Sponsor Statement for HB 84

Limiting the authority to conduct pull-tab charitable gaming to qualified
organizations that are exempt from taxation
under 26 U.S.C. 501(c)(3) or (19).

Alaska’s current charitable gaming program allows virtually any organization to apply for and obtain a permit to conduct gaming activities, including bingo, raffles, lotteries and pulltabs. These organizations include many that were never conceived to be included under even the most liberal definition of a charity, such as labor unions, professional organizations, political parties, and many others.

Alaskans did not intend for legalized charitable gaming to be abused in the ways it is today; they certainly did not anticipate that an unprecedented stream of gaming-generated dollars, mainly from pulltabs, would flow into the political process, as they now do. Research has shown that political contributions from organizations that raise money from pulltabs have now eclipsed political contributions from the oil industry in Alaska. In the meantime, Alaskan charities, the intended beneficiaries of the charitable gaming permits, are receiving a lower percentage return than ever.

In the past, subgroups of both political parties have used pulltab permits to raise campaign funds. While campaign finance reform cleaned up much of what was wrong with Alaska political financing, the loophole of charitable gaming is still there, although it remains to be seen (based on gaming permit applications) how many political subgroups will keep this lucrative option open to themselves. Alaska is the only state in the nation that allows direct access between gam(bl)ing dollars and the political arena.

House Bill 84 seeks to remedy this deplorable situation by simply permitting only tax-exempt organizations under the IRS code to conduct pulltab games. Pulltabs would continue to be available to the gambling public; however, the proceeds would go to help the needy and other worthy causes, and not be diverted into the pockets of politicians. Other organizations, which would no longer be permitted to conduct pulltab gaming because they do not qualify for tax-exempt status, would still be able to raise money with raffles, bingo, lotteries, and myriad other classics, contests and derbies.