Legislature(2003 - 2004)

05/10/2004 08:55 AM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    HB 552-GAMBLING & GAMING                                                                                
CHAIR SEEKINS  announced HB  552 to be  up for  consideration and                                                               
then  announced  an at-ease.  Upon  reconvening,  he took  public                                                               
MR. PERRY GREEN  told members he is an Anchorage  taxpayer who is                                                               
here to help  solve the fiscal gap. When he  began to pursue that                                                               
goal,  he did  not know  that  oil would  be selling  at $40  per                                                               
barrel, but  he does not believe  that will be the  case for much                                                               
longer. He said  the issue of churches and  morality always comes                                                               
up in the debate on gambling.  In his opinion, gambling should be                                                               
an individual's  choice. He considers  himself to be  a religious                                                               
person;  he attends  church  services  regularly and  financially                                                               
supports his  own congregation  and several  others. Four  of his                                                               
five children attended religious primary and high schools.                                                                      
MR. GREEN said  he believes churches and gaming have  a record of                                                               
existing together. He  said one only needs to go  to Las Vegas to                                                               
find churches that are very full.  He said it's been awhile since                                                               
gaming was talked  about in a serious manner. He  told members he                                                               
has made 48  calls in an attempt  to poll people and  only one of                                                               
the respondents opposed  his opinion of gambling. He  said it has                                                               
been borne out that we need  to start thinking globally. Since he                                                               
has been in Juneau, he  has received calls from three continents.                                                               
Those callers recognize the potential  of Alaska's tourism trade.                                                               
He sees this  as an economic and jobs issue,  not a gaming issue.                                                               
He noted that  people can sit in  a hotel room in  Juneau and win                                                               
$200,000. He pointed out that while  Alaska has a fiscal gap, the                                                               
State of  Mississippi, which is  not known for great  schools, is                                                               
increasing its  budget because it has  instituted gaming. Welfare                                                               
recipients  now  have jobs  and  70  percent  of the  food  stamp                                                               
program has  been eliminated  in what was  the poorest  county in                                                               
MR. GREEN  noted that the forestry  industry is a shadow  of what                                                               
it was and revenues from fisheries  and oil are down. The leisure                                                               
industry  is the  largest industry  in the  world today.  He said                                                               
gambling will  bring 1,000  private industry  jobs to  Alaska. He                                                               
pointed  out  that it  is  very  important that  the  Legislature                                                               
create  good  jobs so  that  people  can  create good  lives  for                                                               
SENATOR THERRIAULT  said one  concern among  some members  is how                                                               
passage  of   this  bill   will  open  up   the  state   for  the                                                               
proliferation of  gaming under the Indian  Gaming Regulatory Act.                                                               
He referred to  a memo that he distributed to  members from legal                                                               
counsel that reads:                                                                                                             
     It is impossible  in my opinion for anyone  to say that                                                                    
     gaming will  be limited  to certain  clearly identified                                                                    
     portions  of land  areas  of the  state.  No one  knows                                                                    
     exactly how  much Indian land  there is and  where that                                                                    
     Indian  land is.  It's clear  though  that the  Venetie                                                                    
     decision does not provide the  answer or [indisc.] that                                                                    
     some have alluded to in this regard.                                                                                       
SENATOR   THERRIAULT  then   referred   to   another  memo   from                                                               
independent counsel  Don Mitchell  that cautions  the Legislature                                                               
about taking  any step.  He said that  while the  individuals Mr.                                                               
Green contacted  may have  been in  favor of  just one  casino in                                                               
Anchorage, the  Legislature is the  decision-maker for  the State                                                               
of Alaska and  must keep its eye on whether  that action opens up                                                               
uncontrollable gaming. He continued:                                                                                            
     We would  basically turn control over  that activity in                                                                    
     the State  of Alaska  over to a  federal agency  and no                                                                    
     longer  be able  to make  the  calls on  behalf of  the                                                                    
     citizens and  the Legislature. That's  why a  number of                                                                    
     years  ago  the  Legislature  even did  away  with  the                                                                    
     charitable  fundraising   casino  nights   because  the                                                                    
     roulette wheel  where you're  playing with  paper money                                                                    
     and all of  the proceeds go to a charity  at the end of                                                                    
     the evening,  that could be used  as legalized gambling                                                                    
