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Section 12 Alcohol License – Any Illegality Puts the License at Risk

A bar with an all-alcohol license, issued under M.G.L. c. 138, §12, which permits the premises to serve alcohol to patrons on site, also held a separate automatic amusement device license. The amusement device license, issued by the City of Revere pursuant to M.G.L.c.140, §177A, allows premises to have gaming machines for entertainment only; monetary payouts are not allowed. Investigators of the Alcoholic Beverages Control Commission determined that the bar was violating the law by making cash payouts. The ABCC therefore suspended the Section 12 license for five days, two days to be served and the remainder held in abeyance for two years. It also banned from the premises any gaming machines as a condition of maintaining the Section 12 license.

The bar owner did not appeal the suspension of the license. However, it challenged the condition that it not have any gaming machines on site, arguing that that was an impermissible restriction on its amusement device license. In RK&E Corp. v. Alcoholic Beverages Control Commission, No. 19-P-240 (April 21, 2020), the Appeals Court disagreed and affirmed the judgment in favor of the ABCC. It noted that the ABCC has broad discretion to approve, disapprove, or approve with conditions a license to sell alcohol. The failure of the City to take enforcement action for violation of the Section 177A license did not affect the ABCC’s independent authority to take action on the Section 12 license. The conditions attached to a license following a suspension need only be reasonably related to preventing the unlawful activity on the premises. The condition imposed in this case was held to be reasonably related and therefore affirmed. While the condition may have the effect of negating the value of the Section 177A license, it was not an impermissible usurpation of the authority of the local licensing board.


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