Legislature(2005 - 2006)CAPITOL 17
01/31/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB61 | |
| HB35 | |
| HB15 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 35 | TELECONFERENCED | |
| *+ | HB 61 | TELECONFERENCED | |
| = | HB 15 | ||
HB 61-CHARITABLE GAMING; CALCUTTA POOLS
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 61, "An Act relating to licensing for a
Calcutta pool as a game of chance."
SHALON SZYMANSKI, Staff to Representative Lesil McGuire, Alaska
State Legislature, testified on behalf of Representative
McGuire, sponsor of HB 61. She pointed out that under current
state law there is a very narrow and specific list of allowable
games of chance and skill for charitable purposes. She related
that HB 61 would add Calcutta pools to this list as an allowable
charitable gaming event in Alaska. She stated that Calcutta
pools have been held in the past and have been shown to be a
very effective way to raise money for charities across the
state. She said:
The way that a Calcutta pool is ran is that prior to a
golf or pool tournament, teams are auctioned off.
People then bid on the team that they think will win.
All the money that is raised is then put into a pot.
The person who is the high bidder on the winning team
gets a predetermined percentage of that pot. The
remaining money goes to the organization who holds the
event and the charity. ... Calcutta pools certainly
present no more harm than other charitable giving
events such as rat races or classics that are
currently legal under state law.
LARRY MEYERS, Deputy Director, Tax Division, Alaska Department
of Revenue, pointed out that Calcutta pools are currently
considered gambling, which is illegal in Alaska. He commented
that the current version of the bill is very broad and doesn't
limit the types of gaming. In order to make the pools more
reasonable for the department to administer, he asked that the
legislature make the bill more restrictive.
CHAIR ANDERSON, referring to a previous conversation between
Chair Anderson and Mr. Meyer, he said, "I think you wanted the
30 percent 'take-out' by the permitted conducting the event to
be distributed to the charities."
MR. MEYER agreed.
CHAIR ANDERSON moved to adopt CSHB61, Version 24-LS0281\G as the
working document. There being no objection, Version G was
before the committee.
MS. SZYMANSKI, is response to Representative Guttenberg,
explained that, for Version G, the term "Calcutta pool" was
removed from Section 3, page 2, line 11 of HB 61.
VICKI OTTE, Executive Director, Association of ANCSA Regional
Corporation Presidents and CEOs, stated that she was testifying
in favor of HB 61 as an avid golfer and as a board member of
several nonprofits in Alaska that have benefited from golf
tournaments. She remarked:
In this day and age, raising money for nonprofits that
benefit people in need is very difficult. ... There is
a group of people in the state, however, that love to
golf and play in golf tournaments, and they also like
to give money to charities. At any golf course on any
given day there is at least one tournament. People
play in these tournaments, of course, to have fun, but
they also do so in order to support those agencies
that provide necessary benefits to people that need
help. ... There was one premier golf classic that was
ceased in 2001. Up until that time that special event
rained over $800,000 that was given to charities
throughout the state. ... People and organizations
like to give money to charities, ... but they also
like to have fun doing it. Golf as a sport is
becoming more and more popular in this state.
Calcutta's are a time-honored method of charitable
fundraising, uniquely suited to golfing events. They
raise substantial amounts of money ... and present no
[more] harm to the public than other charitable
activities, including pull-tabs, rat races, and other
classics, which are already legal under state law. I
speak in support of HB 61 and urge that you consider
passing this bill.
CHAIR ANDERSON asked Ms. Otte is she could explain exactly how a
Calcutta pool for a golf tournament would work.
MS. OTTE replied:
The Calcutta is held before the golfing event, where
the teams are auctioned off for a certain dollar
amount. In this particular event, 50 percent of the
proceeds went to the nonprofit organization and 50
percent was paid back to the golfers or the purchasers
of those teams; you purchase a team of four. And
they're broken down by percentage so there might be
... 144 players, I can't remember how many teams that
is, but they might pick ... the top 20 teams and break
down the proceeds that would go back to those
particular teams.
