Legislature(2025 - 2026)BELTZ 105 (TSBldg)
05/02/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB170 | |
| SB89 | |
| SB99 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 170 | TELECONFERENCED | |
| += | SB 89 | TELECONFERENCED | |
| += | SB 136 | TELECONFERENCED | |
| += | SB 99 | TELECONFERENCED | |
SB 170-GAMING; ELECTRONIC PULL-TABS
1:34:07 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
170 "An Act relating to gaming; relating to bingo; relating to
pull-tabs and electronic pull- tab systems; and providing for an
effective date."
1:34:23 PM
CHAIR BJORKMAN speaking as sponsor provided a brief recap of SB
170 and stated that the bill modernizes charitable gaming laws
to maximize benefits for charities and nonprofits through e-tabs
and electronic gaming. He said SB 170 engages stakeholders to
support gaming businesses and the organizations they fundsuch
as youth sports, senior centers, and veterans' groups
recognizing their vital community work and reducing the need to
seek state funding.
1:35:32 PM
CHAIR BJORKMAN announced invited testimony on SB 170.
1:35:43 PM
BILL BRESLO, President, Diamond Game Enterprises (Diamond Game),
Anchorage, Alaska, testified by invitation on SB 170 and moved
to slide 1-4. He stated that several gaming businesses under
Diamond Game's umbrella have supplied charitable gaming products
in Alaska for decades, including paper pull tabs, vending
machines, and electronic pull tabs. He noted that Diamond Game,
founded in 1994, specializes in device-based gaming and is part
of Pollard Banknote Limited, a family-owned company since 1907.
He said their approach emphasizes long-term, sustainable markets
by working with local stakeholders, regulators, and lawmakers to
introduce the right products responsibly. Drawing on experience
in lottery, casino, and tribal gaming, he cautioned against
expanding too quickly, which has caused market failures
elsewhere. He added that in Alaska, manufacturers should either
all be allowed or all be prohibited from owning distributors,
emphasizing consistent regulations without grandfathering
exceptions.
1:39:38 PM
MR. BRESLO moved to slide 5-6 and said that a committee formed
after last session examined electronic pull tabs, focusing on
whether they should be offered through slot-style cabinets or
handheld tablets. The debate centered on ensuring a level
playing field and avoiding the appearance of mini-casinos across
the state. He said similar discussions in other markets
supported the committee's conclusions and noted that choosing
between cabinets and tablets is a "false choice," as cabinets
typically dominate the market and quickly reach capacity limits.
1:41:07 PM
At ease.
1:42:10 PM
CHAIR BJORKMAN reconvened the meeting.
1:42:26 PM
MR. BRESLO continued with slide 6 and stated that the company
produces cabinet-style machines and values their role in the
business, but noted that when both cabinets and tablets are
allowed, cabinets tend to dominate the market. He added that
locations often reach the machine caps quickly, as some
manufacturers install the maximum number allowed to block
competitors rather than based on actual performance needs.
1:43:34 PM
MR. BRESLO moved to slide 7 and said Minnesota's experience
shows that tablet-based electronic pull tabs strengthen
charitable gaming rather than replace paper pull tabs. Since
tablets were introduced in 2013, paper pull tab sales have
doubled to over $2 billion, while electronic pull tabs reached
$2.7 billion in 2024.
1:44:14 PM
MR. BRESLO moved to slides 8-9 and stated that in contrast,
cabinet-style machines have reduced paper sales, as seen in
Idaho where sales fell 50 percent after cabinets were
introduced, and similar trends occurred in North Dakota, Ohio,
and Virginia. He explained that tablets are cheaper to produce,
ship, and maintain, providing greater savings for charities,
while cabinets are more costly and tend to dominate locations.
He also said revenue comparisons between the two are misleading
because cabinets in other states have higher payout rates,
making tablets potentially more profitable when adjusted for
differences. He noted that tablets have performed well even in
markets with slot machines, such as Minnesota's tribal casinos,
showing they can compete effectively.
1:47:40 PM
MR. BRESLO moved to slides 10-11 and noted that tablets have
performed well even in markets with slot machines, such as
Minnesota's tribal casinos, showing they can compete
effectively. He said the success of Minnesota's tablet-based
model is hard to dispute and believes it would work well in
Alaska, adding that while the company could provide cabinets if
authorized, tablets offer a more effective approach.
