Saying there was a “clear and present danger” to the public from criminal conduct occurring in association with adult gaming businesses, Montrose City Council passed a temporary moratorium on any such new establishments and restrictions on existing ones.

The moratorium buys the city time to further research what restrictions and enforcement might be permanently put into place. It was approved at an emergency meeting Tuesday, Sept. 21, following a lengthy work session discussion the morning before.

“In general we’re investigating very serious crimes, to include obstruction and some assaults and drug offenses in relation to the locations of these businesses,” Montrose Police Chief Blaine Hall said Thursday.

“We are unsure if the business itself is a legal business to operate because of the gambling laws, but the type of business attracts individuals who are also prone to committing serious crimes.”

Hall said that clearly not everyone who patronizes adult arcade-style businesses is criminally inclined.

“But we don’t have another business in town that we respond to with this type of serious crime and frequency involved. It’s not just the frequency, but how we have four of these businesses and at all four, we are experiencing the same (type) of serious crime surrounding these businesses and their parking lots, and sometimes in the businesses themselves,” he said.

Those cases have included shootings, stabbings and a strangulation/kidnapping. Police records presented to council on Monday morning showed 14 serious crimes reported at two of the business locations in 2021 and other involved crimes at similar businesses. (See related info box for a highlight of major cases.)

The moratorium chiefly applies to future businesses of an adult gaming nature — slot machines, gambling devices, simulated gambling devices and video gaming devices such as “fish gaming tables.”

Existing businesses of this nature cannot relocate from where they now are; cannot employ anyone under 21; cannot admit anyone under 21 and must post signage to that effect. If they close, they cannot reopen while the moratorium is in effect for the next 180 days.

The affected businesses are TapIn Adult Skills Gaming; Spin N Win; Mad Skillz and Gone Fishing.

The Montrose Daily Press reached out to some of the businesses for comment but did not hear back prior to deadline.

‘Hotbed of crime’

In pushing for a moratorium, city staff looked at municipal code, state law and the Colorado constitution, the latter of which regulates unlicensed gaming. It allows limited gaming within the commercial districts of Black Hawk, Central City and Cripple Creek.

The four Montrose businesses provide access to vendor gaming machines that accept money or tokens and also pay monetary prizes, City Senior Planner Amy Sharp told councilors on Monday.

She said it isn’t clear whether some of the devices in the local businesses fit the legal definition of slot machine, gambling device or simulated gambling devices, which would be illegal.

“New businesses are actually being created to work around these legal definitions of gambling, so we are requesting that we have a temporary moratorium,” Sharp said.

The prospect of other gaming establishments opening left some councilors worried about whether they were acting quickly enough and it was ultimately decided to hold an emergency meeting Tuesday to vote on the 180-day moratorium to halt new gaming businesses.

As far as Assistant City Attorney Matthew Magliaro was able to determine, no other municipality in the state has a moratorium like the one councilors were considering Monday and approved Tuesday; however, he found two examples in Florida and also noted that Palisade and Aurora regulate gambling under local ordinances. Further, Montrose barred gambling between 1918 and some point in the 1970s, Magliaro said.

“The Montrose Police Department has had a number of serious cases that have involved work from the patrol staff, from the detective staff, as well as specialized units, arising from these establishments,” Magliaro said Monday.

“I want to make a point here that the police department is reacting to behaviors at the business arising from there and not picking on or focusing on these businesses.”

The incidents arising from the gaming businesses demand heavy resources from the police department because of their complexity and seriousness, he also said. “That has had real world costs upon the resources the department has to keep us safe throughout the community.”

Montrose Police Sgt. Larry Witte referred to the locations as “a hotbed of crime,” and detailed an alleged murder attempt, a stabbing, a shooting and a strangulation, all either originating on gaming business grounds or otherwise related to them. (See the same info box referenced above.)

“Neighboring businesses are complaining about the crime that’s going on, the drug paraphernalia they’re finding in their parking lots during the day,” Witte said.

Law enforcement also is concerned because two of the establishments are near Pomona Elementary.

