Analysis of Denver’s Final Entertainment Licensing Law Draft Ordinance

Jun 16

This is not a comprehensive review of the draft. We are not lawyers. Also, due to the short timeframe between draft publishing and city council vote on June 23rd (next Tuesday), we used ChatGPT to analyze parts of the draft and write some of this.

We wish we had more time with it, but alas, we wanted to let people know what was going on as soon as possible.

We are willing to modify our interpretation as new information comes to light.

The silver lining is that in our conversations with them, DLCP seems open to bringing it back to council in the relatively near future if they find parts of it are not working due to community feedback and real-world application. They will also be engaging the public in its rule making process if this passes.

We wish there were more time and funds to gather data through nighttime economy surveys so that the laws could be written citing facts. We hope that The City can find some funding at some point so that future updates to the law can be based on empirical information.

As the draft stands, though, it could be worse. Overall, we believe it is a decent improvement over the previous rules that may allow for more culture to proliferate, barring unintended consequences of the language.

No plan survives contact with the real world, but this seems to be a good-faith effort to reform our dated entertainment laws.

Since we didn’t have a lot of time to review and consult, this is not an endorsement of the draft, but rather an acknowledgement that, in our view, the process has been transparent. We can say that DLCP has worked closely with operators and affected parties by considering their concerns.

If anything is unacceptable or needs clarification, we suggest you make your voice heard to City Council and to the department itself through the information provided on its page. We will be doing the same.

Issues the final draft appears to fix or improve

First, the good news.

1. Transition gap for existing licensees: improved

The final draft now creates a conditional bridge for existing cabaret/amusement-style licensees. It says prior licenses will not be renewed, but a licensee may continue offering live/adult entertainment after expiration if it files a complete application, pays the fee, applies for a license that covers the prior privileges, and operates under the new Article I:

“A licensee may continue to offer adult and/or live entertainment, as applicable, after the expiration of a previously issued license” if it submitted “a complete application,” paid the fee, the new license “encompasses the privileges” of the prior license, and the licensee operates under the new Article I.

But the bridge is conditional. DLCP can still require entertainment to stop if the license is under disciplinary action or if the licensee lacks required approvals, inspections, or permits.

2. One late event no longer automatically makes a business “nightlife”: fixed

The final draft defines nightlife entertainment by frequency:

“Nightlife entertainment business means a business that offers live entertainment after midnight more than twelve (12) times in one (1) calendar year.”

That fixes the earlier concern that one occasional late event could automatically trigger the heavier nightlife category.

3. Limited entertainment now has an intermittent late-hours path: fixed/improved

The final draft says:

“A limited entertainment business may provide live entertainment after midnight on an intermittent basis.”

It then allows live entertainment between midnight and 2 a.m. if it happens no more than 12 times per year, DLCP gets 72-hour written notice, and the business posts exterior notice 72 hours before the extension.

4. Limited entertainment businesses appear able to operate after midnight if live entertainment stops

The unlawful-act section does not say limited entertainment businesses must close at midnight. It says:

“It shall be unlawful for a limited entertainment business to provide live entertainment between the hours of 12 a.m. to 7 a.m., daily, unless the limited entertainment business has complied with the requirements of section 7-5(b) of this Code.”

That supports the narrower reading: limited entertainment businesses can likely remain open after midnight if they are not providing live entertainment.

5. The promoter/manager problem is improved

The final draft narrows “entertainment business manager” to people with operational control and compliance responsibility:

“Entertainment business manager means an individual who wholly or partially manages and controls the premises of an entertainment business, who has ongoing operational control of the entertainment business, and who is responsible for ensuring compliance…”

It still includes people with authority over day-to-day operations, staffing, security, revenue, talent, marketing, promotions, admission, ejection, and crowd-control policies.

But it now expressly excludes intermittent/one-time third-party promoters:

“Entertainment business manager does not include third-party commercial promoters who contract with an entertainment business to produce a special event or performance at the premises on an intermittent or one-time basis.”

6. Bad-actor promoters are addressed more directly

Instead of making every promoter a manager, the final draft says:

“Third party commercial promoters shall not assume operational control of an entertainment business or perform the duties of an entertainment business manager as described in subsection 7-1(9).”

That is more targeted. It goes after the promoter/operator who is effectively running the venue, not the normal promoter who books or markets one event.

7. Manager presence is softened from “always on premises” to “available”

For nightlife businesses, the final draft says:

“At least one (1) nightlife entertainment business manager or owner must be available to respond to law enforcement and if applicable, available to appear on the premises during all hours of operation.”

If no approved manager or owner is available, the business must stop live entertainment operations until someone is available or approved.

That is still a compliance burden, but it is less severe than requiring an approved manager physically on site at all times.

