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City code prohibits alcohol prizes

BY KATHRYN STINSON | FEBRUARY 09, 2010 7:30 AM

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Drinking. Games. Iowa City officials are warning bars owners that they need to keep the two separate.

In a recent letter to all Iowa City liquor-license holders, City Assistant Attorney Eric Goers asked bar owners to acknowledge the city ordinance banning bars from distributing alcohol as game prizes.

Seven years after the Iowa City City Council enacted the regulation, local officials might begin cracking down after they recently noticed violations.

While the Iowa Code permits gaming machines and allows the winning tickets to be redeemed for alcohol, using the tickets as drink vouchers is illegal under the city’s ordinance.

Goers said the City Council passed the rule to combat binge drinking in Iowa City.

“If a person wins a $100 bar tab, it’s a lot more likely that binge drinking will follow, than had there been an award of food, merchandise, or even a cash prize,” Goers wrote in an e-mail.

Iowa City police Sgt. Denise Brotherton said no citations have been issued.

Goers told The Daily Iowan he recommends bar owners instead offer to exchange winning tickets for cash or program the machines to dispense money to winners.

But David Werning, a spokesman for the Iowa Department of Inspections and Appeals, said the suggestion could raise issues with state law.

Machines that offer cash as a prize are consider slot machines in the Iowa Code. “Amusement devices” are only legal if they distribute prizes that can only be redeemed on the premises and which may not exceed $5, according to the code. Werning noted slot machines are only permitted in licensed casinos.

“These machines are only amusement machines,” he said. “Tickets, tokens, and coins may be exchanged for merchandise purchased only in the establishment.”

Until receiving Goers’ letter, Mark Puerling, the manager of Eagle’s Lodge, 225 Highway 1 W., allowed patrons to redeem tickets for alcohol, in addition to other prizes.

Now, they can only earn food, T-shirts, charity dinners, and sodas with their tickets, each worth $1.
Puerling said he thinks the city attorney is misinterpreting the award.

“The prize isn’t alcohol, it’s the ticket,” he said. “The tickets have a dollar value.”

Puerling said he is also concerned that without the alcohol as an option, the amount of money Eagle’s Lodge raises for local charities will deteriorate.

The establishment donates thousands of dollars each year to local charities, Puerling said. The lodge raised a significant amount for the construction of the UI Diabetes Research Center.

Goers’ letter also affects the gaming companies that own and operate the machines and collect a cut of the profits.

Larry Elbert of Camden Amusement, which has a few machines in Iowa City bars, said almost all of his clients offer alcohol for tickets.

Because he doesn’t know of anyone who has operated the machines without the incentive of alcohol, he is unsure know what the financial implications will be for bars.

Elbert said he is considering attending the City Council’s next meeting on Feb. 16, along with other gaming vendors.

“I’m not sure what the correct avenue is yet,” he said. “Right now, it’s all speculation.”


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