     in  the State  of Alaska  and under  the Indian  Gaming                                                                    
     Regulatory  Act, could  throw  the state  open for  the                                                                    
     spread  of gambling  in  a fashion  that  the state  no                                                                    
     longer controls.  That's a  real motivating  factor for                                                                    
     myself,  enough to  the fact  that we  have independent                                                                    
     counsel  that advises  us and  watches the  things that                                                                    
     are being  discussed in Congress  so that we  make sure                                                                    
     that the Legislature continues to  make the policy, set                                                                    
     the policy in the State  of Alaska in regards to gaming                                                                    
     and not some federal agency.                                                                                               
MR.  GREEN  responded  that  he   also  got  legal  opinions  and                                                               
suggested putting a sunset clause  in the bill to address Senator                                                               
Therriault's concern. He thought that  litigation would be so far                                                               
down  the line  that  no one  else  would try  to  do any  gaming                                                               
outside of Kake, Klawock, and Metlakatla. He told members:                                                                      
     Metlakatla has gaming over and  above the state maximum                                                                    
     for those games because it  is an independent place and                                                                    
     recognized  as such.  Indian gaming  in California  has                                                                    
     made  it  possible to  take  a  lot  of people  off  of                                                                    
     welfare but  the state must, in  good conscience, enter                                                                    
     into  a contract  with those  Indian  casinos that  you                                                                    
     were  talking   about  and  they  must   pay  the  same                                                                    
     percentage. That's  why the  percentage is  actually 20                                                                    
     percent  and  the state  would  get  that money  should                                                                    
     people  in other  areas go  into gaming.  They have  to                                                                    
     have a state contract and if  you have it at 17 percent                                                                    
     to the state, 3 percent  to the borough, they also must                                                                    
     pay that too, should that be  the case. But my focus is                                                                    
     on  Far East  travelers. My  focus is  on international                                                                    
     players. My focus  is not to compete even  with a small                                                                    
     or a medium-size  Indian casino that would  have to pay                                                                    
     20 percent of its proceeds  to the state because in the                                                                    
     compact - every  state that has a compact  - Nevada has                                                                    
     a compact, Connecticut has a  compact with the Indians,                                                                    
     they  pay  one-half billion  dollars  in  the state  of                                                                    
     Connecticut. So that is true everywhere.                                                                                   
     There is  Indian gaming  in other  states but  there is                                                                    
     also private gaming.  Indian gaming is in  Nevada but I                                                                    
     challenge  you  to find  somebody  who  has visited  an                                                                    
     Indian gaming casino in the  state of Nevada. Everybody                                                                    
     goes to  Bellagio or to  Binions (ph) or to  the Hilton                                                                    
     or the  Sheraton and that  is the same in  other places                                                                    
     where they do  have Indian land. I  think your concerns                                                                    
     and  the  litigation that  would  take  place would  be                                                                    
     years  and years  and there  is a  sunset provision  in                                                                    
     this legislation and that  sunset provision would scare                                                                    
     anybody into  not investing a  lot of money in  an area                                                                    
     that doesn't have a real population base.                                                                                  
     I can go  back to 1989 to the one  store in Alaska that                                                                    
     contributed  between $20  and $29  million per  year to                                                                    
     the state  of Alaska  in revenues from  Asian tourists.                                                                    
     Last year that same store  only paid the state $311,000                                                                    
     because we do  not have that tourist  base anymore. The                                                                    
     Asians  aren't here.  They're the  big spenders.  In my                                                                    
     little business  plan that I made  up with consultation                                                                    
     with others, I  figured that there would  be $3 billion                                                                    
     in retail sales - in  additional retail sales and taxes                                                                    
     collected over  a 10-year period throughout  the state.                                                                    
     Now I'm thinking that might even be too low.                                                                               
CHAIR SEEKINS  asked Mr. Green  if he provided  committee members                                                               
with copies of the legal opinions he referred to.                                                                               
MR. GREEN said he did.                                                                                                          
CHAIR SEEKINS  indicated that there  has been a  proliferation of                                                               
casinos in  the State of  Washington and  asked Mr. Green  why he                                                               