8. Public-space responsibility is narrower than before

The final draft requires procedures for admission and crowd control, but the disorderly-congregation language is now tied to ingress and egress points:

“All owners, managers, and employees shall make reasonable efforts to prevent individuals from congregating in a disorderly fashion within twenty-five (25) feet of all ingress and egress points for the nightlife entertainment business.”

That is more precise than an undefined “near the premises” standard, though it still creates responsibility for some public-space conditions. We also wish it only applied to all public ingress and egresses, rather than a catch-all.

Issues the final draft still creates or leaves unresolved

1. Community Support Requirements Need Clearer Decision Standards

The application section requires:

“Evidence of community support. All entertainment business license applications shall include evidence of community support as defined in subsection 7-1(10).”

The definition of evidence of community support includes letters of support or non-opposition from eligible neighborhood organizations, good neighbor agreements, petitions or affidavits from parties in interest, and:

“Any other evidence deemed sufficient by the Department to show support for the business from parties in interest in the designated area.”

Community engagement is an important component of responsible nightlife policy. Public notice, neighborhood outreach, and opportunities for community input are common features of entertainment licensing systems throughout the United States.

The concern is not that the ordinance requires community engagement. The concern is that the ordinance establishes a community-support requirement without clearly establishing how the required evidence will be evaluated or weighed in licensing decisions.

Unlike several other provisions in the draft that expressly defer implementation details to Department rule, the community-support section establishes a substantive requirement directly in the ordinance. However, it does not clearly explain how that evidence will be applied once submitted.

For example, the ordinance does not clearly state:

How much evidence of support is sufficient;
Whether different forms of evidence are weighted differently;
How support and opposition will be evaluated when both exist;
What happens if an eligible neighborhood organization declines to participate;
Whether evidence of support is primarily intended to demonstrate community outreach or neighborhood preference; or
How community-support evidence is weighed against objective factors such as public safety, compliance history, operational plans, noise mitigation measures, and crowd-management procedures.

The ordinance would benefit from additional clarity regarding the role that community-support evidence plays in the licensing process. Clear decision standards would provide greater predictability for applicants, residents, neighborhood organizations, and the Department while reducing the risk of inconsistent application.

2. The Definition of Eligible Neighborhood Organization Would Benefit From Clearer Standards

The ordinance defines an eligible neighborhood organization to include a Registered Neighborhood Organization (RNO), but also:

“Any other type of association of residents and owners of real property designated by the Department as an eligible neighborhood organization.”

The practical reason for this language is understandable. Not every affected stakeholder group fits neatly within Denver's existing RNO framework, and effective nightlife governance often requires engagement with a variety of neighborhood, resident, business, and property-owner organizations.

The concern is therefore not that the ordinance allows the Department to recognize organizations beyond RNOs. In many circumstances, that flexibility may be beneficial.

The concern is that the ordinance does not establish clear standards governing how additional organizations are designated or what qualifications they must meet before receiving special standing within the licensing process.

For example, the ordinance does not specify:

What criteria the Department will use when designating an organization;
Whether organizations must have defined geographic boundaries;
Whether organizations must have transparent governance structures;
Whether organizations must meet minimum membership or representation requirements;
Whether conflict-of-interest standards apply; or
Whether the designation process will be governed by Department rule.

The ordinance would benefit from establishing baseline eligibility standards while directing the Department to develop administrative procedures through rulemaking. This approach would preserve flexibility while ensuring that the designation process remains transparent, predictable, and consistently applied.

Without clear standards, applicants, residents, businesses, and neighborhood organizations may have difficulty understanding which groups are entitled to participate in the licensing process and how those organizations obtained that status.

3. Conditions are broad

The draft says DLCP may place conditions on a license to ensure lawful operation, incorporate enforceable provisions of agreements with parties in interest, mitigate sound/noise/vibration/light impacts, or:

“add any operational requirements or restrictions that may be necessary to protect the public interest.”

That is a very broad condition-setting power.

4. Hearings remain discretionary and can apply to more than new licenses

The draft says:

“A public hearing may be required prior to the issuance of an entertainment business license.”

It also says a hearing is required upon relevant substantial requests from parties in interest, and may also be required before ownership transfer, material/substantial alteration, or renewal.

At the hearing:

“The applicant shall have the burden of proving by a preponderance of the evidence its qualifications for the license.”

5. The 30-day decision deadline still has no hard consequence for DLCP

The draft says DLCP should issue a written decision within 30 days after the hearing unless more time is needed, but then says:

“The failure of the Department to issue a final decision within thirty (30) days after the date of the public hearing shall not preclude the Department from later determining that the application should be approved or denied.”

So the deadline exists, but there is no automatic approval or clear consequence if DLCP misses it.

6. “Dance floor” still counts as live entertainment

The definition says:

“Live entertainment includes the provision of a dance floor, live music, and live performances, including performances by a disc jockey.”

