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The legislative body of any city or a consolidated local government in which traffic in alcoholic beverages is not prohibited under KRS Chapter 242 may impose license fees for the privilege of manufacturing and trafficking in alcoholic beverages. Only those licenses set out in this section shall be issued, and the fee for each shall not exceed the specified amount set out in KRS 243.070.
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There are a limited number of liquor drink ("LD") licenses and liquor package ("LP") licenses available in a wet territory. These are referred to as "quota" licenses. In counties containing second to fourth class cities, one (1) LP license is available for every 2,300 county residents, and one (1) LD license is available for every 2,500 county residents. 804 KAR 9:010. The ABC Board can set lower city LP and LD quotas and have for other cities. They have indicated that Danville will be eligible for six (6) LD and six (6) LP licenses.
If a city or county has a corresponding local ABC license (KRS 243.070), the local ABC Administrator must first grant local license approval before an applicant can obtain a state license.
Generally, a licensee cannot permit a minor less than twenty-one years of age to remain on any premises where alcoholic beverages are sold by the drink or consumed on the premises. There are numerous exceptions to this rule see KRS 244.085 and 804 KAR 5.070.
Permitting gambling is a crime in Kentucky. If there is a buy-in, no matter how small, and a cash payout or other reward, no matter how small, it will be construed as gambling under Kentucky Law. Licensees commit a crime when they permit gambling on their premises, even if they do not receive a "cut" or profit from the game. The criminal penalties include a fine of up to $250.00 and/or 90 days in jail for an individual and a fine up to $5,000.00 for a corporation. In addition, the ABC will administratively cite the licensee resulting in large civil fines, license suspension, or even revocation.