Legislature(2023 - 2024)BARNES 124
02/26/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB385 | |
| HB237 | |
| HB290 | |
| HB200 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 385 | TELECONFERENCED | |
| += | HB 200 | TELECONFERENCED | |
| += | HB 289 | TELECONFERENCED | |
| *+ | HB 179 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 290 | TELECONFERENCED | |
| += | HB 237 | TELECONFERENCED | |
HB 200-GAMING; ELECTRONIC PULL-TABS
3:51:11 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 200, "An Act relating to pull-tabs; relating to
persons prohibited from involvement in gaming; and relating to
the duties of the Department of Revenue." [Before the
committee, adopted as the working document on 2/12/24, was the
proposed committee substitute (CS) for HB 200, Version 33-
GH1054\S, Wallace, 2/8/24, ("Version S").]
CHAIR SUMNER opened invited testimony.
3:51:44 PM
SANDY POWERS, Owner, Big Valley Bingo, gave invited testimony on
Version S. She opined that there could be a version of
electronic pull-tabs ("E-Tabs") that could be workable in
Alaska. She said that Arrow International, the company behind
the proposed legislation, seems to be creating a monopoly in
Alaska because they bought the largest distributor, Whaler
Casino Supply, which is one of only four distributors in the
state. She explained that the E-Tab manufacturers would get
somewhere between 31 and 35 percent of the adjusted gross income
while charities would receive 30 percent. In contrast, she
noted that the cost of electronic bingo games in Alaska is
between 2 and 10 percent. She cited AS 05.15.128, which she
understood to mean that the game average payout cannot exceed 85
percent; however, she said most E-Tab companies want 90-92
percent. She questioned why the amount of money going to the
charities wouldn't increase if the volume of play increased.
Lastly, she expressed concern about the indeterminate fiscal
note, as the true cost to Alaska charities and businesses is
unclear. She said she would like to see the bill written for
the benefit of Alaska charities.
3:59:29 PM
DAVID LAMBERT, representing self, gave invited testimony on
Version S. He informed the committee that he is a licensed
charitable gaming operator who has been involved in charitable
gaming for 30 years to protect the interest of nonprofits. He
said Alaska has a unique charitable gaming system that needs to
be protected. He advocated for the switch the E-Tabs because
the cost of paper is "out of control." He expressed his
opposition to AS.05.15.180(a), which would grant the department
unrestricted authority in the future. He said the bill was
written by Arrow International for the company to create a
monopoly. He said the bill would ban other manufacturers and
put limitations on them that would not be good for the industry.
He explained that Arrow International owns most of the paper
pull-tab manufacturers and would take 50 percent of the profit.
He opined that HB 200 should be written by Alaskans, not by the
Department of Revenue (DOR). He acknowledged that pull-tabs
need to be regulated; however, non-profit protections need to be
prioritized.
4:07:29 PM
JOSHUA LEWIS, representing self, gave invited testimony on
Version S. He informed the committee that he is a charitable
gaming operator in Alaska and shared his experience working in
the field. He said the Alaska charitable gaming industry is the
poster child for charitable gaming nationally. He said
provisions for nonprofits to earn charitable gaming revenue
exists in several distinct ways, which is not offered in other
states. He said the introduction of E-Tab machines is
effectively the introduction of slot machines into the Alaska
market, and E-Tab manufacturers would take somewhere between 35-
50 percent of the charities' profit. Further, he reported that
E-Tab machines provide 5-15 percent profit [for charities],
while paper pull-tabs provide 20-23 percent profit. He reported
that currently, a $5 paper pull-tab purchase results in $1
profit to the charity, whereas E-Tabs require a four-fold
increase in volume to create an equivalent financial return. He
said early all participants in Alaska charitable gaming would
experience a significant decrease in profit if E-Tabs were
introduced, adding that only E-Tab manufacturers would see an
increase in revenue. He opined that HB 200 is not a good option
for the state of Alaska.
4:11:03 PM
JERRY LEWIS, Operator, Northern Lights Bingo, gave invited
testimony on Version S. He shared experience in the industry
and reiterated that Alaska has the gold standard for charitable
gaming. He said the numbers spouted by E-Tab projections are
hypotheticals based on states that are not similar to Alaska,
and asked why the state would risk charities' income on
hypotheticals. He estimated that if manufacturers would charge
between 40-50 percent, revenue would need to double or triple
for charities to break even. He noted the social ills that
would come from the expansion of gaming. He agreed that E-Tabs
are coming to Alaska; however, the bill as written, is not the
answer for Alaska. He urged a "no" vote.
