No Deal

The Drop in Federally Licensed Firearms Dealers in America

As a result of the lax requirements for becoming a firearms dealer, the number of Type 1 FFLs ballooned from 146,429 in 1975 to 245,000 in 1992. The vast majority of these license holders became known as "kitchen-table" dealers� individuals who conducted business out of their homes and offices and did not operate actual gun or sporting-goods stores. And while many kitchen-table dealers obtained the license merely to enjoy lower prices and evade the perceived "red tape" associated with gun laws, others recognized it as a dramatic loophole in federal law that could be easily exploited to facilitate high-volume criminal gun trafficking.

The effect of this unregulated universe of gun dealers was detailed in a 1990 ATF study titled Project Detroit. From January 1989 to April 1990, ATF and the Detroit police traced guns used in Detroit crimes to the original source dealer. For the 32 dealers who had five or more firearms traced back to them from crime scenes:

• one third of these dealers were kitchen-table dealers (10 out of 32, one dealer's status was unknown);
  
  
• of the top 10 dealers in terms of number of crime guns traced, kitchen-table dealers ranked first, second, sixth, seventh, eighth, and ninth;
  
  
• kitchen-table dealers supplied 41 percent of all guns traced (139 out of 343), even though they accounted for only one third of all dealers with five or more traces; and,
  
  
• the average number of crime guns traced per kitchen-table dealer (13.9), was nearly 50 percent higher than that of stocking gun dealers (9.3).³

By 1993, ATF reported in its study Operation Snapshot, only 26 percent of license holders in the U.S. were "stocking dealers"�FFLs that operated a storefront business. The vast majority, 74 percent, were kitchen-table dealers.⁴ The ATF report found that many dealers did not meet the statutory definition of "engaged in the business" of making or selling firearms which is the minimum level of activity required to be eligible for a dealer's license. According to ATF:

• 45 percent of licensed dealers in the United States had acquired no firearms in the 12 months preceding the report, while 81 percent had acquired 10 firearms or less and,
  
  
• 46 percent of licensed dealers in the United States had disposed of no firearms in the preceding 12 months, while 80 percent had disposed of 10 firearms or less.⁵

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 All contents � 2002 Violence Policy Center