Leaders consider curbs on pull-tabs

Alaska lawmakers may restrict use to traditional charities

Posted: Wednesday, December 10, 2003

ANCHORAGE - A legislative subcommittee is looking at whether to limit pull-tabs to traditional charities, like those set up to help people directly.

Pull-tabs are big money in Alaska. In 2002, pull-tabs raised $25.2 million for groups in every part of the state.

"If we're going to allow gambling in the state of Alaska for charities, should there be some definition of what a charity is?" asked Sen. Ralph Seekins, a Fairbanks Republican.

Pull-tab gambling in Alaska is one of the activities commonly referred to as "charitable gaming," but state law never restricted it to charities.

A broad range of groups can obtain pull-tab permits. To qualify, a group must be nonprofit, at least three years old with 20 or more members, and must fall into one of several categories, such as being a civic, service, labor, political, educational or fraternal organization.

Seekins' subcommitee, which consists of him and Sen. Hollis French, an Anchorage Democrat, held a hearing on the issue Monday and has another one scheduled for next Monday. The legislators also are looking at whether groups should be prohibited from raising pull-tab dollars outside their own region.

They plan to make a recommendation to the full Senate Labor and Commerce Committee after the Legislature convenes next month.

During Monday's hearing in Fairbanks, several pull-tab operators asked the legislators to leave the industry alone.

George Wright is a pull-tab operator with locations in Fairbanks, Juneau and Anchorage. According to the Tax Division, Wright works with about 30 nonprofits in five communities

Wright said he doesn't have concrete standards governing the nonprofits with which chooses to work.

"I just accept them and take them at face value," he said.

Wright told lawmakers that regionalizing gaming, so that organizations couldn't use their permits in parlors outside their immediate areas, would make it tougher for villages to benefit from gaming since they have smaller populations.

About 12 people attended the Monday gathering in Fairbanks, with testimony also offered from Kenai, Anchorage and Juneau via teleconferencing.

Seekins said it will be difficult to determine what charities are "real charities."

Lawmakers in the past have talked about limiting pull-tab eligibility to groups that have an Internal Revenue Service 501 C-3 charitable exemption, said Jeff Prather, who works on pull-tab issues for the Alaska Department of Revenue. But that would shut out some veterans groups and fraternal and service organizations like the Lions Club.

Randy Virgin, executive director of the Alaska Center for the Environment, expressed alarm at the prospect of the Legislature deciding which groups are worthy of pull-tabs.

"It smacks of favoritism and partisanship," said Virgin, whose organization often is at odds with the Republican-controlled Legislature.

The center receives about $50,000 a year from pull-tabs, Virgin said. The law restricts it to use for basics, he said, like rent and health insurance for the staff.

The Alaska Democratic and Republican parties have pull-tab permits that bring in $30,000 to $50,000 each year.

They used to spend the money on political activities, said Alyce Hanley, president of the Anchorage Republican Women's Club, which holds the Republican permit. But the law changed a few years ago and now the parties use the money for scholarships or give it to charities.

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