does not anticipate the same thing happening in Alaska.                                                                         
MR. GREEN said the casinos in  Washington are card casinos in the                                                               
municipalities. A municipality  can have pull tabs  and cards but                                                               
they cannot have machines like Indian casinos do.                                                                               
CHAIR  SEEKINS  pointed out  that  there  has  also been  a  huge                                                               
proliferation of Indian gaming in Washington.                                                                                   
MR. GREEN responded:                                                                                                            
     That's why if you start  gaming like Nevada did, if you                                                                    
     start gaming like New Jersey  did, if you start and put                                                                    
     it there - you know, I'm  a member of the Safari Club -                                                                    
     I don't go  hunting but I just believe  in free choice.                                                                    
     I'm a  member of the  NRA. I don't collect  guns, don't                                                                    
     have any use  for them, but I think  people should have                                                                    
     the choice.  I think we need  to give - you  know, this                                                                    
     bill   calls   for   approval  by   the   people   and,                                                                    
     particularly, in the  area where it's going  to be most                                                                    
     affected,  which is  the  Anchorage  area. Everybody  I                                                                    
     talk to  - oh, I  hope you get it,  gee I'd like  to go                                                                    
     there, it's  a social thing.... It's  entertainment and                                                                    
     you're going to be  entertaining the willing and that's                                                                    
     what you'll get.  You'll get a lot more  money for this                                                                    
     state and  for this  economy and you  won't have  to be                                                                    
     having these 12 o'clock  midnight sessions that you all                                                                    
     have been  working hard for.  Gambling isn't  the total                                                                    
     answer  for  sure but  it  is  a  step in  creating  an                                                                    
     economy that's sustainable. It's a year-round thing.                                                                       
SENATOR THERRIAULT  referred to the  memo from Don  Mitchell, and                                                               
read from page 5:                                                                                                               
     The  Alaska Legislature's  enactment of  HB 552  can be                                                                    
     expected  to motivate  numerous Native  groups to  file                                                                    
     Class 3 Gaming Act  ordinances with the National Indian                                                                    
     Gaming  Commission that  will request  the chairman  of                                                                    
     the commission to allow groups  to conduct that kind of                                                                    
     casino  style gaming  that the  enactment will  empower                                                                    
     the Alaska Gaming Commission to have in Anchorage.                                                                         
SENATOR THERRIAULT  said the  memo then  talks about  the lengthy                                                               
process  and negotiation  that IGRA  goes through.  If the  state                                                               
were  to   disagree  with  a  proliferation   of  gambling,  "the                                                               
Secretary  of  the  Interior  shall  unilaterally  implement  the                                                               
compact  and   the  Indian  tribe  may   conduct  classic  gaming                                                               
activities  over the  state's objection."  He  repeated that  the                                                               
state  would  completely  lose  control and  that  no  one  knows                                                               
exactly what lands would be  subject to the proliferation at this                                                               
time. He  said it  is a known  fact that in  some of  the smaller                                                               
villages in Alaska  with very tenuous economies, there  is a high                                                               
level of pull-tab operations, most  likely beyond what the people                                                               
in the  community can  afford. He concluded,  "I don't  know that                                                               
you're going to have a huge  casino in Venetie or you're going to                                                               
have a card room with a  roulette wheel and people spending money                                                               
there. I  just think this is  something that because of  IGRA, in                                                               
particular, if  we open this  'Pandora's Box' we just  don't know                                                               
what we're getting ourselves into."                                                                                             
SENATOR  OGAN said  seven  or eight  years  ago, former  Attorney                                                               
General Botelho advised  the [Majority] caucus in  the House that                                                               
it was  time to do  away with Monte  Carlo gaming because  of how                                                               
the law  was being interpreted.  He cautioned of  a proliferation                                                               
of casinos  on Native-owned  lands. He said  he is  not impugning                                                               
anyone of  bad intentions but  believes it  is a policy  call the                                                               
Legislature  must make,  taking into  consideration problems  the                                                               
bill's enactment might create.                                                                                                  
TAPE 04-70, SIDE B                                                                                                            
SENATOR  OGAN  said  that  gambling   is  a  relatively  harmless                                                               
activity for those people who  don't become addicted but can lead                                                               
