Legislature(2003 - 2004)
05/10/2004 08:55 AM Senate JUD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 552-GAMBLING & GAMING
CHAIR SEEKINS announced HB 552 to be up for consideration and
then announced an at-ease. Upon reconvening, he took public
testimony.
MR. PERRY GREEN told members he is an Anchorage taxpayer who is
here to help solve the fiscal gap. When he began to pursue that
goal, he did not know that oil would be selling at $40 per
barrel, but he does not believe that will be the case for much
longer. He said the issue of churches and morality always comes
up in the debate on gambling. In his opinion, gambling should be
an individual's choice. He considers himself to be a religious
person; he attends church services regularly and financially
supports his own congregation and several others. Four of his
five children attended religious primary and high schools.
MR. GREEN said he believes churches and gaming have a record of
existing together. He said one only needs to go to Las Vegas to
find churches that are very full. He said it's been awhile since
gaming was talked about in a serious manner. He told members he
has made 48 calls in an attempt to poll people and only one of
the respondents opposed his opinion of gambling. He said it has
been borne out that we need to start thinking globally. Since he
has been in Juneau, he has received calls from three continents.
Those callers recognize the potential of Alaska's tourism trade.
He sees this as an economic and jobs issue, not a gaming issue.
He noted that people can sit in a hotel room in Juneau and win
$200,000. He pointed out that while Alaska has a fiscal gap, the
State of Mississippi, which is not known for great schools, is
increasing its budget because it has instituted gaming. Welfare
recipients now have jobs and 70 percent of the food stamp
program has been eliminated in what was the poorest county in
Mississippi.
MR. GREEN noted that the forestry industry is a shadow of what
it was and revenues from fisheries and oil are down. The leisure
industry is the largest industry in the world today. He said
gambling will bring 1,000 private industry jobs to Alaska. He
pointed out that it is very important that the Legislature
create good jobs so that people can create good lives for
themselves.
SENATOR THERRIAULT said one concern among some members is how
passage of this bill will open up the state for the
proliferation of gaming under the Indian Gaming Regulatory Act.
He referred to a memo that he distributed to members from legal
counsel that reads:
It is impossible in my opinion for anyone to say that
gaming will be limited to certain clearly identified
portions of land areas of the state. No one knows
exactly how much Indian land there is and where that
Indian land is. It's clear though that the Venetie
decision does not provide the answer or [indisc.] that
some have alluded to in this regard.
SENATOR THERRIAULT then referred to another memo from
independent counsel Don Mitchell that cautions the Legislature
about taking any step. He said that while the individuals Mr.
Green contacted may have been in favor of just one casino in
Anchorage, the Legislature is the decision-maker for the State
of Alaska and must keep its eye on whether that action opens up
uncontrollable gaming. He continued:
We would basically turn control over that activity in
the State of Alaska over to a federal agency and no
longer be able to make the calls on behalf of the
citizens and the Legislature. That's why a number of
years ago the Legislature even did away with the
charitable fundraising casino nights because the
roulette wheel where you're playing with paper money
and all of the proceeds go to a charity at the end of
the evening, that could be used as legalized gambling
in the State of Alaska and under the Indian Gaming
Regulatory Act, could throw the state open for the
spread of gambling in a fashion that the state no
longer controls. That's a real motivating factor for
myself, enough to the fact that we have independent
counsel that advises us and watches the things that
are being discussed in Congress so that we make sure
that the Legislature continues to make the policy, set
the policy in the State of Alaska in regards to gaming
and not some federal agency.
MR. GREEN responded that he also got legal opinions and
suggested putting a sunset clause in the bill to address Senator
Therriault's concern. He thought that litigation would be so far
down the line that no one else would try to do any gaming
outside of Kake, Klawock, and Metlakatla. He told members:
Metlakatla has gaming over and above the state maximum
for those games because it is an independent place and
recognized as such. Indian gaming in California has
made it possible to take a lot of people off of
welfare but the state must, in good conscience, enter
into a contract with those Indian casinos that you
were talking about and they must pay the same
percentage. That's why the percentage is actually 20
percent and the state would get that money should
people in other areas go into gaming. They have to
have a state contract and if you have it at 17 percent
to the state, 3 percent to the borough, they also must
pay that too, should that be the case. But my focus is
on Far East travelers. My focus is on international
players. My focus is not to compete even with a small
or a medium-size Indian casino that would have to pay
20 percent of its proceeds to the state because in the
compact - every state that has a compact - Nevada has
a compact, Connecticut has a compact with the Indians,
they pay one-half billion dollars in the state of
Connecticut. So that is true everywhere.
