9, 1997)
that "We thought that we were voting for a once -a -week
sweepstakes ticket. Had I known [what it would
become, I would have fought it 'til I died." It is this
transformation of gambling from a seemingly
innocuous way to supplement public revenues and a
form of leisure recreation into an aggressive attempt to
pull in as much money as it can from people that is
making more people grow fearful. By increasingly
taking more money than people can reasonably afford
and by diverting those monies from local retail
establishments and forms of entertainment, gambling
can harm communities.
Gambling, which is typically approved by a narrow
majority margin in public referenda, has also taken on a
high -visibility symbolic presence. This is because, in
Colorado and South Dakota, it has usurped traditional
downtown functions; or because, in riverfront
communities, city planners have assumed, with
decidedly mixed results, that it could leverage spin-off
benefits to moribund downtowns and have placed
casinos front and center on public waterfronts wherever
possible; or because, in state lotteries, like the one in
Massachusetts, Keno parlors have displaced up to 50
percent of convenience store square footage in both
commercial and residential areas. Thus, while gambling
advocates can say that you don't have to gamble unless
,you want to, gambling increasingly is literally in the
public eve. It is increasingly interwoven as part of the
fabric of contemporary life, whether you are eating
dinner in a New York restaurant, buying milk at the
corner store, or headed downtown on a Saturday night.
It is this high visibility that in no small way affects the
quality of everyday life for those opposed to gambling,
many of whom feel that gambling inculcates an alien set
of values that neither they nor their children can escape,
and influences other citizens who are certainly drawn by
the pervasiveness of gambling's lure of "easy' money.
♦ Opinions on gambling depend primarily on the
perspective of those asked. Public officials generally
supported gambling in the first instance. They have a
vested interest in its success. Economic development
directors and city planners suddenly have money to
support long -delayed capital projects, and elected
officials can point to direct jobs and their use of
revenues to support community projects and/or lower
taxes. Those who initially opposed gambling on moral
or social grounds continue to do so. Businesses that sell
goods and services to the casinos are happy; those that
sell goods that are dependent on available discretionary
income and are experiencing a reduction in sales are
not.
One group that should carefully consider whether
gambling is an effective strategy to boost a community's
economic development and improve quality of life is
politicians. A surprising number of mayors have lost
reelection in their first campaigns during or after the
advent of gambling, including those in Natchez and
Vicksburg, Mississippi, Shreveport, Louisiana, and
Lawrenceburg, Indiana.
♦ For those who are uncertain about whether gambling
might be a good thing for their community, a key determinant
that can sway their opinion is how public -sector revenues
from gambling are spent. For example, the earmarking of
Deadwood's revenues for historic preservation has
most preservationists there supportive of gambling. The
expenditure of funds in upgrading infrastructure in
neighborhoods and the downtowns of Deadwood and
Joliet builds political constituencies, as does the
distribution of funds in Davenport to nonprofit
organizations from the Riverboat 'Development
Authority. In Vicksburg, gambling money has been
used to enhance low-income neighborhoods with the
paving of streets and sewer system improvements.
53
A residual effect for connnunities that deal Xith tht',trrmhling
issue, a,hether it is ultimately adopted or riot, is the
estahlisfunent of an organizational structure to deal znith
other community issues in the future. The Madison,
Indiana, story demonstrates this finding. Shortly after
the gambling issue was laid to rest in Madison, a
proposal was made to locate a prison near the
community. Organized opposition was quickly
mobilized to successfully defeat that proposal, using
many of the same arguments employed against
gambling. That achievement is credited to the
community activist structure already in place because of
gambling. In Vicksburg, the pro -gambling organization
HELP frequently resurfaces in support of other
economic development initiatives, such as the
convention center, which will be funded with gambling
revenues. Similarly, the gambling issue has provided a
"wake-up call" for preservationists in many
communities to take stock in their regulatory measures
to increase protection of their community's historic and
architectural resources.
THE BOTTOM LINE
Does gambling benefit historic communities and, if
so, under what set of conditions? William Eadington,
who has studied the issue for several years, answers
simply, "It depends" (Eadington 1995, 51). What it
depends on, he argues, is, first, the volume of business
the casinos generate from outside the region where they
are located. When this happens, job creation and
economic stimulation occur. When it doesn't, casino
gains are offset by jobs lost and revenue shortfalls
elsewhere in the region. Secondly, he suggests that
citizens ask themselves, if there were no ancillary
economic benefits to be derived from casinos, would
casinos still be acceptable to the broad majority of the
citizenry as a legitimate consumer activity? If not, and
given the risk of casino proliferation and the dissipation
of economic benefits, the community should say No to
gambling because they may someday have to live with
the perceived and real problems associated with casinos
without the benefits.
Another criterion for local consideration, even in a
locally based casino market, is whether the citizens are
willing to substitute tax revenues derived from
gambling (and the municipal services and capital
investments they can fund) in exchange for negative
impacts on selected private -sector business and tourism
markets and increased social costs. In an era when taxes
are difficult to raise, is that a trade local citizens are
willing to make?
Our case study towns were in fact biased toward
those that drew their gamblers heavily from outside
their region —Deadwood, Black Hawk, and Joliet. Only
Natchez and Davenport represented predominantly
local markets. A significantly higher percentage of
smaller communities, however, including most of those
in Illinois, Iowa, Missouri, Indiana, and Louisiana are
local market driven. In Mississippi, both Tunica, which
drains heavily from Tennessee, and the Gulf Coast,
which draws from Florida and Alabama and to some
extent from Louisiana, work as export models. Of our
case studies, only Deadwood serves as a destination
resort with significant overnight visitation.
This studv, «.hich relies heavily on interviews with
citizens, officials, planners, business people, and
preservationists in the case study communities, neither
proves nor disproves EadingtonIs economic predictions,
but a review of available statistical evidence suggests
that thev are true. Except in Deadwood and in Colorado
communities, regional unemployment was only
marginally affected. In Natchez and Davenport, retail
sales in several sectors were down. Heritage tourism
was helped in Deadwood but hurt in Natchez (as is the
case in most other small historic cities based on the
research for this report). Despite active downtown
streetscape programs financed by or being run parallel
to gambling in all five cities, retail sales in these historic
districts have failed to increase except in isolated cases.
In general, these downtowns have more vacancies now
than they did prior to gambling. The exceptions to this,
of course, are Deadwood and Black Hawk, where all
storefronts are filled with casinos and retail uses have
relocated out-of-town.
There do, however, seem to be two strategies cities
can embrace to leverage economic benefits from casinos.
The first is to deny them unlimited entertainment, food
and drink, and hotel room capacity, instead returning
these back into the community. Only New Orleans, to
date, has adopted this strategy and has yet to discover if
it will work (clearly, casinos resist it). In Vicksburg, the
first boat in under the enabling legislation had no
support facilities, and the arrival of gambling spurred
business in surrounding restaurants, hotels, and
entertainment facilities. Today, as a result of a change in
the enabling legislation, three additional boats offer a
total entertainment experience with food and lodging,
which has closed entertainment venues and several
restaurants in Vicksburg's downtown. The second
strategy is to invest a portion of the revenues from
gambling into other economic development
initiatives —to treat gambling as a tax mechanism
intended to facilitate parallel development. Davenport
offers evidence of the value of the second approach.
Davenport's. economy was on the rebound prior to the
initiation of riverboat gambling. Initiatives were taken
to expand museums, build riverfront recreational
centers, rebuild the riverfront minor league baseball
stadium, construct a new office building, and enlarge
and modernize the convention center. The casino
restored the historic Blackhawk Hotel, and its presence
tilted the scales in favor of an independently financed
new Marriott hotel. It supplemented rather than drove
the city's revitalization efforts.
To build or not to build a casino? This study tends to
follow Eadington's admonitions: be sure you have a
destination market and be sure you can live with it even
if it doesn't leverage economic benefits. Casinos come
with hidden costs attached; be sure you understand
them. Create a regulatory environment at the state and
local levels that supports local objectives, including
historic preservation. Be sure you have knowledgeable
help on your side of the table during any city/casino
negotiations. Proceed at your own pace, not the
casino's, and, most importantly, be willing to enforce
your regulations.
5.1
VELLS J787ONFE COUNTV BOARD OF PLANNING
67H FLOOR. 416AARY QVILDING - $10 N, 21MM
P.p, 90X 1178 - 6+6LINGt, MONTANA $21Q7
PHONG: 14061657.9446
TO.
COMPANY:
DEPT:
FAX#: 7- 7
# OF PAGES INCLUDING COVER PAGE: DATE:
FROM: rw� •• .��Se..
COMPANY: Yellowstone Count,v Board Qf Planning
,ADDRESS: 510 North Broad�aray� � , 4th door. Billings. MT 591 C1
PHONE #: (406) 657-8246
FAX#; (406) 657-8252
MESSAGE: AS- pg-r VOW./ /� urS+. C' ui .?o,�;,.� c0i Q
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SERVING BILLINGS, BROADVIEW AND YELLOWSTONE COUNTY
TifLM AND
DESCRIPTION OF
MUSTRIES
SR - SPECIAL REVIEW
A ALLOWED
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PLAcEs (SEE B MCC SEC'mN
27-612)
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With the sale of beer and
wine only for on -premise
covsumpdon, witbm
gaming
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wine only for on -premise
ctrosjmpdon, with
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alcoholic beverages for
on -premise ronsumpdon,
with gamins
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* Establ�rDeots with drive-in
Service shall comply with
BMCC Section 27- 612.
59 MJSCE[.t. NWUS RETAIL
(S'im PL.Y CARRYoLrr),
(EXCEM BEc ow):
A*
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598 Fuel dealers
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* Fimworks stands shag
oonpiy with BMCC Section,
27-614.
** Sexually Oriented busbws,
as classified and defined in
BMCC Section 27-611.
DIVLSION H - FINANCE.
INSURANCE, AND REAL
ESTATE (See 11MCC Section
27-612).
60 DEPosrrmy
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42
Sec. 27-612. Supplemental Commercial Development Standards.
Certain commercial uses shall be specifically restricted as follows.
