Legislature(2021 - 2022)BELTZ 105 (TSBldg)
05/03/2021 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HJR14 | |
| SB130 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 14 | TELECONFERENCED | |
| *+ | SB 130 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
May 3, 2021
1:30 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Joshua Revak, Vice Chair
Senator Peter Micciche
Senator Gary Stevens
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 14
Supporting the passage by the United States Congress of the SAFE
Banking Act of 2019, sec. 110606 of the Heroes Act, or similar
legislation relating to cannabis-related legitimate businesses'
access to financial services.
- MOVED HJR 14 OUT OF COMMITTEE
SENATE BILL NO. 130
"An Act relating to electronic pull-tabs."
- MOVED SB 130 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HJR 14
SHORT TITLE: RESOLUTION: FED SAFE BANKING ACT/CANNABIS
SPONSOR(s): REPRESENTATIVE(s) RASMUSSEN
03/05/21 (H) READ THE FIRST TIME - REFERRALS
03/05/21 (H) CRA
04/01/21 (H) CRA AT 8:00 AM BARNES 124
04/01/21 (H) Heard & Held
04/01/21 (H) MINUTE(CRA)
04/06/21 (H) CRA AT 8:00 AM BARNES 124
04/06/21 (H) Moved HJR 14 Out of Committee
04/06/21 (H) MINUTE(CRA)
04/07/21 (H) CRA RPT 7DP
04/07/21 (H) DP: MCCABE, PRAX, PATKOTAK, DRUMMOND,
MCCARTY, SCHRAGE, HANNAN
04/22/21 (H) TRANSMITTED TO (S)
04/22/21 (H) VERSION: HJR 14
04/23/21 (S) READ THE FIRST TIME - REFERRALS
04/23/21 (S) L&C
05/03/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 130
SHORT TITLE: ELECTRONIC PULL-TAB GAMES
SPONSOR(s): LABOR & COMMERCE
04/23/21 (S) READ THE FIRST TIME - REFERRALS
04/23/21 (S) L&C
05/03/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
REPRESENTATIVE SARA RASMUSSEN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HJR 14.
SCOTT BERGMANN, Staff
Representative Sara Rasmussen
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HJR 14 on behalf of the sponsor.
LACY WILCOX, President
Alaska Marijuana Industry Association (AMIA)
Juneau, Alaska
POSITION STATEMENT: Provided supporting testimony on HJR 14.
RYAN TUNSETH, representing self
Owner, East Rip
Kenai, Alaska
POSITION STATEMENT: Testified in support of HJR 14.
MICHAEL MARTIN, President
Alaska Bankers Association (ABA);
CEO and General Counsel
Northrim Bank
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 14.
MELODIE WILTERDINK, Staff
Senator Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 130 on behalf of the Senate
Labor and Commerce Committee.
ANGIE FRAIZE, Communications Officer
Anchorage Police Department Employee Association (APDEA)
Anchorage, Alaska
POSITION STATEMENT: Testified on SB 130 by invitation.
JOHN POWERS
Tudor Bingo Center
Anchorage, Alaska
POSITION STATEMENT: Stated opposition to SB 130 without more
input from people like himself.
JACK TRIPP, former owner
The Viking
Juneau, Alaska
POSITION STATEMENT: Testified on SB 130 by invitation.
SANDY POWERS
Big Valley Bingo
Willow, Alaska
POSITION STATEMENT: Expressed concern with SB 130.
SCOTT HENNEMAN, Vice President
Business Development and Governmental Affairs
Grover Gaming
Omaha, Nebraska
POSITION STATEMENT: Testified in support of SB 130.
NANCY DECHERNEY, Executive Director
Alaska Council on the Arts
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 130.
MACK MEINERS, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 130.
JOHNATHON GREEN, Attorney
Kempell, Huffman, and Elise
Wasilla, Alaska
POSITION STATEMENT: Testified that SB 130 would not expand
requirements for the state to negotiate with tribal entities for
class III gaming.
