Legislature(2015 - 2016)BELTZ 105 (TSBldg)

02/01/2016 01:30 PM JUDICIARY


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01:35:00 PM Start
01:37:27 PM Partners for Progress Reentry Center Overview: No-cost and Cost-bending Ways to Improve Community Reentry and Reduce Recidivism
02:21:57 PM SB157
03:03:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Progress Reentry Center
Overview: No-Cost and Cost-Bending Ways to
Improve Community Reentry and Reduce Recidivism
*+ SB 157 AMUSEMENT DEVICES & GAMBLING DEFINITION TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= SB 41 PSYCHOLOGIST & ASSOC CRIM HISTORY CHECKS TELECONFERENCED
Scheduled but Not Heard
-- Testimony <Invited & Public> --
         SB 157-AMUSEMENT DEVICES & GAMBLING DEFINITION                                                                     
                                                                                                                                
2:21:57 PM                                                                                                                    
CHAIR MCGUIRE announced the consideration of SB 157.                                                                          
                                                                                                                                
FORREST WOLFE, Staff, Senator Lesil McGuire, sponsor of SB 157,                                                                 
introduced the legislation on behalf of the sponsor speaking to                                                                 
the following sponsor statement:                                                                                                
                                                                                                                                
     SB 157 is  a housekeeping measure that  aims to clarify                                                                    
     that   restaurants  featuring   arcade-style  amusement                                                                    
     games may lawfully operate in  Alaska. Elsewhere in the                                                                    
     United  States, popular  restaurant businesses  feature                                                                    
     arcade areas where  patrons play games of  skill to win                                                                    
     tickets which can  then be redeemed for  toys and other                                                                    
     novelties.  Unfortunately, Alaska's  outdated laws  are                                                                    
     so vague that  the legality of these  operations is far                                                                    
     from  clear. SB  157 would  clarify that  playing these                                                                    
     arcade-style amusement games  of skill, winning tickets                                                                    
     and redeeming them for small,  non-cash prizes does not                                                                    
     constitute  gambling under  Alaska  law. By  clarifying                                                                    
     this  issue,  the  risk for  companies  seeking  to  do                                                                    
     business in Alaska will be eliminated.                                                                                     
     These  family-friendly  businesses can  be  significant                                                                    
     additions  to Alaska's  economy.  For  example, Dave  &                                                                    
     Busters is  seeking to  open a  location at  the Dimond                                                                    
     Center mall  in Anchorage. It is  anticipated that Dave                                                                    
     &  Buster's will  spend  approximately  $10 million  to                                                                    
     build said  location, and once operational  will employ                                                                    
     approximately 140-160 workers.  Moreover, this addition                                                                    
     to the Dimond  Center is the keystone to  a much larger                                                                    
     renovation project for the mall  that is anticipated to                                                                    
     employ approximately 200  construction workers. In this                                                                    
     time of economic uncertainty, this  is an effective way                                                                    
     to add  well-paying jobs  to Alaska's  economy. Passage                                                                    
     of this bill will give  businesses like Dave & Buster's                                                                    
     the sure-footed  legal ground to move  ahead with their                                                                    
     plans.                                                                                                                     
                                                                                                                                
     Finally, it  should be made absolutely  clear that this                                                                    
     narrow bill  does not in  any way  legalize traditional                                                                    
     gambling,  nor  does  it  legalize  casino-style  video                                                                    
     gambling such as video poker,  slots, or roulette. Once                                                                    
     again,  this  bill  only  clarifies  that  arcade-style                                                                    
     operations that  award tickets to be  redeemed for toys                                                                    
     and other novelties are lawful.                                                                                            
                                                                                                                                
