Anchorage: Gaming Capital of the Pacific Rim

• Citation: Vol. 17
• Publication year: 2000

§ 17 Alaska L. Rev. 343. ANCHORAGE: GAMING CAPITAL OF THE PACIFIC RIM

Alaska Law Review
Volume 17
Cited: 17 Alaska L. Rev. 343

ANCHORAGE: GAMING CAPITAL OF THE PACIFIC RIM

A. Gregory Gibbs

I. INTRODUCTION

II. NATIONAL GAMBLING IMPACT STUDY

III. INTERNET GAMBLING

IV. GAMBLING ON NATIVE AMERICAN LANDS

V. STATE LOTTERIES

VI. CONVENIENCE GAMBLING

VII. SPORTS BETTING

VIII. PARI-MUTUEL GAMBLING

IX. DESTINATION GAMING RESORTS

X. SOCIETAL IMPACT OF GAMBLING

XI. CONCLUSION

FOOTNOTES

This Note examines the current state of legalized gambling in Alaska and inquires as to the optimal breadth of legalized gambling for the state to pursue. The Note surveys the various forms of gambling currently present in the United States, including Internet gambling, and explores how legalization of the respective forms may impact Alaska. The Note's final evaluations are critical of most forms of gambling, including those forms currently legal in Alaska and those otherwise widely accepted by American states, but the Note also suggests that the development of destination gaming resorts, if strategically located and targeted to a receptive tourist consumer market, may serve as a considerable source of revenue and jobs for the people of Alaska.

I. INTRODUCTION

Legalized gambling ^[1] is an established aspect of Alaska culture. Whether you find yourself in an Anchorage mall, driving the [*pg 344] streets of Soldotna, or spending any time within any sizable Alaska town, you are bound to encounter come-ons for an opportunity to achieve riches through the simple skill of selecting the winning pull-tab. ^[2] Despite the ubiquitous presence of legalized gambling in Alaska (in the form of pull-tabs and charity bingo), the severe restrictions on the scope of legalized gambling are such that one could plausibly ask: does Alaska really permit gambling? After all, there are no casinos, no state lottery, and none of the typical forms of gambling attractive to the typical American gambler. Why is this? ^[3] Is the current scope of legalized gambling in Alaska at the [*pg 345] optimum for political, economic, and social purposes in this particular state? Should Alaska consider an expansion in the legalization of gambling? What are the risks and benefits attendant in doing so?

The extent of legalized gambling in America is determined on a state-by-state basis, and in the current climate, the voters of the fifty states are consistent and supportive in their acceptance of legalized gambling. As of today, gambling is legal in forty-eight states (the holdouts being Utah and Hawai'i), ^[4] and thirty-seven states (along with the District of Columbia) feature state-sponsored lotteries. ^[5] Alaska's closest neighboring states -- Washington, Oregon, California, and Idaho -- all permit legalized gambling on Native American tribal lands. ^[6] Canada also allows gambling essentially Canada-wide (gambling is federally regulated in Canada ^[7]), and this comes into play particularly in the nearby Western Canadian provinces of British Columbia and Alberta. ^[8]

Alaska, in contrast to the majority of states, does not run a state lottery. ^[9] Alaska does not currently allow gambling on Native lands. Instead, the currently available forms of gambling in Alaska include the aforementioned pull-tabs and charity bingo, which provide about $260 million in annual gross revenue, but little in the way of new jobs. ^[10] However, these forms of gambling bring with them the negative social consequences of gambling. ^[11] There was a [*pg 346] recent push to determine whether to allow convenience gambling (e.g., video poker terminals) in Alaska establishments, ^[12] but beyond that, curiously little has been done recently to address the issue of legalized gambling in Alaska and to consider to what degree the state of Alaska should attempt to capture the benefits of legalized gambling, as well as to examine what costs legalized gambling (even at the current levels) brings upon Alaskans.