A. Bars, Taverns and Lounges. Any person desiring to use any premises or to erect,
construct or alter any new or existing building or structure for use as a bar, tavern, lounge
or any commercial establishment which serves alcoholic beverages as a primary or
accessory use shall first make application for Special Review as regulated in BMCC
Sections 27-1503 and 27-1509. No building, structure or premises shall be used for retail
p1coholic beverage sales unless:
1. A distance of six hundred (600) feet between property lines, measured In a
straight line, is maintained from any school, playground, public park, public
recreation area, churches or other public buildings.
Exceptions to the terms of above subsection (1) may be granted by the Governing
Body during the Special Review process when it is found that the strict application of the
provisions of this section may result in undue hardship, and that the granting of such
exception shall be in the pubic interest.
Exemptions to above subsection (A) are located in BMCC Section 27-613.
B. Drive-in Service. Any persons desiring to use any premises or to erect, construct
or alter any new or existing building or structure for a drive-in service as defined in BMCC
Section 27-201 shall satisfy the following criteria, based upon the a4ioining zoning
district(s).
1. When a drive-in establishment adjoins (including any location across an alley)
residentially zoned property, the use shall obtain approval of a Special Review as
outlined in BMCC Sections 27-1503 and 27-1509.
2. All other drive-in establishments, including those which are located across a
public street from residentially -zoned property, shall meet the following criteria:
a. A traffic accessibility study shall be completed and approved by the City
Engineer or County Public Works Director; and
b. The use shall comply with all other sections of the this code.
C. Gambling Operation. Any gambling operation as defined in Article 7-1100 of the
Billings, Montana City Code, other than for nonprofit organizations, shall be allowed only
in those zones specified in BMCC Section 27-306, and shall meet all of the rules,
regulations and requirements of this resolution!ordinance pertaining to bars, taverns and
lounges, except that this provision shall not apply to bingo.
82
i
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}
i
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t
(Including all revisions and amdments through 7 August 1995; codified in June
'A
18.04.340. 18.04.420
temporarily accommodate two or more camping
parties, including cabins, tents, recreational vehicles
or other camping outfits. (Ord. 1332 § 1 (Exh. A)
(part), 1991)
18.04.340 Carport.
"Carport" means a structure, open on at least two
sides, consisting of a roof and either walls or col-
umns for the purpose of housing automotive vehi-
cles and other chattels. The structure shall be con-
sidered as an accessory building when detached
from the principal building and as a part of the
principal building when attached to the principal
building along one or more sides of the carport or
principal building. (Ord. 1332 § 1 (Exh. A) (part),
1991)
18.04.350 Casino.
A. "Casino" means an establishment whose
primary use or activity is gambling, either in the
form of gambling machines (video poker, keno,
etc.), card games, or other licensed gambling activi-
ty. A casino will normally have beverage and res-
taurant facilities as ancillary uses. In all instances,
an establishment will be considered a casino for the
purpose of these regulations if any of the following
characteristics apply:
1. The establishment is referenced as a casino
by signage or by name;
2. More than one card table is on the premises;
3. Fifteen or more gambling machines are on
the premises.
B. An applicant for a casino establishment must
obtain a Montana state license to sell alcoholic
beverages for consumption on the premises. (Ord.
1439 § 1, 1997: Ord. 1332 § 1 (Exh. A) (part),
1991)
18.04.360 Cemetery.
"Cemetery" means land used for the burial of the
dead and dedicated for cemetery purposes, including
crematories, mausoleums and mortuaries when oper-
ated in conjunction with and within the boundary of
such cemetery. (Ord. 1332 § 1 (Exh. A) (part),
1991)
18.04370 Child.
"Child" means a person under twelve years of
age. (Ord. 1332 § 1 (Exh. A) (part), 1991)
18.04380 Church.
"Church" means a building, together with its
accessory buildings and uses, where persons regular-
ly assemble for religious worship, and which build-
ing, together with its accessory buildings and uses,
is maintained and controlled by a religious body
organized to sustain public worship. (Ord. 1332 §
I (Exh. A) (part), 1991)
18.04390 City.
"City" means the city of Bozeman. (Ord. 1332 §
1 (Exh. A) (part), 1991)
18.04.400 Club, private (nonprofit).
"Private (nonprofit) club" means a nonprofit
association of persons who are bona fide members
paying annual dues which owns, hires or leases a
building, or a portion thereof, the use of such pre-
mises being restricted to members and their guests.
(Ord. 1332 § 1 (Exh. A) (part), 1991)
18.04.410 Commission, city.
"City commission" means the governing body of
the city and, when involving issues of this title, the
zoning jurisdiction of the city. (Ord. 1332 § 1 (Exh.
A) (part), 1991)
18.04.420 Community residential facility.
"Community residential facility" means a single
residential structure having common kitchen facili-
ties occupied by eight or fewer persons having
developmental disability and living together for the
purpose of residential training, observation and/or
common support, in which are is provided on a
twenty -four-hour per day basis. The limitation of
eight or fewer persons does not include the operator
of a residential facility, members of the operator's
family or persons employed as staff, except that the
total number of all persons living at the residential
facility shall not exceed ten. (Ord. 1332 § l (Exh.
A) (part), 1991)
305 tao 4.98)
I O.-m-T 1 V-10.-YJ.V`tV
prevent sewage backup into permitted structures;
and
B. All toilet stools, sinks, urinals and drains
must be located so the lowest point of possible
water entry is at least two feet above the elevation
of the one hundred -year flood. (Ord. 1334 § 2 (Exh.
A § 30C), 1991)
18.44.410 Violation notice.
The floodplain administrator shall bring any
violation of this chapter to the attention of the local
governing body; its legal council; and the Montana
Department of Natural Resources and Conservation.
(Ord. 1334 § 2 (Exh. A § 19), 1991)
18.44.420 Violation —Penalty.
Violation of the provisions of this chapter or
failure to comply with any of the requirements,
including permit approval prior to development of
floodprone lands and conditions and safeguards
established shall constitute a misdemeanor. Any
person who violates this chapter or fails to comply
with any of its requirements shall, upon conviction,
be fined not more than one hundred dollars or im-
prisoned in jail for not more than ten days or both.
Each day's continuance of a violation shall be
deemed a separate and distinct offense. (Ord. 1334
§ 2 (Exh. A § 21), 1991)
Chapter 18.45
CASINO OVERLAY DISTRICT
Sections:
18.45.010
Intent.
18.45.020
Application for zoning
designation.
18.45.030
Permitted uses.
18.45.040
Restrictions.
18.45.050
Lot area and width.
18.45.060
Lot coverage.
18.45.070
Yards.
18.45.080
Building height.
373
18.45.010 Intent.
The intent of the casino overlay district is to
provide suitable locations for casinos (as defined in
Section 18.04.350) based on review for impacts to
neighboring uses and to minimize adverse effects on
the community in the best interests of the public
health, safety, and welfare. (Ord. 1439 § 5 (part),
1997)
18.45.020 Application for zoning
designation.
Any person wishing to establish a casino must
make application as per Chapter 18.55, Text
Amendments and Rezoning Changes, for a casino
overlay district (Ord. 1439 § 5 (part), 1997)
18.45.030 Permitted uses.
Permitted uses in the casino overlay district are
as follows:
A. Principal Uses.
All principal uses permitted in the M-1 dis-
trict if the underlying zoning is M-1
All principal uses permitted in the M-2 dis-
trict if the underlying zoning is M-2
B. Conditional Uses.
Casinos
All conditional uses permitted in the M-1
district if the underlying zoning is M-1
All conditional uses permitted in the M-2
district if the underlying zoning is M-2
C. Accessory Uses.
All accessory uses permitted in the M-1
district if the underlying zoning is M-1
All accessory uses permitted in the M-2
district if the underlying zoning is M-2
(Ord. 1439 § 5 (part), 1997)
18.45.040 Restrictions.
A. Casino overlay districts shall be permissible
zoning only in areas previously zoned M-1, light
manufacturing district, or M-2, manufacturing and
industrial district.
(Boummn 4.98)
18.45.050-18.50.010
B. Casino overlay districts shall not be located
within an entryway overlay district except for the I-
90 entryway overlay corridor. Casino overlay dis-
tricts shall not be located in areas where the I-90
entryway corridor overlaps other entryway overlay
districts.
C. Casino overlay district lots shall not be locat-
ed within six hundred feet, in any direction, of lots
used for schools, churches, residences, public parks,
or other casinos.
D. Sale for on -premises consumption of beer,
wine and liquor is permissible only for casino and
restaurant establishments. (Ord. 1439 § 5 (part),
1997)
18.45.050 Lot area and width.
There shall be no minimum lot area; however, no
lot width shall be less than one hundred feet and the
lot area shall be sufficient to provide all required
yard areas and off-street parking. (Ord. 1439 § 5
(part), 1997)
18.45.060 Lot coverage.
The entire lot, exclusive of required yards and
parking, may be occupied by the principal and ac-
cessory buildings. (Ord. 1439 § 5 (part), 1997)
18.45.070 Yards.
Every lot within a casino overlay district shall
have the following minimum yards:
Front yard 25 feet
Rear yard 10 feet
Side yards 8 feet each side.
(NOTE: All yards shall be subject to the provisions
of Section 18.43.060 and Section 18.50.060(D)
when applicable.) (Ord. 1439 § 5 (part), 1997)
18.45.080 Building height -
Maximum building height in a casino overlay
district shall be thirty-eight feet for buildings with
roof pitches of 3:12 or greater and thirty-two feet
for buildings with flat roofs or with roof pitches of
less than 3:12. (Ord. 1439 § 5 (part), 1997)
(Bmz== 4-98) 374
Chapter 18.50
GENERAL BUILDING AND
DEVELOPMENT STANDARDS
Sections:
18.50.010
Purpose.
1850.020
Standards for specific uses.
1850.030
Use of lands, buildings and
structures.
18.50.035
Miscellaneous requirements.
18.50.040
Dwelling unit restrictions.
18.50.050
Accessory buildings, uses and
equipment.
