Dave Aceto was shocked when he had to pay $15,000 in fees for his newly relocated arcade, Arcadia. He took to social media to call attention to the issue, calling on the city to cap its $150-per-device fee at the first 20 games. Aceto plans to reopen the bar with 50 pinball machines and 50 arcade games. It turns out he has precedent on his side. The owner of Jokers ran into the same issue in 1997 and won a consent agreement with the city, which agreed to reduce the fee. Ben McCanna/Staff Photographer

Portland officials may restructure licensing fees for businesses with arcade games and pinball machines, in response to one businessman who raised concerns about shelling out over $15,000 to license his Congress Street venue.

Dave Aceto, owner of Arcadia National Bar, took to social media last week to express his outrage over the annual fee, which city officials said he paid without complaint. The post prompted many supporters to call on the city make a change.

“It’s insulting as we try to bounce back from a pandemic, and it’s unreasonable for how much it already costs us to own and maintain games,” Aceto wrote on Instagram. “It would kill 50 cent pinball, it would kill free pinball night – it would kill pinball.”

Neither City Manager Jon Jennings nor Mayor Kate Snyder was aware of Aceto’s concerns until told about the social media post by a reporter. The staff in the city’s business licensing department also was unaware of the issue but has begun working on a proposal to restructure the fee after learning about it and because the city previously discounted fees for a different arcade to avoid a lawsuit.

Jennings said the city staff should not be blamed for simply enforcing current ordinances, but he agreed the fee is “problematic.”

“The current fee structure dates back to many years ago and doesn’t make a lot of sense,” he said. “I have asked staff to bring forward common sense changes that will be reviewed by the City Council. It is unfortunate Mr. Aceto did not bring his concerns up to staff during the process, but I do believe changes need to be made to the ordinance.”

A City Hall spokesperson said staff likely will recommend only charging for the first 25 games, but the proposal might not benefit Aceto this year.

Aceto said he was not surprised by the fee, since he paid a similar per-game fee at his old location on Preble Street. He expected the $15,300 fee for up to 100 games when he moved into the former Port City Music Hall, which is a much larger venue that he hopes to open next month.

Aceto said he’s been discussing his concerns about the fee with City Councilor Andrew Zarro, who owns a coffee shop.

An array of arcade machines is at the newly relocated Arcadia. Owner Dave Aceto plans to reopen the bar with 50 pinball machines and 50 arcade games. Ben McCanna/Staff Photographer

Arcadia is not the only bar in the city to get hit with the fee. Spare Time Portland, on Riverside Street, paid nearly $9,500 for its liquor license, $6,885 of which was for amusement devices. A company spokesperson could not be reached for comment.

Communities throughout the state have different methods for assessing annual fees on businesses with amusement devices. But Portland’s fee structure seems more expensive than others, based on a review of fees in several communities that host arcades.

Portland charges businesses $153 per device and does not cap fees, or offer discounted rates, after a business pays for a certain number.

By comparison, Old Orchard Beach, where the Arcade at Palace Playland boasts of having more than 200 arcade games, charges $15 a unit, but caps the fee at $300. That fee and cap only applies to businesses whose primary purpose is a video arcade. If video games are an accessory use, businesses are charged $20 per game.

South Portland charges $100 a device for the first 10 devices and then charges $50 a machine thereafter. But fees are capped at $6,500.

Auburn charges $50 each for the first nine coin-operated amusement devices and $30 each thereafter. That fee, however, increases to $1,500 per machine if it’s an “adult amusement device.”

Dave Aceto plays Knight Rider, a pinball machine from 1977, on Thursday at Arcadia. He says the city’s licensing fee for businesses with arcade games and pinball machines “would kill 50 cent pinball, it would kill free pinball night – it would kill pinball.” Ben McCanna/Staff Photographer

Jim Grattelo said he ran into a similar issue in 1997 when he opened Joker’s Family Fun & Games in Portland. The business was eventually relocated to Westbrook before permanently closing last year because of the pandemic.

Grattelo believes the fee originated decades ago as a way for the city to capture revenue from bars that the city believed were making money “hand over fist.”

“Decades ago, there were pool tables and pinball machines in bars and they wanted to capture fees,” he said. “Most had three or four (games) tops, so it wasn’t an issue. And then along comes Joker’s with 150 games.”

Grattelo said his attorney prepared a lawsuit against the city, citing a state law that ties licensing fees to reasonable costs associated with administration and enforcement. The attorney sent a draft of the lawsuit to the city, which instead of going to court or changing the ordinance negotiated a lower fee with Grattelo through a consent agreement.

That consent agreement allowed Grattelo to pay the full fee, which was $125 each at the time, for the first 10 devices and then $20 for each device thereafter, according to a 2008 letter from the city to Grattelo.

“When we challenged it, they didn’t even fight us,” he said. “But they didn’t want to change it because they didn’t want to lose out on revenue at the time.”

Aceto said he was happy to hear that the city was considering changing the fee, even though he may not benefit this year. He thinks the city should charge only $75 a game and cap it at $1,000.

It’s just more in line with what other venues are paying to offer their services,” he said.

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