Licensed as eating establishments
Eating establishments: You need seating for most of your patrons, but you can usually have live bands as entertainment. However, depending on the area, you might need to get zoning variances for things like DJs, dancing, larger capacities and a variety of other restricted functions.
Public halls: Dancing is allowed, but not after 12:45 am or before 9 am (unless the proceeds are being donated to a "recognized patriotic, fraternal, charitable or religious organization"). Also, patrons of "immoral character" or who behave in a "loose, disorderly or improper manner" aren't allowed in the hall during "dancing hours."
Billiard halls: Entertainment is allowed, and so are billiard tables. However, zoning restrictions limit where you can open your business.
Entertainment facilities: These don't need as much seating as restaurants, but must have more security, soundproofing, insurance and metal detectors, and are heavily restricted in terms of location.
*All licence info taken from the city of Toronto website.