Legislature(2005 - 2006)BUTROVICH 205

03/29/2006 08:30 AM Senate JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 343 HARASSMENT/ASSAULT/STALKING TELECONFERENCED
Moved CSHB 343(JUD)AM Out of Committee
+= HB 272 CARD ROOMS & OPERATIONS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
                 HB 272-CARD ROOMS & OPERATIONS                                                                             
                                                                                                                                
9:20:07 AM                                                                                                                    
CHAIR  SEEKINS   announced  CSHB  272(FIN)   AM  to  be   up  for                                                               
consideration.                                                                                                                  
                                                                                                                                
MICHAEL O'  HARE, Staff to  Representative Pete  Kott, introduced                                                               
the bill. The  game of poker is seeing a  growing popularity. The                                                               
bill would provide a safe environment  in which to play games and                                                               
would remove  the need for  illegal backroom games. The  types of                                                               
games would include  non-banking card games, such  as poker, pan,                                                               
rummy, bridge,  and cribbage.  Licenses would  be limited  to one                                                               
license for  municipalities for less  than 30,000 people  and the                                                               
limit  for municipalities  with over  30,000 may  not exceed  the                                                               
population divided by that number.                                                                                              
                                                                                                                                
9:22:47 AM                                                                                                                    
The  licensee   would  be  required   to  pay   a  non-refundable                                                               
application fee of  $25,000 with the Department  of Revenue (DOR)                                                               
and would post $500,000 cash bond  at least sixty days in advance                                                               
of commencement of  card room operation as well as  a $10,000 fee                                                               
per card table. Licensee would  be required to undergo a personal                                                               
background check  and pay for  investigative costs  incurred over                                                               
the  application   fee.  Licensee  would  be   required  to  host                                                               
quarterly tournament  with proceeds to  be distributed to  a non-                                                               
profit educational institution.  The bill would allow  the DOR to                                                               
impose regulations. The bill would  give back to the community in                                                               
the form of jobs and support of non-profit charities.                                                                           
                                                                                                                                
Included in the bill packet are  the fiscal notes and a sectional                                                               
analysis and  legal opinion.  The Supreme  Courts of  Montana and                                                               
Oregon have identified that poker is a game of skill.                                                                           
                                                                                                                                
9:26:11 AM                                                                                                                    
SENATOR FRENCH asked  Mr. O'Hare whether alcohol  would be served                                                               
at the card rooms.                                                                                                              
                                                                                                                                
MR. O'HARE  inferred there  was currently  no intention  to allow                                                               
alcohol to be served in the cardrooms.                                                                                          
                                                                                                                                
SENATOR  FRENCH  inquired  whether the  bill  prohibited  alcohol                                                               
sales.                                                                                                                          
                                                                                                                                
MR. O'HARE said no.                                                                                                             
                                                                                                                                
9:28:08 AM                                                                                                                    
SENATOR  GUESS  commented that  a  business  could have  multiple                                                               
owners. She  asked Mr.  O'Hare to comment  on whether  all owners                                                               
would have to submit to the background checks.                                                                                  
                                                                                                                                
MR.  O'HARE  said  he  understood  that  everyone  including  the                                                               
directors of the  corporation would need to  be fingerprinted and                                                               
background checked.                                                                                                             
                                                                                                                                
SENATOR  GUESS  asked whether  a  minority  owner with  a  felony                                                               
conviction could be part owner of the card room.                                                                                
                                                                                                                                
MR. O'HARE offered to get back to the committee.                                                                                
                                                                                                                                
SENATOR  GUESS referred  to page  3, lines  29-30, and  asked for                                                               
explanation of the language.                                                                                                    
                                                                                                                                
MR. O'HARE responded that language  was added in order to enhance                                                               
any investigations that might occur.                                                                                            
                                                                                                                                
9:30:26 AM                                                                                                                    
SENATOR HUGGINS asked the reason for the bill.                                                                                  
                                                                                                                                