1:48:26 PM
JOHN POWERS, Owner, Tudor Bingo Center, Anchorage, Alaska,
testified by invitation on SB 170 and stated that he has worked
in charitable gaming since 1994 and now owns his business. He
expressed concern with Section 31, AS 05.15.186(f) on electronic
pull tab costs. He opposed allowing manufacturers and
distributors to receive up to 35 percent of proceeds when
charities get only 30 percent, arguing they should not earn more
than the nonprofits. He noted that Minnesota recently reduced
its cap from 30 percent to 25 percent and that all parties there
remain profitable, suggesting Alaska should adopt the same 25
percent limit.
1:50:49 PM
JON WEAVER, Owner, Pilot Games, Minnetonka, Minnesota, testified
by invitation on SB 170 and stated that Pilot Games is the
largest charitable gaming company focused solely on electronic
pull tabs and is independently owned. Founded in Minnesota in
2014, it is the state's oldest electronic pull tab operator and
has experienced steady growth over 11 years. He thanked the
committee for considering electronic pull tabs in Alaska,
describing them as easy to regulate, track, and account for. He
said the company provides real-time reporting tools for
charities and the state, allowing effective oversight even in
large or remote areas, ensuring strong accountability and
regulation.
1:53:10 PM
MR. WEAVER continued with his testimony of SB 170 and stated
that he supports electronic pull tabs, noting his company began
in Minnesota in 2014 when the product was struggling because
distributors feared it would hurt paper pull tab sales. He
designed games to complement, not compete with, paper pull tabs,
emphasizing that electronic versions should expand participation
and increase funds for charities. Over 11 years, his company has
helped raise hundreds of millions of dollars for local
nonprofits, while tax revenue from electronic pull tabs helped
Minnesota pay off bonds for the Vikings' U.S. Bank Stadium 20
years early. He added that tablets also support local bars and
veterans' clubs, especially after COVID-19, by providing social,
community-based gaming rather than casino-style play. He said
tablets better suit the atmosphere of local venues and offered
to share his company's experience in charitable gaming, noting
it has twice been named U.S. Gaming Company of the Year.
1:57:28 PM
CHAIR BJORKMAN asked if a 30 percent manufacturer cap on ideal
net, excluding taxes, work for Pilot Games in Alaska.
1:57:41 PM
MR. WEAVER replied that a 30 percent cap would be workable for
Pilot Games, but 25 percent is not sustainable even in
Minnesota. Developing new games costs about $350,000 and
requires major investment in technology, security, and
reliability, supported by a staff of over 100 and offices in
multiple states. He noted that Minnesota's 25 percent rate was
reduced at the request of tribes, not charities or the state,
and his company's rate had been 31 percent. He added that
operating at 25 percent caused losses in early 2025, and without
1,800 sites and strong ties to Minnesota charities, continuing
business there would be difficult.
2:00:08 PM
MARC DOWNING, Chief Counsel, Grover Gaming, Greenville, North
Carolina, testified by invitation on SB 170 and read the
following:
[Original punctuation provided.]
My name is Marc Downing, and I am Chief Counsel of
Grover Gaming, Inc. Grover Gaming is a software
development company headquartered in North Carolina.
Grover Gaming is the nation's leader in electronic
charitable gaming. Our products have netted our
charitable partners over $860 million nationwidein
New Hampshire, North Dakota, Kentucky, Ohio, and
Virginia.
2:00:38 PM
MR. DOWNING continued with his testimony of SB 170:
We believe electronic pull tabs would be a boon to
Alaska charities and the local communities they serve.
In every state that has modernized its charitable
gaming to allow electronic pull tabs, charities have
seen a tremendous increase in their fundraising. With
this new revenue, charities have been able to reinvest
in themselves by renovating and updating their posts
and lodges, offer new services to their members and,
most importantly, invest more in their charitable
causes in their local communities. Additionally,
participating charities have seen their membership
increase, tapping into younger demographics. The
modernization of charitable gaming has brought about
positive, palpable change to charities and local
communities in other states, and the same would happen
in Alaska.
The only change we encourage you to make is
authorizing consoles in addition to tablets in order
to provide flexibility to the charities. We are
cognizant of not having the appearance of mini casinos
as that is not the intent of charitable gaming.
Therefore, one solution is to authorize consoles in
members-only locations, but then only tablets in
establishments open to the public. Nevertheless, I
encourage you to support SB 170.
2:03:08 PM
JULIE OTTO, Manager, Easy Street Pull Tabs, Kenai, Alaska,
testified by invitation on SB 170, providing the following
testimony:
[Original punctuation provided.]
2:03:39 PM
MS. OTTO continued with her testimony of SB 170:
Where does the money go, how does it affect us, what
would we do without it?