to tragic consequences for those who are.                                                                                       
SENATOR  THERRIAULT referred  to  a letter  of  support from  Jim                                                               
Palacke (ph) of Fairbanks supporting  passage of the bill because                                                               
of  the creation  of  construction  jobs. He  said  he knows  Mr.                                                               
Palacke  and would  guess that  he does  not understand  how IGRA                                                               
works and that  if the Legislature takes a step  that seems to be                                                               
controlled,  that  step  would  start  a  process  in  which  the                                                               
Secretary of  the Interior  could force  the state  into compacts                                                               
and decide the  terms. He added that the local  vote in Anchorage                                                               
would  have statewide  implications.  He said  if Congress  could                                                               
clear  up  the issue  of  what  is  tribal  land in  Alaska,  the                                                               
Legislature  would  have  some  assurance of  what  it  would  be                                                               
initiating with  this legislation but  the issue of  tribal lands                                                               
in the state is hugely contentious.                                                                                             
MR.  GREEN said  he believes  one has  to look  at Indian  gaming                                                               
operations  and what  they have  done for  surrounding areas.  He                                                               
maintained  that those  gambling operations  have provided  a way                                                               
for people  to get  off of  welfare and  their dependency  on the                                                               
federal government. He  said in every state that  requires that a                                                               
percentage of  proceeds go  to the state,  the Indian  group must                                                               
have a compact with the state.  He believes that would be a long-                                                               
term process  but is why he  is suggesting a sunset  provision in                                                               
the bill.                                                                                                                       
CHAIR SEEKINS  said if  the state proposes  a compact,  which the                                                               
Native group  does not agree to,  a whole series of  events would                                                               
then  start  to  take  place: negotiation,  mediation,  and  then                                                               
federal  imposition of  the terms  of the  contract if  the state                                                               
cannot agree  over any state objection.  He said that is  a major                                                               
concern with the compact.                                                                                                       
SENATOR THERRIAULT was unsure whether  once that line is crossed,                                                               
a sunset date would negate the compact.                                                                                         
CHAIR SEEKINS also doubted that a sunset date would.                                                                            
MR. GREEN stated, "I'd like to  respond just by saying that if in                                                               
the  state that  the  state's  terms would  be  the  same as  the                                                               
borough's term,  which is 17  and 3, which  is a fortune,  and in                                                               
many of  these rural areas, getting  that much back and  the very                                                               
high cost  - in  that bill are  so many things  in order  to have                                                               
gaming in the  state, all the cost  is borne by the  casino - the                                                               
cost - and no  government job has got one bit of  cost to it. I'm                                                               
of firm belief that we should have it. That's all.                                                                              
MR. GUY  WARREN, Stated  Clerk of  the [Southeast]  Presbytery of                                                               
Alaska, stated sincere  opposition to the approval of  HB 552. He                                                               
told members:                                                                                                                   
     The [Southeast]  Presbytery of  Alaska consists  of the                                                                    
     15 member  churches of  the Presbyterian  Church U.S.A.                                                                    
     from Yakutat in  the north to Metlakatla  in the south.                                                                    
     It includes the communities  of Klawock, Metlakatla and                                                                    
     We  believe that  this  bill  represents a  significant                                                                    
     step towards situations, which will  not be in the best                                                                    
     interest  of the  state government  or the  citizens it                                                                    
     While we  know that approval of  this legislation could                                                                    
     provide some new funding to  meet the state's financial                                                                    
     needs and perhaps new employment,  we also believe that                                                                    
     the  costs the  state will  incur attempting  to repair                                                                    
     the social ills that gambling  brings with it will more                                                                    
     than  consume that  new funding,  and  remove any  real                                                                    
     benefit  from any  new  employment.  These social  ills                                                                    
     include    increased    domestic   violence,    various                                                                    
     psychological  and  social  problems and  an  increased                                                                    
     incidence  of suicide.  One  example  of the  increased                                                                    
     rate  of  suicide  we  fear  might  occur  is  seen  in                                                                    
     Nevada's Clark County, which is  the home of Las Vegas.                                                                    
     During the  year 2002, their coroner's  office reported                                                                    
     295  suicides. Similar  numbers were  seen in  previous                                                                    
