The marquee above Benny's Rebel Room in the 14th Street red-light district proclaims it as "Home of the Porno Stars." Although it continues to serve liquor and feature topless dancers regularly, Benny's hasn't served any food for the last month and a half because of electrical problems. According to its classification under the District's liquor laws, however, Benny's is a restaurant.

Under city liquor laws passed in 1934, only a few types of establishments other than restaurants can sell liquor by the drink. So owners of Washington nightclubs, go-go joints, discos and topless bars say they are forced to characterize their establishments as restaurants, although in many cases their main function is not to serve food. Under city liquor laws, bars and discos just don't exist.

The situation is frustrating for owners who say the cost of serving food hinders business. Citizen groups in Georgetown, Shepherd Park, Dupont Circle and Takoma also are upset with the law because they say it allows go-go joints and topless bars to operate in their neighborhoods--often despite community opposition--under the guise of being restaurants. They say if the laws were more strictly interpreted, many establishments they deem undesirable would lose their licenses.

Both groups have begun to call for changes in parts of the law, administered by the city's Alcoholic Beverage Control board. Businesses seek changes that would reduce meal requirements. Citizen groups want restrictions, such as zoning, that would address their concerns.

The District of Columbia Alcoholic Beverage Control Act was enacted by Congress in 1934, a year after the repeal of national prohibition laws. Although it legalized and controlled the sale of liquor by requiring some establishments to serve meals, the law virtually outlawed bars and saloons that existed before prohibition.

"The intent of the law was that meals had to be available too," explained Dallas Evans, acting director of the ABC board.

Many bar owners and citizens say the law reflects outdated fears of lawlessness and immorality.

"The law is very much behind the times," said Bill Gormley, manager of Bojangles, at 2100 M St. NW.

"The law is a little antiquated," Evans said. "It needs to be clarified, fitted to the needs of some establishments." Evans said the ABC, in its 1983 legislative package, will propose a liquor license classification that would allow clubs, discos and cabarets to serve alcohol without many of the requirements to serve food.

In the meantime, many citizen groups upset over businesses allowed to operate as restaurants in their communities have focused on language in the ABC laws that determines what a restaurant is.

Courts Oulahan, an attorney who since 1966 has represented several community groups in challenges of more than 100 ABC licenses, has charged that the ABC board fails to strictly enforce regulations. He said many establishments do not obey the letter of the law.

According to the D.C. Code, "the chief source of revenue to be derived from the operation of a liquor licensed restaurant shall be from the preparation, cooking and serving of meals and not from the sale of beverages."

"The [ABC] board doesn't pay any attention to that requirement," Oulahan said.

Daniel Gallucci, owner of Chances R, 7212 Georgia Ave. NW, which features topless dancers, said more of the club's revenue comes from liquor than from food. His menu lists a dozen items. Renewal of his liquor license has been challenged by the Shepherd Park community.

ABC Board Chairman Peter Ridley said the board "strictly enforces" its regulations through inspections, yearly license reviews and investigations of citizen complaints.

He said the board can use discretion in deciding whether an establishment satisfies the requirements that most of its income come from food. Ridley said the regulations are interpreted "generally" rather than "quantitatively."

Evans said a 1956 opinion by then-corporation counsel Vernon West allows the board to use discretion on the source of revenue. Oulahan, however, said the opinion allows room for various interpretations. "The fact of the matter is they're supposed to be restaurants," he said.

D.C. corporation counsel officials said a current opinion on the legal definition of a restaurant and the source of revenue issue would require months of research.

"We don't close businesses down summarily unless there's obvious, almost irrefutable, evidence they are violating ABC regulations ," Ridley said.

Earlier this year, the ABC denied requests to renew liquor licenses to The Warren Restaurant and Lounge at 1521 14th St. NW and The Dixie Bell Bar and Grill at 1527 14th St. NW.

Both had operated under restaurant liquor licenses for at least 25 years, Evans said. However, a recent investigation by the ABC found neither was equipped to prepare and serve food or had menus and food on the premises.

After ABC hearings, both were found to be regular hangouts for suspected pimps and prostitutes who congregated along sections of 14th Street.

According to the ABC, about 870 District establishments that sell liquor, beer or wine are licensed as restaurants. Most are considered restaurants in the traditional sense, Evans said.

However, a number of owners and managers of local bars and nightclubs that exist as restaurants said their businesses operate primarily to provide entertainment and they make most of their money from selling drinks from the bar.

Mike O'Hara, who has owned or managed six nightclubs and discos here since 1967, explained: "People don't want to eat when they come in a high-energy place like a dance club. I spent $50,000 to $60,000 on a kitchen for one club . I had to hire chefs to run it for people who didn't want to eat."

O'Hara said many businesses make honest efforts to serve meals but find they don't have the customers. He said the food requirements hurt some of them.

There also is concern about the liquor laws in the restaurant industry. John Cockrell, executive vice president for the Restaurant Association of the Metropolitan Area, said his group is concerned about the District's ABC laws on restaurants because some establishments included under the laws, such as sex-oriented clubs, project a negative image on all restaurants.

"We're sure of one thing," he said. "We do not think a lot of them are restaurants. A lot of these places wish the heck they didn't have to sell food."