Legislature(2021 - 2022)ADAMS 519
03/18/2021 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB69 || HB71 | |
| Presentation: Reverse Sweep - Office of Budget and Management | |
| HB128 | |
| HB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 128 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 76 | TELECONFERENCED | |
HOUSE BILL NO. 128
"An Act relating to charitable gaming online ticket
sales and activities."
2:07:42 PM
REPRESENTATIVE ZACH FIELDS, SPONSOR, appreciated the
opportunity to introduce his bill to the committee. He
explained the purpose of HB 128. The bill made one simple
change - it made regulations that allowed for the sale of
charitable gaming raffle tickets online and in-person
during the pandemic permanent. Passage of the bill was
needed to ensure Alaska's many non-profits could continue
to raise money into the future. Time was of the essence, as
some of the non-profits were currently planning events
during the ongoing pandemic. A local business owner had
suggested the bill because the sort of raffles online were
necessary to raise funds for the Anchorage Duck Race which
benefited Excel Alaska and many other non-profits.
Representative Fields continued that while the concept was
proposed to him by an Anchorage business owner, charitable
raffles occurred throughout the state. He provided several
examples including the Great Alaska Duck Race in Anchorage,
the Kuskokwim Ice Classic in Bethel, and the Nenana Ice
Classic. He noted some of the beneficiaries of the raffles
including the American Cancer Society, KUAC Radio in
Fairbanks, and the Public Library. The Fairbanks Chamber of
Commerce had a rubber ducky race, and many sportsman's
groups used raffles to raise money.
Representative Fields noted that the raffles not only
benefited individual groups but also put more money into
Alaskan communities for management and conservation. He
mentioned that the Kenai River Sportfishing Association
(KRSA) was one of the many groups that purchased raffle
tickets and was an example that illustrated why it was
important to extend the regulations. He detailed that in
the current year KRSA sold tickets online in addition to
in-person. Even though the raffle tickets were available
in-person at many sporting goods stores like Cabela's, they
sold the majority of tickets online. As a result he thought
that the rules needed to remain in place for Alaska's
charities to survive during a pandemic.
Representative Fields also suggested that by putting the
regulations in place permanently, the state would raise
more money for very important functions longer term. It
made sense to make online raffle sales permanent. He was
available for questions.
Representative LeBon spoke with the Fairbanks Chamber of
Commerce who supported the bill. He also spoke with one of
the pull tab operators in his district who had sold tickets
online which boosted his business and indirectly benefited
non-profits. He wondered if a provision was included that
would ensure that tickets were sold to eligible Alaskans.
He wondered how to address the issue.
Representative Fields reported that the bill simply made
permanent the same framework put in place by the governor
which contained the requirement.
2:11:00 PM
Representative Rasmussen asked if there was a reason why
the state would not want people from outside of Alaska to
purchase raffle tickets that benefited Alaskan non-profits.
Representative Fields responded that it was a topic of
conversation he had had with some groups. He believed the
issue would be addressed to everyone's satisfaction as the
bill progressed.
Representative Wool asked if pull tab activity was allowed
online. Representative Fields indicated that pull tabs
would not be sold online. He invited his staff to respond
in more detail. The Department of Revenue (DOR) was also
available online.
TRISTAN WALSH, STAFF, REPRESENTATIVE ZACK FIELDS, answered
that the language that was adopted followed HB 76
[Legislation which passed in 2021 regarding extending the
Covid 19 disaster emergency] that was put forward by the
Department of Law and in the bill before the other body.
The Department of Revenue might be able to speak to the
reason pull tabs were not included in the original bill.
2:12:26 PM
COLLEEN GLOVER, DIRECTOR, TAX DIVISION, DEPARTMENT OF
REVENUE (via teleconference), explained that the initial
language that went into the emergency declaration,
including some of the public health orders, were geared
towards online games, raffles, derbies, and classics. Pull
tabs were not included. It would open up several issues
about electronic pull tabs and other issues that required a
larger discussion. The division wanted to limit it to
something easy to manage at the time.
Representative Wool did not personally support online pull
tabs and was glad it was not included. He did not see
charitable gaming in the bill. He thought the bill related
to raffles or lotteries. Representative Fields responded
that it was a different section in statute, AS 05.15.690.
