Legislature(1995 - 1996)
01/23/1996 01:06 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 358 - DOG MUSHING CONTESTS/GAMES OF CHANCE Number 0086 CO-CHAIR IVAN noted that the committee packets contained the bill; relevant statutes; two zero fiscal notes, one from the Department of Revenue and one from the Department of Community and Regional Affairs; a sectional analysis; a sponsor statement; and a letter of support from the Kuskokwim 300 Race Committee. Number 0125 DARIO NOTTI, Legislative Intern and aide to Representative Ivan, presented the sponsor statement for HB 358. He referred to a wall map and pointed out that HB 358 would affect a minimum of twelve dog races in Alaska, stimulating economic activity in at least nine different communities. He said the legislation would make those races, which brought in thousands of visitors, economically viable. He added that employment during those races was almost exclusively Alaskan. He explained HB 358 added dog mushers' contests to AS 05.15.180 and defined those contests in AS 05.15.690; it further removed them from the sunset clause that would require the legislation to be reenacted in four years. Mr. Notti informed the committee that Dennis Poshard from the Department of Revenue could answer technical questions. Number 253 REPRESENTATIVE PETE KOTT referred to the sectional analysis and asked about the sunset clause, stating his understanding that the provision would not take effect until January 1, 2000. MR. NOTTI said he understood that anything changed in that statute between now and the year 2000 would need to be reenacted in 2000 if it were not for Section 3 of HB 358. Number 0378 REPRESENTATIVE VEZEY referred to Section 2, subsection (b), and asked for clarification on games of chance with three elements of uncertainty. DENNIS POSHARD, Director, Charitable Gaming Division, Department of Revenue, responded that the concept of three elements of uncertainty that could not be determined at the start of a race originated with a bill passed the previous year for the Iditarod mushing sweepstakes. When that bill was being discussed, it was left up to the group conducting the activity to determine the three elements. Possible elements included the total number of dogs to cross the finish line, the temperature at the time the winner crossed the finish line or other variables. However, no one had yet conducted an activity of that type. Number 0526 REPRESENTATIVE VEZEY said he was having difficulty visualizing exactly what the contest would be. The language did not say there could be up to three elements of chance; it specified there would be three elements. MR. POSHARD agreed that was the way the Charitable Gaming Division had interpreted the language. He added that in the interim, they had worked with the Iditarod Trail Committee to try to implement their mushing sweepstakes. The language applying to that sweepstakes, which was nearly identical to language in HB 358, was found by the Iditarod Trail Committee to be so constrictive that they decided not to conduct their contest this year. They were considering returning to the legislature for changes to their definition of a mushing sweepstakes. Number 0601 REPRESENTATIVE VEZEY commented that the Iditarod Trail Committee had found the wording unacceptable and now the same wording was going into a new statute. MR. POSHARD responded that he believed Co-Chair Ivan's office was planning to work on the language with the Iditarod Trail Committee. He said he himself had not spoken with that committee in the past three weeks and did not know what steps they had taken regarding new language. Number 0682 REPRESENTATIVE JERRY MACKIE asked if HB 358 was intended to be like the Nenana Ice Classic. In that contest, participants simply guessed the time the ice would break up, causing the tripod to fall over. He wondered, with the language in HB 358, if there could be a guess, for example, as to the time the winner crossed the finish line. Number 0710 MR. POSHARD replied that the Iditarod Trail Committee's concern had not been the three elements but the guesses. They had wanted an automated game with choices randomly picked by a computer. The Charitable Gaming Division had determined, through several prior rulings within the division, that a guess required an active choice by the participant; the computer setup proposed by the Iditarod Trail Committee did not require such a guess. He added that the Charitable Gaming Division did not necessarily oppose the concept of a game such as the one proposed by the Iditarod Trail Committee; however, the Iditarod contest did not fit within the definition. Number 0830 REPRESENTATIVE KIM ELTON asked if the three elements could consist of, for example, the twelfth hour, the fifteenth minute and thirty- seventh second. MR. POSHARD replied that he would not interpret it that way; however, he said, he supposed if one wanted to stretch the definition, it could be so interpreted. He explained that in the beginning, the language of the previous year's Iditarod bill did not include