MR.  O'HARE advised  that currently  backroom poker  games happen                                                               
all  over the  state, usually  in the  middle of  the night,  and                                                               
without  any level  of  control or  consumer  protection. HB  272                                                               
would  establish a  legal, monitored  and friendly  atmosphere in                                                               
which to play poker.                                                                                                            
                                                                                                                                
SENATOR THERRIAULT noted that bars  are currently allowed to hold                                                               
"poker nights" without the wagering of cash.                                                                                    
                                                                                                                                
CHAIR SEEKINS  said it  was his understanding  that HB  272 would                                                               
allow the  house or owner of  the establishment to take  a cut of                                                               
the winnings.                                                                                                                   
                                                                                                                                
SENATOR FRENCH referred  to an article in the  packet regarding a                                                               
poker  tournament that  uses prizes  for  the winner  in lieu  of                                                               
cash.                                                                                                                           
                                                                                                                                
9:35:04 AM                                                                                                                    
CHAIR  SEEKINS asked  for clarification  whether  the bill  would                                                               
bring  professional poker  playing  into Alaska  by allowing  the                                                               
card room  owner to  take a  "rake." He  asked whether  there was                                                               
anything in the bill that would control "shills."                                                                               
                                                                                                                                
RYAN MAKINSTER, Staff to Senator  John Cowdery, offered to answer                                                               
questions. He said  it is currently illegal to play  for money in                                                               
a  public environment  in  Alaska unless  you  are in  somebody's                                                               
home.                                                                                                                           
                                                                                                                                
9:38:43 AM                                                                                                                    
MR.  MAKINSTER  advised  the committee  that,  under  the  Indian                                                               
Gaming Regulatory Act, Alaska would  be required to work with any                                                               
Alaska tribes within its class of gaming.                                                                                       
                                                                                                                                
SENATOR HUGGINS  asked Mr. O'Hare  whether there was  a committee                                                               
on gambling  and if so,  were any recommendations  suggested from                                                               
that committee.                                                                                                                 
                                                                                                                                
MR. O'HARE observed that a task  force was identified on a gaming                                                               
commission. The  task force has  not made any  recommendations as                                                               
of yet.                                                                                                                         
                                                                                                                                
SENATOR FRENCH  asked whether the  bill provided for any  type of                                                               
table restrictions.                                                                                                             
                                                                                                                                
MR. O'HARE  informed there were  no stipulations to the  limit of                                                               
tables but each table would cost $10,000.                                                                                       
                                                                                                                                
CHAIR SEEKINS noted a discrepancy in the title of the bill.                                                                     
                                                                                                                                
MR.  O'HARE replied  he did  have  the memo  from legal  services                                                               
alerting the sponsor to that issue.                                                                                             
                                                                                                                                
9:42:41 AM                                                                                                                    
CHAIR SEEKINS  questioned the reason  for removing  the municipal                                                               
option.                                                                                                                         
                                                                                                                                
MR. O'HARE said he did not know.                                                                                                
                                                                                                                                
SENATOR  GUESS asked  how  the  number of  30,000  was chosen  to                                                               
determine the number of card rooms.                                                                                             
                                                                                                                                
MR.  O'HARE replied  initially it  was  a random  number used  to                                                               
separate   Anchorage   and   Fairbanks    out   as   the   larger                                                               
municipalities.                                                                                                                 
                                                                                                                                
9:45:53 AM                                                                                                                    
SENATOR GUESS noted that Anchorage  could have 10 card rooms with                                                               
an unlimited number of tables.                                                                                                  
                                                                                                                                
MR. O'HARE said correct.                                                                                                        
                                                                                                                                
SENATOR GUESS  referred to page  10 and  asked how the  DOR would                                                               
determine who is  awarded a license. She also noted  that on line                                                               
18 the language seemed very subjective.                                                                                         
                                                                                                                                
MR. O'HARE said it was in  order to give the utmost discretion to                                                               
the Department.                                                                                                                 
                                                                                                                                
SENATOR  GUESS referred  to page  10, line  26 and  asked whether                                                               
that would be legal.                                                                                                            
                                                                                                                                
CHAIR SEEKINS said he didn't think so.                                                                                          
                                                                                                                                