Vendors were not affected by the bill. The underlying
statute differentiated between the types of charitable
gaming operators.
Co-Chair Merrick indicated that the committee would be
hearing from invited testimony.
2:14:14 PM
JASON MOTYKA, OWNER, 49TH STATE BREWING COMPANY, ANCHORAGE
(via teleconference), introduced himself and reported
having businesses in Anchorage and Denali Park. He was the
treasure of the downtown community council and volunteered
with Excel Alaska and other non-profits throughout the
state. He relayed that at the start of the pandemic his
organization supported a number of non-profits that had
events at his facilities to try to raise money for various
organizations. It became apparent that all of the
organizations and their fundraising efforts would likely
come to a halt which occurred. He reached out to
Representative Fields and Senator Begich to see if there
was anything the council could do to keep the events going
and expand them. They quickly facilitated businesses being
able to operate during the pandemic. He increased sales
significantly and expand the operation throughout the
state. The effort was tremendous success which brought in a
significant number of non-profits into a race held in
Downtown Anchorage. He reported that over $100,000 was
raised for organizations to utilize.
Mr. Motyka continued that the idea of changing the rule
permanently was important given the uncertainty of what
would happen to public events. He also pointed out that
Alaska needed to adapt to rules that other states had in
place. Online gaming platforms were being built across the
country. The technology was more secure and accurate for
tracking gaming transactions than was currently required.
As technology advanced and Alaskan organizations understood
how to use the platforms to reach a greater audience,
fundraising would change. He thought it was important to
distinguish between pull tabs and the events currently
being discussed. He argued that it opened up different
problems if pull tabs were included. The bill provided
tremendous benefits to organizations which allowed the
state to track changes more accurately into the future.
Mr. Motyka agreed with Representative Rasmussen's idea of
selling to people outside of Alaska. It was important to
note that when the race in Anchorage was started
originally, the idea was to sell tickets to tourists
because of the number of visitors Alaska had each year. He
agreed with the prospect of using tourist dollars to help
support Alaska's non-profits. He thanked the committee.
2:17:57 PM
Representative Rasmussen thought that as long as the
non-profits benefitting from internet raffle ticket sales
were Alaskan, tickets should be available for anyone inside
and outside of Alaska.
Representative Wool commented that certain raffles were
limited by the number of tickets available. He asked
whether restrictions being eased would result in a decrease
in foot traffic because of the fundraisers being conducted
online. He wondered about the potential impacts of moving
things to an online platform.
Mr. Motyka thought the old way of selling, tracking, and
keeping raffle tickets was inefficient. The reality was
that people wanted to get together to socialize and
participate in events. However, he thought the technology
aspect created far more efficiency for organizations for
in-person and online events. He argued that at some point
organizations would need the tools to keep up with the rest
of the country in terms of the use of online platforms for
charitable fundraising efforts.
2:21:28 PM
JAMIE KLAES, MARKETING DIRECTOR, ALASKA EXCEL, ANCHORAGE
(via teleconference),explained that her employer was a non-
profit organization in Anchorage located on the Alaska
Pacific University Campus. Alaska Excel provided
educational opportunities to rural students in grades 7-12
and typically served about 600 students per year. It did
not make sense to her to sell online tickets to people
outside of Alaska. The current regulations allowed non-
residents to purchase tickets if they were in Alaska. The
current regulations also allowed people to buy tickets over
the phone from the Lower 48. She mentioned the Alaska
Airmen's Association giving away an airplane every year.
She indicated that nine times out of ten the winner was
someone from the Lower 48.
Ms. Klaes relayed her support for HB 128, as there were
many benefits to conducting charitable gaming online. Her
organization hosted the Great Alaska Duck Race in 2019.
They sold paper tickets per the regulations and generated
approximately $30,000. In 2020, her organization hosted the
event again. Because of the regulation changes, they sold
tickets online and generated over $100,000 and included 10
additional non-profits from across the state who also
benefited from the proceeds. Alaska Excel expanded its
reach and collaborated with organizations as far as
Utqiagvik which would not have happened without being
online. She noted that the Great Alaska Duck Race event
took a substantial amount of time and energy to host. She
suggested that if it was limited to selling paper tickets
again, her organization would have to take a serious look
at whether it was worth the effort.