three elements of uncertainty. It required only the closest guess of a single element of uncertainty, which he believed was originally the finishing time. But that bill was amended in the Senate Finance Committee, its last committee of referral, to require three elements of uncertainty. The discussion around that amendment had been that with only one element of uncertainty, there would be too much possibility for collusion or cheating. Mr. Poshard added he did not know how realistic that concern was, but that was the reason for the present language. Whether or not that language should be left in HB 358, he did not know. Number 0942 CO-CHAIR IVAN noted that the committee had been joined by Representatives Elton and Nicholia. REPRESENTATIVE ELTON asked why the distance of 200 miles had been included in HB 358. He noted that it omitted certain kinds of races such as sprints. Number 0960 MR. NOTTI responded that 200 miles was chosen because it was a long enough distance that there would be less likelihood of being able to fix the race. REPRESENTATIVE ELTON commented that with three elements of uncertainty, the 200 miles might not be much of a concern if one element was time. MR. POSHARD said although he did not know what happened in the introduction of the bill, he understood from discussions that the intent of the 200-mile minimum was to restrict contests to races that would qualify a musher for the Iditarod. Number 1020 REPRESENTATIVE VEZEY asked if who came in first, who came in second and who came in third would be considered one element of chance or three. MR. POSHARD replied he would consider that three elements of chance. REPRESENTATIVE VEZEY asserted that it would not be terribly difficult to commit fraud if someone wanted to rig the race. MR. POSHARD said he did not know how difficult it might be to rig the Iditarod, where mushers traveled 1,000 miles to Nome in freezing cold temperatures. He said he imagined that a musher who had been on the trail for 12 or 13 days in 60-below weather with high winds would not be thinking about the exact second of crossing the line. However, he admitted it would be possible to rig a race, despite the significant amount of collusion required. Number 1097 CO-CHAIR IVAN noted that the Iditarod Trail Committee had been invited to participate via teleconference and asked if anyone from that committee was on line. He then called on Joe Redington. Number 1128 JOE REDINGTON testified via teleconference, saying he was representing all dog mushers in Alaska, not just the Iditarod Trail Committee. He recounted a contest in 1973 where there was only one element of chance, the winner's time. He thought the proposed contests would bring people to both the smaller races and the Iditarod. The smaller ones, he added, could have simpler elements. He believed the winner's time should be included, as well as possible elements such as temperature at the start or finish of the race, the last place finisher's time or other variables. He suggested that with smaller races such as the Knik 200, the Klondike 300, the Copper Basin 300 and the Kuskokwim 300, visitors would be drawn from all over the United States because people like a chance to win a few dollars. Number 1251 REPRESENTATIVE KOTT asked Mr. Redington for his reaction to including sprint races and lowering the mileage to, say, 20 miles, given that Mr. Redington had indicated he represented all the dog mushers of Alaska. Number 1279 MR. REDINGTON clarified that he had not said he represented any races, just the mushers. He said he concurred with the 200-mile races being included and added that the races he had mentioned were all over 200 miles. VIOLET REDINGTON testified via teleconference in support of HB 358, saying she agreed with the amendment. She explained Joe Redington was hard of hearing and she was therefore assisting with the teleconference. She said Mr. Redington had not understood Representative Kott's question. Number 1353 MR. REDINGTON added that the short races would be ideal also. The small races were not well known and did not draw crowds except for the Fur Rendezvous. He thought it would be great for the Fur Rendezvous and North America races to be included in the legislation, as long as the contests did not get so complicated they made a bad name for the races. He thought it possible that all the races could be included. He added that it was a great thing for dog mushing. Number 1397 DOUG KATCHATAG testified via teleconference from Unalakleet in support of HB 358. He said that with dog mushing declining in popularity, HB 358 would help build interest, especially in Unalakleet with the North and South 200. He thought the three elements would be good for that race. Number 1453 CHRISTOPHER NAPOLI, Coordinator, Nushagak Classic, testified via teleconference from Dillingham. He said the Nushagak Classic was a mid-distance race of over 200 miles and an Iditarod rookie qualifier. He said he represented the Nushagak region, with a board of directors that had voted unanimously in support of HB 358. MR. NAPOLI