1850.060
Yard and height
encroachments,
limitations and exceptions.
18.50.070
Fences, walls and hedges.
1850.080
Street vision triangle.
18-50.100
Landscaping.
1850.110
Property frontage and drive
access standards.
18.50.120
Parking requirements.
18.50.130
Off-street loading berth
requirements.
18.50.140
Special temporary use permit
18.50.150
Home occupations.
18.50.160
Nonconforming uses and
structures.
18.50.180
Mobile homes on individual
lots.
18.50.010 Purpose.
A. The purpose of this chapter is to establish
general development standards. These standards are
intended and designed to assure compatibility of
uses; to prevent urban blight, deterioration and de-
cay; and to enhance the peace, health, safety and
general welfare of the residents living within the
zoning jurisdiction of the city.
B. These standards are also intended to be used
as guidelines for evaluating and assessing the quality
and design of proposed planned unit developments.
The particulars of any planned unit development
will be evaluated against their respective standards
contained in this chapter. It is expected that the
Missoula City Zoning Ordinance r� 14V
Reordered and Reprinted: June 1999
CHAPTER 19.22
CLB COMMERCIAL ON -PREMISES LIQUORIBEER ESTABLISHMENT DISTRICT
Sections:
19.22.010 Created. 19.22.030 Restrictions.
19.22.020 Application for zoning 19,22.040 Standards.
designation. 19.22.050 Determination authority.
19.22.010 Created. A now zoning district to be known as CLB is created.
19.22.020 Application for zoning designation. Any person wishing to establish an
on -premises liquor and wine and beer facility must apply to the city council for a CLB zoning
designation.
19,22.030 Restrictions.
A. CLB zoning shall be permissible zoning only in areas previously zoned C-I, C, [C 11.•
OPN #91-07], D, I -I, I -II, P-II, CRD or SC.__
B. Any on -premises liquor and/or beer establishment placed under the CLB commercial
district shall comply with all of the restrictions of its previous zone.
C. Consumption of beer and wine and liquor is permissible on premises zoned CLB.
19.22.040 Standards. A CLB zoning designation shall be made only upon a determination by
the city council that:
A. The zoning is justified by public convenience and necessity; and
B. That the welfare of the people residing in the vicinity of the property for which the
zoning designation is requested will not be adversely or seriously affected.
19.22.050 Determination authority. The State Department of Revenue's consideration and
determination of the above criteria as affecting the desirability of issuing a liquor license shall
not be binding on the city council in determining the appropriateness of the CLB zoning
designation.
Missoula City Zoning Ordinance ru�V.c < 77
Reordered and Reprinted: June 1999
CHAPTER 19.72
CHANGING DISTRICT BOUNDARIES
tl
Sections:
19.72.010 Generally.
19.72.020 Establishment of land use fees
19.72.050 Applying city zones to recently annexed areas where county zones
were in place
19.72.010 Gener2lly.
A. Changes in the boundaries of any district or part thereof may be made either by the
city council on its own initiative or by a petition requesting such change presented to the
city council, duly signed by the owners of thirty-five percent or more, either of the area of
the lots included within the change, or of the lots immediately adjacent in the rear thereof,
extending one hundred fifty feet therefrom. or of those lots adjacent on either side thereof
within the same block, or of the lots directly opposite thereto, extending one hundred fifty
feet from the street frontage of the opposite lots.
B. If the boundary change is requested by petition or initiated by the city council, the
same shall then be referred to the zoning commission which shall make a careful
investigation and hold a public gearing thereon before submitting its final report to the
city council. In either case, the city council shag; cause notice to be published twice in the
official newspaper of the city of the time and place set for the hearing upon the boundary
changes.
The first publication of such notice shall be made not less than fifteen days before the
date of such. hearing. At such hearing the city council shall hear all persons and all
objections and recommendations relative to the proposed change. Action shall be taken:
upon such ordinance by the city council at the next regularly scheduled meeting and the
action shall be final and conclusive as to all matters and things involved in the boundary
clean e- vided that, in case of a protest against such change signed by the owners of
�,. t (20) ent or more, either of the area of the lots included in such proposed
---''"� chang , o (the area of.- OPN #88-011 those immediately adjacent in the rear thereof
extending one hundred fifty (150) feet therefrom, or of (the area of- OPN #88-011 those
directly opposite thereof extending one hundred fifty (150) feet from the street frontage of
such ife n amendment shall not become effective except by the favorable
-.--emote t 4y"e-fourths of U members of the City Council.
C. Such protest petitions must be filed with the city clerk's office by twelve o'clock noon
of the Friday preceding the public hearing before the city council.
D_ When such proposed amendment has been rejected by the city council, neither it nor
one involving only the same property shall be offered for adoption within one year after
such rejection.
19.72.020 Establishment of land use fees. A processing fee is required for processing permits
and variances, and shall cover the cost of providing public notice, processing permits and
variances, and performing sufficient field inspection to ensure compliance with this Title.
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ORDINANCE 99-8
AN EMERGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WHITEFISH,
MONTANA, ESTABLISHING THE REQUIREMENT OF A CONDITIONAL USE PERMIT
PRIOR TO THE OPENING, OPERATION OR LICENSING OF ANY NEW
ESTABLISHMENTS THAT SELL ON -PREMISE ALCOHOLIC BEVERAGES, BEER,
AND/OR WINE, OR WHICH PERMIT OR OPERATE GAMBLING OR GAMING, AND
DIRECTING THE STUDY OF NEW PROPOSED ORDINANCES TO REGULATE SUCH
ESTABLISHMENTS.
WHEREAS, establishments that sell on -premise alcoholic beverages, beer and/or
wine or which permit or operate gambling or gaming are currently permitted within Certain
zoning districts of the City of Whitefish and its extraterritorial jurisdiction; and
WHEREAS, the location of establishments selling on -premise alcoholic beverages,
beer and/or wine or which permit or operate gambling or gaming are subject to some
regulation by State law, with respect to the distance that such establishments may be
located from a church, synagogue, or other place of worship or a school; and
WHEREAS, State law (Section 16-3-306, MCA) restrictions on the proximity of such
establishments to churches, synagogues, or other places of worship, or schools, are
applied in a somewhat arbitrary fashion, often allowing such establishments to operate
within a short distance of a church, synagogue, or other place of worship or a school; and
WHEREAS, State law permits cities to supplant the restrictions contained in Section
16-3-306, MCA, and thereby impose greater restrictions than contained in State law; and
WHEREAS, Section 16-3-309, MCA, permits a city to enact an ordinance defining
certain areas where alcoholic beverages may or may not be sold; and -
WHEREAS, Section 23-5-171, MCA, permits a city to enact an ordinance defining
certain areas where gambling is prohibited; and
WHEREAS, the establishments that sell on -premise alcoholic beverages, beer
and/or wine or which permit or operate gambling or gaming can have a blighting effect on
a neighborhood, and can through such blighting effect create a public nuisance; and
WHEREAS, establishments that sell alcoholic beverages, beer and/or wine or which
permit or operate gambling or gaming can have a blighting effect on churches,
synagogues, or other places of worship, or schools, and can through such blighting effect
create a public nuisance; and
WHEREAS, State law permits a city to adopt an emergency ordinance for the
immediate preservation of the public peace, property, health, or safety, which emergency
ordinance may take c:ffc-?t:t illMl di:itOly: n1ld
Post-tt'" s
brand fax trAnmittal memo 7871 #of
WHEREAS, State law allows the City to adopt an interim zoning ordinance to protect
public safety, health, and welfare without following the procedures otherwise required
preliminary to the adoption of zoning ordinances, and such interim zoning ordinances may
prohibit uses that may be in conflict with a contemplated zoning proposal which the
legislative body is considering or intends to study within a reasonable time; and
WHEREAS, the City Council of the City of Whitefish has determined that the
licensing, opening, or operation of any new establishments that sell on -premise alcoholic
beverages, beer and/or wine or which permit oroperate gambling or gaming within the City
of Whitefish and its extraterritorial jurisdiction, would, without the requirement of a
Conditional Use Permit, be immediately detrimental to, harmful to, and a threat to the
public peace, property, health, safety, and welfare, and would have a blighting effect on
the City and its inhabitants, until such time as the City has had an opportunity to further
study such issue and an opportunity to adopt appropriate ordinances, zoning or otherwise,
to appropriately deal with any such new establishments.
NOW, THEREFORE, BE ITORDAINED BYTHE CITY COUNCIL OF THE CITY OF
WHITEFISH, MONTANA, AS FOLLOWS:
Section 1: That all of the recitals set forth above are hereby adopted as Findings of
Fact.
Section 22: That the City of Whitefish hereby directs the Flathead Regional
Development Office to investigate and study the effect of the opening of new
establishments that sell on -premise alcoholic beverages, beer and/or wine orwhich permit
or operate gambling or gaming and to make recommendations concerning new zoning
ordinances that could be adopted to better regulate and/or deal with such establishments,
to limit or prohibit any negative effect, or blight, upon the City (including its extraterritorial
zoning jurisdiction) and its inhabitants, or the neighborhoods located therein.
Section 3: That the City of Whitefish directs the Flathead Regional Development
Office to present such investigation and recommendations to the Whitefish City -County
Planning Board, and that such Planning Board provide its recommendation to the City
Council, so thatthe City Council may consider such issue within four (4) months of the date
of the enactment of this Ordinance.
action 4: Until such new ordinances, zoning or otherwise, are adopted and in
effect to deal with the issues described above, any new establishments attempting to sell
on -premise alcoholic beverages, beer and/or wine or attempting to permit or operate
gambling orgaming are hereby prohibited from being opened, operated, or licensed, within
the City of Whitefish and its extraterritorial jurisdiction until they have applied for and
obtained a Conditional Use Permit.
t-
& ti n 5: Any individual, entity, or establishment that violates the terms of the
restrictions set forth above shall be deemed to be creating a public nuisance, and shall be
subject to prosecution in the same manner as one who violates City ordinances, and shall
further be subject to such civil action to restrain or abate, as the City deems appropriate.