Ms. Klaes reported that eleven other states allowed for
online gaming. The American Gaming Association indicated
that in the United States it was a $240 billion business
and employed 1.7 million individuals. She argued that paper
tickets were limiting the ability to generate revenue. They
were more difficult to keep track of and were more time-
consuming. She found from using the online ticket system
compared to paper tickets, it was easier to track, it took
less time, and data collection was streamlined. With the
temporary change in the prior year, Alaska Excel was able
to include Alaskans from all across the state. She thought
rural communities felt more connected to events happening
in Anchorage and Fairbanks. She spoke about growing up in
rural Alaska and feeling isolated from events taking place
in other parts of the state. She reiterated her support for
HB 128.
2:24:59 PM
Representative LeBon referred to Section 2 of the bill that
asked for verification of the legal age of the purchaser
and their physical presence in the state. He asked how to
protect the non-profit organizations from exposure if a
ticket was sold to an underaged person or a person in an
unapproved location. Representative Fields responded that
the language could be tweaked to ensure that non-profits
did not face an impossible burden. Other states had adopted
such language. He agreed with the notion of accepting
someone's money even if they were not from or in Alaska.
Representative Rasmussen would appreciate the opportunity
to put forth an amendment to allow for out-of-state ticket
purchasing. Representative Fields would look forward to
working with her on an amendment.
2:26:57 PM
MICHELLE DEWITT, DIRECTOR, BETHEL COMMUNITY SERVICE
FOUNDATION, BETHEL (via teleconference), reported that her
organization sponsored the Kuskokwim Ice Classic and fully
supported the bill. She elaborated that the ice classic was
a small event highly localized in Bethel. Alaskans tended
to be familiar with the Nenana Ice Classic, a similar
contest. The Kuskokwim Ice Classic was a contest where
customers guessed the month, day, and time of breakup of
the Kuskokwim River and had a very high regional presence,
especially along the Kuskokwim. The revenues from the
contest were dedicated to non-profit groups that provided
services in the community of Bethel and along the river
from Aniak to Kwigillingok. Most groups were youth groups
such as the local youth dance group, the local swim
program, and the youth violence prevention group. In
pre-Covid times, youth groups would sell tickets in stores
to earn money for their clubs or groups.
Ms. Dewitt reported that over the years the foundation had
received feedback about purchasing guesses online. There
was a high demand for online purchasing. She had to turn
folks away in terms of guessing online. People wanted to be
able to participate and have access on their own timeline.
She argued that online purchasing allowed for keeping the
control for submitting guesses online in the hands of
customers instead of relying on a volunteer to write down
and submit a significant amount of data on a guess
accurately.
Ms. Dewitt reported that in the prior year, due to the
pandemic, the ice classic had to pivot at the last minute
to phone sales only. It escalated the need to move to an
online format. Implementing the ice classic by phone as the
only sales strategy was an enormous burden. It had
significant inefficiencies with a high risk for errors.
There was also a huge decrease in sales. She reviewed the
cumbersome process of a phone sale providing the detailed
information collected from the caller by the volunteer
answering the call. She noted that the volunteers worked
from home which meant the organization had to collect all
of the forms associated with ticket sales, sort them, and
conducted a fail-safe check. She reported that the process
occurred over 6000 times in the prior year. She reiterated
that the antiquated process currently being used did not
make sense based on the technology that was available.
Ms. Dewitt opined that HB 128 offered a solution for the
issue. It would allow customers to participate in online
sales, keep people safer, reach more customers, and allow
for built-in efficiencies with the utilization of current
technologies. She highly supported the bill. She addressed
some of the questions regarding Alaska-based sales versus
sales outside of the state. She had hired an attorney 5
years prior to closely examine the statute and provide some
advice. The guidance she received was that much of the
burden was on the customer to meet the requirements. She
would also support an amendment that would clarify the
issue taking the vagueness out of whether a person had to
be an Alaskan in Alaska. She urged members to support the
bill.
Co-Chair Merrick would be hearing the bill again in another
meeting.
HB 128 was HEARD and HELD in committee for further
consideration.
2:34:28 PM
AT EASE
2:35:55 PM
RECONVENED