said that with increasing limits of sponsorship and the financial burden on race committees, they saw this bill as important to both the Nushagak Classic and to their business. He added that it would create an essential vehicle statewide for race committees to raise necessary funding to maintain the sport of dog mushing. His committee, which was composed of volunteers, currently depended on raffles and endless phone calls to procure funds. They saw HB 358 as a step towards making the race self- supporting. MR. NAPOLI added his suggestion for three important elements in the race that would be hard to manipulate: 1) the winner's time; 2) the half-way winner's time; and 3) the red lantern time. Number 1609 REPRESENTATIVE MACKIE expressed his appreciation of Mr. Napoli's answer regarding the three elements. However, he questioned whether the red lantern time might not be the easiest to manipulate, because there was certainly no rush to cross the finish line. Number 1573 MR. NAPOLI responded that what he had witnessed in five years of the Nushagak Classic and other races was that when a person had been on the trail as long as the last-place musher, that person wanted to get home and get warm as soon as possible. Mr. Napoli saw little likelihood that musher would want to manipulate the finishing time. However, he admitted there would always be a situation where someone could manipulate one element or another. He said the elements needed to be set up properly and monitored; he suggested that perhaps the race rules could address monitoring for unnecessary delays. Number 1609 REPRESENTATIVE MACKIE agreed that two good elements would be the winner's time and half-way point time. He asked for opinions on other possible elements on which to place bets. MR. NAPOLI replied he was not sure about including the temperature at the start or finish because those numbers would not allow a wide spectrum of guesses. There might be a lot of identical entries because temperatures were not broken down like finishing times, which are calculated to hundredths or tenths of a second. Number 1668 MR. POSHARD referred to Representative Mackie's concern and stated that the Charitable Gaming Division had always approached the contest as requiring the closest guess of at least three elements. Elements would not be looked at individually. Contests would be set up so that all three variables were looked at to determine the winner. He cited an example where several contestants would guess the first element, resulting in the second element being considered. If several had also guessed that one, they would proceed to the third element to determine a winner. Number 1726 CO-CHAIR ALAN AUSTERMAN asked Mr. Napoli his opinion about the 200- mile minimum distance in HB 358. MR. NAPOLI replied that he liked the 200-mile provision because it allowed the Nushagak Classic and several other important races a vehicle for fund-raising. However, the board he served on was also involved with a local sprint race that he did not want to see limited. He therefore felt a conflict over the issue. He stated that he had missed part of the meeting and was not aware that the three elements would be considered together to determine the contest winner. In that light, he said, perhaps having the temperature at the start or finish might be a tie-breaker that was easy to analyze. Number 1792 CO-CHAIR AUSTERMAN suggested that HB 358 should address age limits for participants, as it concerned a form of gambling. REPRESENTATIVE ELTON responded to Mr. Napoli's comment regarding the three elements. If only one person picked the winning time, for example, he wondered how the other two elements would be incorporated to determine the overall winner. MR. POSHARD commented that was a good question. He said he would assume the first element would suffice in that instance, but indicated he was not sure. Number 1860 REPRESENTATIVE ELTON replied that if that were the case, it would not address the Senate Finance Committee's concern, as there would no longer be the control of two other elements of uncertainty. MR. POSHARD said he saw Representative Elton's point. Number 1876 REPRESENTATIVE MACKIE affirmed that the three elements needed further definition in HB 358. He noted that the key wording was "of at least three elements." He thought that if temperature were used, there would be many contestants tying on that element. But with winning times and half-way point times, he asserted, there would be little likelihood of duplicate winners. REPRESENTATIVE VEZEY said he surmised the contest would be like a lottery where the contestant either chose all three elements correctly or did not win. Most of the time, he added, there would be no winner; he did not believe that was what the mushers wanted. Number 1935 MR. POSHARD said his impression was different from Representative Vezey's. However, he supposed the legislation could be read that way. He thought the mushers definitely wanted a winner, because a contest without a winner would backfire and hurt them in the long run. He