Such ability of the City to prosecute and/or enjoin or abate is in addition to any other
remedies available to the City, at law or in equity.
Section 6: The restrictions contained in this Ordinance are not intended to, and do
not affect or prohibit in any way the opening, operation or licensing of any new
establishment under a license issued pursuant to Section 16-4-420 through 164-423,
MCA, also known as "cabaret" licenses.
ectiont 7: This Ordinance is made expressly retroactive and shall apply to all
applications for building permits, zoning variances, conditional use permits, zoning
changes, and all other applications for building and land use permits, development activity,
land use activity, land use changes, business licensing, and any other applications for
approval of any type or nature, which had been received the City of Whitefish and not
granted as of the effective date of this Ordinance.
Section 8: Each term, condition, and provision of this Ordinance shall be viewed as
separate and distinct, and in the event that any such term, condition, or provision shall be
held by a court of competent jurisdiction to be invalid, the remaining provisions shall
continue in full force and effect.
. Section 9: This Ordinance shall take effect immediately upon its passage by the
City Council of the City of Whitefish, Montana, and approval by the Mayor thereof.
PASSED AND ADOPTED by the City Council of the City of Whitefish, Montana, on
the' iWay of S�AhL , 1999.
ATTEST:
City C.I&k
Mayor, or Vice -Mayor
3
TOTAL F.03
23-5-171. Authority of local governments to regulate gambling. (1) A local government may not
license or regulate a form of gambling authorized by parts 1 through 8 of this chapter or assess or charge
any fees or taxes unless specifically authorized by statute.
(2) An incorporated city or town may enact an ordinance or resolution zoning certain areas within its
incorporated limits in which gambling is prohibited.
(3) A county may enact a resolution zoning certain areas in the county, not within an incorporated city
or town, in which gambling is prohibited.
(4) A county or incorporated city or town may not restrict the number of licenses that the department
may issue. -
History: En. Sec. 4, Ch. 642, L. 1989; amd. Sec. 13, Ch. 398, L. 1993.
Part 6
Video Gaming Machine Control Law
Chapter Compiler's Comments:
Machine Manufacturer Bill Acceptors Allowed -- Coordination: Sections 1 and 2, Ch. 344, L. 1989,
amended 23-5-606 and 23-5-609 to allow machine manufacturer bill acceptors on video draw poker and
keno machines. Section 4, Ch. 344, L. 1989, was a coordination instruction that required the Department
of Justice by rule to allow machine manufacturer bill acceptors if the provisions of S.B. No. 431 repealing
23-5-606 and 23-5-609 were passed and approved. Senate Bill No. 431 was passed and approved May
5, 1989.
Cross References:
Slot machines, 23-5-112 (definition), 23-5-153.
Administrative Rules:
Title 23, chapter 16, ARM Department of Justice rules regulating gambling.
Title 23, chapter 16, subchapter 18, ARM Video gambling machines — general.
Title 23, chapter 16, subchapter 19, ARM Video gambling machine specifications.
ARM 23.16.2001 Manufacture of gambling devices not legal in Montana.
Part Case Notes:
DECISION UNDER FORMER LAW
Used Poker Machine Licensing -- Temporary Restraining Order and Preliminary Injunction Proper. It
was reasonable for the District Court to issue a temporary restraining order and a preliminary injunction
when the court found that plaintiffs risked losing their used, unmodified video poker machines unless they
could buy modification kits or new machines within 3 days and kits were not available. Under these
circumstances, plaintiffs would suffer irreparable injury if they lost use of the used machines or had to buy
more expensive new machines. As none of the criteria of the court orders changed or contravened the
Video Draw Poker Machine Control Law of 1985, the Department of Revenue was not prevented under
27-19-103 from executing its duties. Further, it was also proper for the court to structure terms of the final
order to protect licensees and limit the time for them to come into compliance with the new law. Mont.
Tavern Ass'n v. St., 224 M 258, 729 P2d 1310, 43 St. Rep. 2180 (1986).
Law Review Articles:
Video Gambling Devices, Rychlak, 37 UCLA L. Rev. 555 (1990).
23-5-601. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 1, Ch. 720, L. 1985; amd. Sec. 36, Ch. 83, L. 1989.
23-5-602. Definitions. As used in this part, the following definitions apply:
(1) "Associated equipment" means all proprietary devices, machines, or parts used in the
manufacture or maintenance of a video gambling machine, including but not limited to integrated circuit
chips, printed wired assembly, printed wired boards, printing mechanisms, video display monitors,
metering devices, and cabinetry.
(2) "Bingo machine" means an electronic video gambling machine that, upon insertion of cash, is
available to play bingo as defined by rules of the department. The machine utilizes a video display and
microprocessors in which, by the skill of the player, by chance, or both, the player may receive free
games or credits that may be redeemed for cash. The term does not include a slot machine or a machine
that directly dispenses coins, cash, tokens, or anything else of value.
(3) "Draw poker machine" means an electronic video gambling machine that, upon insertion of cash,
is available to play or simulate the play of the game of draw poker as defined by rules of the department.
The machine utilizes a video display and microprocessors in which, by the skill of the player, by chance,
or both, the player may receive free games or credits that may be redeemed for cash. The term does not
include a slot machine or a machine that directly dispenses coins, cash, tokens, or anything else of value.
(4) "Gross income" means money put into a video gambling machine minus credits paid out in cash.
(5) "Keno machine" means an electronic video gambling machine that, upon insertion of cash, is
available to play keno as defined by rules of the department. The machine utilizes a video display and
microprocessors in which, by the skill of the player, by chance, or both, the player may receive free
games or credits that may be redeemed for cash. The term does not include a slot machine or a machine
that directly dispenses coins, cash, tokens, or anything else of value.
History: En. Sec. 2, Ch. 720, L. 1985; amd. Sec. 1, Ch. 154, L. 1987; amd. Sec. 1, Ch. 317, L. 1987; amd. Sec.
1 Ch. 603, L. 1987; amd. Sec. 44, Ch. 642, L. 1989; amd. Sec. 54, Ch. 647, L. 1991; amd. Sec. 17, Ch. 626, L.
1993.
Compiler's Comments:
1993 Amendment: Chapter 626 deleted definition of video gambling machine
manufacturer -distributor that read: ""Video gambling machine manufacturer -distributor" means a person
who assembles, produces, makes, or supplies video gambling machines or associated equipment for
sale, use, or distribution in the state."
1991 Amendment: Changed defined term from net machine income to gross income. Amendment
effective July 1, 1991.
1989 Amendment: In definition of associated equipment substituted "gambling machine" for "draw
poker machine" and at end inserted "and cabinetry"; deleted definitions of Department, licensed
establishment, licensee, manufacturer -distributor, used keno machine, used video draw poker machine,
and video draw poker machine (see 1987 MCA for former text); inserted definitions of bingo machine,
draw poker machine, and video gambling machine manufacturer -distributor; in definition of keno machine,
after "video", substituted "gambling" for "game", after "play" substituted "keno as defined by rules of the
department" for "or simulate the play of the game of keno or bingo as provided in part 4 of this chapter",
and in last sentence inserted "slot machine or a'; in definition of net machine income substituted
"gambling machine" for "draw poker or keno machine'; and made minor changes in phraseology and
punctuation.
1987 Amendments: Chapter 154 in (2) changed "department of revenue" to "department of
commerce".
Chapter 317 inserted definitions of associated equipment and manufacturer -distributor; and in (5), in
two places, inserted "or association".
Chapter 603 inserted definitions of keno machine, licensed establishment with respect to licensure of
video draw poker machines, net machine income, and used keno machine; at beginning of (4)(a) inserted
"with respect to the licensure of keno machines" and at end inserted "or an establishment licensed under
23-5-421'; and in (5), after "poker machines", inserted "or keno machines".
Cross References:
Liquor licensing criteria, Title 16, ch. 4, part 4.
Administrative Rules:
ARM 23.16.1802 Definitions.
ARM 23.16.1901 General specifications of video gambling machines.
23-5.603. Video gambling machines -- possession -- play — restriction. (1) A licensed operator
may make available for public play only the number of approved video gambling machines specifically
authorized by this part.
(2) The video gambling machines specifically authorized by this part are bingo, keno, and draw poker
machines. Only the number of approved machines for which permits have been granted under 23-5-612
may be made available for play by the public on the premises of a licensed operator. The department
shall adopt rules allowing a video gambling machine that needs repair to be temporarily replaced while it
is being repaired with a video gambling machine that is approved under the permit provisions of this part.
A fee may not be charged for the replacement machine.
(3) Machines on premises appropriately licensed to sell alcoholic beverages for on -premises
consumption, as provided in 23-5-119, must be placed:
(a) in a room, area, or other part of the premises in which alcoholic beverages are sold or consumed;
and
(b) within control of the operator for the purpose of preventing access to the machines by persons
under 18 years of age.
History: En. Sec. 9, Ch. 720, L. 1985; amd. Sec. 2, Ch. 603, L. 1987; amd. Sec. 4, Ch. 652, L. 1987; amd. Sec.
45, Ch. 642, L. 1989; amd. Sec. 46, Ch. 647, L. 1991; amd. Sec. 10, Ch. 465, L. 1997.
Compiler's Comments:
1997Amendment: Chapter 465 in (3), after "premises", inserted "appropriately" and inserted "as
provided in 23-5-119".
Severabiiity. Section 12, Ch. 465, L. 1997, was a severability clause.
1991 Amendment: At beginning of (1) substituted "licensed operator" for "person'; in (3)(a), after
"sold", substituted "or" for "and normally"; inserted (3)(b) concerning preventing access to machines by
minors; and made minor changes in style. Amendment effective July 1, 1991.
1989 Amendment.• Substituted (1) restricting play to approved number of video gambling machines
for former provision prohibiting placement of machines in a licensed establishment unless licensed under
23-5-612; inserted first sentence of (2) regarding machines authorized by this part; in (2) deleted
provision that a person under 18 could not play video draw poker or video keno (but see 23-5-158,
enacted by Ch. 642) and at end inserted two sentences relating to rules for replacement of a machine
needing repair and a fee exemption for a replacement machine; inserted (3) relating to where machines
may be placed; deleted former (2) through (4) relating to hours of play, allowing a local government to
establish its own hours, and stating that part 3 of this chapter does not apply to draw poker or keno
machines; and made minor changes in phraseology.
