I have a friend who runs a small event venue. Apparently he has been scoring some serious extra revenues by hosting “after parties”
In a nutshell
The party promoter goes out canvassing the clubs selling wristbands for $X amount as admission to his “party”.
Promoter provides DJ, Alcohol, food, security, pays for venue.
Police have supposedly visited the place and have no problem with these events because it is a “private party and alcohol is not being sold on the premises”
Also because it is a private party, they can serve alcohol all night if they want.
This to me sounds like a prime example of obeying the letter of the law while defeating the spirit, or is there some kind of precedent for this business model that allows for it to occur completely legally. I would think the simple matter of paying elsewhere would not legally absolve the party host of BATF regulations.
I ask out of concern for my friend and his business because this sounds really shady to me and I am curious if there is more to the legalities of this than the party promoters are letting on or know.
I wonder if you can get one whistle blower or witness to come forward… if the police can then get a warrant to crash one event and target the underage drinking.
Don’t know anything about CA liquor licensing laws, but anywhere where I do know a bit about liquor licensing, entry charge to property + property owner/occupier serving alcohol = selling alcohol, and requires a licence. I’d be astonished if the same wasn’t true in CA, if only because of the coach and four that such a gap would drive through the liquor licensing laws.
You might want to suggest to your friend that he set aside a chunk of that income and contact a lawyer now so he has someone to call to get bailed out quickly when the investigation is over.
Party promoter goes out to nightclubs around town inviting people to his “party” for a fee, they are given a wristband that allows them into the venue later that night.
No money changes hands at the party or venue. If someone shows up at the party without one they are turned away, period.
Alcohol is served at this party (alot) along with music and some food.
Venue has a signed contract stating they are just the venue, being rented by the party host. None of the food, alcohol, DJ, etc is provided by the venue.
If its this simple, I think this would be a hell of a fun business to be in.
I told him that when he told me about it. He seems to think its the greatest thing on earth and that he can’t get in trouble because the cops have made an appearance just curious what all the activity was late at night in what is basically a shopping center.
Just because the fee is not collected at the party venue does not mean that they are still not essentially selling alcohol after hours, they are just doing it in advance of the 2 am legal cut-off…
I would imagine when this finally comes to light by the CDABC (or whoever is in charge of liquor enforcement in Ca.) it will not be too hard for them to get a conviction.
Liquor laws can be complicated. In Pennsylvania, for example, there are places without liquor licenses that charge an admission fee, but allow people to byob. They then charge for mixers/cups/etc.
In general the cops are not going to make a fuss unless there is a complaint. The police officers don’t know the ins and outs of liquor licensing law. Unless there is underage drinking or general rowdiness they will probably wait for clarification on what to do.
Calling it a “party” (I have a mental image of your friend doing the air quotes while he is selling the tickets) and collecting payment in another location does not change the fact that he is selling alcohol … to think otherwise is just foolish. How far away does the payment need to be made to make it legal … next door, across the parking lot, across the street, across town, pay by mail? He can call it a petunia or a zakafranzel if he likes, it doesn’t alter the fact that he is taking money in exchange for alcohol.
When the bust does come, if your buddy disregards his lawyer’s advice and presents his silly defense in court I suspect the judge will express his displeasure at the attempt to make a fool of the legal system by handing down a very severe sentence.
The cops have already shown they know something is going on. If an investigation hasn’t started yet, it most certainly will when the neighbors start complaining about the things that are going to take place given a bunch of after hours clubbers and an open bar; public urination, puke in the parking lot, fights, squealing tires, drunk driving arrests, car crashes … even if the local patrol cops are on the payroll, others might stumble across it accidentally during an investigation of one the coke dealers who are likely going to frequent the place … and the legitimate bar owners who pay big bucks to operate legally aren’t likely to remain quiet for long, either.
If you can’t get your buddy to talk to a lawyer, perhaps he would at least consent to stashing some cash with someone so he has a way to make bail with one phone call … it’s no fun to try to arrange that stuff while sitting in a holding tank, not to mention the stress it puts on friends and family when the call comes … be prepared, just in case it turns out he only thinks he has outsmarted the system.
Additionally it’s him who is putting his livelyhood at risk, for what I bet is a pretty small share of the profits. The promoter is I’m sure bringing big bucks, and when your friend’s place is shut down (and charged with running an illegal drinking establishment to boot), he can just move on to another venue.
Presumably the cops don’t give a crap as long everything seems to be under control and not causing a problem. The first time there is a fight in the parking lot or some other inevitable incident they will look more carefully, or get the local beverage control board involved (if they are not already).
Since the tickets are sold at bars, I’d say the chances are close to 100%.
I’m mainly interested in how much a ticket costs. So let’s modify that to free food and drink, DJ, and security. Although if my memory of my younger days is accurate, I could pound down quite a bit of booze at an after hours party. Maybe kids these days are different.
I was a member of a charity. It’s primary fund raising method was to throw two big “private parties” every year. They sold tickets to the public, friends, etc. The ticket price included food and alcohol. They pre-sold tickets and tickets at the door. The charity was the host in a rented venue. The charity, as host, apparently had to get an alcohol permit from CA ABC, presumably because if ticket sales include alcohol, then that is tantamount to selling alcohol. I doubt they could get around that by simply saying no door sales. I am sure they wouldn’t have bothered if it was not legally necessary.
My wife is a teacher and they have a private staff group at her school. That staff group throws an annual staff party every year. They rent a venue and sell tickets. The ticket price includes food and alcohol. She had to get an alcohol permit from CA ABC before the event or hire a catering service that had an alcohol permit to serve the alcohol.
Again, why bother to get an ABC permit if it’s not legally required? I am sure ABC would have told them they don’t need a permit when they applied for one if the law didn’t require a permit.
I think a quick anonymous call to CA ABC is in order. They should be able to tell your friend the rules. As it stands, these private parties don’t sound proper as described.
Further, I am not clear if your friend is the host or merely the venue for hire. Either way, what kind of insurance does he have? I can envision a personal injury or wrongful death claim as a result of some drunk kid bringing this whole thing crashing down on everyone, especially if there was no ABC permit where one may have been required. How much will the attorney cost to clean up that mess?
I hope your friend doesn’t lose his shirt and doesn’t choose to be willfully blind.
He is only the venue, he does not do any of the selling himself nor does he provide anything other than a roof, 4 walls, chairs, tables, electricity. The insurance issues I am pretty sure he has covered. My only real concern is does he somehow assume tax/permit responsibility for alcohol sales in a rented venue where he does not provide the alcohol.
OK, he may not need a permit. I don’t know. I would still have your friend call ABC or an attorney to check on all permits and conditions required of a host and a venue.
Venue and/or host may also need approval from local law enforcement and fire marshal. I know when we hosted events, police and fire both had to sign off on it.
That still does not address the insurance question. He needs to check his policy and the insurance coverage of the host/promoter to find out who pays when something goes horribly wrong. This includes policy exclusions for failure to get proper permits, etc.
Yeah… in Ontario, if you’re hosting a wedding, trade show, private party, etc, where alcolol is sold, you need a special event permit. I imagine the same would be true in California.
Edit to last post: You need the permit for an event where alcohol is served or sold. Very important distinction that I completely failed to point up in my first post.