added that he interpreted "guess or guesses" to mean that more than one person could win. As in the Nenana Ice Classic, if two people had identical guesses, both would win. Number 1967 MR. NOTTI referred to Representative Vezey's question and said the word "closest" addressed the issue. Even if the nearest guess were 59 minutes off, someone would have the closest time. Number 2000 BEVERLY HOFFMAN, Board of Directors, Kuskokwim 300, testified via teleconference in favor of HB 358. She said the board supported not only the Kuskokwim 300, but other races as well. They wanted to bring dog mushing back in their communities and award prize money worthy of the mushers' time and efforts. She referred to the Fur Rendezvous and North American races and said she would support, as she believed would the board, wording to include those two races. Ms. Hoffman stated she was unclear about the three elements of uncertainty. She added that the board wanted the contest based on the closest guess of the winning time. Number 2082 REPRESENTATIVE KOTT referred to Mr. Redington's testimony that he would not mind lowering the mileage limit below 200 miles if it did not complicate matters. He asked Mr. Poshard to comment on complications from the perspective of the Charitable Gaming Division. Number 2100 MR. POSHARD responded that the only complication from the division's perspective was that there would be more permits to issue. He explained they would issue permits for both the race itself and for this new contest under HB 358. Currently, they were issuing 59 dog race permits per year; therefore, there would not be more than 59 additional permits. He felt this number was not significant enough to dramatically impact the service provided by the Charitable Gaming Division. He thought they could maintain current staffing and funding levels, with a zero fiscal note still applicable. Number 2140 REPRESENTATIVE KOTT asked if any revenue was associated with the permits. MR. POSHARD replied that yes, there was a small amount of revenue from a permit fee, which cost from $20 to $100 depending on the amount of revenue the applicant had generated the previous year. There was also revenue generated from a 1 percent fee on the net proceeds that an organization retained from the activity they conducted. He explained that in the case of dog mushing contests, that amount was very small. Few dog mushing contests were in the business to make money; almost all money they took in was awarded in prizes to the participants. Number 2190 REPRESENTATIVE KOTT further asked what the Charitable Gaming Division looked at before deciding to issue a permit. MR. POSHARD responded that they first ensured that the organization wishing to conduct an activity was qualified; they had to have existed for three years immediately prior to the application, needed 25 members and had to conduct their business in a nonprofit manner. If those criteria were met, the division checked to see what type of activity they wanted to conduct. If, for example, it was a dog mushing contest, the division usually reviewed their internal rules, since there were few statutes or regulations addressing dog mushing contests. Mr. Poshard said although the division sometimes recommended changes to increase the integrity level of the race, that was about it. He added it was not a significant portion of the division's operations; out of $257 million gross annual activity, he said, $250 million was related to bingo and pull tabs. Number 2262 HELEN DONAHUE, Legislative Assistant to Representative Gary Davis, explained that Representative Davis was offering, with Co-Chair Ivan's approval, a conceptual amendment to HB 358 adding the Seward Silver Salmon Derby Classic and the Mountain Marathon Race Classic to the legislation. She briefly explained both events and said the proposed amendment was not ready yet. Number 2340 CO-CHAIR IVAN commented that he had hoped a representative of the Iditarod Trail Committee would have been available on teleconference to discuss proposed changes. In order to offer that opportunity and to consider amendments, he said, the House Community and Regional Affairs Committee would hold HB 358 for further consideration at the next meeting. Number 2372 CO-CHAIR AUSTERMAN wondered how extensively the committee wanted to open up HB 358. He mentioned that Seward was not the only place in Alaska with a fishing derby. REPRESENTATIVE VEZEY added that as he read HB 358, it already included salmon classics. A specific bill was not necessary to include them. Number 2458 MR. POSHARD responded that if he remembered correctly, the Seward Silver Salmon Derby was already in existence. Its activities were conducted under the fishing derby statutes, which were not specific to any particular site or organization. On the other hand, the statutes about salmon classics were highly specific. Number 2451 REPRESENTATIVE VEZEY asked what was being allowed in the chapter relating to salmon classics. MR. POSHARD replied that there were either one or two organizations in Alaska allowed to conduct a salmon classic. He offered to look up the statutes to clarify the matter. TAPE 96-3, SIDE B Number 0001 MR. POSHARD reviewed the statutes and said AS 05.15.690 authorized a salmon classic that was a game of chance, to be operated and administered by the United Fishermen of Alaska. In that classic, a prize of money was awarded for the closest guess of the total number of salmon harvested commercially statewide during a certain period of time. He said that was the only salmon classic provided for in statute. 