There is Indian gaming in other states but there is
also private gaming. Indian gaming is in Nevada but I
challenge you to find somebody who has visited an
Indian gaming casino in the state of Nevada. Everybody
goes to Bellagio or to Binions (ph) or to the Hilton
or the Sheraton and that is the same in other places
where they do have Indian land. I think your concerns
and the litigation that would take place would be
years and years and there is a sunset provision in
this legislation and that sunset provision would scare
anybody into not investing a lot of money in an area
that doesn't have a real population base.
I can go back to 1989 to the one store in Alaska that
contributed between $20 and $29 million per year to
the state of Alaska in revenues from Asian tourists.
Last year that same store only paid the state $311,000
because we do not have that tourist base anymore. The
Asians aren't here. They're the big spenders. In my
little business plan that I made up with consultation
with others, I figured that there would be $3 billion
in retail sales - in additional retail sales and taxes
collected over a 10-year period throughout the state.
Now I'm thinking that might even be too low.
CHAIR SEEKINS asked Mr. Green if he provided committee members
with copies of the legal opinions he referred to.
MR. GREEN said he did.
CHAIR SEEKINS indicated that there has been a proliferation of
casinos in the State of Washington and asked Mr. Green why he
does not anticipate the same thing happening in Alaska.
MR. GREEN said the casinos in Washington are card casinos in the
municipalities. A municipality can have pull tabs and cards but
they cannot have machines like Indian casinos do.
CHAIR SEEKINS pointed out that there has also been a huge
proliferation of Indian gaming in Washington.
MR. GREEN responded:
That's why if you start gaming like Nevada did, if you
start gaming like New Jersey did, if you start and put
it there - you know, I'm a member of the Safari Club -
I don't go hunting but I just believe in free choice.
I'm a member of the NRA. I don't collect guns, don't
have any use for them, but I think people should have
the choice. I think we need to give - you know, this
bill calls for approval by the people and,
particularly, in the area where it's going to be most
affected, which is the Anchorage area. Everybody I
talk to - oh, I hope you get it, gee I'd like to go
there, it's a social thing.... It's entertainment and
you're going to be entertaining the willing and that's
what you'll get. You'll get a lot more money for this
state and for this economy and you won't have to be
having these 12 o'clock midnight sessions that you all
have been working hard for. Gambling isn't the total
answer for sure but it is a step in creating an
economy that's sustainable. It's a year-round thing.
SENATOR THERRIAULT referred to the memo from Don Mitchell, and
read from page 5:
The Alaska Legislature's enactment of HB 552 can be
expected to motivate numerous Native groups to file
Class 3 Gaming Act ordinances with the National Indian
Gaming Commission that will request the chairman of
the commission to allow groups to conduct that kind of
casino style gaming that the enactment will empower
the Alaska Gaming Commission to have in Anchorage.
SENATOR THERRIAULT said the memo then talks about the lengthy
process and negotiation that IGRA goes through. If the state
were to disagree with a proliferation of gambling, "the
Secretary of the Interior shall unilaterally implement the
compact and the Indian tribe may conduct classic gaming
activities over the state's objection." He repeated that the
state would completely lose control and that no one knows
exactly what lands would be subject to the proliferation at this
time. He said it is a known fact that in some of the smaller
villages in Alaska with very tenuous economies, there is a high
level of pull-tab operations, most likely beyond what the people
in the community can afford. He concluded, "I don't know that
you're going to have a huge casino in Venetie or you're going to
have a card room with a roulette wheel and people spending money
there. I just think this is something that because of IGRA, in
particular, if we open this 'Pandora's Box' we just don't know
what we're getting ourselves into."
SENATOR OGAN said seven or eight years ago, former Attorney
General Botelho advised the [Majority] caucus in the House that
it was time to do away with Monte Carlo gaming because of how
the law was being interpreted. He cautioned of a proliferation
of casinos on Native-owned lands. He said he is not impugning
anyone of bad intentions but believes it is a policy call the
Legislature must make, taking into consideration problems the
bill's enactment might create.
TAPE 04-70, SIDE B
SENATOR OGAN said that gambling is a relatively harmless
activity for those people who don't become addicted but can lead
to tragic consequences for those who are.
SENATOR THERRIAULT referred to a letter of support from Jim
Palacke (ph) of Fairbanks supporting passage of the bill because
of the creation of construction jobs. He said he knows Mr.
Palacke and would guess that he does not understand how IGRA
works and that if the Legislature takes a step that seems to be
controlled, that step would start a process in which the
Secretary of the Interior could force the state into compacts
and decide the terms. He added that the local vote in Anchorage
would have statewide implications. He said if Congress could
clear up the issue of what is tribal land in Alaska, the
Legislature would have some assurance of what it would be
initiating with this legislation but the issue of tribal lands
in the state is hugely contentious.
