Alaska State Legislature

News from the House Majority

Ken Freeman, House Majority Press Secretary
State Capitol
Juneau, AK 99801
Phone: (907) 465-3804
Actuality line: 1-800-478-6540
http://www.akrepublicans.org
For Immediate Release February 24, 1997, Contact: Rep. Terry Martin (907) 465-3783

Martin Bill would Increase Gaming Income to Charities; Eliminate Permit Operators

JUNEAU, AK -- Representative Terry Martin (R-Anchorage) today introduced legislation that would make major changes to the state’s charitable gaming laws to increase the amount of profits charities would earn.

“The reforms we tried in 1993 just didn’t work,” Martin said. “We were embarrassed at that time that the charities were receiving a paltry 12 percent of the take. Now, they’re only getting eight percent, on average. It just shows me that every time we allow the gamblers to be part of the solution, we end up with less going to the people we’re supposed to be helping. In my view, past history shows the cost to society was less to pay off crooked local officials when gambling was illegal than to legalize it today under the guise of helping charities.”

Martin’s bill would change the requirement that the minimum percent that is supposed to go to the charity that holds the permit be figured on gross receipts, rather than adjusted gross income or net proceeds. That minimum is either 30 percent on pull-tabs or ten percent on other games such as bingo and raffles. Under current law, a person who operates a permit for a permittee is allowed to deduct prize money, taxes and all other expenses from gross income before the 30 or ten percent is figured.

The bill, HB 156, would also eliminate the operators and put the responsibility of running a permit back on the permittee. “The charities are very passive in this money-making scheme,” Martin said. “This bill will make them active and responsible for the operation of their permits, and make them accountable for the gross receipts. Currently, they are happy with just about any amount they receive from the operators, and they’re not willing to speak out for fear their permit will not be operated at a favorable time and place.”

Martin estimates the change would also save the state about $500,000 because the division of charitable gaming would not have to spend as much time auditing and analyzing operators’ expenditures. “Since the 30 percent would be figured on gross revenues, it won’t matter to the state how the permittee spends the remaining 70 percent,” he said. Martin also noted that gaming regulators would be freed up by the change to actually spend time better policing what’s happening in the bingo and pull-tab parlors.

Martin said HB 156 would work with an earlier gaming bill he has introduced, HB 84, to close a loophole left by last year’s campaign finance reform legislation. Business corporations and unions are now prohibited from contributing to candidates and political parties, but non-profit organizations are not. While HB 84 would allow only tax-exempt non-profits to hold pull-tab permits, HB 156 diminishes the incentive for charitable organizations to be involved in the political process.

To increase accountability and to prevent criminals from getting involved in gaming, HB 156 also would require gaming managers to be certified by the state.

“I think it’s important to remember what we’re trying to do when we introduce an influence like legalized gambling into our social fabric,” Martin said. “If you’re legalizing gambling in the name of charity we should be sure they at least get a fair share.”

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