2:24:42 PM                                                                                                                    
HUGH  ASHLOCK,  owner,  Dimond   Center  Mall  (DCM),  Anchorage,                                                               
Alaska, said this is an  Alaskan and family-owned shopping center                                                               
that receives over 12 million  visits annually. He explained that                                                               
DCM is  in the middle of  a $50 million expansion  and renovation                                                               
project. He reviewed the progress  thus far and relayed that Dave                                                               
and Buster's  would be a  44,000 square  foot addition on  top of                                                               
the shopping center.  "Dave and Buster's will  spend $10 million,                                                               
we  would  spend  an  additional $13  million."  Aside  from  the                                                               
estimated 200 construction jobs, there  will be about 100 offsite                                                               
ancillary construction jobs. He described  Dave and Buster's as a                                                               
serious anchor for the Dimond Center Mall.                                                                                      
                                                                                                                                
CHAIR  MCGUIRE expressed  support for  the project,  a preference                                                               
for using  both a  union and  non-union workforce,  and providing                                                               
renewable or sustainable energy systems to the degree possible.                                                                 
                                                                                                                                
MR. ASHLOCK  said this will  be a  highly skilled project  and to                                                               
get that level of talent in  Alaska a union shop is necessary. He                                                               
reported that the project will  use the newest energy saving HVAC                                                               
systems and  the parking lot  has already been converted  to high                                                               
density, high lumen and lighting.                                                                                               
                                                                                                                                
CHAIR  MCGUIRE  enthused about  new  building  projects that  add                                                               
jobs.                                                                                                                           
                                                                                                                                
SENATOR COGHILL  commented that the  investment is great  and the                                                               
bill clarifies the issue of gaming.                                                                                             
                                                                                                                                
2:30:04 PM                                                                                                                    
HOWARD  TRICKEY,   representing  Dave  and   Busters,  Anchorage,                                                               
Alaska, said he  would provide background and  context to explain                                                               
the Dave and  Buster's business model, and the  reason the change                                                               
in law is needed.                                                                                                               
                                                                                                                                
He explained  that Dave and  Buster's was  formed in 1982  and is                                                               
not a franchise. It is currently  in 80 locations in more than 30                                                               
states and employs [12,000] nationally.  The business model is to                                                               
provide  family fun  and  the establishments  are  for playing  a                                                               
variety of  amusement games. The  company has  well-developed and                                                               
effective  policies prohibiting  guests  under age  18 without  a                                                               
parent or guardian. The employees  are trained using a nationally                                                               
recognized program  that is known  as "Certified to  Serve Safe."                                                               
This is a family-friendly environment  designed to have fun while                                                               
patrons watch sports games, play games, or enjoy fine dining.                                                                   
                                                                                                                                
Dave and  Buster's offers two types  of games in the  arcade. One                                                               
is skill-based where  strategy, timing, and dexterity  is used to                                                               
determine the outcome of the game.  About 65 percent of the games                                                               
are  this  type. The  second  type  are simulation  games.  These                                                               
include  simulations of  flying  an aircraft  or  driving in  the                                                               
Indianapolis  500.  The  criteria  for selecting  games  for  the                                                               
arcade  is  those that  assess  and  evaluate a  player's  skill.                                                               
Players earn tickets that can  be redeemed onsite where there are                                                               
a variety of prizes that range  in value. Tickets can be redeemed                                                               
immediately or the  customer can save tickets and  redeem them in                                                               
the future.                                                                                                                     
                                                                                                                                
MR. TRICKEY  stated that this  amendment was requested  to define                                                               
amusement devices  whose outcome  is determined  predominantly by                                                               
the skill  and ability of the  player. He said the  definition is                                                               
needed because of an outdated  2001 attorney general opinion that                                                               
concluded that  a video golf  game that was programed  to include                                                               
significant  elements of  chance did  constitute gambling.  Under                                                               
that opinion,  Dave and Buster's  would face some  uncertainty if                                                               
they went forward  with the proposed investment  at Dimond Center                                                               
Mall.                                                                                                                           
                                                                                                                                
He explained  that the  bill adds  a new  Section 3  that defined                                                               
amusement  devices in  both a  positive and  negative sense.  The                                                               
bill positively  defines what constitutes "amusement  device" and                                                               
then describes  the games that  are excluded. The  excluded types                                                               
of  games  are video  forms  of  casino  style games  that  would                                                               
constitute a gambling activity.                                                                                                 
                                                                                                                                