DAVID LAMBERT, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 130.
KATRINA MITCHELL, Gaming Manager
Tax Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
130.
COLLEEN GLOVER, Director
Tax Division
Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
130.
ACTION NARRATIVE
1:30:22 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:30 p.m. Present at the call to
order were Senators Gray-Jackson, Revak, and Chair Costello.
Senators Micciche and Stevens arrived during the course of the
meeting.
HJR 14-RESOLUTION: FED SAFE BANKING ACT/CANNABIS
1:31:00 PM
SENATOR COSTELLO announced the consideration of HOUSE JOINT
RESOLUTION NO. 14 Supporting the passage by the United States
Congress of the SAFE Banking Act of 2019, sec. 110606 of the
Heroes Act, or similar legislation relating to cannabis-related
legitimate businesses' access to financial services.
1:31:37 PM
REPRESENTATIVE SARA RASMUSSEN, Alaska State Legislature, Juneau,
Alaska, sponsor of HJR 14, related that the bill came about
after her husband, who is a mortgage originator, mentioned that
somebody had applied for a home mortgage and could not qualify
because they worked in the legal cannabis industry. This is
despite the 2014 initiative in which 53 percent of voters
approved cannabis use. She reached out to industry leaders and
learned that these businesses have difficulty renting or
purchasing property and they have to pay their taxes, utility
expenses, rent, and employees in cash. Believing that there
should be a better way, she worked with the congressional
delegation to produce HJR 14. It seeks to level the playing
field for all Alaskan businesses and increase transparency and
safety measures.
1:33:56 PM
CHAIR COSTELLO summarized that because cannabis is not legal at
the federal level, these businesses do not have access to
banking so all transactions are in cash. The resolution asks the
federal government to allow these businesses to operate under
the federal Secure and Fair Enforcement (SAFE) Banking Act.
REPRESENTATIVE RASMUSSEN agreed with the summary.
1:35:00 PM
SCOTT BERGMANN, Staff, Representative Sara Rasmussen, Alaska
State Legislature, Juneau, Alaska, stated that HJR 14 calls on
Congress to pass the Secure and Fair Enforcement (SAFE) Banking
Act or similar legislation to provide a safe harbor for
financial institutions that provide services to legal cannabis-
related businesses. Under current federal law it is a Schedule I
felony to accept deposits and conduct other banking business
with the legal cannabis industry.
He reported that since 1996, 33 states comprising 68 percent of
the nation's population have legalized cannabis for medical or
adult use. He highlighted that the U.S. House of Representatives
passed a SAFE Banking Act and Senator Murkowski and Senator
Sullivan are co-sponsors of the U.S. Senate version of the bill.
SENATOR GRAY-JACKSON asked if legal marijuana businesses accept
credit card transactions. She acknowledged the nonverbal
negative response and expressed support for changing the federal
law.
SENATOR REVAK commented that this is a state's rights issue and
he appreciates the legislation. The people of Alaska voted to
legalize cannabis; forcing the industry to transact business in
cash is dangerous and it impedes commerce.
1:37:50 PM
LACY WILCOX, President, Alaska Marijuana Industry Association
(AMIA), Juneau, Alaska, stated that on behalf of the industry,
she was offering support for HJR 14. She said this resolution
would send a message that the Alaska Legislature cares about
health and safety. Access to financial services is paramount in
protecting Alaskans from the public safety risks associated with
transacting business entirely in cash. She described banking as
a tool for law enforcement, tax collectors, regulators, and
auditors to identify less than honorable industry participants.
Passing the resolution in support of the SAFE Banking Act would
make Alaska a leader and other states would be likely to follow.
MS. WILCOX highlighted the effect of the federal law on the more
than 400 cannabis business entities, shareholders, investors,
and employees. She said the 10,000 or more employees are
probably the most affected by the lack of access to banking
services. They are unable to qualify to buy a house or car or
take out a student loan to further their education. The lack of
access to financial services also prevents cannabis businesses
from offering health and retirement benefits to their employees.