SENATOR FRENCH said it was  a laudable idea but probably couldn't                                                               
be codified in statute.                                                                                                         
                                                                                                                                
9:49:46 AM                                                                                                                    
CHAIR SEEKINS asked for clarification  the actual amount of money                                                               
that a person would  have to put up in order to  open a card room                                                               
with four tables.                                                                                                               
                                                                                                                                
MR. O'HARE  responded the initial  application fee of  $25,000, a                                                               
$5,000  cash  bond,  and  $10,000   per  table  as  well  as  any                                                               
additional costs associated with the background investigation.                                                                  
                                                                                                                                
CHAIR  SEEKINS  speculated  that  card   rooms  must  be  a  very                                                               
profitable business.                                                                                                            
                                                                                                                                
MR. O'HARE said it could be.                                                                                                    
                                                                                                                                
CHAIR SEEKINS asked whether the  license could be sold to another                                                               
person.                                                                                                                         
                                                                                                                                
MR. O'HARE did not believe so.                                                                                                  
                                                                                                                                
CHAIR  SEEKINS asked  whether the  bill identified  it as  a non-                                                               
transferable license.                                                                                                           
                                                                                                                                
MR. O'HARE offered to find the section related to that topic.                                                                   
                                                                                                                                
SENATOR FRENCH  asked whether  there were  statutory restrictions                                                               
on how the house  earns the money, such as by the  hand or by the                                                               
half hour.                                                                                                                      
                                                                                                                                
MR. O'HARE said there are no restrictions.                                                                                      
                                                                                                                                
9:52:25 AM                                                                                                                    
SENATOR FRENCH  asked what the  financial integrity  system would                                                               
be for the purpose of transparency to the state overseer.                                                                       
                                                                                                                                
MR. O'HARE admitted the bill contained no stipulation for that.                                                                 
                                                                                                                                
SENATOR FRENCH expressed  concern and said it  would be difficult                                                               
to keep  exact track of  how much the  players earn and  how much                                                               
the house earns.                                                                                                                
                                                                                                                                
MR. MAKINSTER informed the committee  that other states do all of                                                               
that in regulation rather than statute.                                                                                         
                                                                                                                                
SENATOR FRENCH commented the State  of Washington requires closed                                                               
circuit  television recording  of the  tables and  the cages.  He                                                               
asked whether HB 272 did the same.                                                                                              
                                                                                                                                
MR. O'HARE said  no it does not but the  sponsor would be willing                                                               
to amend the bill to include that.                                                                                              
                                                                                                                                
SENATOR  FRENCH asked  about  the effective  dates  and how  they                                                               
envision the process and first licensing.                                                                                       
                                                                                                                                
MR. O'HARE did not know. He deferred to the DOR.                                                                                
                                                                                                                                
9:56:37 AM                                                                                                                    
SENATOR  GUESS asked  Mr. O'Hare  to  discuss the  rakes and  the                                                               
sideboards around them.                                                                                                         
                                                                                                                                
MR. O'HARE  replied the bill does  not discuss rakes or  how much                                                               
money the card room would be allowed to make.                                                                                   
                                                                                                                                
SENATOR GUESS asked how the business hours would be set.                                                                        
                                                                                                                                
MR.   O'HARE  informed   that  would   be  addressed   under  the                                                               
regulations.                                                                                                                    
                                                                                                                                
SENATOR HUGGINS asked whether people could play poker online.                                                                   
                                                                                                                                
MR. O'HARE said yes and it was a popular method of playing.                                                                     
                                                                                                                                
MR.  MAKINSTER interrupted  to inform  the committee  that online                                                               
poker playing  is not the same  as plugging into Las  Vegas since                                                               
much of the online business is routed internationally.                                                                          
                                                                                                                                
SENATOR  GUESS  referred to  page  17,  line  10 and  noted  that                                                               
"cheats at a card game" is a broad and undefined charge.                                                                        
                                                                                                                                
10:01:19 AM                                                                                                                   
SENATOR FRENCH  asked whether there  would be a prohibition  on a                                                               
bingo operation attached to a card room.                                                                                        
                                                                                                                                
