Sen. Jesse Bjorkman outlines HB 386 to allow and regulate electronic pull tabs; committee hears concerns about fees and charity revenue

The House Labor and Commerce Committee took up HB 386 on May 11, hearing public testimony and a sectional review of the bill that would authorize and regulate electronic pull-tab (e‑tab) games in Alaska.

Sen. Jesse Bjorkman, the bill’s sponsor, told the committee the proposal adds definitions and security requirements for e‑tabs, allows distributors to deliver e‑tab series electronically, prohibits visuals that mimic slot-machine reels, restricts credit-card transactions, and requires display of serial numbers and prize information. “The bill caps the manufacturer fee at 35 percent,” Sen. Bjorkman said, describing the cap as a ceiling charities and nonprofits could negotiate downward from and as protection against monopolistic practices.

The sponsor also described device limits and operational safeguards. Under the bill, a location would be limited to one tablet for every six persons of allowable occupancy or 10 tablets total, whichever is greater; e‑tab games would have a finite, predetermined ticket structure (the draft cited a maximum of 15,000 tickets). The measure would extend current recordkeeping requirements to electronic games, bar vendors’ shares would be limited to 25 percent of adjusted gross receipts for e‑tabs (versus 30 percent for paper pull tabs), and operators would be barred from accepting gifts from manufacturers.

Public testimony was mixed but largely critical on revenue and fee points. Mac Miners of Juneau, who said he has been involved in pull tabs for 27 years, urged the committee to reject the change, warning that electronic gaming would “take a large percentage” and that charities would “end up not making so much money.” He told the committee he distrusted some industry actors and said broadcasting and expanded advertising for gaming have already changed how charitable games operate.

Jerry Lewis, an Anchorage operator testifying by remote connection, highlighted current splits in other jurisdictions and raised concrete numbers: “In Minnesota, manufacturers charge 20 percent; HB 386 would allow manufacturers to charge 35 percent,” Lewis said, and added that venues in Minnesota receive about 15 percent while the bill would allow a 25 percent vendor/permittee share for e‑tabs. Lewis asked the committee to consider those fee differences and said the bill’s changes affect charitable organizations with which he contracts.

Committee members pressed the sponsor on how the 35 percent cap was set and whether it would disadvantage small or rural charities. Rep. Colom asked why the cap would not simply match a published 31 percent agreement; Sen. Bjorkman said the 35 percent cap provides negotiating space above a reported 31 percent deal and was intended to avoid price ceilings that could make it uneconomical for manufacturers to serve rural areas, which could cut access for small charities.

Members also sought clarification on distinctions between paper and electronic pull tabs. Rep. Sadler received confirmation from the sponsor that the bill leaves paper pull‑tab percentages unchanged, while placing new, specific requirements on electronic pull tabs (sections cited in the draft include serial-numbering, ticket limits and disclosures, and device/security rules). The bill would also allow charitable gaming on the Alaska Marine Highway and would relax current advertising prohibitions to permit certain broadcasting and online promotion for charitable gaming.

The draft includes implementation and tax provisions. Sponsor remarks and the draft say the state’s existing 3 percent charitable-gaming tax remains in place; the Department of Revenue would be authorized to adopt regulations needed to implement the act. The bill sets staggered effective dates (for example, an effective date cited in the draft is Jan. 1, 2027, for certain sections and Jan. 1, 2031, for another), which the sponsor said is intended to prevent a sudden market expansion of distributors.

Committee staff announced they expect a committee substitute (CS) for SB 170 to be available soon; the committee set an administrative amendment deadline for that CS at 5:00 p.m. the following day. The committee also noted it will take up three governor appointees at a Wednesday meeting before the joint session. The committee adjourned at 4:21 p.m.

What’s next: The committee’s work on HB 386 will continue after members receive the forthcoming committee substitute and any proposed amendments.