She mentioned the ancillary support businesses that have found
it difficult to conduct business with the industry because large
payments for supplies and services must be paid in cash or money
orders. General contractors, plumbers, electricians, utility
companies, and supply vendors may jeopardize their financial
standing by doing business with cannabis businesses. She shared
the message she has heard from people in the financial services
sector, which is that they would like to offer banking services
to the industry but they need assurance through the SAFE Banking
Act or similar legislation that doing so would not be a crime.
1:42:37 PM
CHAIR COSTELLO opened public testimony on HJR 14.
1:42:51 PM
RYAN TUNSETH, representing self, Kenai, Alaska, advised that he
is the owner of the retail cannabis business, East Rip. He urged
the committee to support HJR 14 or similar legislation to
support passage of the SAFE Banking Act or similar legislation.
He said this is a nonpartisan issue about protecting working
Alaskans. It sends a clear message that legislators from both
sides of the aisle will look out for the safety of Alaskans and
protect the rights of workers and Alaska businesses. He agreed
with previous testimony that moving and handling large amounts
of cash is problematic. He pointed out that there is also an
efficiency element related to the state's finances. Currently
there is nearly $2 million in unpaid marijuana taxes and this
would add a tool for the state to audit against that. It would
also make it easier for businesses to make those payments.
Finally, there is an equity piece that people have mentioned
about not being able to secure a loan because the payments may
come from the cannabis industry. Deeper than that, being able to
secure any type of financing to secure a loan to start a
business is very difficult. Because of that, most of the people
who entered the industry were able to do it because they had
cash by robbing 401 K plans or something similar. He said others
who may not have that ability are blocked from entering the
industry. There are no other mechanisms for funding. He urged
the committee to support HJR 14.
1:45:10 PM
MICHAEL MARTIN, President, Alaska Bankers Association (ABA); CEO
and General Counsel, Northrim Bank, Anchorage, Alaska, testified
in support of HJR 14. He stated that ABA represents the seven
banks that have operations in Alaska, including four state-
chartered banks and three national banks, all of which have
substantial operations in Alaska. He said ABA and its member
banks support HJR 14, urging the federal government to adopt the
SAFE Banking Act to provide a safe harbor to depository
institutions that provide financial products and services to
legal cannabis-related businesses. He noted that the SAFE
Banking Act is a bank-specific solution that creates a safe
harbor and enables banks to serve cannabis-related businesses.
The U.S. House of Representatives most recently passed this
legislation and it is awaiting action in the Senate.
MR. MARTIN highlighted that ABA and the member banks have never
taken a position on the legalization of cannabis, but the banks
are committed to serve the financial needs of Alaska consumers,
businesses, and communities. He said all bankers in Alaska are
subject to federal law and cannabis remains illegal so banks
currently face substantial risks by offering banking products
and services to cannabis-related businesses. Most notably, the
issue is the potential loss of the bank's charter and therefore
the ability to do business in general. He said the reality is
that cannabis-related businesses currently cannot open and
maintain deposit accounts with Alaska banks. They cannot engage
in electronic transactions, which includes tax payments. They
have a difficult if not impossible time obtaining loans from
banks. This causes these legitimate and substantially regulated
businesses to operate in cash and money orders and find
alternative means of financing and funds management outside of
the banking system. He also noted that the American Banking
Association submitted a letter to Congress in March 2021
supporting the SAFE Banking Act. He thanked the sponsor and
urged the committee to support HJR 14.
1:48:52 PM
CHAIR COSTELLO closed public testimony on HJR 14. She asked the
sponsor if there was another committee of referral.
REPRESENTATIVE RASMUSSEN answered no; the resolution received
just one referral in each body.
1:49:20 PM
SENATOR REVAK moved to report HJR 14, work order 32-LS0617\A,
from committee with individual recommendations and attached
fiscal note(s).