JEFF BARNHART, Head Professional, Palmer Golf Course, stated
that he was formerly the assistant manager of the Moose Run Golf
Course in Anchorage, and was the past president of the Alaska
Sled dog and Racing Association in Anchorage. He commented,
"Calcutta's were a part of the dog racing and the heritage of
the Last Frontier ... as much as they were a fundraising effort
for golf tournaments." He remarked that he has been a part of
fundraising efforts in the golfing business in Alaska for 20
years.
REPRESENTATIVE ROKEBERG asked if donated prizes are sometimes
awarded for the team placement rather than the cash, which is
basically a take in a part of the charity.
MR. BARNHART replied affirmatively and said that [donating
prizes] is one way of donating money through the trade of a
service or a product.
REPRESENTATIVE ROKEBERG asked if "mandating a certain amount of
take would cause any administrative difficulties".
3:33:46 PM
MR. BARNHART responded:
I believe it would be to the benefit of both the ...
facility hosting the event and the charitable
organization to do it. It certainly would be a lot
better than any of these ... backdoor operations that
go on throughout the state, and it would be our
pleasure and probably to the benefit of every ...
activity to be able to administer that, whether it had
limits or not, and that's probably to the benefit of
... both the state and all activities to have some
limits, and requirements and have it administered to
some degree. It certainly would be something that we
would look forward to doing because it is such a
super-effort. ... Eighty percent of the tournaments at
any of our facilities in the state are for fundraising
efforts. And a lot of those events ... looking for
better methods of adding to the fundraising efforts.
MR. BARNHART, in response to Representative Rokeberg, remarked
that there are historical accounts of Calcutta pools where the
proceeds did not go to charity. However, he said, "Most of
those Calcuttas have been done away with since the laws have
changed here in the last few years, and I think this legislation
would bring that ... complete turn, and we would look forward to
raising additional funds."
REPRESENTATIVE ROKEBERG commented:
There is a tradition in the game of golf. It is most
certainly the game played by gentlemen and gentle
ladies, and has ... protocol, etiquette and the rules
are very, very important. But one aspect of the game
is the fact that, in order to develop a little
internal competition, is there is some de minumus
wagering that goes on ... If we continue to ... try to
legislate every particular activity, I'm worried about
it intruding on the privacy of people that ... engage
in a little private wager here and about. I just want
to go on record saying that ... I hope it's not the
case that that we have the Department of Revenue
sneaking around on the first tee of the golf courses.
REPRESENTATIVE GUTTENBERG pointed out that Calcutta pools are
[well-defined in the bill], and he asked Mr. Barnhart if he
foresaw the Calcutta pools being expanded out to events like
bowling or basketball tournaments.
MR. BARNHART answered that Calcutta pools "could go just about
anywhere you wanted them to go." As an example, he referred to
the Fur Rendezvous World Championship Dogsled Race, which
historically had a Calcutta pool.
3:38:33 PM
MR. BARNHART stated that, the way a Calcutta pool is set up, "it
could fit anything that had some ... level of competitiveness,
or competitive game, where there's multiple participants." In
comparing dog-sledding and golf, he said that there are many
things within both of these activities that regulate a level
playing field for all competitors, and "helps a potential ...
auctioning person to evaluate what level they want to
participate."
REPRESENTATIVE GUTTENBERG asked if Calcutta pools could be
expanded to the Great Alaska Shootout.
MR. BARNHART replied, "There is no reason why is could not. But
... it's a much better fundraiser when there's more participants
than the 12 or the 16 ... because ... now you're only ...
auctioning off 10 items instead of potentially 35 or 40 items."
CHAIR ANDERSON commented that the bill's sponsor only added pool
and golf because that's traditionally where the Calcutta games
are usually played, but "I'm sure you could expand it out to
quite a few, and I think it's good to put that on the record."
He noted that Montana, North Dakota, and Wyoming already permit
Calcutta pool "as long as it's charitably-gamed with a
percentage given to charities and to the state."
3:41:05 PM
JEFF BARNHART remarked, "One of the most high-profile things
that the state offers ... is the Iditarod, and the Iditarod
would be a perfect match for this situation also."
