Alaska, one of five states in the U.S. without a lottery, suddenly has two bills active in the legislature that would create one.
One, proposed by Governor Mike Dunleavy, is called the Alaska Lottery Corporation Act. The governor introduced the bill with this statement: “In the face of low state revenues, my administration has been actively seeking new revenue sources to diversify our economy. Not only does this legislation have the potential of creating new business opportunities, the profits generated from lottery activities will be designated to K-12 education, domestic violence prevention programs, drug abuse prevention programs, foster care and homelessness.”
He added, “Alaska is one of only five states that does not have any form of a state lottery. I believe it is time we, as a state, have the conversation on the potential benefits that could come from a state lottery.”
The bill, SB 188/HV 246, would create the Alaska Lottery Corp. as a new state-owned corporation within the Department of Revenue. It would have a seven-member board appointed by the governor.
The proposal comes after last year’s proposed budget cuts by the governor, cuts that raised considerable protest from the public and sparked a recall against Dunleavy.
Dunleavy’s proposal “doesn’t solve Alaska’s fundamental fiscal problem,” declared Senator Jess Kiehl recently. Kiehl supports raising taxes on the state’s petroleum industry as well as a state income tax.
House Majority Leader Steve Thompson has sponsored his own bill, which departs from the governor’s in that it would not allow scratchers or video lottery terminals.
GGB News reached out to Rep. Thompson for an exclusive interview about his bill, and the political atmosphere in the state relating to gaming.
GGB: Rep. Thompson, both you and Governor Dunleavy have proposed bills that would establish an Alaska lottery. How does your bill differ from his?
Thompson: My bill, HB 239, will allow Alaskans to participate in in-state and multi-state lotteries and will only allow draw games like Powerball. All instant lotteries, scratch-off ticket games, video lottery terminals or any other electronic game involving direct physical contact between the player and a machine are prohibited by HB 239. The Alaska Lottery will be administered by the lottery board, a state entity that will allow a high degree of legislative oversight as we seek to generate new revenue for the state.
Alaska has been pretty resistant to forms of gaming in the past. Why a lottery now? What conditions have changed in the state that might warrant a lottery?
Past proposals to expand gaming in Alaska have fallen short, for numerous reasons. One is that we just didn’t need the revenue. Today, we find ourselves in a place where we must seek to diversify the revenues that fund state services. While HB 239 will only be a small part of that, every little bit helps. Another reason that past proposals have failed is that they didn’t give adequate consideration to the social impacts the expansion of gaming would have. I’m committed to ensuring that we weigh the pros and cons of introducing a lottery in Alaska, and that we make sure those considerations guide us as we seek to develop good policy for the state.
How would you answer criticism that you might be opening the state to more gaming expansion?
HB 239 will only allow draw games that do not have the characteristics most frequently associated with problem gambling. Any further gaming expansion would require the same legislative scrutiny that’s being exercised as we move HB 239 through the legislative process.
If a lottery commission is created, might it be used as a springboard for other gaming?
HB 239 will create a state board to operate and administer the Alaska Lottery. The board will only be empowered to conduct draw games. Any further expansion would require additional laws to be passed by a future legislature.
Are you expecting criticism from the charitable gaming industry in the state?
I’ve been in contact with stakeholders from the charitable gaming industry in Alaska to make sure we’re addressing any concerns they have relating to the introduction of a lottery. So far, the stakeholders I’ve spoken to have not raised significant concerns with my proposed legislation. The position expressed on the Alaska Charitable Gaming Alliance’s website speaks to the efforts we’ve made to ensure that we’re not adversely affecting charitable gaming in Alaska:
“In Thompson’s case, there is neither significant and costly new government infrastructure, nor an alarming expansion of gaming. The best part of his effort has been he included the Alaska Charitable Gaming Alliance. Rep. Thompson communicated his interest in meeting with our president, Sandy Powers, to seek counsel on how his proposed legislation would affect charitable gaming. He has been transparent and thoughtful.”
Are there other state lotteries that you look to as models for what an Alaska version might be?
In developing HB 239, I’ve been in contact with lottery officials from around the country. In terms of a model, I’ve looked to states with similarly small populations, which also limit lottery activity to draw games. Wyoming has been one of the most helpful examples throughout the process of developing HB 239.
Despite having separate bills, would you say that you and the governor are allied on this question?
I agree with the governor that we need to continue to consider ways to develop new revenue streams for the state, in the face of declining oil revenue.
How much do you think a lottery could raise for the state annually?
We’re projecting net revenue for the state generated by HB 239 would be somewhere between $5 million and $10 million annually.
Would the money raised by targeted for a specific purpose, or just for the general fund?
The money raised by HB 239 would be placed in the general fund to support state services that all Alaskans rely on.
How do you answer criticism that a lottery wouldn’t address the state’s fundamental fiscal problem, based on declining petroleum prices and thus smaller tax revenues?
HB 239 isn’t a silver bullet for our fiscal challenges. In the face of declining oil revenues, it can be a piece of the puzzle that will build a strong Alaska for generations to come.
Does your bill allow for online lottery sales?
No, HB 239 prohibits any lottery activity that involves direct physical contact between a player and a machine.