The  bill adds  a new  paragraph to  define amusement  device. It                                                               
clarifies that  playing an amusement  device is not  gambling and                                                               
earning tickets that can be redeemed  for a prize is not gambling                                                               
either. In  no other way does  the bill change the  definition of                                                               
what is a game of chance and what constitutes value.                                                                            
                                                                                                                                
2:39:05 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked,  "As  I'm reading  this,  Chuck  E.                                                               
Cheese is illegal?"                                                                                                             
                                                                                                                                
MR.  TRICKEY   replied  the  franchisee  is   probably  taking  a                                                               
calculated  business  risk based  on  the  2001 attorney  general                                                               
opinion.                                                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI referenced  page 2, line 6, and  asked if he                                                               
had a definition for "electronic novelty."                                                                                      
                                                                                                                                
MR. TRICKEY replied  the term isn't defined but  the intention is                                                               
to  allow  electronic  prizes  that  customers  can  redeem  with                                                               
tickets. He noted that one of the prizes is an IPad.                                                                            
                                                                                                                                
SENATOR WIELECHOWSKI wondered whether there  should be a limit on                                                               
the  toy,   candy,  or  electronic   novelty  or  the   value  of                                                               
merchandise in a claw machine or similar device.                                                                                
                                                                                                                                
MR. TRICKEY  offered his  belief that  it should  be a  matter of                                                               
personal family  choice for the  Dave and Buster's  customers. "I                                                               
don't see why  the legislature would want to place  a value on it                                                               
in  a way  that would  make it  more difficult  for the  business                                                               
model to be successful."                                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI referenced page 2,  line 27, and asked if he                                                               
had  a definition  for "casino  games."  He said  he's trying  to                                                               
build a  record in the event  that someone wants to  come in with                                                               
other types of games.                                                                                                           
                                                                                                                                
MR.  TRICKEY  explained that,  "By  listing  what's excluded,  we                                                               
developed  a   clear  category  of   games  that  would   not  be                                                               
permitted," he said.                                                                                                            
                                                                                                                                
2:44:44 PM                                                                                                                    
SENATOR  WIELECHOWSKI noted  that  one of  the  documents in  the                                                               
packet  discusses site  criteria, one  of which  is 500,000  to 1                                                               
million  residences  within  10  miles.  He  asked  if  Dave  and                                                               
Buster's is making an exception  for that, because Anchorage does                                                               
not meet that criterion.                                                                                                        
                                                                                                                                
MR. TRICKEY suggested the question  may be better for Mr. Ashlock                                                               
or Mr.  Tobin, but  his understanding is  that the  Dimond Center                                                               
Mall was selected because it is a statewide center.                                                                             
                                                                                                                                
CHAIR MCGUIRE related that when  she first enquired about getting                                                               
a Dave and  Buster's in Anchorage she was told  the threshold was                                                               
1  million. She  offered her  belief that  Dave and  Buster's has                                                               
found that  Alaska is  a good  opportunity, despite  the original                                                               
entry requirements.  "As a broader economic  development point of                                                               
view  for us  here in  the legislature,  I think  this is  a good                                                               
trend."                                                                                                                         
                                                                                                                                
She asked Mr. Ashlock to address the question.                                                                                  
                                                                                                                                
2:47:51 PM                                                                                                                    
MR. ASHLOCK reported that Anchorage is  number 2 in eating out in                                                               
the U.S.  at $6,900 per  capita. New York  is number 1  at $7,100                                                               
per capita  and San Francisco is  number 3 at $6,100  per capita.                                                               
Much like  Honolulu, Anchorage  serves as  a regional  magnet and                                                               
hub  for  medicine,  entertainment, shopping,  and  international                                                               
travelers. It's a perfect model for Dave and Buster's to select.                                                                
                                                                                                                                