MR. O'HARE  said the  bill would  only allow an  owner to  have a                                                               
card room operation.                                                                                                            
                                                                                                                                
10:06:52 AM                                                                                                                   
GUY  WARREN,  Clerk  for  the  Presbytery  of  Alaska,  testified                                                               
against  the bill.  He said  implementing the  bill would  create                                                               
social  disorder and  would not  serve to  the betterment  of the                                                               
people of the State of Alaska.                                                                                                  
                                                                                                                                
10:10:37 AM                                                                                                                   
RUTH BLANCHARD,  Houston, testified in  support of the  bill with                                                               
some  amendments,  such as  local  control,  super majority,  and                                                               
municipality change to cites.                                                                                                   
                                                                                                                                
LINDA COY,  Anchorage, testified in  opposition to the  bill. She                                                               
took issue  with the claim  that creating card rooms  would bring                                                               
money into  the state.  She said  that all  pathological gamblers                                                               
started when they were young  and she encouraged the committee to                                                               
abandon the bill.                                                                                                               
                                                                                                                                
10:13:36 AM                                                                                                                   
DEBBIE JOSLIN, Eagle River, testified  in opposition to the bill.                                                               
She quoted  Warren Buffet as  saying that gambling  begets crime,                                                               
bankruptcy and suicide.                                                                                                         
                                                                                                                                
MARIE TOOTHMAN,  Houston, testified in  support of the  bill. She                                                               
said the money  would stay in Alaska and that  people need winter                                                               
entertainment.                                                                                                                  
                                                                                                                                
LINK  FANNON, Houston,  testified that  the Houston  city council                                                               
supported the  bill with  a couple of  amendments, such  as local                                                               
control and the super majority vote.                                                                                            
                                                                                                                                
10:19:21 AM                                                                                                                   
PAMELA SAMASH, Nenana,  testified in opposition to  the bill. She                                                               
shared  a personal  experience of  how  gambling addictions  have                                                               
destroyed her family.                                                                                                           
                                                                                                                                
10:23:57 AM                                                                                                                   
PERRY GREEN testified  in support of HB 272. He  claimed that the                                                               
gaming  commission  was doomed  to  failure  because all  of  the                                                               
people on  the commission  were against  gaming. He  claimed that                                                               
billions of dollars  were leaving America due  to online overseas                                                               
games. He  said the cost  for licensing was excessive  but agreed                                                               
with the City of Houston's suggested amendments.                                                                                
                                                                                                                                
10:27:26 AM                                                                                                                   
ROSEMARY BURNETT,  Deputy Mayor of Houston,  testified in support                                                               
of the  bill. She said there  are already after hours  card rooms                                                               
in the MatSu Valley and it is getting out of hand.                                                                              
                                                                                                                                
BOB CHAFFONE,  Professional poker  player in  Michigan, testified                                                               
that poker  is an addiction but  said it was not  the function of                                                               
the  bill  to  micro-manage  people   and  their  addictions.  He                                                               
testified  in  support  of  the  bill and  said  it  would  be  a                                                               
responsible form of government to regulate the gambling.                                                                        
                                                                                                                                
ROBERT  HALL,  Houston, testified  in  support  of the  bill.  He                                                               
suggested  allowing for  customers to  pre-set limits  as to  how                                                               
much they could lose in a sitting.                                                                                              
                                                                                                                                
10:35:29 AM                                                                                                                   
SUSAN  DUCK  said  she  recently   planned  a  poker  tournament.                                                               
Approximately 7,500  players participated and it  was an enormous                                                               
success.   She  did   not  hear   one  complaint   regarding  the                                                               
tournament.  She said  the bottom  line is  that card  playing is                                                               
already  happening and  people are  making  money illegally.  She                                                               
encouraged  the  committee  to organize  and  regulate  the  card                                                               
rooms.                                                                                                                          
                                                                                                                                
10:37:55 AM                                                                                                                   
CHAIR SEEKINS apologized  that he had to  interrupt testimony. He                                                               
held the bill in committee.                                                                                                     

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