Governor proposes independent corporation to run an Alaska lottery

Gov. Mike Dunleavy has introduced legislation that would create a statewide lottery.

The bill would see the formation of the Alaska Lottery Corporation, an independent public corporation that would be in charge of operating the state’s lottery. The corporation would be in charge of deciding what type of gaming opportunities are offered to Alaskans, including the potential for numbered lottery draws, keno and sports betting.

The legislation would limit participation in Alaska lotteries to people who are 18-years-old or older.

The goal of the governor’s proposal is to help bridge the state’s $1.5 billion deficit.

“Alaska is one of only five states that does not have any form of a state lottery. I believe it is time we, as a state, have the conversation on the potential benefits that could come from a state lottery,” the governor said in a prepared statement.

Sandy Powers, the president of the Alaska Charitable Gaming Alliance, expressed some concern about the governor's proposal and potential impact to nonprofits that rely on gaming revenue.

Concerns were also raised by Democratic Sen. Jesse Kiehl of Juneau about the impact a lottery could have on low-income Alaskans and people susceptible to an addiction to gambling.

"Ringing more cash from the poorest Alaskans is not the way to get to sustainable growth for our future," he said.

Officials with the Department of Revenue have a wide range of revenue forecasts depending on which gaming choices would be chosen by the independent corporation:

Department of Revenue officials say that the lower-revenue forecasts are more likely.

Fairbanks Republican Rep. Steve Thompson has introduced a bill that would also create a statewide lottery. Thompson’s proposal is limited to Alaska creating its own numbered lottery draw or joining a multi-state lottery such as Powerball or Mega Millions.

Thompson reserved judgement on the governor's proposal.

Under the governor’s legislation, it would cost an estimated $3 million to create the lottery corporation, officials say. It’s estimated that the next fiscal year would be a break-even year before the corporation begins to be profitable in 2022.

The governor is touting the proposal as a way to create new business opportunities for small retail establishments. Administration officials did not have a specific forecast on Tuesday about how much of an impact on small businesses that a lottery could provide.

The revenue collected by the Alaska Lottery Corporation is intended to be spent on K-12 education and to address domestic violence, drug abuse, foster care, senior services, and homelessness.

Powers said the ACGA would be looking to protect revenue for nonprofits. "I don't think it's a good idea to do one at the expense of the other," she said.

The Dunleavy administration did not answer on Tuesday if there were projections on the potential impact of a lottery on charitable gaming revenue. Those questions would be answered in legislative hearings, officials said.

The Alaska Constitution prohibits dedicating funds in most instances so it would most likely be up to the Legislature to decide how the lottery funds would be spent.