1987Amendments: Chapter 603 in temporary version in first sentence, after "poker", inserted "bingo,
or keno" and in second and third sentences, after "poker", inserted "or keno". Chapter 603 in version
effective July 1, 1988, in (1) in first sentence, after "poker", inserted "bingo, or keno" and in second
sentence, after "poker", inserted "or keno"; and in (4), after "poker", inserted "or keno".
Chapter 652 in version effective July 1, 1988, inserted (2) relating to restriction on hours of play for
video draw poker or keno machines; and inserted (3) authorizing local governing body to determine
proper playing hours for video draw poker machines.
Cross References:
Adult rights, Art. 11, sec. 14, Mont. Const.
Administrative Rules:
ARM 23.16.1807 Issuance of permit decal.
ARM 23.16.1822 Permit not transferable.
ARM 23.16.1913 Use of temporary replacement or loaner machines -- permit required -- reporting.
ARM 23.16.1924 Prohibited machines.
ARM 23.16.1925 Possession of unlicensed machines by manufacturer, supplier, distributor, owner, or
repair service.
ARM 23.16.1926 Location of machines on premises.
ARM 23.16.1929 Repairing machines -- approval.
23-5-604 reserved.
23-5-605. Repealed..Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 7, Ch. 720, L. 1985; amd. Sec. 1, Ch. 211, L. 1987; amd. Sec. 3, Ch. 603, L. 1987.
23-5-606. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 3, Ch. 720, L. 1985; amd. Sec. 2, Ch. 211, L. 1987; amd. Sec. 1, Ch. 640, L. 1987; amd. Sec.
1, Ch. 344, L. 1989. - -
23-5-607. Expected payback -- verification. The department shall prescribe the expected payback
value of one credit awarded to be at least 80% of the value of one credit played. Each video gambling
machine must have an electronic accounting device that the department may use to verify the winning
percentage.
History: En. Sec. 4, Ch. 720, L. 1985; amd. Sec. 1, Ch. 163, L. 1987; amd. Sec. 4, Ch. 603, L. 1987; amd. Sec.
54, Ch. 642, L. 1989.
Compiler's Comments_ :
1989 Amendment: Near beginning substituted "gambling machine" for "draw poker or keno
machine'; deleted provision prohibiting Department from publishing or disseminating income figures or
other statistics obtained in the payback verification. process in a manner that would allow identification of
a particular machine or its owner; and made minor changes in phraseology.
1987 Amendments: Chapter 163 inserted last sentence concerning confidentiality.
Chapter 603 near beginning of second sentence, before "machine", inserted "video draw poker or
keno".
Administrative Rules:
ARM 23.16.1802 Definitions.
ARM 23.16.1905 Safety specifications.
ARM 23.16.1906 General video gaming machine software specifications.
ARM 23.16.1907 Video draw poker software.
ARM 23.16.1910 Restrictions on optional game format or features.
ARM 23.16.1911 Software information to be provided to the department.
ARM 23.16.1924 Prohibited machines.
23-5-608. Limitation on amount of money played and value of prizes -- payment of credits in
cash. (1) A video gambling machine may not allow more than $2 to be played on a game or award free
games or credits in excess of the following amounts:
(a) $800 a game for a video draw poker machine; and
(b) $800 a game for a video keno or bingo machine.
(2) A licensee shall pay in cash all credits owed to a player as shown on a valid ticket voucher.
History: En. Sec. 5, Ch. 720, L. 1985; amd. Sec. 3, Ch. 211, L. 1987; amd. Sec. 5, Ch. 603, L. 1987; amd. Sec.
53, Ch. 642, L. 1989; amd. Sec. 1, Ch. 227, L. 1995.
Compiler's Comments:
1995 Amendment: Chapter 227 in (1)(a) increased payout for video draw poker from $100 to $800.
1989 Amendment: At beginning of (1) substituted "gambling machine" for "draw poker or keno
machine" and increased maximum payout from $100 to $800 a game for a video keno or bingo machine;
and made minor changes in style and phraseology.
1987 Amendments: Chapter 211 inserted (2) requiring licensee to pay player in cash all credits
shown on valid ticket voucher. (Chapter 640, L. 1987, inserted subsection (4)(f) of 23-5-606. The Code
Commissioner has corrected the reference in (2) to reflect this insertion.)
Chapter 603 in (1), before "machine", inserted "video draw poker or keno".
Administrative Rules:
ARM 23.16.1910 Restrictions on optional game format orfeatures.
ARM 23.16.1924 Prohibited machines.
23-5-609. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 8, Ch. 603, L. 1987; amd. Sec. 2, Ch. 344, L. 1989.
23-5-610. Video gambling machine gross income tax -- records -- distribution -- quarterly
statement and payment. (1) A licensed operator issued a permit under this part shall pay to the
department a video gambling machine tax of 15% of the gross income from each video gambling
machine licensed under this part. A licensed operator may deduct from the gross income amounts equal
to amounts stolen from machines if the amounts stolen are not repaid by insurance or under a court
order, if a law enforcement agency investigated the theft, and if the theft is the result of either
unauthorized entry and physical removal of the money from the machines or of machine tampering and
the amounts stolen are documented.
(2) A licensed operator issued a permit under this part shall keep a record of the gross income from
each machine in the form the department requires. The records must at all times during the business
hours of the licensee be subject to inspection by the department.
(3) A licensed operator issued a permit under this part shall, within 15 days after the end of each
quarter, complete and deliver to the department a statement showing the total gross income from each
video gambling machine licensed to the operator, together with the total amount due the state as video
gambling machine gross income tax for the preceding quarter. The statement must contain other relevant
information that the department requires.
(4) (a) The department shall, in accordance with the provisions of 15-1-501, forward one-third of the
tax collected under subsection (3) to the general fund.
(b) The department shall, in accordance with the provisions of 15-1-501, forward the remaining
two-thirds of the tax collected under subsection (3) to the treasurer of the county or the clerk, finance
officer, or treasurer of the city or town in which the licensed machine is located, for deposit to the county
or municipal treasury. Counties are not entitled to proceeds from taxes on income from video gambling
machines located in incorporated cities and towns. The two-thirds local government portion of tax
collected under subsection (3) is statutorily appropriated to the department as provided in 17-7-502 for
deposit to the county or municipal treasury.
History: En. Sec. 9, Ch. 603, L. 1987; amd. Sec. 52, Ch. 642, L. 1989; amd. Sec. 47, Ch. 647, L. 1991; amd.
Sec. 29, Ch. 15, Sp. L. July 1992; amd. Sec. 16, Ch. 398, L. 1993; amd. Sec. 31, Ch. 455, L. 1993; amd. Sec. 40,
Ch. 18, L. 1995.
Compiler's Comments:
1995Amendment: Chapter 18 in (4)(a) and near beginning of (4)(b), after "15-1-501", deleted
reference to subsection (6); and made minor changes in style.
1993 Amendments --Composite Section: Chapter 398 in (1), in second sentence after "amounts",
inserted "stolen", after "insurance" inserted "or under a court order", and after "theft" inserted "and if the
theft is the result of either unauthorized entry and physical removal of the money from the machines or of
machine tampering and the amounts stolen are documented'; and made minor changes in style.
Chapter 455 near beginning of (4)(a) and (4)(b) inserted "in accordance with the provisions of
15-1-501(6)"; and made minor changes in style. Amendment effective April 21, 1993.
A style change was slightly different in the two chapters. The codifier chose the more appropriate of
the two.
Retroactive Applicability: Section 35, Ch. 455, L. 1993, provided: "[This act] applies retroactively,
within the meaning of 1-2-109, to all tax periods beginning after December 31, 1992, and to taxes
collected by audit after December 31,1992, or taxes collected after December 31, 1992, if the payment
was made after the date on which the tax was payable."
1992 Special Session Amendment Chapter 15, Sp. L. July 1992, at end of (4)(a) inserted reference
to surtax imposed by 23-5-646.
Effective Date: Section 38, Ch. 15, Sp. L. July 1992, provided that this act is effective on passage
and approval. The act became effective pursuant to Article VI, sec. 10, of the Montana Constitution due to
the passage of 25 days after delivery without gubernatorial action on the bill. Effective August 14, 1992.
Retroactive Applicability - Termination: Section 39(4), Ch. 15, Sp. L. July 1992, provided that this
section applies to tax liabilities for calendar quarters beginning after June 30, 1992, and before July 1,
1993. This section terminates upon receipt of taxes for the quarter ending June 30, 1993.
1991 Amendment: Throughout section substituted reference to gross income for reference to net
income and inserted "licensed" before "operator'; inserted second sentence of (1) concerning amounts
stolen from machines; in (2), near middle of first sentence after "income", inserted "from each machine'
and made minor changes in style. Amendment effective July 1, 1991.
1989 Amendment.• In five places substituted "gambling machine" for "draw poker and keno machine';
at beginning of (1), (2), and (3) substituted "An operator issued a permit under this part" for "Each
licensee"; at end of (2) deleted "its agents, or employees"; in second sentence of (4)(b), before "cities",
inserted "incorporated'; and made minor changes in phraseology.
Administrative Rules:
ARM 23.16.1802 Definitions.
ARM 23.16.1806 Distribution of net machine income tax to local governing body.
ARM 23.16.1826 Quarterly reporting requirements.
ARM 23.16.1827 Record retention requirements.
Collateral References:
Validity of state or local gross receipts tax on gambling. 21 ALR 5th 812.
23-5-611. Machine permit qualifications -- limitations. (1) (a) A person who has been granted an
operator's license under 23-5-177 and who holds an appropriate license to sell alcoholic beverages for
consumption on the premises as provided in 23-5-119 may be granted a permit for the placement of
video gambling machines on the person's premises.