“We wanted to bring this to you to potentially act fast so we can get a handle on this situation before it gets much worse,” Hall told council Monday.

In response to Councilor Anthony Russo, Hall also said there are not other businesses in town where things like stabbings, shootings and drug activity take place on a regular basis.

“It’s not like there are three (gaming) businesses where this stuff isn’t happening and one where it is. These businesses just attract this kind of activity in general,” the chief said.

Gray area

Building off of Magliaro’s comments, Mayor Doug Glaspell and Councilor David Reed asked about financial enforcement options.

Magliaro said businesses need a sales tax license if they are selling goods or merchandise. The gaming businesses are required to pay an annual use tax on games and fixtures. He said only one of the four businesses (which he did not specify) had applied for any kind of licensure and that none of them has paid the use tax.

As far as prohibiting gaming businesses outright, although no one has the right to operate an illegal businesses, adult gaming centers operate in a “gray area,” because there has been no conclusion as to their legality.

The Daily Press reached out to the Colorado Attorney General’s Office to see if the state had clarity on the matter, but did not immediately hear back.

Council could possibly pursue nonpayment of the use taxes, Magliaro said, but it’s uncertain whether the city could shut down the gaming tables over that issue.

Councilors also noted the proximity to Pomona and raised concerns over business patrons bringing alcohol on-premises. The gaming tables do not sell alcohol.

Regulations against intoxicated pedestrians in the roadway and public intoxication are in place, Magliaro said, and in terms of policy-making, council could explore them as conditions of business licenses.

City Attorney Stephen Alcorn cautioned council against putting “the cart before the horse” as the Monday discussion went on. The focus of the work session topic was the temporary moratorium, which would give staff time to fully research permanent options.

“We want to narrowly tailor it to the problems and weave this constitutional line while still addressing the real concerns,” Alcorn said.

Although council members were raising thoughtful questions, the time wasn’t necessarily ripe for all of them, he said.

Reed did not entirely agree.

“I believe this suggests there is a present danger with respect to the operation of these businesses,” he said.

The matter shouldn’t wait, he said, and council should consider the avenues it has to address the public safety concerns.

Reed said although he did not know the ramifications of completely shutting down the gaming businesses, “I’m very concerned about the ongoing activity and it suggests to me action needs to be taken now and perhaps it’s an intermediate action.”

The initial thought was to put the moratorium on the Monday night regular council agenda.

Colorado Open Meetings Law generally requires a 24-hour public notice. According to written guidance from the Colorado Attorney General’s Office, the state Court of Appeals found that — in narrow circumstances — emergency meetings without timely notice can be allowed.

The Open Meetings Law itself has no provision for emergency meetings.

The appellate court in 1996 found that, if the emergency is one involving “an unforeseen combination of circumstances or the resulting state that calls for immediate action,” a meeting with less than 24 hours of notice is allowed.

In those circumstances, public bodies should provide notice in some form on their websites as soon as possible.

Councilor Barbara Bynum balked at voting on the moratorium at Monday night’s council meeting, but not because she didn’t have concerns about crime.

“I’m concerned about a precedent where we would be putting a moratorium on a type of business with very little noticing before a public meeting,” she said.

“Although I do think there is an urgency and a safety issue here, if we were to limit any other type of business with less than 24 hours notice … I’m just concerned about that. We have a noticing requirement.”

Bynum during Monday’s meeting also sought to create a public record demonstrating sufficient, imminent public danger to justify straying from policy. As part of that, she wanted each of the several police officers in the room to tell council why they felt the danger was imminent. Council later decided to take those statements during the actual moratorium hearing.

Although Alcorn said there was an “unprecedented public safety risk” and Glaspell later used the words “clear and present danger,” it was decided to instead convene an emergency session Tuesday, an action that provided more than 24 hours’ notice.

The Tuesday session also was called because three of five councilors were headed to a Denver conference.

The temporary moratorium passed unanimously Tuesday. As Alcorn noted on Monday, the affected businesses also now have 180 days to react with their concerns.

Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.

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Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.