This Note will examine the various types of gambling present in the United States, and how the propagation of these forms of gambling in Alaska may impact the state. The Note will also discuss the highly topical issue of Native gaming, and how the expansion of gambling on Native lands in the contiguous United States may or may not present some opportunities and precedents for Alaska to follow. The Note will conclude by opposing most forms of legalized gambling (including the varieties currently allowed and recently considered in Alaska), criticizing these forms as bringing the costs of gambling to Alaskans without bringing much in the way of benefits. This will be contrasted with perhaps counter-intuitive insights regarding Anchorage, and how Anchorage may prove a near-optimal choice as a locale for destination gaming resorts.

II. NATIONAL GAMBLING IMPACT STUDY

In 1996, Congress approved the National Gambling Impact Study Act, which created the impetus for the nine-person National Gambling Impact Study Commission ("NGISC") to assess the current state of gambling in America and to present suggestions for determining the course of legal gambling in the near future. ^[13] The Committee, selected by President Clinton, featured Robert Loescher, director of Sealaska Corporation, thereby managing to include one representative of Alaska as well as one (but only one) [*pg 347] representative of Native American interests on the panel. ^[14] After conducting extensive discourse on the issue with Americans directly impacted by gambling, and sponsoring outside research, the NGISC presented its findings in a final report in June of 1999.

The NGISC final report offered a number of suggestions. For instance, gambling on the Internet should be developed under federal rather than state law, particularly as it would require federal resources and the federal government's "singularity of voice" to implement the NGISC's recommendation: a prospective ban on any Internet gambling not already authorized. ^[15] The report also recommended that the expansion of legal gambling in the United States should be halted for the present time. Although characterized in the press as a negative evaluation of gambling, the NGISC findings were actually fairly sympathetic toward at least some aspects of legal gambling, but the glaring absence of substantial, scientific research into the long-term economic and social impact of legalized gambling fomented a desire for caution among NGISC members, quite reasonable especially given the wildfire spread of legal gambling nationwide within the last decade. In no way did the NGISC final report advise prohibitions or future restrictions on currently legal forms of gambling (aside from betting on collegiate athletics, and Internet gambling, which currently has unclear legal status).

III. INTERNET GAMBLING

Few forms of new technology have had as pervasive and as instantaneous an impact on the lives of Alaskans, and in fact all Americans, as has the development of the Internet. The way we communicate with one another, the manner and speed in which we obtain information, the way we buy and sell things, and even the language that we use in conversation have all changed dramatically as a direct effect of the Internet. ^[16] The Internet also impacts the way people entertain themselves, including those with a passion for gambling. A quick browse on the World Wide Web will readily reveal numerous sites whereby individuals may wager real money on real bets (and perhaps even hope for real winnings). The number of gambling websites and the amount wagered on these websites [*pg 348] have ballooned within the last couple of years, and will likely continue to expand rapidly for the near future. ^[17]

But are they legal? According to some federal government sources, gambling websites on the Internet have always been prohibited. ^[18] Unfortunately, the law is unclear. The legal status of gambling is generally determined individually by the states, and a small number of states have passed legislation expressly addressing the legality of on-line gambling. ^[19] Most of these states, including Nevada, Louisiana, Texas, and Illinois, are states featuring large-scale legalized gambling revenue that is placed at risk by allowing new forms of gambling to emerge from the Internet, and these states have recently banned (or introduced legislation banning) Internet gambling explicitly. ^[20] Although the State of Alaska has not specifically addressed the issue, Internet gambling may be deemed illegal in Alaska. ^[21] But how does one enforce these state [*pg 349] laws on the World Wide Web, particularly when dealing with websites based out-of-state, or even outside American borders? ^[22] To facilitate enforcement efforts, the legality of Internet gambling may be best handled on the federal level. ^[23]

Thus turning to the federal level, the Wire Communications Act of 1961 ("Wire Act") ^[24] is a relevant source of law pertaining to on-line gambling. ^[25] Passed well before the advent of the Internet, the Wire Act strictly prohibits interstate use of phone lines for the purpose of gambling. ^[26] The Act was intended primarily to impede the practice of bookies lining up bets on horse races, collegiate football games, and other athletic events. ^[27] Unfortunately, the statutory language is grounded in the technologies of the time, and the application of the Wire Act to Internet...