Alaska Lawmakers Advance Electronic Pull-Tab Gaming Bill

The Alaska House Labor and Commerce Committee voted Thursday to advance legislation modernizing the state's charitable gaming statutes to allow pull tabs played on tablets after a contentious debate over market competition and concerns about creating monopolies.

The committee approved Senate Bill 170 without objection after adopting amendments that capped manufacturer costs at 30 percent of the ideal net, down from the original 35 percent, and limited tablets to 25 per establishment regardless of size.

Bill sponsor Senator Jesse Bjorkman warned the amendments could distort the market and give one manufacturer an unfair advantage. He said allowing manufacturers to own distributors while also capping their costs at 30 percent creates danger.

"You have created some danger in allowing one manufacturer to completely control the market in Alaska by allowing that manufacturer a very significant level of price advantage for their product by owning a distributor," Bjorkman said.

The bill modernizes Alaska's charitable gaming statutes to allow pull tabs played on tablets rather than paper. It does not expand where pull tabs can be sold or who can buy them. The legislation also updates prize limits for bingo halls and reporting requirements.

Debate centered on balancing fundraising potential for charities against preventing bars from becoming mini casinos and ensuring a competitive marketplace. Bingo hall operators and bar owners disagreed on payout percentages, tablet limits, and auto-close features.

The committee adopted an amendment by a vote of 4 to 1 allowing manufacturers to own one distributor, reversing language that would have required complete separation. Bjorkman said the original language aimed to maximize competition.

"The language in the bill originally started through conversations from stakeholders about what would create the maximum amount of competition," Bjorkman said. "Originally, the bill required complete divestiture of the Wähler from Arrow, the manufacturer, and for all of their paper pull tabs and electronic pull tabs."

Matt Fisher of Alaska Wholesale said the requirement to become a pull-tab distributor in Alaska is minimal, essentially a $1,000 license fee. He argued that in Minnesota, where manufacturers and distributors are separated, the company Chugach Electric selected has 2,800 sites while Arrow has 28.

"What it does when you have a local distributor, an Alaskan-based distributor, they look out for the nonprofits and find the best product," Fisher said.

The committee rejected an amendment to lower the electronic pull-tab payout limit from 90 percent to 85 percent by a vote of 4 to 1. Sandy Powers, owner of Big Valley Bingo in Wasilla, said the higher payout would cannibalize paper pull-tab sales that many charities rely on.