Groups worry about gaming bills

Posted: Sunday, April 27, 2003

ANCHORAGE (AP) In the tiny Aleutian Islands village of Nikolski, residents rely on pull-tab gambling money from games played 900 miles away for basics such as the satellite phone that links them to the outside world in bad weather.

Around the state, people newly diagnosed with multiple sclerosis get detailed information about the disease through mailings paid for with pull-tab profits.

And when Alaska families lose their homes to fire, the American Red Cross uses pull-tab proceeds to put them up temporarily.

Now gambling bills are moving through the state Legislature that some say threaten to damage the pull-tab industry and the organizations that benefit.

Gov. Frank Murkowski wants to generate millions for the state by dramatically increasing state taxes on pull-tabs.

House members are working on a bill that would allow video gambling machines to join pull-tabs, bingo, fishing derbies, ice classics and raffles in Alaska's small but politically powerful gambling industry.

By week's end, there were signs in Juneau that the video gambling bill was in trouble for this year. Key senators, including Senate President Gene Therriault, said the issue was too complex to make it through in the remaining three weeks. House Speaker Pete Kott, a booster, was more optimistic of the chances.

I think it's about 50-50,'' said Kott, R-Eagle River.

Gambling spending in Alaska soared about 300 percent between 1988, the year lawmakers allowed higher prize limits on pull-tabs, and 2001, the latest full year for which figures are available. Charities' share has gone up about 200 percent.

In all, out of $274 million played in pull-tabs in 2001, charities and other organizations netted $23 million. Most of the money, almost $214 million, went for prizes. The rest goes for taxes and expenses.

Bars now are leading the fight for video gaming, seeing it as a lucrative source of money in tough times.

They are taking on charities and their old pull-tab allies, who fear games like video poker and black jack would lure players away from the old cardboard standby of pull-tabs sheerly on entertainment value.

Oh man, that would kill us. That would kill the industry. It would be devastating,'' Boris Merculief, chairman of the Aleutian/Pribilof Islands Association, said of video poker.

The Aleutian association is part owner of Gold Cache Bingo in Anchorage, one of the state's biggest and most profitable bingo halls. The association is among six Native organizations that each cleared more than $160,000 in 2001 for playing their pull-tab permits there.

It's a very small percentage of our overall budget, but it is a very critical amount. It is our only pot of discretionary hard dollars,'' said Dan Duame, general counsel for APIA.

With its pull-tab money, the association has hired specialists in economic development and natural resources. It also uses the money for emergency needs such as medical travel.

The tribal government of Nikolski, a village of 12 homes, is a partner at Gold Cache, and the Nikolski Fisherman's Association also uses its permit there.

The association pays for satellite phones at the village health clinic, bought a 48-foot landing craft that can travel to Dutch Harbor and funds cultural programs in Aleut dance and language, all with pull-tab money.

Most gambling is illegal in Alaska. The exception is what's known as charitable gaming. Some 1,200 organizations turn to gaming to finance their work and good deeds. About half do so with pull-tabs, including many in rural Alaska.

Not all are, strictly speaking, charities. The state allows a wide range of groups to participate, including Native villages, whaling associations, mushing associations, sports teams, municipalities, trade associations, political organizations and fraternal organizations like the Moose and Elks.

It stretches the definition of charity, in my mind,'' said state Sen. Con Bunde, chairman of the Senate Labor and Commerce Committee. The Nome Chamber of Commerce, for instance, uses pull-tab money for salaries.

Even if video poker doesn't come through this year, lawmakers may go for higher pull-tab taxes, through HB 169 and SB 102.

Murkowski wants the state to take 8 percent off a game's gross sales, before prizes. Under the current tax structure, the state collects 3 percent of a much smaller figure, the ideal net. That's what's left if every ticket is sold and all the prizes are paid out.

The state taxes and fees collected would go up from $2 million to about $22 million. Charities also would get more, if players kept playing.

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