SHARON MCCONNELL-GILLIS, Executive Director, Doyon Foundation,
stated that the Doyon Foundation is a 501c3 private foundation
established in 1989 by Doyon, Limited, the regional native
corporation for Interior Alaska. She said:
[The foundation's] mission is to promote self-
reliance, and the economic and social well-being of
Doyon shareholders and descendants, and to strengthen
our native culture and heritage through education. To
accomplish this mission, [the foundation provides]
scholarships for higher education to over 300 students
each year that total about $350,000. To award this
amount, the foundation relies on a yearly contribution
from [the] parent company, Doyon, Limited, and also
revenue received from corporate and individual donors.
Tuition and living costs are quite high and the amount
that is awarded does not nearly fund the students'
needs. Doyon Foundation does have a State of Alaska
gaming permit that allows us to hold raffles and this
had proven very beneficial to raise needed funds for
our scholarship program. However if Calcutta's were
legal the amount raised could ... be substantially
more, which in turn would mean more scholarship
dollars that we could provide. So therefore Doyon
Foundation is in support of [HB 61].
CHAIR ANDERSON asked, "If we don't pass [HB 61], doesn't it
create a problem in the converse, which is now potentially it's
perceived as illegal gaming, and all the folks that do this for
charities may have a problem doing the activities in the future?
... Isn't the legislation really critical?"
MS. MCCONNELL-GILLIS agreed that Calcutta's are very critical
and that they benefit nonprofits a lot.
STAN HARRINGTON, Anchor Point Chamber of Commerce, stated that
he also represents the South Kenai Peninsula Sportsman
Association. He explained that the term "Calcutta" was
originally from India, and used for fundraising activities in
polo tournaments. Since then it's been adopted to several other
methods of fundraising for both nonprofit and for-profit
organizations in the United States. He remarked that his father
was the world champion Calcutta auctioneer in Colorado. In
Anchor Point, he said:
We've been sponsoring a Calcutta tournament since
1994, and this is a king salmon tournament. ...
Typically we will have anywhere from 25 to 40 boats
enter the tournament. This is the sole fundraising
activity for the South Peninsula Sportsmen
Association. They receive 25 percent of the proceeds;
75 percent of the proceeds then go back out to the
fishermen and the boats. And how the auction is
conducted is, the night prior to the tournament, we
have a banquet, and I'll do the auction at that
banquet and all the boats have to preregister. And at
that time I'll auction each of the boats off; betters
will bid on a boat that they feel is going to win the
tournament. ... The next day when fishing starts, ...
it's a one-fish-wins-all; whoever brings in the
largest king salmon wins 50 percent of the pot.
Whoever bid on the high boat gets 25 percent, and the
South Peninsula Sportsmen Association gets the
remaining 25 percent, which they utilize for a variety
of youth programs, hunting safety classes ... in the
Anchor Point and Homer area. I'd like to see the
Calcutta reinstated. ... It's essential for nonprofit
organizations in this day and age to have some method
to raise funds, especially when you're small
communities ... unincorporated communities that have
no other way of raising funds.
CHAIR ANDERSON commented, "Mr. Harrington brings up a point
that, of course, is always either the fear or apprehension when
a bill like this is brought forward, which is, everybody then
wants to add in" other sports or games, such as salmon derbies
and dogsled races. He said:
I don't know if the sponsor's intent was to do that.
I think from the associations that came to
Representative McGuire it was just pool and
specifically golf that they were intending. ... This
may require an amendment. ... Then everybody who does
a Calcutta, so it's not illegal, will want to add
their activity to the legislation.
AMY FREEDEN, Senior Controller, Shared Services Department, Cook
Inlet Tribal Council, she said that she works with over 40
nonprofit organizations as the financial advisor. She remarked
that she also serves on several boards and volunteers for
several nonprofit organizations. She stated that she supports
HB 61 because Calcutta pools are a very cost-effective way for
nonprofit organizations to raise funds to support their direct
services. She said that she has worked with several
organizations that have had golf tournaments, and one
organization raised $42,000 for educational scholarships. She
commented that this past year, without a Calcutta pool, the
funding was cut in half. She said, "There's over 2,000
nonprofits in the State of Alaska and they are could potentially
benefit from this."
CHAIR ANDERSON closed public testimony.
