Gambling proposal could allow casinos, lotteries

MEASURE 1: State Legislature would lose expansion authority.

August 24, 2008 

Alaska voters will be asked Tuesday whether they want to create a Gaming Commission within the state Department of Revenue, resolving a bitter fight between pro- and anti-gambling forces.

The seven-member commission would have authority to expand gambling by allowing slot machines, poker rooms, lotteries or any form of waging game.

Right now, only state legislators have that authority and they have been jockeying for years over what is right for Alaska. Should card players be able to play Texas Hold 'em for money? Should bar patrons be able to try their luck with slot machines? Should Alaska be allowed to join other states in the Powerball lottery?

Supporters of creating the commission through Ballot Measure 1 say allowing more gambling will attract tourists, keep revenue in state that is now going to Nevada or to online gambling sites, and possibly create jobs and provide additional money to the state coffers through new taxes.

"There's a lot of money involved, and it should stay here," said lawyer Ken Jacobus, who helped write the initiative for the group Alaskans for Gaming Reform. "I'm voting yes because I think it's good for the Alaska economy."

Opponents say nothing about the system is broken now, and gambling can lead to such serious societal ills as child neglect, divorce, bankruptcies and debt-driven crimes. Only lawmakers should have the power to expand it, they say. Alaskans for Gaming Reform is hoping to enact something it can't get through traditional law-making channels, they say.

BIG INDUSTRY

The seven members on the commission would be appointed by the governor and approved by the Legislature. The five voting members would serve staggered terms of five years. Only three would be needed for a quorum.

Members of Alaskans for Gaming Reform defend their initiative and say creating the commission is about regulating Alaska's existing games better, according to Christian Schneider, a political consultant hired by the group.

More than 1,000 charities, cities, education groups and other nonprofits currently benefit from gaming in Alaska, mostly through pull tabs, bingo and raffles. The $350 million industry raises $32 million for them a year, according to 2006 numbers from the Department of Revenue.

Schneider said better oversight into the game operators is needed to ensure nonprofits are really getting their fair share. "This is a call for transparency," he said.

But Johanna Bales, deputy director of the revenue department's Tax Division, which looks after gaming in the state, doesn't see better or more regulation under the ballot measure.

"This commission is given very broad power under this initiative, so you would have three individuals potentially who could decide what types of gaming can take place in the state up to a full-blown casino," she said. "There's nothing in here that sets any kind of parameters as far as I can tell."

Three years ago, the state House convened a task force to look at whether a gaming commission should be established. In the end, it decided no. It said the power to expand gaming should remain with the Legislature. It also recommended regulation of online gaming and increased prosecution of after-hour gambling establishments.

BACKED BY BAR OWNERS

Jim Minnery is president of Alaska Family Council and opposes the ballot measure. The gaming commission will have little motivation to look at the societal costs of gambling, he said. He worries about people becoming addicted to gambling, and the high depression, suicide rates and domestic violence that some studies link to the problem.

"There's a reason why they say, 'What happens in Vegas, stays in Vegas,' " he said.

One of the few details in the initiative says the commission could not allow more than five gaming machines, such as a slot machine, within one location before Dec. 31, 2012. After that date, no more than 20 gaming machines will be allowed at a bar or other location.

Bar owners, as primary funders of Alaskans for Gaming Reform, are leading the campaign for the ballot measure's passage.

The group's spokesman, Schneider, said bar owners see the loose rules and the potential for theft or embezzlement. Schneider and other supporters, however, were vague about how big that problem is.

Darwin Biwer, chairman of Alaskans for Gaming Reform and owner of the Anchorage bar Darwin's Theory, spearheaded the initiative. He said people are running raffles and taking huge "salaries" in the name of charity.

"There is no one watching the henhouse," he said.

But officials with the revenue department, including Bales, say creating a commission within their department does not crack down on illegal activity. The department has the jurisdiction to deal only with licensing issues, not criminal ones. The ballot measure wouldn't change that.


Find Megan Holland online at adn.com/contact/mholland or call 257-4343.

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