Editorial:

State wrong to limit liquor licenses

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Wyoming generally prides itself on being a business-friendly place, where entrepreneurs don’t have to worry about getting bogged down in government red tape as they pursue the American dream.

But it’s a different story if someone wants to start and operate a business that involves selling alcohol.

Before you can open up a bar or start selling beer or liquor to the public, you must first get the government’s blessing via a liquor license. Further, only a certain few can receive one of those coveted permits in Wyoming, as the number of available licenses is limited by the number of people who lived in that given town, city or county at the time of the last census. (The City of Powell, for instance, is allowed to dole out no more than 14 retail liquor licenses.)

Predictably, the cap on the number of liquor-serving establishments leads to regular fights and controversies across the state.

The City of Cody, for instance, found itself bitterly divided several years ago as a split city council considered who should receive Cody’s last available liquor license among several worthy applicants.

It could be the Powell City Council’s turn next week.

Two prospective businesses have asked for the city’s last available retail liquor license: a planned hotel and conference center known as Powell Clocktower Inn and a proposed expansion of the Lovell fitness center Club Dauntless that would include a high-end sports bar known as the Dauntless Club. At meetings earlier this month, Powell councilmembers heard pitches from the entrepreneurs behind both businesses and set a Dec. 3 hearing to make a decision.

However, city leaders were told last week that the Clocktower Inn may be able to succeed with a more limited permit known as a bar and grill license. As Councilman Eric Paul noted, getting both businesses to start up in Powell would be the best scenario.

“These are two very good ... situations for Powell,” Paul said of the businesses. “I think we would like to make sure we explore every opportunity to make sure that we can accommodate, ideally, both.”

We wholeheartedly agree, but regardless of whether Powell’s liquor license situation winds up as a win-win, the question needs to be asked: Why is a win-lose scenario even on the table? Why is it necessary for government to limit the number of people who can sell alcohol?

While Wyomingites are used to fights over liquor licenses playing out at city hall or the county courthouse, it doesn’t have to be this way. We would suggest it’s past time for the Legislature to consider repealing the state’s cap on retail licenses.

If you insert any other business into the current liquor regulations — say, for instance, you could only open a Powell hair salon if you were one of the first 14 people to obtain a hair-trimming license — it sounds absurd.

Of course, there are reasons why alcohol, a drug, is treated differently from other products.

As just one example of the many impacts of irresponsible drinking, alcohol was listed as a factor in more than half — 57 percent — of all the arrests made in Wyoming in 2016.

We believe the government has a legitimate interest in regulating alcohol sales, but it fails to follow that a population-based cap on licenses is an effective way to do that.

As a Casper policeman told the Casper Star-Tribune in 2014 (after the Legislature upped the number of bar and grill licenses), the problem doesn’t lie with the number of establishments.

“I can’t think of a correlation between enforcement and the number of bar and grill licenses,” Lt. Brad Wnuk said then. “It’s the temperament of the people and their activities.”

Even if you like the idea of a city council or county commission choosing who’s the most worthy to serve spirits, the current cap isn’t a good way to choose. Most of the licenses are handed out on a first-come, first-served basis. While the last ones in line get a thorough vetting and battle it out before torn elected officials, those who applied for licenses years ago basically received rubber-stamped approval.

The inequity continues into a prospective business owner’s bottom line, too. If you’re lucky enough to get a retail liquor license straight from the government, you’ll pay a relatively modest fee ($1,500 in the case of the City of Powell). However, if they’re all gone and you need a full retail license, you’ll have to try buying one from a current license-holder; in places like Casper and Cheyenne, prices for a license can reportedly run $200,000 to $300,000.

The real problem with all this is that government is unnecessarily manipulating supply and demand.

It’s possible that Powell is currently unable to support more than 14 liquor establishments (plus the other restaurants and microbreweries that serve alcohol). But that’s something that should be sorted out through competition and the free market — with consumers picking winners with their wallets.

The current license limits are not only unfair to entrepreneurs, they’re unfair to council members and commissioners, who shouldn’t be forced to effectively say no to someone who wants to start a business and grow the local economy.

We hope the Legislature takes action before the next city or county is forced to turn a winning proposal into a losing one.

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