3:52:16 PM
REPRESENTATIVE ROKEBERG declared a potential conflict of
interest, "I have an insignificant, or perhaps a significant,
ownership interest in the Settler Bay Golf Course in Wasilla,
Alaska. Therefore there is the possibility that the passage of
this bill may affect or not affect the activities of my business
interest. However we're not sure whether it's significant or
insignificant."
CHAIR ANDERSON noted the conflict and stated that Representative
Rokeberg will still be required to vote. He then offered
Conceptual Amendment 1, which deletes the current Section 4 and
adds a new Section 4. He said:
Section 4 simply defines Calcutta pool, and it states,
"Calcutta pool means wagering on a contest of skill
limited to an amateur golf or pool tournament
conducted by a permittee in which those who wager,
bid, and auction for the exclusive right to purchase
or wager upon a particular contestant or entrant in
the event. And when the outcome of the event has been
decided, the total wagers comprised in the pool no
less than 30 percent 'take-out' by the permittee
conducting the event is distributed to", and we have
knocked out in the copy that it has been distributed.
That last line we have added, "to the charities". So
30 percent at a minimum must go to a charity from a
Calcutta pool. But in offering this Conceptual
Amendment 1 I want to add in, and the legal services
drafter can place this where necessary, presumably
with a comma after "pool" on the first line of the
amendment, "fishing derbies, and sled dog racing"."
CHAIR ANDERSON moved [to adopt Conceptual Amendment 1] as
written.
REPRESENTATIVE ROKEBERG objected.
CHAIR ANDERSON made the friendly amendment, adding "fishing
derbies and sled dog racing" to Section 4 of Version G.
3:54:42 PM
REPRESENTATIVE LEDOUX commented that perhaps the wording could
be "professional and amateur sports tournaments".
REPRESENTATIVE KOTT asked for clarification regarding the use of
the words "sports activities"; he wondered if this would include
viewing as well as participating in sports.
3:56:26 PM
REPRESENTATIVE KOTT said that they need to think this through
further. He then goes on to ask if these are sports that you
are participating in or are they ones that are being viewed.
3:57:35 PM
REPRESENTATIVE ROKEBERG stated his support of Representative
LeDoux's idea and said,
Clearly from the testimony, to try to narrow the
definition is going to be problematic. ... This is an
old, kind of traditional fundraising mechanism. I've
got some concerns about mandating charitable
contributions.... It's ironic enough that once we
start talking about this in the legislature, people
start shutting these things down; there's a worry
about enforcing so-called gambling that's been self-
policed for years and now ... all of a sudden it's a
no-no.
REPRESENTATIVE ROKEBERG continued by stating that it was a
shame that the government has to intrude on stuff like
this. He said that by introducing more legislation like
this that more Calcuttas will be created.
CHAIR ANDERSON announced that while we have the conceptual
amendment before us, the committees should go to the witnesses.
He asked Mr. Meyers if he had any thoughts on how it should be
defined and how it could be phrased.
MR. MEYERS said:
We are working under the charitable gaming statutes
and regulations, this is what this bill is been
introduced in. ... If we issue a permit to a qualified
organization to have a charitable gaming permit, they
have certain guidelines. And they will lose their
permit if they're conducting unauthorized gaming or
gambling. In this instance it would be the Calcutta;
that is illegal gambling in the state as it stands
right now. What we're working with under this bill is
trying to bring in certain types of Calcutta that
would fit within the definition that would be
allowable under charitable gaming. What we propose,
because there already existed by definition is
"contest of skill", which means "a contest or game in
which prizes awarded for the demonstration of human
skill in marksmanship, races, and other athletic
events." So by it's nature that fits in nicely
talking about human sports, and we've also inserted
... the word "amateur" so that we don't get involved
in ...[a situation] where you could have a Calcutta
betting on professional sporting activities, because
that is again taking it into a whole new realm.
3:59:53 PM
CHAIR ANDERSON suggested changing [the bill] to define a
Calcutta pool as "wagering on a contest of skill limited to
amateur events in the state."
