Legislature(2005 - 2006)BELTZ 211
04/14/2005 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB108 | |
| SB157 | |
| SB149 | |
| SB148 | |
| SB175 | |
| HB61 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 61 | TELECONFERENCED | |
| *+ | SB 149 | TELECONFERENCED | |
| *+ | SB 148 | TELECONFERENCED | |
| *+ | SB 175 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 108 | TELECONFERENCED | |
| += | SB 157 | TELECONFERENCED | |
CSHB 61(FIN)-GAMING: CALCUTTA POOLS & CRANE CLASSICS
CHAIR CON BUNDE announced CSHB 61(FIN) to be up for
consideration.
SHALON SZYMANSKI, staff to Representative McGuire, sponsor of
CSHB 61(FIN), explained that under current state law, there is a
very narrow and specific list of allowable games of chance and
skill for charitable purposes. HB 61 adds Calcutta pools and
crane classics to this list. 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. With Calcutta pools, prior
to a tournament, teams are auctioned off and people will bid on
the team that they think will win. All the money that is raised
in the auction is placed into a pot. The person who is the high
bidder for the winning team gets a predetermined percentage of
that pot and the remaining money goes to the organization
holding the permit. The bill is limited to sporting events that
are held within the State of Alaska only.
MS. SZYMANSKI explained that 30 percent of the pot has to go to
the charity, but the organization holding the permit can choose
to donate more.
CHAIR BUNDE asked if other monies could be added to the pool.
MS. SZYMANSKI replied only the money that the organization
raised in the auction.
SENATOR BEN STEVENS said he has been involved with Calcutta
pools a number of times and asked why the minimum is set at 30
percent.
MS. SZYMANSKI replied that the Department of Revenue suggested
setting up Calcutta pools similar to pulltabs, which use thirty
percent as a minimum.
SENATOR BEN STEVENS said most of the pools he has participated
in have a 50/50 distribution. Many times the teams get together
and make a contribution, which makes the pot go up considerably.
3:00:08 PM
He asked if the sponsor would support an increase to the minimum
of the distribution stating, "Thirty percent is not enough."
MS. SZYMANSKI replied that she would have to talk to the
sponsor, but didn't think she would have a problem since she
brought the bill forward for charitable purposes.
SENATOR BEN STEVENS said he would work with the sponsor to raise
the distribution.
SENATOR SEEKINS asked if the number of pools for each event is
limited.
MS. SZYMANSKI replied that the bill did not limit each sporting
event to one Calcutta pool, but she thought it would be
something to look into.
SENATOR SEEKINS said that most pools he's seen have been at golf
tournaments and no one else besides the people who were putting
it on were involved.
3:04:19 PM
CHAIR BUNDE asked Ms. Szymanski to define a qualified
organization.
MS. SZYMANSKI replied that a qualified organization is one that
obtains its permit through the Department of Revenue and uses it
for charitable purposes, like non-profit scholarships.
3:05:39 PM
SENATOR BEN STEVENS said some charities auction off the numbers
of the participants - like in the Iditarod. The bid number
depends on who gets to ride in what basket. The difference is
that in the Iditarod, the participant doesn't split the pot; the
award is to ride in the basket. In a Calcutta pool, one bids on
the team number and the team that wins, wins the pot and splits
it with the charity.
3:06:58 PM
SENATOR SEEKINS commented that he learned in the pulltab wars
that Alaska is a not-for-profit corporation gambling state and,
"To refer to these things as charitable gaming is an absolute
mischaracterization, Mr. Chairman."
CHAIR BUNDE agreed and insisted on having a definition of
qualified charitable organization.
SENATOR ELLIS said, "It's not near enough benefit for the
charities - the 30 percent."
CHAIR BUNDE said current law limits a municipality or qualified
organization to a maximum of $1 million each year in prize
activities and he wondered if the sponsor would entertain an
increase in the amount a municipality could raise.
MS. SZYMANSKI replied that that idea has been brought to the
sponsor's attention in the past and she chose to stay away from
it, because she didn't want to complicate the bill any more than
what it already was. However, she offered to bring it up with
Representative McGuire again. She added:
You will find that this bill also has many limitations
on how a Calcutta pool can be run. First of all,
Calcutta pools can be held only at a sporting event
held within the State of Alaska. The Calcutta pools
cannot be held for elementary, secondary, post-
secondary or youth organization sporting events and
all participants must be at least 18 years of age. And
Calcutta pools can only be held in auctions; and in
order to even hold this auction, organizations must go
through the Department of Revenue to obtain a permit.
In addition to obtaining this permit, a report must be
filed with the department after the Calcutta is held.
A Calcutta pool must be conducted by a permittee; an
operator cannot be hired to run a Calcutta pool. This
will insure that the permittee oversees the entire
event. And, finally, no less than 30 percent of the
money raised during the auction must go to the charity
though this is up to the charity holding the permit to
decide of it wants to give more than 30 percent....
CHAIR BUNDE said he also wanted a definition of "team" and asked
if a jockey and a horse would be a team.
MS. SZYMANSKI guessed that would be considered a team. Calcutta
pools were actually started with horse races. She agreed that
defining team would be important.