CHAIR COSTELLO found no objection and HJR 14 was reported from
the Senate Labor and Commerce Standing Committee.
SB 130-ELECTRONIC PULL-TAB GAMES
1:49:53 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO.
130 "An Act relating to electronic pull-tabs."
1:50:19 PM
MELODIE WILTERDINK, Staff, Senator Mia Costello, Alaska State
Legislature, Juneau, Alaska, introduced SB 130 on behalf of the
Senate Labor and Commerce Committee. She read the following
sponsor statement into the record:
Traditional paper pull-tabs are multilayered tickets
with perforated sections that when "pulled" by tearing
the perforation, reveal symbols which indicate whether
the player has won. Pull-tab gaming permits are
exclusively available to charities in Alaska for
fundraising, and Alaska charities have benefitted by
receiving donations through pull-tab games.
Senate Bill 130 would allow pull-tab operators the
choice of providing paper pull-tab tickets or
electronic pull-tab tickets, which are accessed onsite
through a kiosk or tablet device. Electronic pull-tabs
are played in the same manner as paper pull-tabs, but
there are no physical tickets for operators to count,
deface, or store. Benefits of electronic pull-tabs
include increased security, easier tracking and
reporting, and reduced fraud. Modernizing pull-tabs
makes it less onerous for small businesses to become
pull-tab operators in support of local charities.
MS. WILTERDINK showed the committee the number of used pull-tabs
from one bartender in a single shift and the number of used
pull-tabs created from a single bar in six weeks to illustrate
the paper waste that SB 130 has the potential to reduce or
eliminate by giving operators the option to switch to electronic
pull-tabs.
CHAIR COSTELLO asked her to talk about eliminating both the
potential for fraud and the administrative burden of parsing
through used pull-tabs.
1:53:28 PM
MS. WILTERDINK explained that the bar puts up the up-front
payment and the charity is responsible for delivering the pull-
tabs to the bar. She noted that many charities hire a third
party to do deliveries, which reduces the profit to the charity
by tens of thousands of dollars per year. Inside the bar, the
profit on individual pull-tabs is small but the volume is high.
The bartender counts out individual pull-tabs to customers and
they may accidentally give extras. This is a loss to the
charities but it is difficult to count and track individual
pull-tabs. She relayed stories of people taking a winning pull-
tab from one bar and slipping it in at another bar to receive
payment twice. She said the fraud can be onerous and the
responsibility falls on the bar owners who are putting up the
up-front cash to support the charities.
1:54:43 PM
SENATOR GRAY-JACKSON asked how a winning tab is paid.
MS. WILTERDINK replied that winnings are paid in cash and that
would not change with electronic pull-tabs.
SENATOR GRAY-JACKSON offered her understanding that other states
pay winnings from electronic pull-tabs with a check. She asked
whether winners, particularly large winners, would receive a
check in the mail.
MS. WILTERDINK deferred the question to representatives from the
Department of Revenue.
1:56:25 PM
CHAIR COSTELLO clarified that the pull-tab kiosks would still be
on the premises, not offsite. She noted that this bill is
different from the charitable gaming bill the committee
considered where individuals were able to donate to charities
from their home using their own electronic device.
1:57:07 PM
SENATOR MICCICHE joined the committee.
SENATOR GRAY-JACKSON said the explanation answered her
questions.
CHAIR COSTELLO turned to invited testimony on SB 130.
1:57:50 PM
ANGIE FRAIZE, Communications Officer, Anchorage Police
Department Employee Association (APDEA), Anchorage, Alaska,
testified in support of SB 130. She advised that since 2017,
APDEA has had a nonprofit arm called Anchorage Cops for
Community that works to connect to the community in non-law-
enforcement ways. In the first three years, they received close
to $100,000 in gaming money to help meet the mission to foster
and inspire community wellbeing through collaboration between
the community and law enforcement. She listed some of the
programs and projects and noted that they give to five main
charities every year if the funds are available.
