Lawmakers have mixed reaction to governor's lottery concept

Gov. Mike Dunleavy delivers the 2020 State of the State. (01/28/20)
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JUNEAU, Alaska (KTUU) - The governor has said he will introduce legislation that would create a statewide lottery in Alaska, the concept has sparked a mixed reaction among legislators.

“Forty-five states have lotteries in place, it’s past time for Alaskans visitors to have the option to individually contribute to fixing Alaska's fiscal issue,” the governor said during his second annual State of the State address on Monday.

The plan for what sort of lottery the governor will propose is still being formulated, according to his office and will be determined partly by the appetite Alaskans have for new gaming opportunities. A 2018 presentation from the Department of Revenue to the Alaska Legislature detailed a number of options he could support:


  • Scratch-off tickets: Similar to pull tabs.

  • Number lotteries: Players pick a series of numbers,and win if they match the numbers picked in an official drawing. Could be solely in Alaska or Alaska could join a multi-state lottery.

  • Video lotteries: Electronic games similar to a slot machine.

In 2015, the Department of Revenue published its Fall revenue forecast, projecting that a lottery could generate $8 million per year for state coffers.

“However, an expansion of gaming through any sort of lottery, while beneficial to state revenue, would almost certainly have some negative impact on current state-regulated charitable gaming activities such as pull tabs and raffles,” the forecasters wrote at the time. “These current activities support numerous nonprofits in the state and any changes would likely be opposed by the entities that benefit from the current system.”

The Alaska Charitable Gaming Alliance (ACGA), a trade organization formed in November, represents the charitable gaming industry. The ACGA has opposed casinos opening in Alaska, saying they pose a risk to nonprofits reliant on the revenue raised by gaming.

According to 2018 estimates from the Department of Revenue, charitable gaming such as bingo and pull tabs netted $35 million for over 1,000 nonprofits across the state.

The ACGA is adopting a wait-and-see approach to the idea of a statewide lottery.

“It really depends on what the legislation looks like and whether it could harm nonprofits across Alaska,” said Sandy Powers, the president of the ACGA, before continuing to say she thought a numbered lottery draw may not pose as much of a threat as casinos to nonprofits.

Fairbanks Republican Rep. Steve Thompson says he is “very pleased” to hear the governor float the idea of a state lottery. Throughout the summer his office conducted its own research on the idea of joining a multi-state lottery such as Powerball or Mega Millions.

Thompson contacted officials in Wyoming, a state that started its own lottery in 2014 and has roughly the same population as Alaska. According to those conversations, Thompson concluded the state could generate “somewhere between $5-$10 million” from joining a lottery held across the country.

With a full Permanent Fund dividend, the state is projected to have a $1.5 billion deficit.

“Every little bit helps,” Thompson said of the revenue a lottery could raise. He is in the process of finalizing a bill and says he’ll contact the Dunleavy administration to see which legislation moves forward.

Elsewhere in the Legislature there is less enthusiasm for the idea of a lottery.

Rep. Lance Pruitt, R-Anchorage, the House minority leader, didn’t speak for or against the idea right after the governor’s Monday speech. “We'll see what happens, the lottery is an interesting one," he said.

Republican Fairbanks Sen. Click Bishop introduced legislation creating a Permanent Fund dividend education raffle that was drawn on Tuesday. He says he is “reserving judgement” on the idea of a lottery and will wait to see the bill.

Senate Democrats were more definitive.

“I have grave concerns,” said Sen. Jesse Kiehl of Juneau. “Lotteries almost exclusively make their funding from the lowest-income people.”

Multiple studies have been done across the country over recent decades that suggest lotteries can be regressive.

Sen. Tom Begich, an Anchorage Democrat and the Senate minority leader, said the caucus hadn’t taken a formal position on the lottery concept but informal conversations with other members suggested they held a similar opinion to Kiehl.

Thompson said he was aware of the concerns about the regressive risk of lotteries but said his research showed electronic games and scratch-off tickets posed a bigger threat than a numbered lottery draw. “They would probably have a bigger effect on the low-income people who can’t afford to do those things,” he said

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