I am pretty sure that it is not a law, but it is their right to refuse service to them. I have heard how a few go down there and ruin it for the rest so they just don't let any of them in. Not too hard to do when your only form of identification is your military ID.
If i lived in the area I would not spend one penny in that town, just like I refuse to spend one penny in Berkeley California and I live very close to it. And on another note I would cut those dumb people out of the tree's in Berkely...