Alaska Digest

staff and Wire reports

Posted: Wednesday, April 27, 2005

Video gambling initiative rejected

ANCHORAGE - Lt. Gov. Loren Leman has rejected an application for a ballot initiative seeking to legalize video gambling at a South Anchorage location.

Leman said his decision was based on a recommendation by the state Department of Law, which determined the 15-page initiative would violate the Alaska Constitution because it calls for establishing a gaming district in a specific area. State law prohibits the use of an "initiative to enact local and special laws," Assistant Attorney General Sarah Felix wrote in memo to Leman last week.

The proposal calls for construction of a building on a vacant lot in South Anchorage to allow such games as video poker, bingo and slot machines, Ken Jacobus, an Anchorage attorney representing the sponsors of the initiative, said Tuesday. Jacobus said the concept could be expanded elsewhere in the state if it works in Anchorage.

Jacobus said the state's interpretation was based on a technicality in the initiative language. He said the measure likely will be clarified and resubmitted.

Sponsors of the initiative include Darwin Biwer, owner of Darwin's Theory, a downtown lounge.

Legislators move gambling bills

JUNEAU - With less than two weeks left in the legislative session, the odds are against proposals to expand gambling in Alaska, but two bills to establish "card rooms" are moving quickly through committees.

Card rooms are similar to casinos but only allow certain games of chance such as poker, rummy, bridge and cribbage. And unlike casinos, the house is not allowed to play or bet on the games.

Rep. Pete Kott, R-Eagle River, told the House Judiciary Committee Tuesday that his bill would create jobs and establish a new source of tax revenue for the state.

But those opposing the proposal argued that card rooms would lead to full-blown casinos and the social ills that accompany them.

The bill would limit card rooms to boroughs with a population of 30,000 or more. It also limits those communities to one card room for every 30,000 residents. That would allow a total of 13 card rooms in Alaska's five largest communities. Those under 21 would not be allowed to play.

The state Department of Revenue estimates that 13 card rooms would generate about $2.5 million for the state in the first year and $2.1 million annually each additional year.

Card room operators would pay the state $10,000 per table annually and a $25,000 license fee, Kott said. The bill also requires card rooms to hold quarterly tournaments and donate the winnings to a nonprofit educational institution or group.

Kott said a number of underground gambling operations are already present in Alaska and the bill would allow the state to regulate and tax them.

"Don't be fooled for a second that those underground things are going to go away," said Rep. John Coghill, R-North Pole. "It's just they move next door and up the stakes. I think all we're going to do is create another growing industry next door to us."

Rep. Nancy Dahlstrom, R-Anchorage, argued that prostitution, drug use and car theft also are against the law but legislators aren't proposing legalizing and taxing them.

"My biggest fear is this is going to lead to large-scale casinos," said Rep. Les Gara, D-Anchorage.

Hotel buildings barged to Kenai

KENAI - A Kenai business has barged in two hotel buildings from Homer that will be part of a new resort overlooking the Kenai River.

The two buildings reached Kenai Monday and are part of the Kenai Landing resort being developed from the old Wards Cove Packing Co. cannery that closed in 1997. The resort is scheduled to open May 12.

One of the barged buildings is 124 feet long. The other is 84 feet. Combined they make up 16 hotel units.

"It's absolutely huge," said Jon Faulkner, co-owner of Kenai Landing. "There's nothing rinky-dink about it."

The facility was purchased by Faulkner and Steve Agni, who have spent the past year and millions of dollars turning old buildings made of corrugated iron and run-down bunkhouses into a renovated historic site where visitors can dine at a restaurant, shop for souvenirs, watch a movie or stay in a hotel.

There also will be an independent dock for commercial fishermen and a custom seafood processor.

"It's like remodeling a small town," Agni said.

Kenai Landing is slated to open next month, but Faulkner said some work will continue at the 64-acre site.

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