Critics pan video gambling bill

Posted: Sunday, April 09, 2000

JUNEAU (AP) -- Critics of a video gambling bill say the biggest beneficiaries will be bar owners, not the nonprofit organizations that are supposed to profit from charitable gaming in Alaska.

The House Judiciary Committee on Friday took testimony on video gambling in Oregon, then listened to critics rip the bill before Alaska's Legislature for possibly cutting down on the number of charities that will benefit and for linking gambling to establishments that sell alcohol.

Committee Chairman Pete Kott, R-Anchorage, the sponsor of House Bill 182, said afterward the measure will not move out of committee this session.

''I think it's too big, too late, for any kind of move,'' Kott said.

The hearing began with a presentation by David Hooper, public affairs manager for the Oregon Lottery. He said his state embraced video gambling in part to replace illegal and unregulated video gambling.

Illegal machines were replaced with video gambling machines monitored by state-run central computer system that accounts for all money spent and paid out. Regulators test machines for fairness.

Hooper said video gambling in his state is limited to bars, taverns and lounges that have liquor licenses, in part because of their procedures in place to keep minors out.

The state earns $300 million on all forms of gambling, including the state lottery, racing, and pulltabs, on gross sales of $1.2 billion, with more than $200 million earned from video gambling. Prior to video, net gambling proceeds were about $100 million.

''Clearly, video gambling is a very viable source of revenue for the state,'' Hooper said.

Oregon limits retailers to five of the poker machines. Customers can bet from 25 cents to $2. The maximum payout is $600 per hand of video poker.

The machines have been a boon to bars, Hooper said. At a time when people were drinking less because of health concerns and a lowering of the blood alcohol content required to be found guilty of drunk driving, Hooper said, video gambling was an economic shot in the arm.

Bar owners clear an average of $70,000 annually from their five video gambling machines, he said.

''This has become what we would call a very valuable adjunct to their business,'' Hooper said.

Oregon's retailers receive an average 32.5 percent of net receipts, the profit remaining after payouts.

Kott's bill calls for Alaska charitable gambling permit holders -- nonprofit agencies -- to receive 30 percent of the profits after payouts. Vendors, such as bar owners, also would receive 30 percent. The state would be in line for 20 percent of the earning and municipalities would receive 20 percent of the profit earned within their boundaries.

''They don't have to do anything but spend it,'' said Larry Hackenmiller of Fairbanks, president of the Cabaret, Hotel and Restaurant Retail Association, which is lobbying for passage of the bill.

But critics say some charities that now profit from pulltabs would be cut out.

Anchorage certified public accountant Eugene Furman said the bill raises the amount each permit holder could award in prizes from $1 million to $6 million. That would mean vendors could deal with fewer charities.

''You are going to decrease the number of charities that are allowed to participate,'' Furman said.

The bill also was assailed by Alaskans who profit from selling pulltabs and by representatives of charities who are satisfied with their current charitable gaming earnings.

Ole Brenton of Alaska Bingo supply said video gambling is highly addictive and has been described as the crack cocaine of gaming. She said the social costs would show up in increases on the welfare rolls, divorce rates and crime.

Counselor Joseph Dimatteo said more gambling means more spinoff social problems such as depression, suicide and child abuse by people who lose.

If Alaska's bar business needs help, he said, ''Maybe the problem with bars is that we've got too many of them.''

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