(b) If video keno or bingo gambling machines were legally operated on a premises on January 15,
1989, and the premises were not on that date licensed to sell alcoholic beverages for consumption on the
premises or operated for the principal purpose of gaming and there is an operator's license for the
premises under 23-5-177, a permit for the same number of video keno or bingo gambling machines as
were operated on the premises on that date may be granted to the person who held the permit for such
machines on those premises on that date.
(c) A person who legally operated an establishment on January 15, 1989, for the principal purpose of
gaming and has been granted an operator's license under 23-5-177 may be granted a permit for the
placement of bingo and keno machines on the person's premises.
(2) An applicant for a permit shall disclose on the application form to the department any information
required by the department consistent with the provisions of 23-5-176.
(3) A licensee may not have on the premises or make available for play on the premises more than
20 machines of any combination.
History: En. Sec. 8, Ch. 720, L. 1985; amd. Sec. 4, Ch. 211, L. 1987; amd. Sec. 46, Ch. 642, L. 1989; amd. Sec.
48, Ch. 647, L. 1991; amd. Sec. 11, Ch. 465, L. 1997.
Compiler's Comments:
1997 Amendment: Chapter 465 in (1)(a), after "23-5-177 and", substituted "who holds an appropriate
license" for "a -license" and after "premises" inserted "as provided in 23-5-119"; and made minor changes
in style.
Severability: Section 12, Ch. 465, L. 1997, was a severability clause.
1991 Amendment: At end of (3) deleted "and no more than 10 may be draw poker machines".
Amendment effective July 1, 1991.
1989 Amendment: In (1)(a) inserted operator's license requirement; deleted former (1)(b) requiring a
license applicant to disclose previous involvement as an owner or operator of gambling devices or
establishments; inserted (1)(b), a grandfather clause for premises not licensed to sell alcoholic beverages
and not operated principally for gaming purposes; inserted (1)(c), a grandfather clause for premises
operated principally for gaming purposes; inserted (2) requiring a permit applicant to disclose information
required by the Department; in (3) substituted "20 machines of any combination and no more than 10
may be draw poker machines" for "five machines'; deleted former (3) giving one denied a license a right
to a hearing; and made minor changes in phraseology.
1987Amendment. Inserted (1)(b) requiring applicant for video draw poker license to disclose
previous gambling operation ownership or employment and gambling convictions.
Cross References:
Montana Administrative Procedure Act — contested cases, Title 2, ch. 4, parts 6 and 7.
Liquor licensing criteria, Title 16, ch. 4, part 4.
Administrative Rules:
ARM 23.16.1803 Application for permit, fee, and permit requirements.
ARM 23.16.1807 Issuance of permit decal.
ARM 23.16.1808 Licenses issued under temporary authority.
ARM 23.16.1822 Permit not transferable.
23-5-612. Machine permits -- fee. (1) The department, upon payment of the fee provided in
subsection (2) and in conformance with rules adopted under this part, shall issue to the operator an
annual permit for an approved video gambling machine.
(2) (a) The department shall charge an annual permit fee of $200 for each video gambling machine
permit. The fee must be prorated on a quarterly basis but may not be prorated to allow a permit to expire
before June 30. The department may not grant a refund if the video gambling machine ceases operation
before the permit expires.
(b) If the person holding the gambling operator's license for the premises in which the machine is
located changes during the first quarter of the permit year and the new operator has received an
operator's license and if a machine transfer processing fee of $25 per machine is paid to the department,
the permit remains valid for the remainder of the permit year.
(3) The department shall deposit 50% of the total permit fee collected under subsection (2)(a) and
100% of the machine transfer processing fee collected under subsection (2)(b) in the state special
revenue fund for purposes of administering this part and for other purposes provided by law. The balance
of the fee collected under subsection (2)(a) must be returned on a quarterly basis to the local government
jurisdiction in which the gambling machine is located. The local government portion of the fee is statutorily
appropriated to the department, as provided in 17-7-502, for deposit in the local government treasury.
History: En. Secs. 10, 12, Ch. 720, L. 1985; amd. Sec. 2, Ch. 154, L. 1987; amd. Sec. 6, Ch. 603, L. 1987; amd.
Sec. 1, Ch. 496, L. 1989; amd. Secs. 47, 73, Ch. 642, L. 1989; amd. Sec. 49, Ch. 647, L. 1991; amd. Sec. 1, Ch.
210, L. 1993; amd. Sec. 2, Ch. 354, L. 1997.
Compiler's Comments:
1997 Amendment: Chapter 354 in (3), near beginning of first sentence after "shall", substituted
"deposit" for "retain", near middle, after "subsection (2)(b)", inserted "in the state special revenue fund",
and at end inserted "and for other purposes provided by law". Amendment effective July 1, 1997.
1993 Amendment: Chapter 210 inserted (2)(b) relating to payment of a machine transfer processing
fee following a change in ownership; in (3), in first sentence, inserted reference to 100% of machine
transfer processing fee and in second sentence inserted reference to fee collected under subsection
(2)(a); and made minor changes in style. Amendment effective July 1, 1993.
1991 Amendment: Near end of (1), before "permit", inserted "annual'; in (2) inserted second
sentence concerning proration of fee and third sentence prohibiting refunds; in (3), in first sentence,
substituted "50%" for 1100" and after "collected" inserted "under subsection (2)" and at beginning of
second sentence substituted "The balance" for "The remaining $100"; deleted former (3) and (4) that
read: "(3) The permit expires on June 30 of each year, and the fee may not be prorated.
(4) A used keno machine may be licensed under subsection (1) without meeting the requirements of
23-5-609 [as that section read on September 30, 1989] if the applicant for licensure can establish to the
satisfaction of the department that, on the date of application, he owns or possesses a machine that was
owned or operated in the state prior to June 30, 1987. A license issued under this subsection expires for
all purposes no later than June 30, 1989'; and made minor change in style. Amendment effective July 1,
1991.
1989 Amendments: Chapter 496 inserted (4)(a) of temporary version relating to meeting
requirements of 23-5-607 and 23-5-608; inserted (4)(b) of temporary version relating to meters; and in
(4)(c) of temporary version substituted "was licensed by the department prior to January 1, 1989" for "was
owned or operated in the state prior to June 30, 1987" and deleted last sentence that read: "A license
issued under this subsection expires for all purposes no later than June 30, 1989." Amendment effective
July 1, 1989, and terminates June 30, 1990. Section 73, Ch. 642, L. 1989, in (4)(b) of temporary version
inserted "as that section read on September 30, 1989". Amendment effective May 5, 1989.
Chapter 642 throughout section substituted "permit" for "license" and "gambling machine" for
references to draw poker machine or keno machine; in (2) increased fee from $100 to $200 and provided
that the $100 increase is statutorily appropriated to the local government; in (3) inserted "and the fee may
not be prorated'; corrected internal references; and made minor changes in phraseology.
Proration of 1989 Fee: Chapter 642, L. 1989, transferred administration of parts 1 through 6 of this
chapter to the Department of Justice and amended various fee provisions. Section 69 provided: "A fee
imposed under 23-5-321, 23-5-421, 23-5-612, 23-5-625, or 23-5-631 between [the effective date of this
section] [May 5, 1989] and October 1, 1989, must be prorated to cover only the period between the date
the permit or license takes effect and October 1, 1989."
1987 Amendments: Chapter 154 in (1)(a) changed "department of revenue" to "department"; and in
(1)(b), near middle of second sentence after "collected", deleted "in fiscal years 1986 and 1987 and shall
retain 3% thereafter", but see Ch. 603 amendment.
Chapter 603 near end of (1)(a), after "poker", inserted "or keno"; in (1)(b) reduced fee to $100 from
$1,500 for each video draw poker machine, inserted $100 license fee for each keno machine, and
substituted last two sentences permitting Department to retain $100 of total license fee for administrative
purposes and establishing June 30 of each year as date for expiration of license for former language that
read: "The department shall retain 5% of the total license fee collected in fiscal years 1986 and 1987 and
shall retain 3% thereafter for purposes of administering this part, except 23-5-615. The department shall
deposit one-third of the remaining fee in the state general fund and forward two-thirds of the remaining
fee to the treasurer of the county or the clerk, finance officer, or treasurer of the city or town in which the
licensed machine is located, for deposit to the county or municipal treasury. Counties are not entitled to
proceeds from fees on licensed machines located in cities and towns. The license expires on June 30 of
each year, and the fee is prorated. The two-thirds portion of the annual fee is statutorily appropriated to
the department as provided in 17-7-502 for deposit to the county or municipal treasury'; and inserted (2)
authorizing the licensing of used keno machine not meeting required specifications if license applicant
establishes that machine was owned or operated in state prior to June 30, 1987.
Administrative Rules:
ARM 23.16.1803 Application for permit, fee, and permit requirements.
ARM 23.16.1805 Refund of permit fee.
ARM 23.16.1806 Distribution of net machine income tax to local governing body.
ARM 23.16.1807 Issuance of permit decal.
ARM 23.16.1808 Licenses issued under temporary authority.
ARM 23.16.1822 Permit not transferable.
ARM 23.16.1823 Expiration — renewal of permit.
Case Notes:
No Clear Legal Duty to Issue Gambling Licenses and Permits -- Activity Unlawful Under Federal Law
--Writ of Mandamus Properly Denied: The Department of Justice, Gambling Control Division, denied
gambling licenses and permits to the plaintiffs, business owners who operate within the boundaries of the
Flathead Indian Reservation. The denial of licenses was based on the determination of the U.S. Attorney
that the operation of video gambling machines would no longer be lawful on Indian lands absent a
tribal -state compact. The plaintiffs filed a petition for a writ of mandamus ordering the state to issue the
licenses and permits. The writ was denied. The plaintiffs appealed on the grounds that the state had a
clear legal duty under state law to issue the licenses and permits. On appeal, the Supreme Court rejected
the state's contention that state gambling laws specifically authorize it to refuse to process the plaintiffs'
applications. However, because the plaintiffs seek to conduct gambling operations on the Flathead Indian
Reservation, federal statutes must be considered in conjunction with state law. State law that conflicts
with the purpose and operation of a federal statute, regulation, or policy is preempted by the federal law.