CHAIR BUNDE added that he wanted the percentage to be part of
the gross, not of the net.
LARRY MEYERS, Deputy Director, Tax Division, Department of
Revenue, clarified that qualified organizations are defined in
statute already and that the current 30 percent is on the
percentage of gross.
3:13:31 PM
CHAIR BUNDE asked if all 1,200 qualified organizations in Alaska
suddenly decided they wanted to do a Calcutta, what fiscal
impact would that have on the department.
MR. MEYERS replied that the department doesn't have any
experience with this type of gaming activity, but if all 1,200
applied for permits and filed reports, that would be a lot more
work than the department currently has before it.
CHAIR BUNDE asked what he thought of creating a percentage for
the state to cover the cost of regulation.
MR. MEYERS responded, "We always welcome any help we can get."
3:14:10 PM
SENATOR BEN STEVENS asked if any qualified organization for a
gaming permit can run a Calcutta pool.
MR. MEYERS replied yes.
SENATOR BEN STEVENS asked, "Even if that entity is not managing
their own sporting event?"
MR. MEYERS replied the bill provides that the participants bid
at an auction. The intent he has seen in the past at golf
tournaments, for instance, is there would be a banquet before
the event and the teams would be auctioned before tee-off time.
The bill clarifies the type of auction.
3:15:56 PM
SENATOR BEN STEVENS remarked that his son's hockey organization
has a charitable gaming permit and one of the most competitive
things he has witnessed is the annual state youth hockey
tournament.
CHAIR BUNDE reminded him that kids' teams and school and college
teams are not allowed.
SENATOR BEN STEVENS said he is talking about the parents. He
wanted to tighten up the eligibility section and require a
qualified gaming permit holder to apply for each specific event.
3:17:31 PM
MR. MEYERS agreed and added that he envisions that each event
would need a permit sanctioned by the department.
CHAIR BUNDE asked what the department would do if two people
applied for the same permit.
MR. MEYERS replied that he would look for guidance from the
committee on that, but he thought that only the entity hosting
the event should be able to have a permit.
CHAIR BUNDE noted that both Nome and Anchorage host the
Iditarod.
SENATOR SEEKINS envisioned that the Iditarod Committee, not the
cities of Nome and Anchorage, would be able to have a Calcutta
pool.
3:18:39 PM
SENATOR SEEKINS said he thought only the event sponsor should be
eligible to hold a Calcutta pool if it had a gaming permit and
he wanted only one pool per event.
SENATOR ELLIS commented that allowing Calcutta pools could have
the biggest impact since pulltabs and asked why only three other
states have them.
MR. MEYERS pointed out that those three are western states with
small populations.
3:22:45 PM
CHAIR BUNDE brought up the fiscal note and said he didn't want
to cost the state money. He supported the user pay notion.
MR. MEYERS said he would look at that issue.
SENATOR BEN STEVENS commented that only two states don't allow
organized gaming and Alaska is one of them. "They can go to the
bookie and bet on the sporting event that they want and not
share the profits with the charity."
VICKI OTTE, Executive Director, ANCSA CEO's Association
supported HB 61. She is an avid golfer and is a very strong
supporter and board member of quite a few non-profit
organizations in this state. she said:
As you all know, in this day and age, raising money
for non-profit organizations that benefit people in
need is very difficult. However, there is a group of
people in the state that love to play golf as many of
you do and they play in golf tournaments and like to
give money to charities. At any golf course on any
given day during the summer, of course, there is at
least one tournament being held....
There was one premier golf classic that ceased its
Calcutta event in 2001 when it came to their attention
that a Calcutta event was not legal. At least it
wasn't clear that they were legal until we had a legal
opinion done by the state. Up until that time, this
event was ceased it raised $800,000 that was given to
various charities. Ceasing the Calcutta decreased the
proceeds to those charities significantly.
People in organizations like to give money, but they
also like to have fun doing it. Golf is a sport that
is becoming more and more popular in this state.
Calcuttas are a time-honored method of charitable fund
raising uniquely suited to golfing events. They raise
substantial amounts of money, as I mentioned earlier,
and present no more harm to the public than any other
charitable activities including pulltabs, 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. As you know, revenue
generated helps cease the burdens that you all have in
funding programs that benefit people in need.
MS. OTTE related that there are premier golf classics in the
Anchorage and Fairbanks areas that receive big sponsorships
because of Calcutta pools. She thought if proceeds were limited
to 50 percent, even though all of them give 50 percent now, that
it might diminish the number of sponsors.
3:27:43 PM
JEFF BARNHART, Head Professional, Palmer Golf Course, supported
HB 61. He said he helps administer golf tournaments for 30 to 50
different organizations throughout a summer and a majority of
them are conducted to raise money for charities like Rotary and
Boys and Girls Clubs. He is continuously asked how more money
can be raised and Calcutta pools have been very successful for
many years for raising money. He thought every organization
would agree to pay a fee to the state to support a fiscal note
for administration of the regulations.
CHAIR BUNDE thanked everyone for their comments and said he
would hold HB 61 for another hearing and adjourned the meeting
at 3:33:40 PM.
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