MS. FRAIZE said SB 130 offers a way for community members to
responsibly engage in gaming and help nonprofits. Transitioning
to electronic pull-tabs brings this aspect of gaming up to
modern times and makes it easier for everyone.
2:01:04 PM
CHAIR COSTELLO opened public testimony on SB 130.
2:01:17 PM
JOHN POWERS, Tudor Bingo Center, Anchorage, Alaska, said he
opposes SB 130 right now because the gaming industry is evolving
so rapidly. He noted that there are several versions of
electronic pull-tabs and one looks and plays like a slot
machine. The play is very rapid and he believes this could lead
to overspending. He said he also supports maintaining the
existing payout limits. He said states that have adopted
electronic pull-tabs generally have specific rules and
guidelines and he would request the committee table this bill at
least this session and get input from industry leaders like
himself. He referenced previous testimony and said his company
also supports charities and they recycle all the used pull-tabs.
He also suggested imposing limits on the number of terminals or
machines in each facility to prevent a casino atmosphere. He
reiterated his opposition to SB 130 without further input from
people like himself.
CHAIR COSTELLO clarified that SB 130 provides the option, not a
mandate, for electronic pull-tabs. The regulation process will
address the fine details to ensure compliance with the existing
charitable gaming laws.
2:05:56 PM
SENATOR GRAY-JACKSON asked Mr. Powers if he had pull-tabs at his
bingo hall.
MR. POWERS answered yes.
SENATOR GRAY-JACKSON asked if he was aware that SB 130 offers a
choice of transitioning to electronic pull-tabs or continuing to
use paper.
MR. POWERS answered yes but he is concerned that this change
could lead to additional bad actors entering the industry in
Anchorage and throughout Alaska. He said the big issue is that
the charities suffer.
SENATOR GRAY-JACKSON thanked him for his email.
CHAIR COSTELLO returned to invited testimony and recognized Jack
Tripp.
2:08:31 PM
JACK TRIPP, former owner, The Viking, Juneau, Alaska, advised
that in the 32 years he owned the bar he ran a lot of pull-tabs
and helped many charities. He referenced the suggestion to wait
to ensure against bad actors and pointed out that the issue of
fraud in gaming has been discussed for 20 years. He mentioned a
catastrophic theft by bartenders that he once suffered and said
it almost put him out of business but the charity absorbed none
of the loss.
He said electronic pull-tabs are a way to safeguard against bad
actors. The play is encapsulated and there is no opportunity for
theft. He said it makes sense and it removes the human error. He
said people think pull-tabs generate a lot of money for the
vender but venders receives just 30 percent. The profit margin
on a game might be $300 so the vender would sell 3,000 tickets
to make $90 before paying the bartender. He reiterated that
removing the human time makes sense and will help clean up an
industry that probably could use a little clean up.
CHAIR COSTELLO asked if there were any unresolved concerns
related to pull-tabs or if this is the right time to move in
this direction.
MR. TRIPP replied he thinks it is the right time. He thinks that
people will like electronic pull-tabs and it will increase
gaming, which will help the charities. The only people who will
be hurt are the ones who opt to continue to use the paper pull-
tabs. He added that it is difficult to steal from a machine but
easy to steal from a pull-tab bin.
2:12:15 PM
CHAIR COSTELLO continue with public testimony.
2:12:26 PM
SANDY POWERS, representing self, said she operates Big Valley
Bingo in Willow, Alaska. She has been looking at electronic
pull-tabs for some time and her biggest concern is that the play
is very fast and people may have a tendency to overspend. This
has the potential to increase financial and societal problems.
Additionally, it might bring in the tourism industry and she
does not typically market to that industry. She acknowledged the
reduced potential for theft with electronic pull-tabs but
pointed out that businesses would still need to keep lots of
cash on hand because faster play means the vender will pay out
more money.
