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3 ‘gifts’ politicians are wrapping for restaurants this holiday season

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Even with a federal shutdown, restaurants are likely to feel the impact of government initiatives gaining momentum in Congress, statehouses and state governors’ offices. Here’s a look at three currents that are building particularly quickly.

Sports betting

The federal government is poised to shut down as of midnight tonight, but lawmakers weren’t idle on other matters in the days leading to the crisis. Among the measures introduced in the Senate was a bill of significance to casual dining, a rare bipartisan proposal that will open the door to more sports gaming. 

The measure would establish a process for legalizing sports betting in more states (eight have currently set legalization in motion), along with a framework for federal regulation. The measure was noteworthy in part because of its sponsorship. It is the brainchild of Chuck Schumer, the liberal Democratic senator from New York, and Orrin Hatch, a conservative Republican from Utah. 

Casual dining has eyed sports betting as a possible lure for customers, many of whom frequent chains such as Buffalo Wild Wings and Twin Peaks to watch televised games. Operators say patrons would be drawn to operations that also allowed them to bet on the contests. Buffalo Wild Wings has already introduced a mild form of sports gaming under an arrangement with DraftKings, a leading online betting service. Guests can draft virtual football teams on Sunday and vie for no-cash prizes such as loyalty-program points and free chicken wings. The chain is also sponsoring a weekly DraftKings contest in which participants can win up to $10,000. 

A day before the Schumer-Hatch bill was introduced, a measure legalizing sports betting was passed by the legislative council of Washington, D.C. The measure is still subject to approval by Mayor Muriel Bowser and the U.S. Congress.

Cannabis legalization

The dominos are falling fast as states scramble for a share of the tax revenues and tourism benefits their neighbors have decided to chase. With New Jersey set to legalize the recreational use of cannabis, New York Gov. Andrew Cuomo called on Monday for approving the sale of THC-laced products in the Empire State in 2019, designating it as a top priority for his administration. Two days later, Pennsylvania Gov. Tom Wolf called for a “serious and honest look” at legalizing recreational pot use in his state.

Incoming Connecticut Gov. Ned Lamont has also set legalization of recreational cannabis use as a priority.

What choice does Rhode Island have but to look at legalization, as Gov. Gina Raimondo and state lawmakers acknowledged this week? Some form of possession and use of recreational cannabis is already permitted in Massachusetts, Vermont and Maine. 

Restaurants have largely been on the sidelines, unsure of legalization’s effect. But the chances of offering cannabis, or at least permitting its consumption on-premise, have been steadily rising. Alaska’s Marijuana Control Board voted this week to allow “social consumption,” or use in public places such as cafes. Oregon is also considering a greenlight for on-premise social use. 

The flurry of activity follows legalization in the new federal farm bill of hemp use across the nation. 

Predictive scheduling

Chain restaurants in Philadelphia will be required to set labor schedules two weeks in advance starting in 2020, the result of a bill signed into law this week by Mayor Jim Kenney. The measure makes the City of Brotherly Love the sixth major urban center to adopt a predictive scheduling requirement. 

Like colleagues in other cities, restaurants covered by the Philadelphia law will be penalized if schedules are changed any sooner than 14 days before the start of a shift. The penalties there will consist of half the wages an employee would have earned if hours weren’t cut or a shift was canceled. It differs from most in that it is directed at chains, large foodservice contractors (Aramark is based in Philadelphia) and large multiconcept operators. The law applies to operations with at least 30 sister branches nationwide, and that employ at least 250 people.

Philadelphia’s adoption of predictive scheduling comes as the industry is intensifying its effort to stop the benefit’s spread. The National Restaurant Association’s litigation arm, the Restaurant Law Center, joined forces with two other trade associations to file a legal challenge early this month of New York City’s regulations, saying the civic regulations are pre-empted by state law. The complaint notes that restaurants in the city have paid hundreds of thousands in wages and penalties because of the scheduling rules.

That assertion was echoed this week by Ark Restaurants, a New York City-based multiconcept operator whose properties in the Bryant Park area encompass more than 1,000 outdoor seats, most of which were underused because of bad weather in late summer and early fall. Yet “we're bringing in payroll every day to service that. We have to pay a minimum [for] four hours every time somebody comes in, even if we send them home,” CEO Michael Weinstein told investors this week. “If they're on the schedule, they get paid.”

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