     years.  Las   Vegas  leads  the  nation   in  the  most                                                                    
     depressing statistic.                                                                                                      
     We believe it  would be prudent and only  right for the                                                                    
     Legislature   to   seek  detailed   and   independently                                                                    
     researched estimates  on these costs before  taking the                                                                    
     steps, which  would force the  state to pay  them. This                                                                    
     legislation   will   see    serious   casino   gambling                                                                    
     introduced to our state prior to that research.                                                                            
     The people of  this state have spoken in  the matter of                                                                    
     gambling and  they spoke loudly.  A proposal to  set up                                                                    
     an Alaska  gambling board was  presented to  the people                                                                    
     in  1990.  This measure  was  defeated  by over  40,000                                                                    
     votes, almost a 2:1 margin.  It might be noted that the                                                                    
     bill now before  this body includes the  language for a                                                                    
     local  election   before  plans  for  a   casino  could                                                                    
     proceed.  While an  appropriate added  addition, it  is                                                                    
     not   adequate  to   propose  legislation   so  roundly                                                                    
     defeated  in  1990  [that]  included  a  similar  local                                                                    
     election clause.                                                                                                           
     Finally, if the  committee has any questions  as to the                                                                    
     possibility of  the social ills our  group is concerned                                                                    
     about, I would simply ask  you to consider these facts.                                                                    
     The tax  revenues that  will be  paid by  this proposed                                                                    
     casino,  the  salaries  for   those  employed  by  this                                                                    
     casino, and  all of  the other  costs incurred  by this                                                                    
     casino  will be  paid by  those who  visit and  lose at                                                                    
     this casino.  Some of these  losses will be  from those                                                                    
     simply  engaged in  an expensive  recreational pursuit.                                                                    
     However  I am  certain,  and there  is  no shortage  of                                                                    
     anecdotal  information  on  this,  that  a  significant                                                                    
     amount of  these losses will  come from people  who are                                                                    
     destroying  their  personal finances,  their  families,                                                                    
     and,  as   seen  in  Las  Vegas,   sometimes  literally                                                                    
     Our state's situation is not  nearly so desperate as to                                                                    
     take  the significant  gamble  this  bill proposes.  We                                                                    
     have the largest state savings  account in the country;                                                                    
     we have scenic beauty  that Louisiana, Mississippi, and                                                                    
     Nevada  can   only  dream  of,  and   we  have  natural                                                                    
     resources in  abundance found nowhere else.  We need to                                                                    
     find  solutions  to  our problems;  we  don't  need  to                                                                    
     create new  ones. Building this  casino and  the others                                                                    
     that will  almost certainly follow,  as has  been noted                                                                    
     here, will  create problems and  not solve  them. Thank                                                                    
SENATOR  OGAN said  from his  study of  Alaska history,  he knows                                                               
that the  Presbyterians have been involved  in Native communities                                                               
for a very long time. He  recently had a Presbyterian pastor from                                                               
one of  the [Aleutian Islands] ask  him what could be  done about                                                               
the suicide  problem in that area.  He thinks the problem  is the                                                               
loss of  their culture and  boredom and fears if  gambling enters                                                               
into the picture, more social ills will arise.                                                                                  
MR.  WARREN agreed  with Senator  Ogan  and said  those who  have                                                               
studied  the  statistics  understand  that  Alaska  is  typically                                                               
vulnerable to  social ills for  a number of reasons.  He believes                                                               
adding gambling in  this form will make those  social ills worse.                                                               
He noted  that he has  discussed this matter with  church leaders                                                               
from  other  denominations.  He  made   copies  of  a  letter  in                                                               
opposition  from  the  Catholic Bishops  available  to  committee                                                               
members last  Friday. He concluded,  "And I would agree  with the                                                               
gentleman  that we  have enough  problems here.  We really  don't                                                               
need this one added to the mix.  We have a lot of good things for                                                               
us and this isn't going to contribute anything."                                                                                
With no further participants, CHAIR SEEKINS closed public                                                                       
testimony. He then recessed the meeting to the call of the                                                                      

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