CHAIR COSTELLO asked Scott Henneman to respond to the concern
about the speed of play. She specifically asked whether play
speeds up with electronic pull-tabs and if that can be programed
into the device.
2:15:43 PM
SCOTT HENNEMAN, Vice President, Business Development and
Governmental Affairs, Grover Gaming, Omaha, Nebraska, testified
in support of SB 130. He advised that speed of play for
electronic pull-tabs can be regulated and programed into the
device. Speed of play has not been an issue in the business he
does in numerous states manufacturing both paper and electronic
pull-tab products. He noted that he has been involved in
charitable gaming for more than 30 years as a gaming regulator
and working in the private sector manufacturing paper and
electronic pull-tab products.
2:16:46 PM
MR HENNEMAN said e-tabs have modernized pull-tab gaming but they
have the same fundamental characteristics. The only difference
is that e-tab play is on a touch screen monitor with a digital
display. He said the characteristics are like the paper game
where there are finite and predetermined winners in a box of
pull-tabs. Each game has a predetermined payout and profit,
which is completely different and can be easily distinguished
from a slot machine that uses a random number generator to
determine its outcome. E-tabs are player-versus-player, which is
unlike a slot machine where it is player versus a machine.
Regarding what an electronic pull-tab might look like, he said
it could be a standalone kiosk, a handheld tablet, or a device
that allows players to play an electronic representation of the
paper pull-tabs. All hardware and software are tested and
approved by an independent laboratory to ensure that the games a
charity offers meet the state's particular rules and
regulations. He noted that the Department of Revenue would make
those determinations.
MR. HENNEMAN summarized that speed of play for e-tabs has not
been an issue in his experience. A number of states already use
them in fundraising activities. If approved, venders would have
the option of switching to the electronic product. It is not
mandatory but new players are familiar with and prefer to play
games with a visual digital play accompanied by a sound
stimulus. Charities do not have to store or manually add tickets
to machines in the electronic format, there is no physical
inventory to count, and monitoring is from an internet
connection. The electronic format makes scheduling, ordering,
and reporting to the regulatory agency more efficient.
Furthermore, all communication with the regulatory agency is
encrypted to maintain security and integrity.
2:21:40 PM
SENATOR GRAY-JACKSON asked if he currently uses electronic pull-
tabs in his business.
MR. HENNEMAN answered yes; Grover Gaming manufacturers the
electronic devices and the tickets that are loaded through the
internet to a controlled site at a bingo hall or a charitable
gaming site that sells pull-tabs. Responding to another
question, he clarified that he is a manufacturer as opposed to a
vender.
SENATOR GRAY-JACKSON asked if venders have said that electronic
play has resulted in players spending more money, potentially
more than they can afford.
MR. HENNEMAN replied it has not been an issue that people are
spending more with pull-tabs in the electronic format as opposed
to the paper format. He cited the sales in the state of
Minnesota as an example. Paper pull-tabs accounted for $1.4
billion in sales compared to $600 million in the electronic
format.
2:23:29 PM
SENATOR STEVENS joined the committee.
CHAIR COSTELLO asked if any states that offer both options saw
electronic sales become a higher percentage of sales. She also
asked if his experience is that less revenue is coming from the
electronic format than the paper format.
MR. HENNEMAN replied it depends on the state but Grover Gaming
has worked to ensure that electronic pull-tabs do not
cannibalize existing products like paper pull-tabs and bingo.
There is a social aspect to the paper products but that does not
disappear with the electronic format. Players can take the
tablet to their table or sit at a booth or stool and play. He
said Alaska is in the top six markets of paper pull-tabs in the
country but the player base in aging. He said he believes the
state will see more incremental sales if it offers electronic
pull-tabs as an option. He reiterated that it depends on the
state but some states that offer both options have seen an
increase in paper pull-tab sales.