MR. GREEN said he believes one has to look at Indian gaming
operations and what they have done for surrounding areas. He
maintained that those gambling operations have provided a way
for people to get off of welfare and their dependency on the
federal government. He said in every state that requires that a
percentage of proceeds go to the state, the Indian group must
have a compact with the state. He believes that would be a long-
term process but is why he is suggesting a sunset provision in
the bill.
CHAIR SEEKINS said if the state proposes a compact, which the
Native group does not agree to, a whole series of events would
then start to take place: negotiation, mediation, and then
federal imposition of the terms of the contract if the state
cannot agree over any state objection. He said that is a major
concern with the compact.
SENATOR THERRIAULT was unsure whether once that line is crossed,
a sunset date would negate the compact.
CHAIR SEEKINS also doubted that a sunset date would.
MR. GREEN stated, "I'd like to respond just by saying that if in
the state that the state's terms would be the same as the
borough's term, which is 17 and 3, which is a fortune, and in
many of these rural areas, getting that much back and the very
high cost - in that bill are so many things in order to have
gaming in the state, all the cost is borne by the casino - the
cost - and no government job has got one bit of cost to it. I'm
of firm belief that we should have it. That's all.
MR. GUY WARREN, Stated Clerk of the [Southeast] Presbytery of
Alaska, stated sincere opposition to the approval of HB 552. He
told members:
The [Southeast] Presbytery of Alaska consists of the
15 member churches of the Presbyterian Church U.S.A.
from Yakutat in the north to Metlakatla in the south.
It includes the communities of Klawock, Metlakatla and
Kake.
We believe that this bill represents a significant
step towards situations, which will not be in the best
interest of the state government or the citizens it
serves.
While we know that approval of this legislation could
provide some new funding to meet the state's financial
needs and perhaps new employment, we also believe that
the costs the state will incur attempting to repair
the social ills that gambling brings with it will more
than consume that new funding, and remove any real
benefit from any new employment. These social ills
include increased domestic violence, various
psychological and social problems and an increased
incidence of suicide. One example of the increased
rate of suicide we fear might occur is seen in
Nevada's Clark County, which is the home of Las Vegas.
During the year 2002, their coroner's office reported
295 suicides. Similar numbers were seen in previous
years. Las Vegas leads the nation in the most
depressing statistic.
We believe it would be prudent and only right for the
Legislature to seek detailed and independently
researched estimates on these costs before taking the
steps, which would force the state to pay them. This
legislation will see serious casino gambling
introduced to our state prior to that research.
The people of this state have spoken in the matter of
gambling and they spoke loudly. A proposal to set up
an Alaska gambling board was presented to the people
in 1990. This measure was defeated by over 40,000
votes, almost a 2:1 margin. It might be noted that the
bill now before this body includes the language for a
local election before plans for a casino could
proceed. While an appropriate added addition, it is
not adequate to propose legislation so roundly
defeated in 1990 [that] included a similar local
election clause.
Finally, if the committee has any questions as to the
possibility of the social ills our group is concerned
about, I would simply ask you to consider these facts.
The tax revenues that will be paid by this proposed
casino, the salaries for those employed by this
casino, and all of the other costs incurred by this
casino will be paid by those who visit and lose at
this casino. Some of these losses will be from those
simply engaged in an expensive recreational pursuit.
However I am certain, and there is no shortage of
anecdotal information on this, that a significant
amount of these losses will come from people who are
destroying their personal finances, their families,
and, as seen in Las Vegas, sometimes literally
themselves.
Our state's situation is not nearly so desperate as to
take the significant gamble this bill proposes. We
have the largest state savings account in the country;
we have scenic beauty that Louisiana, Mississippi, and
Nevada can only dream of, and we have natural
resources in abundance found nowhere else. We need to
find solutions to our problems; we don't need to
create new ones. Building this casino and the others
that will almost certainly follow, as has been noted
here, will create problems and not solve them. Thank
you.
SENATOR OGAN said from his study of Alaska history, he knows
that the Presbyterians have been involved in Native communities
for a very long time. He recently had a Presbyterian pastor from
one of the [Aleutian Islands] ask him what could be done about
the suicide problem in that area. He thinks the problem is the
loss of their culture and boredom and fears if gambling enters
into the picture, more social ills will arise.
MR. WARREN agreed with Senator Ogan and said those who have
studied the statistics understand that Alaska is typically
vulnerable to social ills for a number of reasons. He believes
adding gambling in this form will make those social ills worse.
He noted that he has discussed this matter with church leaders
from other denominations. He made copies of a letter in
opposition from the Catholic Bishops available to committee
members last Friday. He concluded, "And I would agree with the
gentleman that we have enough problems here. We really don't
need this one added to the mix. We have a lot of good things for
us and this isn't going to contribute anything."
With no further participants, CHAIR SEEKINS closed public
testimony. He then recessed the meeting to the call of the
chair.
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