Legislature(2019 - 2020)GRUENBERG 120
02/18/2020 03:00 PM STATE AFFAIRS
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HB 239-ESTABLISH STATE LOTTERY BOARD/LOTTERIES 4:47:33 PM CO-CHAIR KREISS-TOMKINS announced that the final order of business would be HOUSE BILL NO. 239, "An Act establishing a state lottery; providing for participation in multi-state lotteries; establishing the Alaska State Lottery Board in the Department of Revenue; relating to confidentiality of information regarding lottery winners; requiring background investigations by the Department of Public Safety; and providing for an effective date." 4:47:54 PM REPRESENTATIVE THOMPSON, as prime sponsor of HB 239, relayed that the proposed legislation would create an Alaska State Lottery Board in the Department of Revenue (DOR), would authorize the board to conduct in-state lottery draw games, and would allow participation in multi-state lotteries. He stated that he and his staff explored the possibility of a lottery as a revenue stream for the state. He said that DOR estimates that an in-state and multi-state lottery would net the state $5-10 million per year. He further stated that HB 239 would only allow the purchase of draw tickets so as not to affect the nonprofit gaming industry's ability to raise money through charitable gaming pull-tabs and bingo; therefore, the proposed legislation does not include scratch-off instant winner tickets or video games. He mentioned problems with gambling addiction being related to instant gratification gaming. He suggested that a draw game type lottery, with a once-a-week draw, would not encourage addictive gambling behavior as would an instant winner lottery. He mentioned research by staff into other states with lotteries and the identification of expert witnesses to testify at the next hearing. REPRESENTATIVE HOPKINS referred to the smaller states with lotteries, like Wyoming and North Dakota, and posed the question: How much money is raised for the states and given out in the lotteries, and how many people apply for them? 4:50:59 PM SETH WHITTEN, Staff, Representative Steve Thompson, Alaska State Legislature, replied that the Chief Executive Officer (CEO) of the Wyoming Lottery Corporation will testify at the next hearing on HB 239 to answer questions. REPRESENTATIVE STORY asked Mr. Whitten whether he has seen studies on state lottery impacts on low income populations. MR. WHITTEN asked whether Representative Story was referring to the impact of problem gambling. REPRESENTATIVE STORY said, "Sure, that could be one, but just in general." She mentioned that the comment regarding once-a-week draw games versus instant [win] games suggests staff may have obtained information on the impacts of state lotteries. MR. WHITTEN relayed that through research, staff found that there are three factors that contribute to problem gambling and gambling addiction: event frequency - how often and how rapidly a person can play; frequency of winning prizes; and how quickly a person gets the reward for a prize. He said that these three factors consistently appear in the psychological research that he has reviewed. He will provide the committee with the research. MR. WHITTEN stated, "In terms of lottery spending ... the lowest 20 percent of the population does spend 61 percent of the entire gross spending on lottery." He said that the percentages are skewed by the large number of instant win games; the percentages are not as extreme when considering only draw games. He offered to provide more information to the committee on the breakdown of percentages. 4:54:07 PM CO-CHAIR FIELDS asked for data on the impacts distributed across income ranges. MR. WHITTEN agreed to provide that information. CO-CHAIR KREISS-TOMKINS asked that HB 239 and the governor's proposed legislation [SB 188 and HB 246] be compared and contrasted. REPRESENTATIVE THOMPSON replied that the differences between the bills will be discussed at the next hearing on HB 239. REPRESENTATIVE STORY asked where the revenue generated by the lottery - an estimated $5-10 million - would go, whether the general fund (GF) or a designated fund. REPRESENTATIVE THOMPSON answered that some consideration was given to this question while drafting the bill. It was suggested that a percentage could go to education; however, with the fear that putting $5 million into education might lead to a $5 million reduction in the education budget, it was decided that the legislature should decide how to use the money. CO-CHAIR KREISS-TOMKINS stated that HB 239 would be held over.