Groups worry that gaming bills will cut funding to charities

Posted: Monday, April 28, 2003

ANCHORAGE - In the tiny Aleutian Islands village of Nikolski, residents rely on pull-tab gambling money from games played 900 miles away for basics such as the satellite phone that links them to the outside world in bad weather.

Around the state, people newly diagnosed with multiple sclerosis get detailed information about the disease through mailings paid for with pull-tab profits. And when Alaska families lose their homes to fire, the American Red Cross uses pull-tab proceeds to put them up temporarily.

Now gambling bills are moving through the state Legislature that some say threaten to damage the pull-tab industry and the organizations that benefit. Gov. Frank Murkowski wants to generate millions for the state by increasing state taxes on pull-tabs.

House members are working on a bill that would allow video gambling machines to join pull-tabs, bingo, fishing derbies, ice classics and raffles in Alaska's small but politically powerful gambling industry.

Gambling spending in Alaska soared about 300 percent between 1988, the year lawmakers allowed higher prize limits on pull-tabs, and 2001, the latest full year for which figures are available. Charities' share has gone up about 200 percent.

In all, out of $274 million played in pull-tabs in 2001, charities and other organizations netted $23 million. Most of the money, almost $214 million, went for prizes. The rest goes for taxes and expenses.

Bars are leading the fight for video gaming. They are taking on charities and their old pull-tab allies, who fear games like video poker and black jack would lure players away from the old cardboard standby of pull-tabs sheerly on entertainment value.

"Oh man, that would kill us. That would kill the industry. It would be devastating," Boris Merculief, chairman of the Aleutian/Pribilof Islands Association, said of video poker.

The Aleutian association is part owner of Gold Cache Bingo in Anchorage, one of the state's biggest and most profitable bingo halls. The association is among six Native organizations that each cleared more than $160,000 in 2001 for playing their pull-tab permits there.

"It's a very small percentage of our overall budget, but it is a very critical amount. It is our only pot of discretionary hard dollars," said Dan Duame, general counsel for APIA.

With its pull-tab money, the association has hired specialists in economic development and natural resources. It also uses the money for emergency needs such as medical travel.

Even if video poker doesn't come through this year, lawmakers may go for higher pull-tab taxes, through HB 169 and SB 102.

Murkowski wants the state to take 8 percent off a game's gross sales, before prizes. Under the current tax structure, the state collects 3 percent of a much smaller figure.

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