State licensure of Class III gaming under the facts of this case would frustrate the federal policy
underlying the Indian Gaming Regulatory Act (IGRA). The Supreme Court concluded that absent a ruling
of a federal court as to the applicability of IGRA to non -Indians, such as the plaintiffs in this case, and
given the apparent conflict between Montana licensing statutes and federal statutes regulating gambling
on Indian lands, there is no clear legal duty requiring the state to issue gambling licenses and permits to
the plaintiffs. The District Court did not err in denying the petition for a writ of mandamus. Larson v. St.,
275 M 314, 912 P2d 783, 53 St. Rep. 158 (1996).
23-5-613. Violations. Unless otherwise provided in this part, a person who purposely or knowingly
violates or procures, aids, or abets a violation of this part or an ordinance, resolution, or rule adopted
under this part is guilty of a misdemeanor punishable under 23-5-161.
History: En. Sec. 11, Ch. 720, L. 1985; amd. Sec. 5, Ch. 211, L. 1987; amd. Sec. 56, Ch. 642, L. 1989.
Compiler's Comments:
1989 Amendment: Substituted "Unless otherwise provided in this part, a person who purposely or
knowingly violates or procures, aids, or abets a violation of this part or an ordinance, resolution, or rule
adopted under this part is guilty of a misdemeanor punishable under 23-5-161" for "A violation of this part,
except 23-5-615, or a rule promulgated under 23-5-605 is a criminal offense, and a fine not to exceed
$10,000 for the first violation and $15,000 for a subsequent violation must be imposed'; and deleted
former (1) and (3) through (6) relating to investigation of violations of this part, suspensions and
revocations, hearings, seizures, personal background investigations, reports of suspected violations to
law enforcement agencies, reports of convictions to the Department, and arrests (see 1987 MCA for
former text).
1987 Amendment: Near beginning of (1) and (4), after "department", inserted "or duly authorized
department representatives"; inserted (5)(b) requiring court clerk to report to Department licensee's
conviction of local gambling ordinance; and inserted (5)(c) authorizing Department to commence
proceeding to revoke or suspend video draw poker license upon receiving report of gambling ordinance
violation conviction.
Cross References:
Definition of peace officer as used in MCA, 1-1-207.
Knowingly, negligently, and purposely defined for purposes of criminal law, 45-2-101.
Absolute criminal liability, 45-2-104.
Administrative Rules:
ARM 23.16.1924 Prohibited machines.
ARM 23.16.1931 Inspection and seizure of machines.
ARM 23.16.1932 Investigation of licensee.
23-5-614. Sale of video gambling machines. (1) A licensed operator who is not licensed as a
manufacturer, distributor, or route operator may sell up to 20 video gambling machines in a calendar year
if the operator:
(a) had obtained permits for the machines and legally operated them prior to the sale; and
(b) sells the machines to another licensed operator or to a licensed manufacturer, distributor, or route
operator.
(2) A lienholder who acquires title to video gambling machines through a foreclosure action involving
a licensed manufacturer, distributor, route operator, or operator may sell the machines to a licensed
manufacturer, distributor, route operator, or operator.
(3) A licensed manufacturer or distributor may sell video gambling machines and associated
equipment approved by the department for delivery to any jurisdiction outside of this state if the sale and
transportation of the machines or equipment complies with all applicable local, tribal, state, and federal
laws and regulations. Prior to the date of the sale, the seller shall notify the department of the terms of the
sale, the identities of the seller, purchaser, and person to whom the shipment will be made, the type and
number of machines or equipment to be sold, and the method of shipment and provide the department
with the approval of the jurisdiction in which the machines or equipment will be received. A person
convicted of purposely or knowingly violating this subsection shall be punished as provided in 23-5-162.
History: En. Sec. 19, Ch. 626, L. 1993; amd. Sec. 3, Ch. 354, L. 1997.
Compiler's Comments:
1997Amendment: Chapter 354 inserted (3) regarding conditions under which video gambling
machines may be sold outside the state. Amendment effective July 1, 1997.
23-5-615. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 6, Ch. 720, L. 1985; amd. Sec. 7, Ch. 603, L. 1987.
23-5-616. Removal of machine from public access. If a machine fails to meet the specifications
and requirements of this part or any rule of the department which specification or requirement existed at
the time the machine was approved at any time after its initial permit has been issued, the operator shall
immediately remove the machine from public access until it meets all requirements.
History: En. Sec. 6, Ch. 211, L. 1987; amd. Sec. 50, Ch. 642, L. 1989.
Compiler's Comments:
1989 Amendment: Substituted "this part or any rule of the department which specification or
requirement existed at the time the machine was approved" for "23-5-606, 23-5-607, or 23-5-608'; after
"initial" substituted "permit has been issued, the operator" for "licensue, the licensee'; and made minor
change in phraseology.
Administrative Rules:
ARM 23.16.1925 Possession of unlicensed machines by manufacturer, supplies, distributor, owner, or
repair service.
ARM 23.16.1929 Repairing machines — approval.
23-5-617. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 7, Ch. 211, L. 1987.
23-5-618. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 8, Ch. 211, L. 1987.
23-5-619 reserved.
23-5-620. Video gambling machines — hours of play. A video gambling machine may not be
played between the hours of 2 a.m. and 8 a.m. each day. However, in the jurisdiction of a local
government where a game is played, the local government may adopt an ordinance allowing play
between 2 a.m. and 8 a.m.
History: En. Sec. 55, Ch. 642, L. 1989.
23-5-621. Video gambling machine specifications -- rules. The department shall adopt rules
describing the video gambling machines authorized by this part and stating the specifications for video
gambling machines authorized by this part. The specifications in the rules must substantially follow the
specifications contained in 23-5-606 and 23-5-609 as those sections read on September 30, 1989. The
department shall adopt rules allowing video gambling machines to be imported into this state and used
for the purposes of trade shows, exhibitions, and similar activities.
History: En. Sec. 49, Ch. 642, L. 1989.
Administrative Rules:
ARM 23.16.1901 General specifications of video gambling machines.
ARM 23.16.1905 Safety specifications.
ARM 23.16.1906 General video gaming machine software specifications.
ARM 23.16.1907 Video draw poker software.
ARM 23.16.1908 Software specifications for video keno machines.
ARM 23.16.1909 Software specifications for video bingo machines.
ARM 23.16.1910 Restrictions on optional game format or features.
ARM 23.16.1911 Software information to be provided to the department.
ARM 23.16.1936 Transportation of machines into state.
ARM 23.16.1940 Video gambling machines — trade shows.
ARM 23.16.2803 Application for authorization to conduct a Calcutta pool.
23-5-622. Tampering with video gambling machine -- penalty. (1) A person commits the offense of
tampering with a video gambling machine if he purposely or knowingly manipulates or attempts or
conspires to manipulate the outcome or payoff of a video gambling machine by physical tampering or
other interference with the proper functioning of the machine.
(2) A violation of this section is a felony and must be punished in accordance with 23-5-162.
History: En. Sec. 57, Ch. 642, L. 1989.
23-5-623 and 23-5-624 reserved.
23-5-625. Video gambling machine manufacturer -- license — fees -- restrictions. (1) It is
unlawful for any person to assemble, produce, or manufacture any video gambling machine or associated
equipment for use or play in the state without having first been issued a video gambling machine
manufacturer's license by the department. A licensed manufacturer may supply a video gambling
machine only to another licensed manufacturer or to a licensed distributor, route operator, or operator.
(2) Except as provided in subsection (6), the department shall charge an annual license fee of $1,000
for the issuance or renewal of a video gambling machine manufacturer's license.
(3) Except as provided in subsection (6), the department may charge the applicant an additional,
one-time video gambling machine manufacturer's license application processing fee. The application
processing fee may not exceed the department's actual costs for processing an application.
(4) All video gambling machine manufacturer's licenses expire on June 30 of each year, and the
license fee may not be prorated.
(5) The department shall retain the license and processing fees collected for purposes of
administering this part, unless otherwise provided.
(6) The department may waive the license fee provided for in subsection (2) if the applicant is
licensed as a distributor or route operator and may waive the application processing fee provided for in
subsection (3) if the applicant is licensed as a distributor, route operator, or operator.
History: En. Sec. 2, Ch. 317, L. 1987; amd. Sec. 51, Ch. 642, L. 1989; amd. Sec. 50, Ch. 647, L. 1991; amd.
Sec. 18, Ch. 626, L. 1993.
Compiler's Comments:
1993Amendment Chapter 626 throughout section substituted "manufacturer" for
"manufacturer -distributor' and substituted "manufacturer's" for "manufacturer -distributor's"; in (1), at
beginning, deleted "(a) Except as provided in subsections (2) and (3)", after "manufacture" deleted "or
supply", and near end, after "licensed", inserted "distributor, route operator, or; in (2), at beginning,
inserted exception clause; in (3), at beginning, substituted "Except as provided in subsection (6)" for "In
addition to other license fees'; deleted former (2) specifying conditions under which licensed operator
who is not a manufacturer -distributor may sell video gambling machines (see 1993 Session Law for text);
deleted former (3) authorizing foreclosing lienholder to sell video gambling machines (see 1993 Session
Law for text); inserted (6) authorizing Department to waive license fee; and made minor changes in style.
1991 Amendment. At beginning of (1)(a) inserted exception clause and inserted last sentence
limiting supply of machine to another licensee; inserted (2) limiting sale by licensed operator not licensed
as a manufacturer -distributor; inserted (3) authorizing sale by a lienholder; and made minor changes in
style. Amendment effective July 1, 1991.
1989 Amendment: Throughout section inserted references to video gambling machine; in (1), after
"person to", substituted "assemble, produce, manufacture, or supply" for "manufacture, sell, or distribute';
in (5) substituted "unless otherwise provided" for "except 23-5-615"; and made minor changes in
phraseology.
