Capital roiled with gambling debate

JUNEAU (AP) Gambling is a hot issue in Alaska's capital as legislators consider a proposal to boost state revenues by allowing video gambling machines in bars and clubs.

Lawmakers are getting a barrage of phone calls and e-mails from both sides. The topic drew a standing-room-only crowd for a 7 a.m. Wednesday hearing of the House Special Committee on Ways and Means, established this session to tackle the state's huge budget gap.

It's an issue that people are very passionate about,'' said Fairbanks Republican Rep. Jim Whitaker, the committee's co-chairman.

The morning hearing was a mixture of cool analysis of potential revenue and emotional claims that gambling is destructive to the community. The audience includes pull-tab operators, who think video gambling would drive them out of business, and bar owners, who stand to gain.

I got really lambasted by the pull-tab people,'' said Darwin Biwer, owner of the downtown Anchorage bar Darwin's Theory. Biwer was representing the Anchorage Cabaret, Hotel and Restaurant Retailers Association, which favors video gambling.

Whitaker decided after the hearing that he and several other legislators would form a special working group to consider electronic gaming. The group will meet Tuesday.

Whitaker said the legislators plan to weigh the social consequences against the financial benefits.

As policymakers, we have a responsibility to analyze a public policy issue such as gaming in a manner that goes beyond a set of personal moral values,'' Whitaker said. But for many legislators, the moral aspect of this issue will be the deciding factor.''

Gov. Frank Murkowski suggested to reporters Wednesday that the best course might be to study the idea.

I'd rather not try to rush into it this year,'' he said. But the Legislature might feel otherwise.''

A representative of CHARR, the bar owners' group, claimed this week that at least half the state House supports video gambling. It has the support of House Speaker Pete Kott, R-Eagle River.

The measure, House Bill 240, was sponsored and passed last week by the House Economic Development, Trade and Tourism Committee. But the committee chairwoman, Anchorage Republican Rep. Cheryll Heinze, heard a lot of public opposition and this week tried to persuade Whitaker to kill the video gambling part of it.

Whitaker said Wednesday that lawmakers will take the time to make a good decision, but there is an urgent need to address the state budget shortfall.

The Alaska Department of Revenue predicts video gambling machines could bring the state $50 million a year, but some lawmakers think that it would be more. The twice-a-year state lottery allowed under the bill would bring in little revenue, but proponents hope to join a multistate lottery.

Under the video gambling bill, 85 percent of what's spent would be returned in prizes. Of the 15 percent skimmed off, 30 percent would to go to the state, 30 percent to the charity that has a permit for the machine, 30 percent to the bar or club that hosts the machines, and 10 percent to the local government, or to the state if no local government exists in the area.

Larry Persily, deputy revenue commissioner, said charities would benefit, though they would likely lose some existing revenue from pull-tabs.

He said that after Saskatchewan, Canada, introduced video gambling, pull-tab revenue in the province declined by 63 percent in five years.

Anchorage Democratic Rep. Harry Crawford urged his fellow lawmakers Wednesday to reject video gambling. He predicted that gambling money will come to influence Alaska politics. Crawford, who comes from Louisiana, said he's seen firsthand that the video machines are addictive and can wreck lives.

Anchorage Republican Rep. Tom Anderson, a key backer of video gambling and a former officer in the CHARR group, said in an interview that Crawford's concerns need consideration. But he still believes the gaming proposal has merit if done properly, maybe with money going to education about gambling and programs that help with addiction. He also said 10 machines in each bar might be too much.

I do not think that this solves our fiscal problem completely,'' Anderson said. But it is an example of how we can find sources of revenue other than a tax.''