That may still sweep in social dancing, cultural dance programming, or movement-based events that are not “live entertainment” in the ordinary sense.

7. Cultural exemptions remain narrow

The exemption list covers amusement/water parks, nonprofit cultural institutions such as museums or art galleries, athletic facilities, movie theaters, city facilities, and schools/colleges/universities.

It does not expressly exempt for-profit galleries, cafés, bookstores, rehearsal spaces, dance studios, artist-run LLCs, or hybrid cultural businesses.

8. Inspections remain discretionary

The draft says inspections may be waived if the applicant recently passed a substantially similar inspection or otherwise met requirements. But it then says:

“However, the Department, in their discretion, may require that the applicant undergo additional inspections.”

That preserves duplicate-inspection risk.

9. FBI Fingerprint-Based Background Checks May Be Broader Than Necessary

The draft defines a background check as:

“Background check means a national criminal history records check conducted by the federal bureau of investigation upon submission of fingerprint records and all required documents.”

It then requires:

“Every application for a nightlife entertainment business and adult entertainment business shall require a background check for all owners and entertainment business managers.”

Unlike earlier drafts, the final version narrows the definition of an entertainment business manager and excludes third-party commercial promoters producing intermittent or one-time events. This is a substantial improvement.

However, the ordinance still extends FBI fingerprint-based criminal history checks beyond owners and into the category of entertainment business managers.

The City has stated that part of the purpose of these provisions is to prevent individuals from exercising effective control over entertainment businesses while avoiding accountability. Addressing those situations is a legitimate policy objective.

The concern is whether requiring fingerprint-based FBI criminal history checks for every entertainment business manager is the narrowest and most proportional way to accomplish that objective.

Colorado already requires fingerprint-based criminal history checks in certain highly regulated licensing contexts, particularly for owners and controlling persons. The draft expands that requirement to a broader group of non-owner operators who may have significant operational responsibilities but do not necessarily possess ownership interests in the business.

Because fingerprint-based FBI background checks represent one of the highest levels of criminal-history screening used in business licensing, the City should consider whether the requirement should be limited to owners, controlling persons, or individuals with ultimate authority over the licensed premises, rather than automatically applying to all entertainment business managers.

A more targeted approach could still address accountability concerns while reducing unnecessary administrative burdens and privacy concerns for non-owner operators.

10. Security remains rule-dependent

The nightlife section says:

“Nightlife entertainment businesses shall adopt, implement, and adhere to an approved security plan as required by the Department in rule.”

That is less prescriptive than mandatory guards/metal detectors in the ordinance text, but the actual burden depends on DLCP rule.

11. Weapons prevention applies to patrons, employees, and contractors

The draft says nightlife businesses must:

“implement and maintain reasonable measures to prevent patrons, employees, and contractors from bringing weapons onto the premises.”

That may create practical questions for performers, vendors, production crews, touring staff, contractors, and back-of-house access.

12. The Common Ownership Requirement May Be More Restrictive Than Necessary

The draft provides:

“Nightlife entertainment businesses that propose to co-locate with a marijuana- or liquor-licensed establishment, as permitted by law, must maintain identical ownership structures. If the co-located entity has a change in ownership or corporate structure, the nightlife entertainment business license issued at the location must be transferred, modified, or surrendered to comply with the requirements of this subsection.”

The likely purpose of this provision is to ensure clear accountability when a nightlife entertainment business operates alongside a liquor-licensed or marijuana-licensed establishment. The City has a legitimate interest in knowing who is responsible for compliance, public safety, and operational decision-making when multiple licensed activities occur within the same premises.

The concern is not the goal of accountability. The concern is whether requiring identical ownership structures is the narrowest and most effective way to achieve that objective.

Nightlife businesses often operate through a variety of business arrangements, including management agreements, operating partnerships, cultural programming partnerships, event-production agreements, and other shared-space models. These arrangements can allow venues to host more diverse programming, create opportunities for emerging operators, and expand access to cultural space without creating ambiguity regarding responsibility for compliance.

The ordinance does not appear to distinguish between situations where ownership structures genuinely create accountability concerns and situations where responsibility can be clearly established through contracts, operating agreements, designated managers, or other compliance mechanisms.

A more flexible approach could preserve accountability while allowing legitimate operating partnerships and shared-space arrangements to exist. Rather than requiring identical ownership structures in all cases, the City could consider requiring a clearly designated responsible operator, approved management agreements, or other mechanisms that establish compliance responsibility without restricting ownership flexibility.

The objective of clear accountability is reasonable. The question is whether identical ownership is necessary to achieve it, or whether the same public-safety goals could be accomplished through less restrictive means.

13. Renewal remains annual and can still become burdensome