2:49:18 PM                                                                                                                    
JAY  TOBIN,  General Counsel,  Dave  and  Buster, Dallas,  Texas,                                                               
clarified that Dave  and Buster's has more  than 12,000 employees                                                               
nationally. It has  been a publicly traded  company since October                                                               
2014 and  the stock is  listed on  the NASDAQ. He  explained that                                                               
Dave  and Buster's  tagline  is the  opportunity  to eat,  drink,                                                               
play, and  watch. As mentioned previously,  this development will                                                               
be  over  40,000  square  feet  and  will  have  a  full  service                                                               
restaurant with a  full service bar. In addition there  will be a                                                               
full service  sports bar,  an area  dedicated to  private events,                                                               
and a midway center for playing a variety of games.                                                                             
                                                                                                                                
He clarified  that these games  are not allowed to  dispense cash                                                               
or cash  equivalents. Addressing  the site criteria  question, he                                                               
related  that  over  time  Dave   and  Buster's  has  learned  to                                                               
experiment,  opening  stores   in  locations  that  traditionally                                                               
wouldn't  fit  the  population   requirement.  He  described  the                                                               
different reasons for openings in  Panama City, Florida, Orlando,                                                               
Florida and Virginia  Beach, Virginia. The reasons  for opening a                                                               
location in Anchorage  are multifold but primarily  it's that the                                                               
market  is  unique.  Anchorage has  a  fulltime  population,  the                                                               
municipality  and  Dimond  Center  are a  significant  draw  from                                                               
throughout the  state, and national and  international tourism is                                                               
pulled in.  Furthermore, the attention to  detail and significant                                                               
quality offered by  Mr. Ashlock was very important  in making the                                                               
decision.                                                                                                                       
                                                                                                                                
2:56:06 PM                                                                                                                    
CHAIR MCGUIRE  commented that this  bodes well for the  future of                                                               
Anchorage. She  mentioned the amazing military  population in the                                                               
state and asked  him to relay a request to  consider both college                                                               
and military discounts, charitable  giving, and partnerships with                                                               
rural communities to enhance opportunities.                                                                                     
                                                                                                                                
SENATOR COGHILL  observed that  the definitions  that are  in the                                                               
negative may be problematic.                                                                                                    
                                                                                                                                
SENATOR COSTELLO  summarized that this legislation  clarifies and                                                               
rectifies a situation for a  specific business. She cautioned the                                                               
committee to  think about this  broadly statewide to  ensure that                                                               
there  are  no  unintended   consequences.  She  questioned,  for                                                               
example, how pull tabs might be affected.                                                                                       
                                                                                                                                
CHAIR MCGUIRE  said her staff  has worked diligently to  be clear                                                               
that this  is not  about legalizing  gambling. She  committed her                                                               
staff and  the drafter to  work with  the members to  ensure that                                                               
any  concerns are  addressed. She  said she  likes the  notion of                                                               
limiting  the   value  of  the   prizes  to   protect  vulnerable                                                               
populations.                                                                                                                    
                                                                                                                                
CHAIR MCGUIRE  announced she would  hold SB 157 in  committee for                                                               
further consideration.                                                                                                          

Document Name Date/Time Subjects
Partners for Progress- No Cost Improvements.pdf SJUD 2/1/2016 1:30:00 PM
Partners for Progress Presentation.pdf SJUD 2/1/2016 1:30:00 PM
Partners For Progress Statistics.pdf SJUD 2/1/2016 1:30:00 PM
Partners Reentry Center Statistics
SB 157 Dave Buster's Renderings.pdf SJUD 2/1/2016 1:30:00 PM
SB 157
SB 157 Dimond Mall Floor Plans.pdf SJUD 2/1/2016 1:30:00 PM
SB 157
SB 157 Dimond Mall Renderings.pdf SJUD 2/1/2016 1:30:00 PM
SB 157
SB 157 Sponsor Statement (002).pdf SJUD 2/1/2016 1:30:00 PM
SB 157