4:13:20 PM
CHAIR SUMNER opened public testimony on HB 200.
4:13:42 PM
MIKE MINERS, representing self, testified during the hearing on
HB 200. He said the most important part of charitable gaming is
the charitable organization. He shared personal anecdotes and
said if vendors are to be trusted to use E-Tabs, someone must be
accountable to the money. He said pull-tab money must be "made
in one year and spent the next" because it is made for charities
to spend the money.
4:18:27 PM
DAVID SANDEN, Hidden Treasures Multi Beneficiary Permit,
testified in opposition to HB 200. He said the bill as written
does not propose a cap on what E-Tab manufacturers would be able
to charge, and without a cap, most if not all of the net gains
would be funneled out of state. In addition, it is unclear
whether the E-Tab software would allow permit holders to impose
a local sales tax on cash and the exchange of playbacks for
additional pull tabs. He argued that the lion's share of the
realized profits from an increase in net pull-tab receipts would
leave the state and only marginally benefit Alaska's charitable
organizations. Furthermore, many organizations would be unable
to run E-Tabs at all. He recommended including language to
limit the amount of ideal net that may be charged for the use of
E-Tab devices to no more than 15 percent. He voiced his
opposition to the proposed legislation as written.
4:22:40 PM
JOHN POWERS, Big Valley Bingo, testified during the hearing on
HB 200 and said he concurred with past testimony. He urged the
committee to speak with Deb McDaniel from North Dakota who is a
knowledgeable resource on charitable gaming. He said the bill
should be crafted by Alaskans for Alaska charities.
4:24:52 PM
JACK HEESCH, President, Anchorage Youth & Recreation, testified
during the hearing on HB 200. He reminded the committee that
there are smaller charitable organizations that help improve
lives in Alaska.
4:28:18 PM
The committee took a brief at-ease at 4:28 p.m.
4:28:46 PM
DON WINCHESTER, Board Vice President, Alliance for American
Legion Baseball, testified in opposition to HB 200. He shared
that his organization receives $30,000 annually from pull-tabs
for gap funding. He opined that the bill is loosely written and
said he would not want to gamble on the idea that increased
volume would result in more money [to the nonprofits].
4:31:26 PM
NANCY DECHERNEY, representing self, testified during the hearing
on HB 200. She said [E-Tabs] is the future, so a solution
should be found that benefits Alaska and the non-profits. She
said charitable gaming is an important way to have augmented
funding. She asked members to do what they can so that
charitable groups can do their work.
4:32:38 PM
MICHAEL TICE, President, Peninsula Oilers Baseball Club,
testified in support of HB 200. He likened the E-Tab proposal
to the electronic modernization of bingo. He opined that it
would increase [Peninsula Oilers Baseball Club's] revenue.
4:33:47 PM
PAULETTE JOY, President, AMVETS Ladies Auxiliary, testified in
support of HB 200. She emphasized the need to help veterans,
their families, and Alaska's active military.
4:35:16 PM
SHARI FULTON, AMVETS Ladies Auxiliary, testified in support of
HB 200. She said revenue needs to be provided for Alaska's
military. She pointed out that people are not responding to
traditional gatherings, such as bake sales; however, they do
play pull-tabs.
4:36:21 PM
MICHELLE SAS, representing self, informed the committee that she
is a member of AMVETS Ladies Auxiliary. She shared her
understanding that the bill would only add to the ability to
increase the available earnings for charities, not affect paper
pull-tabs. She said AMVETS relies on the money from pull-tabs
and looks forward to the potential increase in revenue that E-
Tabs would bring.
4:37:33 PM
CHARLES BORING, representing self, testified during the hearing
on HB 200. He said electronic gaming operators are looking hard
at HB 200 because it affects their operations. He said he
supports electronic gaming, but not HB 200 as written. He said
he would be glad to be involved in a re-write of the bill.
Nonetheless, he maintained that electronic gaming needs to be in
Alaska.
4:40:14 PM
CHRISTA FOLI, Department Commander, AMVETS Ladies Auxiliary,
testified in support of HB 200. She said military clubs rely on
money from pull-tabs. She shared her understanding that paper
pull-tabs would not be affected, noting that electronic bingo
didn't replace paper bingo. She said she sees electronic gaming
as a benefit to Alaska.
4:42:09 PM
DIANA TICE, Alternative Member in Charge, Old Town Bingo,
testified in support of HB 200. She said E-Tabs would help grow
their customer base and increase customer engagement.
4:43:24 PM
CHAIR SUMNER closed public testimony on HB 200. He announced
that the bill would be held over.