0037 REPRESENTATIVE VEZEY asked for clarification on the meaning of AS 05.15.180, which listed salmon classics under the exceptions of subsection (b). MR. POSHARD explained it specified the types of permits that could be issued. But under the definition of "salmon classic," the Charitable Gaming Division could only issue the permit to the United Fishermen of Alaska. Similarly, he said, the ice classic permit could only be issued to the Nenana Ice Classic and a couple of others. The statutes were specific to certain organizations. Number 0114 REPRESENTATIVE VEZEY questioned whether those statutes might be unconstitutional. MR. POSHARD agreed that was probably so. However, he said, no one had challenged them to date. Number 0129 REPRESENTATIVE MACKIE referred to Co-Chair Austerman's comment about opening up HB 358 and said that in his experience in the Alaska State Legislature, there was at least one bill per year dealing with this issue. He suggested that with all the exceptions being added, perhaps they should just repeal the statute and let any organization participate. Number 0166 REPRESENTATIVE ELTON asked Helen Donahue if the purpose of the salmon classic would be to sell chances at guessing the size of the largest salmon caught. MS. DONAHUE responded that the Chamber of Commerce would sell the tickets. It was her understanding the contest would be based on guesses of the weight of the fish. REPRESENTATIVE ELTON asked if there would be an existing prize for catching the fish, with the Chamber of Commerce then selling chances to pick the weight or size of that fish. MS. DONAHUE affirmed that was her understanding. Number 0193 MR. POSHARD referred to his previous comments and clarified that there was no statute, therefore, allowing contestants to guess the weight of a fish to win a prize. There was only a statute covering the salmon derby itself. REPRESENTATIVE ELTON added that would be true unless the statute under consideration was amended, to which Mr. Poshard agreed. MS. DONAHUE added she understood that Representative Gary Davis's office was drafting amendments to deal with these issues. Number 0240 GEORGE WRIGHT, Charitable Gaming Manager, Alaska Native Brotherhood Camp #2, testified that dog mushing should be left alone. He asserted dog mushing was having a hard enough time across the state because of lack of funds, sponsors and snow. He said mushers worked hard at having a clean sport. He wanted to lower the mileage from 200 miles to 20 miles, opening it up for all dog mushers, including sprinters and distance mushers; he said spectators would multiply by the hundreds. He speculated that anyone who could rig the three elements of the hour, the minute and the second was pretty good. He lauded dog mushers' integrity and questioned whether mushers would ever conspire to let one be a winner. He said dog mushers should stand alone; he did not want to add fishing, jogging and boating to the legislation. Number 0350 REPRESENTATIVE VEZEY asked Mr. Wright if it was his interpretation that the hour, minute and second were three different elements of chance. MR. WRIGHT replied yes. He said if betting on a musher were eliminated, using times would be fine. If several people guessed the same time, they would split the money like they did in the Nenana Ice Classic. He reiterated his opinion that integrity was not a problem with dog mushers. Number 0418 REPRESENTATIVE ELTON pointed out that Mr. Wright was the cousin of a classic musher, Roxy Wright. MR. WRIGHT added that in dog mushing, a storm could hold participants up for two days. He wondered how the finishing times could be predicted. Number 0473 CO-CHAIR IVAN noted there had been similar interest the previous year in including mid-distance races. He added that time constraints had precluded adding amendments then. He emphasized that HB 358 provided economic development activities in communities in rural Alaska. He said he looked forward to hearing proposed amendments and recommendations, including those from the Iditarod Trail Committee. Number 0571 CO-CHAIR AUSTERMAN asked Co-Chair Ivan, as sponsor of the bill, and his staff to take a look at age limits as they related to gambling. CO-CHAIR IVAN replied that he also wanted to address that concern. He noted that HB 358 would be heard again on Thursday, January 25, if they were able to contact the Iditarod Trail Committee to testify. Number 0620 MR. WRIGHT added further comments, suggesting that if sprinters were not included, they would approach the legislature the next year.