Proration of 1989 Fee: Chapter 642, L. 1989, transferred administration of parts 1 through 6 of this
chapter to the Department of Justice and amended various fee provisions. Section 69 provided: "A fee
imposed under 23-5-321, 23-5-421, 23-5-612,-23-5-625, or 23-5-631 between [the effective date of this
section] [May 5, 1989] and October 1, 1989, must be prorated to cover only the period between the date
the permit or license takes effect and October 1, 1989."
Administrative Rules:
ARM 23.16.1916 Manufacturers/distributors and producers of associated equipment of video gambling
machines.
ARM 23.16.1917 General requirements of manufacturers, suppliers, and distributors of video
gambling machines or producers of associated equipment.
23-5-626. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 3, Ch. 317, L. 1987.
23-5-627. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 4, Ch. 317, L. 1987.
23-5-628. Inspection of premises, records, and devices. The department or a local law
enforcement official may inspect at any time during normal business hours a premises, as defined in
23-5-112, or a facility where gambling devices are manufactured or distributed. The inspection may
include the examination of records, equipment, and proceeds related to the operation of a gambling
activity or the manufacture or distribution of a gambling device.
History: En. Sec. 10, Ch. 647, L. 1991.
Compiler's Comments:
Effective Date: Section 58(2), Ch. 647, L. 1991, provided that this section is effective July 1, 1991.
23-5-629. Permit for premises within 150 feet of another premises. (1) (a) A licensee may not be
granted a permit for video gambling machines allowed on a premises under 23-5-611 if, at the time of
application for the permit, the licensee's premises are within 150 feet of, or have an external structural
connection not amounting to a common internal wall, as that term is used in 23-5-117, to, a premises that
already has a permit for video gambling machines allowed on a premises under 23-5-611 and if the two
premises have one or more common owners. A measurement of the distance between two premises
must be taken between the nearest exterior wall of each premises.
(b) A premises for which an on -premises alcoholic beverages license was granted, was applied for, or
the transfer of which was validly contracted for prior to February 1, 1995, is not subject to subsection
(1)(a) during the 10-year period following October 1, 1995. A premises licensed before January 1, 1985,
is not subject to subsection (1)(a) for as long as ownership remains within the immediate family that
owned the premises on January 1, 1985, if ownership of the premises on October 1, 1995, was within the
immediate family that owned the premises on January 1, 1985.
(2) For purposes of this section, the following definitions apply:
(a) "Affiliate" means a person or entity that controls, is controlled by, or is under common control with
another person or entity. The term includes but is not limited to a premises that has:
(i) shareholders, partners, or other individual owners, by trust or otherwise, who are also
shareholders, partners, or individual owners, by trust or otherwise, of the other premises;
(ii) shareholders, partners, or other individual owners, by trust or otherwise, who are income
taxpayers related to the shareholders, partners, or other individual owners, by trust or otherwise, of the
other premises;
(iii) an agreement with the other premises or the other premises' shareholders, partners, or other
individual owners, by trust or otherwise, for the ownership and operation of gaming equipment if the
agreement has other financial components, such as a landlord and tenant relationship or noninstitutional
financing; or
(iv) a premises rental agreement with the other premises or its shareholders, partners, or other
individual owners, by trust or otherwise, at a rental rate other than the market rental rate, as determined
by a Montana independent appraisers association appraisal done at the time that the rental rate is set or
changed.
(b) "Common owner" means an affiliate, immediate family member, manager, parent or subsidiary
business entity, investor, person or entity with a commonality of business interests, or other person or
entity able to influence the operator or manager of the premises or to prevent the operator or manager
from fully pursuing the premises' separate interests.
(c) "Commonality of business interests" means:
(i) a contract, deed, contract for deed, concession agreement, or lease, rental, or other agreement
involving real property, with the same person or entity, except:
(A) a commercial mall with at least 50,000 square feet and at least eight separate businesses; or
(B) an agreement by a licensee to lease premises from a person or entity that also leases other
premises in the same building or structure to one or more licensees if there is no other common
ownership between any of the licensees; or
(ii) that the same person or entity, except a financial institution, provides the financing for:
(A) the purchase of the liquor license;
(B) the purchase of the premises; or
(C) operating expenses of more than $25,000, except for expenses allowed under 23-5-130.
(d) "Control" means the power to cause or direct management and policies through ownership,
contract, or otherwise.
(e) "Immediate family" means a parent, children, siblings, grandchildren, grandparents, nieces, and
nephews.
(f) "Investor" means a person who:
(i) advances or pledges to advance funds with the expectation of a specified or unspecified return;
(ii) guarantees a loan, except a loan guaranteed by a route operator who would not otherwise be
considered a common owner; or
(iii) has an option to participate in the premises.
History: En. Sec. 1, Ch. 480, L. 1995.
23-5-630 reserved.
23-5-631. Examination and approval of new video gambling machines and associated
equipment -- fee. (1) The department shall examine and may approve a new video gambling machine or
associated equipment or a modification to an approved machine or associated equipment that is
manufactured, sold, or distributed for use in the state before the video gambling machine or associated
equipment is sold, played, or used. A licensed manufacturer or distributor may bring a video gambling
machine or associated equipment authorized by this chapter into the state for research and development
on behalf of a licensed manufacturer prior to submission of the machine or equipment to the department
for approval.
(2) A video gambling machine or associated equipment or a modification to an approved machine or
associated equipment may not be examined or approved by the department until the video gambling
-machine manufacturer is licensed as required in 23-5-625.
(3) All video gambling machines or associated equipment approved by the department of commerce
prior to October 1, 1989, must be considered approved under this part.
(4) The department shall require the manufacturer seeking the examination and approval of a new
video gambling machine or associated equipment or a modification to an approved machine or
associated equipment to pay the anticipated actual costs of the examination in advance and, after the
completion of the examination, shall refund overpayments or charge and collect amounts sufficient to
reimburse the department for underpayments of actual costs.
(5) Payments received under subsection (4) are statutorily appropriated to the department, as
provided in 17-7-502, to defray the costs of examining and approving video gambling machines and
associated equipment and modifications to approved machines and associated equipment and to issue
refunds for overpayments.
(6) The department may inspect and test and approve, disapprove, or place a condition upon a video
gambling machine or associated equipment or a modification to an approved machine or associated
equipment prior to its distribution and placement for play by the public. A manufacturer, distributor, or
route operator may not supply a video gambling machine or associated equipment to a manufacturer,
distributor, route operator, or operator unless the machine or equipment has been approved by the
department.
History: En. Sec. 6, Ch. 317, L. 1987; amd. Sec. 48, Ch. 642, L. 1989; amd. Sec. 51, Ch. 647, L. 1991; amd.
Sec. 17, Ch. 398, L. 1993; amd. Sec. 20, Ch. 626, L. 1993; amd. Sec. 4, Ch. 354, L. 1997.
Compiler's Comments:
1997 Amendment: Chapter 354 in (1) inserted second sentence establishing conditions regarding
importation of a video gambling machine for research and development. Amendment effective July 1,
1997.
1993 Amendments: Chapter 398 in (6) inserted second sentence prohibiting manufacturer,
distributor, or route operator from supplying gambling machine or equipment to another manufacturer,
distributor, route operator, or operator without approval.
Section 19, Ch. 398, L. 1993, a coordination instruction, in (6) deleted a sentence prohibiting
manufacturer -distributor from supplying gambling machine or equipment to another licensed
manufacturer -distributor or licensed operator without Department approval, contingent on passage and
approval of House Bill No. 411. House Bill No. 411 was passed and approved as Ch. 626, L. 1993.
Chapter 626 in three places inserted "or a modification to an approved machine or associated
equipment'; in two places substituted "manufacturer" for "manufacturer- distributor'; in (1), near beginning
after "gambling machine", substituted "or" for "and'; in (3), after "machines", inserted "or associated
equipment'; in (5), after "equipment", inserted "and modifications to approved machines and associated
equipment"; in (6), in first sentence after "equipment", inserted "or associated equipment or a modification
to an approved machine or associated equipment'; and made minor changes in style.
1991 Amendment: Inserted (5) statutorily appropriating payments to Department. Amendment
effective July 1, 1991.
1989 Amendment: Throughout section substituted "gambling machine" for references to draw poker
machine; inserted (3) mandating that machines approved before October 1, 1989, must be considered
approved for purposes of this part; inserted (5) allowing machine inspection and approval and placing
conditions on machine placement for play; and made minor changes in phraseology.
Machines Approved Prior to October 1, 1989: Section 48, Ch. 642, L. 1989, inserted subsection (3)
providing that "machines approved by the department of commerce prior to [the effective date of this act]
must be considered approved under this part". October 1, 1989, was substituted for "[the effective date of
this act]" by the Code Commissioner, though the "act", Ch. 642, contained three different effective dates
for various sections. The effective date section was amended into the bill. Prior to the amendment, the
whole act was effective October 1, 1989. Under the amendment, sec. 48 is effective October 1, 1989, and
it is clear that "[the effective date of this act]" in sec. 48 refers to October 1, 1989.
Proration of 1989 Fee: Chapter 642, L. 1989, transferred administration of parts 1 through 6 of this
chapter to the Department of Justice and amended various fee provisions. Section 69 provided: "A fee
imposed under 23-5-321, 23-5-421, 23-5-612, 23-5-625, or 23-5-631 between [the effective date of this
section] [May 5, 1989] and October 1, 1989, must be prorated to cover only the period between the date
the permit or license takes effect and October 1, 1989."
Administrative Rules:
ARM 23.16.1918 Video gambling machine testing fees.
ARM 23.16.1927 Approval of video gambling machines by department.
ARM 23.16.1929 Repairing machines - approval.
23-5-632 through 23-5-634 reserved.
23-5-635. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 5, Ch. 317, L. 1987.
23-5-636. Repealed. Sec. 68, Ch. 642, L. 1989.
History: En. Sec. 7, Ch. 317, L. 1987.
23.5-637 through 23-5-645 reserved.
23-5-646. Terminated. Sec. 39, Ch. 15, Sp. L. July 1992.
History: En. Sec. 28, Ch. 15, Sp. L. July 1992; amd. Sec. 32, Ch. 455, L. 1993.