REPRESENTATIVE ROKEBERG objected. He commented that there have
been professional golf tournaments such as the Alaska Open,
where as many as 50 professional golfers were invited to play in
tournament. He pointed out that the Calcutta has been a major
proportion of the fundraising to create an actual professional
purse for that event. Therefore he stated his opposition to
restricting the wagering to solely amateur sports.
MR. MEYERS commented that perhaps "professional golf
tournaments" could be added to the wording, but he encouraged
the committee members to keep the word "amateur" in for as many
activities as possible.
CHAIR ANDERSON asked if Representative Rokeberg would be
satisfied with the deletion of the "golf and pool tournament"
reference and replaced it with "amateur events and professional
golf".
REPRESENTATIVE LEDOUX pointed out that if this change was made,
the Iditarod would be eliminated.
REPRESENTATIVE KOTT commented that if Calcutta pools are
currently illegal then with this bill the legislature is
"legitimizing what I would view as illegitimate activities that
are currently ongoing in the state". He said, "If we adopted
this amendment like it is currently written, then those
activities that would be sanctioned would be those that would be
held within the state, therefore they would exclude ... the
March Madness [basketball tournament]." He asked Mr. Meyers for
confirmation of this.
MR. MEYERS agreed with Representative Kott's statement and said,
"That's why the key word is 'in the state'. That fits in with
the rest of the charitable activities."
4:03:33 PM
CHAIR ANDERSON recommended that Representative McGuire's staff
rewrite the bill. He withdrew Conceptual Amendment 1. He said,
"I still don't think we have a target on what exactly we want,
and maybe consider Mr. Harrington's concern in Anchor Point, so
we don't debate and throw in each sport or interested activity,
and I don't think we'll be content with the final result if we
don't have it worked out. ... Then we'll bring the bill back."
REPRESENTATIVE ROKEBERG stated that he is concerned about the 30
percent [required to be given to a charitable organization] and
he asked Mr. Meyer, from an enforcement standpoint, "how and who
has deemed this a problem in the first place and why are we even
messing with this issue."
MR. MEYERS replied, "The ... 30 percent is actually already
included for certain types of gaming activities that currently
exist. This is to ensure that the charities based on using
their name and their permit and their efforts are guaranteed a
certain minimum contribution back to them. After all that's the
purpose of this." He pointed out that pull-tabs have the same
percentage.
REPRESENTATIVE GUTTENBERG asked if 30 percent was high or low.
MR. MEYERS replied that the 30 percent minimum is similar to
other types of gaming in the state. He reiterated that the
whole point of the Calcutta is for the charities and this way
they are guaranteed a certain minimum.
REPRESENTATIVE KOTT asked Mr. Meyer if he had found any glaring
problems in Section 4 of Version 24-LS0281\G.
MR. MEYERS stated that the definition as written in Section 4
had been borrowed from a Wyoming statute.
CHAIR ANDERSON announced that the bill would be brought back to
the committee once the version was corrected and the working
amendment was phrased right.
REPRESENTATIVE KOTT commented, "I think that the existing
Section 4 is an appropriate section of the bill. I think it's
less intrusive; it doesn't establish maximums or minimums. The
charities and the operators can hold a Calcutta on whatever they
want to hold it on, whether it's fishing or golfing or bowling."
4:07:39 PM
REPRESENTATIVE ROKEBERG asked Mr. Meyer what defines a
qualifying organization.
MR. MEYERS read from AS 05.15.690(36):
"Qualified Organization" means a bona fide civic or
service organization or a bona fide religious,
charitable, fraternal, veterans, labor, political, or
educational organization, police or fire department
and company, dog mushers' association, outboard motor
association, or fishing derby or nonprofit trade
association in the state, that operates without
profits to its members and that has been in existence
continually for a period of three years immediately
before applying for the license or permit; the
organization may be a firm, corporation, company,
association, or partnership."
REPRESENTATIVE ROKEBERG asked what the permitting fee costs are.
MR. MEYERS replied that it is generally $20 and "if they have
activities of more than [$]20,000 ... the year before it's $50,
and if it's over [$]100,000 it's $100".
REPRESENTATIVE KOTT moved to report CSHB 61, Version 24-
LS0281\G, from committee. There being no objection, CSHB
61(L&C) was reported from the House Labor and Commerce Standing
Committee.
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