People often ask, where does the money from charitable
gambling go? Well, the money from our pull tab store,
EZ Street Pull Tabs in Kenai, AK goes to support the
operating costs of the Ninilchik Senior Center. The
center has been around since 1983 and has come upon
hard times more than once. We rely of grant dollars
from the Borough and the State as well fundraising
money we raise ourselves. Having the pull tab store
has made a world of difference for us and the needs of
the center. If we didn't have charitable gaming to
support our operations, we would rely a lot more on
grants, which we all know are not guaranteed.
Paper costs, along with everything else keep going up,
If our e-tabs follow the MN model and we could double
our net, why wouldn't we?? Without them our profits
could start going the other way as costs continue to
rise
Next generation of pull tab players likes electronics
We have had the pull tab store for 5 years now. We
have a pretty loyal clientele however they are aging
out. The next generation is more familiar with
technology as compared to paper in whatever they do.
Pull tabs are no different. We need to stay with the
times and offer that next generation a new form of
entertainment so hopefully we can maintain the money
coming in through charitable gambling. E-tabs will do
that.
Available space
Smaller store. Tablets will do well as far as our
space. Our pull tab store doesn't have a lot of extra
room to add a bunch of cabinets or the counter space
to add an electronic gaming area. Having tablets only
allows the smaller pull tab store only (no bar or big
gaming area) to compete effectively against other
venues.
Limits on payouts:
SP 170 kept the cap on payouts for pull tabs at $2M.
I would like to see that raised more than 10 percent
(since it hasn't been raised since 2015) as all this
money helps out the non-profits and they can always
use more money. In light of not increasing that one,
the payout of $4M on e-tabs seems like a great
opportunity to increase a non-profits bottom line.
2:06:33 PM
MATT FISCHER, Owner Alaska Wholesale LLC, Kasilof, Alaska,
testified by invitation on SB 170 and moved to slide 2, Who we
Are. He said he has operated his distribution business for four
years, continuing the company his father started in the 1990s.
As Alaska's only remaining full-time resident distributor, he
said the charitable gaming industry cannot survive on paper pull
tabs alone due to rising costs and supply shortages, making
modernization essential for its future.
2:07:39 PM
MR. FISCHER moved to slide 3, Alaska Gaming Its About the
Nonprofits. He said Alaska's gaming industry is unique because,
unlike other states, it includes operators and pull-tab stores,
which makes adopting new systems more complex. While
stakeholders compare roles, he supports the Minnesota model,
noting its $75 million increase in net revenue and emphasizing
that net gains, not gross figures, reflect true growth since
most gross revenue is paid out in prizes.
2:08:36 PM
MR. FISCHER moved to slide 4, How Permits Can be Run, and
explained that Alaska has several gaming models: self-directed
sites like senior centers that run their own pull-tab stores,
multi-beneficiary setups with several permittees, and for-profit
operators who raise money for nonprofits. He clarified that the
30 percent nonprofit share is a minimum, not a fixed amount
operators can give more. Similarly, vendors can keep up to 30
percent but may choose less, as these percentages serve as
flexible guardrails rather than rigid limits.
2:10:14 PM
MR. FISCHER moved to slide 5, Paper Pull-Tabs, and explained how
revenue from an 82 percent payout pull-tab game is divided. Of
each dollar, $0.18 remains after player winnings. From that,
about 30 percent goes to manufacturers and distributors, and 36
percent to operators when used. Bingo halls typically have lower
payout rates, while pull-tab stores prefer higher ones but have
had to reduce payouts due to rising paper costs.
2:11:22 PM
MR. FISCHER moved to slide 6, Issues Facing Nonprofits and
Charitable Gaming, and said Alaska nonprofits face growing
challenges, including illegal online pull-tab games on Facebook
and unlicensed gaming stores that cut legitimate proceeds in
half. SB 170 aims to give authorities power to act against these
operations. Meanwhile, nonprofits struggle with rising costs for
rent and supplies while ticket prices remain fixed.
2:12:33 PM
MR. FISCHER moved to slide 7, Key Points From Alaska Industry
Talks, and said he spoke with a few Alaskans that are concerned
about a potential manufacturer monopoly, rising e-tab costs, and
money leaving the state. Bars worry tips could decline with
electronic play, and some fear the games move too fast, though
he noted they are actually slower than paper. He added that
Alaska's permit limits, based on prizes, encourage low payout
games that drive players away.
2:14:03 PM
MR. FISCHER moved to slide 8, Key Points From Alaska Industry
Talks, and said many prefer having the rules in statute rather
than regulation, noting that most of SB 170 is modeled after
Minnesota law, which has already been tested. He added that some
reporting requirements go unused and should be removed to save
time.