2:26:39 PM
NANCY DECHERNEY, Executive Director, Juneau Arts and Humanities
Council, Juneau, Alaska, stated that she was calling to support
SB 130. Nonprofits benefit from pull-tab gaming but small
businesses find it cumbersome to run these gaming operations. SB
130 offers the option to use electronic pull-tabs, which she
believes will alleviate the administrative burden. The
electronic format will be easier to manage, easier to track, and
perhaps make more money for nonprofits in the state.
2:27:59 PM
MACK MEINERS, representing self, Juneau, Alaska, stated that he
has been involved in charitable gaming for over 20 years in
various locations throughout the state. He agreed that there has
been some trouble in bars with misplaced and lost tickets but
Mr. Tripp clarified that the vender pays for any losses. He
emphasized the need for strict quality control.
MR. MEINERS said he believes Grover Gaming offers a good
opportunity to clean up the game and provide a choice of
electronic or paper play. He said he supports the option of
using electronic pull-tabs and he believes it will increase the
opportunity to raise money for charities. That is the point.
2:33:12 PM
JOHNATHON GREEN, Attorney, Kempell, Huffman, and Elise, Wasilla,
Alaska, advised that his firm was hired to analyze whether SB
130 would expand requirements for the state to negotiate with
tribal entities for class III gaming. He said the short answer
is no. He offered to elaborate if there were questions.
CHAIR COSTELLO polled the members and determined that further
elaboration was not necessary.
2:34:39 PM
DAVID LAMBERT, representing self, Fairbanks, Alaska, stated that
he is a charitable gaming operator who has raised funds for over
30 nonprofits. He pointed out that over the last 30 years,
everything associated with charitable gaming has gone up but a
$1 pull-tab still costs just $1. He said it is important to
offer options to attract a new player base and that includes
electronic pull-tabs. He suggested addressing the concern about
casinos by limiting the number of machines per location. He said
modernizing the game by offering electronic pull-tabs as an
option for players would resolve the problem with backlogs on
paper pull-tabs.
SENATOR STEVENS asked what number of machines per location he
would recommend.
MR. LAMBERT said he believes six machines per location would be
reasonable because each machine can hold 20-30 games.
CHAIR COSTELLO asked Ms. Mitchell with the Department of Revenue
whether SB 130 would expand the application process for somebody
to sell electronic pull-tabs.
2:38:05 PM
KATRINA MITCHELL, Gaming Manager, Tax Division, Department of
Revenue, Juneau, Alaska, asked if the question was whether
adding a new game type such as electronic pull-tabs would
require a change in the application process.
CHAIR COSTELLO clarified that she was relaying Mr. Lambert's
concern about too many devices in one location creating a casino
atmosphere.
MS. MITCHELL answered that a licensee is not limited in the
number of paper pull-tab games he or she may offer at one time.
She supposed that limiting the number of electronic pull-tab
games would require a change in the statute or regulations.
CHAIR COSTELLO said she did not believe there was interest in
any limitations because the free market is providing the limits.
She asked if the administration had a position on the
legislation.
2:39:56 PM
COLLEEN GLOVER, Director, Tax Division, Department of Revenue,
Anchorage, Alaska, said the administration does not have a
position on SB 130.
CHAIR COSTELLO asked if she believes that electronic pull-tabs
would reduce record keeping errors.
MS. GLOVER answered that DOR does not have enough information to
make a determination, but they are have reached out to Grover
Gaming and other states that have passed similar legislation to
understand how this would work and to confirm that the
electronic format would be more secure.
2:40:51 PM
At ease
2:43:01 PM
CHAIR COSTELLO reconvened the meeting.
2:43:10 PM
CHAIR COSTELLO closed public testimony on SB 130.
2:43:18 PM
SENATOR REVAK moved to report SB 130, work order 32-LS0811\A,
from committee with individual recommendations and attached
fiscal note(s).
CHAIR COSTELLO found no objection and SB 130 was reported from
the Senate Labor and Commerce Standing Committee.
2:44:04 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:44 p.m.