On August 22, 2025, Governor Kathy Hochul signed Assembly Bill A7040-B, creating a new liquor license category for for-profit membership clubs. The law, which takes effect on February 18, 2026, represents a long-awaited update to New York’s Alcoholic Beverage Control Law.

Historically, only not-for-profit clubs—such as fraternal organizations or benevolent associations—could obtain a club license to sell alcohol for on-premises consumption. For-profit entities, even those with similar membership structures, were excluded. As a result, private social clubs, coworking lounges, athletic facilities, and corporate dining spaces were forced to either forgo alcohol service or operate in legal gray areas.

A7040-B changes this by adding Section 64-f to the Alcoholic Beverage Control Law. It authorizes a new “for-profit club” license, allowing qualifying clubs to serve liquor, wine, beer, cider, mead, and braggot to members and their guests. The license carries a substantial annual fee of $20,000.

Eligibility is carefully defined. A for-profit club must operate solely for recreational, social, patriotic, political, benevolent, communal workspace, corporate dining, or athletic purposes. With the exception of corporate dining facilities, clubs must maintain at least 100 bona fide dues-paying members. Corporate dining spaces enjoy special treatment under the law; not only are they exempt from the membership requirement, but they are also able to contract with third-party food and beverage providers, provided such arrangements are disclosed to the New York State Liquor Authority.

The application process parallels other retail liquor licenses, and applicants are able to apply for temporary permits in order to operate while waiting for approval. As with other On-Premises licenses, the Authority must weigh whether granting a license serves the public interest. Factors include the number and type of nearby licenses, impacts on traffic and noise, the history of violations at the location, and evidence of discriminatory practices. Location restrictions also apply. No license may be issued within 200 feet of a school or place of worship, and applicants are subject to the restrictions of the 500-foot rule as well. 

The law is part of a broader modernization of New York’s Alcoholic Beverage Control Law. Recent changes to the law have expanded temporary permits, and two bills currently await the Governor’s signature; one that authorized limited retailer-to-retailer sales, and one that establishes a brand owner’s license. 

For-profit clubs now have a clear and legal path to incorporate alcohol service into their operations, opening doors for social clubs, co-working spaces, and athletic venues that rely on membership models. Non-profits retain their existing licenses but may explore conversion if the for-profit structure better suits their operations.

By introducing this new license type, New York is acknowledging the growth of modern membership-based hospitality while maintaining significant financial, regulatory, and community safeguards. This change in law offers new opportunities for clubs to enhance member experiences, while giving regulators and neighbors a continued voice in how alcohol is served across the state.

Keven Danow is an attorney representing members of all three tiers of the Beverage Alcohol Industry and member of The Danow Group, 605 Third Avenue, New York, NY 10158.  (212 3703744). Website: thedanowgroup.com; email:kd@thedanowgroup.com