2:14:41 PM
MR. FISCHER moved to slide 9, 100 Percent of Nothing, is
Nothing, and said reducing bar shares isn't practical, noting
that without incentives, bars won't offer pull tabs. Paper pull
tabs already hurt service and reviews, and with electronic
games, bars risk losing tips. He encouraged profit-sharing to
keep them engaged, emphasizing that "100 percent of nothing is
nothing."
2:15:26 PM
MR. FISCHER moved to slide 10, The Minnesota Model, and
explained that the Minnesota model, recently adjusted from an 88
percent to an 85 percent payout, includes strong regulations
requiring manufacturers to sell to all distributors, prohibits
gifts, and bars manufacturers from also acting as distributors
to maintain fair competition.
2:16:06 PM
MR. FISCHER moved to slide 11, Minnesota Compared to Alaska
Games, and said he favors the Minnesota model because, while
Minnesota pull-tab revenue rose 267 percent over the same
period, Alaska's increased only 12.1 percent, even as inflation
climbed 33 percent, showing Alaska's gaming industry is falling
behind.
2:16:33 PM
MR. FISCHER moved to slide 13, Opposition to This Bill, and said
opposition fears about job losses are valid, but adopting the
Minnesota model could generate $75 million from e-tabs,
supporting roughly 800 jobs. Without SB 170, additional revenue
is lost, causing pull-tab stores and nonprofits to struggle or
close, as paper pull tabs alone are no longer sufficient to
sustain them.
2:17:35 PM
MR. FISCHER moved to slide 14, Pull Tabs as Entertainment,
Payout Percentage Matters and referenced a bar chart. He
explained that higher payout percentages increase the number of
plays per $100 spent, for example, 85 percent payout equals 650
clicks, while 90 percent approaches 900990 clicks, allowing
players to "replay" winnings. He emphasized that electronic pull
tabs are meant to provide entertainment, and higher payouts
extend playtime, keeping participants satisfied.
2:18:19 PM
MR. FISCHER moved to slide 16 and showed a picture of the
typical bar setup in Minnesota and stated that a tablet stand
can hold 10 tablets.
2:18:43 PM
MR. FISCHER moved to slide 18, Pull-tab Store Death Spiral, and
stated that pull-tab stores are stuck in a cycle of lowering
payouts to boost profits, which drives away customers and
eventually forces them out of business.
2:19:06 PM
MR. FISCHER moved to slide 19 and stated that raising the $4
million prize cap increases player winnings, and keeps the
players coming back to play.
2:19:32 PM
MR. FISCHER moved to slide 21, a comparison of paper and
electronic tabs showing that after a 3 percent tax deduction,
distributors and manufacturers earn 27 percent. The only
scenario where they make more than permittees is when working
with an operator.
2:20:22 PM
MR. FISCHER moved to slide 24, Why an Electronic Gaming Bill in
2025, and stated that SB 170 establishes guardrails, while
specific details like vendor payment schedules will be handled
through regulations. He said it makes most sense to adapt to the
Minnesota model, with monthly deposits being more practical than
weekly ones.
2:20:56 PM
MR. FISCHER moved to slide 25, Why so Many Changes in Statute,
and stated that lessons from Minnesota and North Dakota show the
importance of strong regulations, noting North Dakota's
unregulated payouts led to problems. Removing key elements from
the model could undermine the system, which is why Alaska favors
Minnesota's proven approach.
2:21:46 PM
MR. FISCHER moved to slide 29 and stated that one of the biggest
concerns is the limited number of manufacturers, noting his
company is one of only three distributors remaining.
2:21:55 PM
MR. FISCHER moved to slide 30 and argued manufacturers should
not be distributors, citing a past case where dual licensing
enabled cheating. He said keeping manufacturers, distributors,
and permittees separate ensures accountability and consistent
reporting to the state.
2:22:35 PM
MR. FISCHER moved to slide 32 and referenced a chart. He
emphasized keeping provisions to prevent kickbacks, noting that
some companies lure permittees with upfront payments that
ultimately reduce profits. Many permit holders lack time to
analyze long-term impacts, so he urged keeping anti-kickback
provisions in SB 170, following Minnesota's regulatory model.
2:23:45 PM
MR. FISCHER moved to slide 37 and referenced a chart. He
described Alaska's current gaming distribution as dominated by
one company, Arrow, which owns both major point-of-sale systems
and several manufacturers. He said this consolidation limits
competition, allows access to competitors' sales data, and
threatens smaller distributors. He urged maintaining separation
between manufacturers and distributors, similar to Minnesota's
model, and said he supports fair competition that benefits
nonprofits.
2:25:49 PM
CHAIR BJORKMAN held SB 170 in committee.