Callaway Liquor Store takes advantage of tribal smoking, gaming
The statewide smoking ban that took effect on Oct. 1, 2007 has hit some bars around the area hard.
But not the on-sale portion of the Callaway Liquor Store. That's because smoking is still allowed in the bar that sits on the White Earth Reservation 11 miles north of Detroit Lakes.
The city-owned bar has seen a nearly 80 percent increase in revenue since the ban was put in place.
Callaway City Clerk Shelley Dillon said that smoking alone doesn't explain the sharp increase.
"When we started gaming, sales went up substantially," Dillon said.
And the numbers prove it.
Gaming in the form of networked machines started at the bar in Aug. 2007. The average monthly revenue from Jan. 2008 to the start of gaming was $14,186.
From the point gaming started to the start of the statewide smoking ban, average sales increased to the tune of $19,028.
Dillon said that the city needs the revenue since not all of the land in Callaway is subject to property taxes. She said that tribally owned housing takes away close to a quarter of property tax revenue.
Another dent to revenue is the Native Harvest store located in the old Callaway School building that is also exempt from property taxes.
Dillon said that the added revenue came when more and more people descended on the bar to smoke and participate in gaming.
Profits from the city-owned liquor store go to the city to help keep property taxes down. At a minimum, $1,000 goes to the city utilities department to help keep costs down for residents.
Allowing smoking, though, has put the city between the White Earth Reservation and the state Department of Health.
White Earth Tribal Attorney Joseph Plumer issued a legal opinion that said that the statewide law doesn't apply to the tribe.
In the opinion, Plumer said that because the Freedom to Breathe Law is considered a civil regulatory law, they have "diminished applicability on lands within the limits of an Indian reservation."
The legal arrangement of tribal gaming machines in Callaway Liquor Store muddies the legal waters.
In essence, the tribe leases the physical space in the areas where gaming machines are located, Dillon said.
Plumer added in the opinion that each site that has a Class II gaming license from the tribe can choose whether to permit smoking or not.
The liquor store in Callaway was the only one that decided to allow smoking.
Other municipal stores in Mahnomen, Ogema and Waubun decided to prohibit smoking. Mahnomen and Waubun authorities relied on an opinion from the Mahnomen County Attorney that said that smoking would be illegal, despite being located on the reservation.
Mahnomen County Attorney Julie Bruggeman said that her office based it's reasoning on the fact that state cannot enforce civil regulatory laws on either tribally-owned land or land that is owned by enrolled tribal members. She thinks Callaway is stretching it.
"Just because it has a gaming license means nothing," Bruggeman said.
The tribe hopes that other municipal liquor stores decide on their own whether to proceed with a smoking ban or not.
Plumer said that for now, the tribe will be waiting for other issues to be resolved with Mahnomen County before pressing on the smoking ban issue.
Right now, there is still the issue of whether the Shooting Star Casino will get back property taxes it has already paid because the land the casino is on was placed into trust status.
A hands-off approach
Despite Callaway allowing smoking for over a year since it became illegal across the state, the bar hasn't been cited for allowing smoking.
The state Department of Health is taking a hands off approach for now, basing its decision on an unclear opinion from the Attorney General's office.
"We did have some direction of what we could or couldn't do," said Tom Hogan, director of the Indoor Environment and Radiation section at the Department of Health. "It wasn't a very clear path."
Hogan said that the health department isn't looking to single Callaway out.
"The state has not received a complaint," Hogan said.
He said that if complaints are made, that's when the state steps in.
"Our main drive is to do what we can to bring them into compliance," Hogan said.
Becker County Attorney Michael Fritz said that because violations are misdemeanors, the responsibility for charging violators of the law falls to cities. That won't happen with Callaway signing off on smoking at the liquor store.
Other establishments say they're hurting
While Callaway is reaping the benefits, other bars are hurting.
The American Legion and Veterans of Foreign Wars posts in Detroit Lakes have seen a dramatic drop in revenue.
American Legion John Bridges Post 15 Manager Dawn Mattson said that revenue have dropped at least 30 percent since the smoking ban took effect.
"A lot of people feel they had a right taken away," said Post 15 Commander Don Thorp. "They haven't come back."
Thorp said that some non-smokers promised to patronize the Legion to help offset the loss of customers who smoke. That hasn't had much of an impact.
"They haven't taken up 10 percent of the revenue," Thorp said.
Mattson said that veterans are upset at not being able to smoke since they received cigarettes in their rations while they served in the military.
The VFW has seen its revenue drop as well.
"It's certainly not a level playing field," said VFW Post Commander Dave Coalwell.
He said that the original plan was for fraternal organizations to be exempt from the smoking ban. Somewhere in the law-making process, Coalwell said, a decision was made not to exempt fraternal organizations.
The loss of revenue from smoking is hurting both organizations' charitable efforts.
Thorp said many organizations that receive money, such as Legion baseball and scholarship programs aren't getting as much anymore.
Mattson said that a large majority of those who played pull-tabs were smokers.
"Ninety percent of them were smokers," Mattson said. "Now they are going to Çallaway."