This section of LOGON is to provide assistance to municipal governments and villages, and does not specifically address the needs or issues of the general public.
The Department of Revenue's Tax Division has oversight of gaming in the State of Alaska and maintains a website with applicable forms and other information, as well as a comprehensive list of frequently asked questions that complement the questions addressed in this chapter.
The State of Alaska provides that municipalities and other qualified organizations may obtain a permit and conduct games of chance to raise money to support certain activities (educational, political, civic, public, charitable, patriotic, or religious purposes). The ability of a qualified organization to conduct games of chance and use the net proceeds is considered a privilege and requires that the organization receive a permit issued by Department of Revenue and conduct the "gaming" activities according to Alaska Statutes and Regulations. Gaming is closely regulated and has many restrictions on it.
In the State of Alaska gaming is regulated under Alaska Statutes Title 5 (AS 05.15.010-.690) and the Alaska Administrative Code 15 AAC .160. These laws establish the process required to receive a permit to conduct gaming and identify the procedures for and restrictions on how the games are conducted.
Many municipalities, tribal governments, and non-profit community "improvement corporations" are active in the gaming business and have chosen gaming as a way to finance activities beneficial to the local residents without imposing additional taxes or increasing the charges for services. There are also communities that choose to avoid gaming because of the social costs of gambling. Regardless of what the community decides on this issue, it remains a local choice. If the residents of a municipality or established village hold an election and the vote favors a prohibition on gaming, no gaming operations may be conducted within five miles of the boundaries of the municipality or in unincorporated areas within five miles of the boundaries of a municipality or within the perimeter of the established village (AS 05.15.620).
There are limits on the charitable gaming activities authorized by the State of Alaska. Some of the available options are bingo, pull-tabs, raffles, and various race and fish classics and contests (AS 05.15.180).
It is allowable to use money received from gaming activities for local government operations to further the activities of local government, with certain restrictions which are spelled out in statute, AS 05.15.150. Proceeds from gaming activities used to further services provided by the local government must be tracked and reported in the annual report.
The following are some of the major requirements for a qualified organization to conduct gaming activities for the benefit of the community. A complete review of the statute and regulations is recommended for any organization or municipality interested in gaming activities.
Gaming permittees must designate a "Member In Charge" to oversee the operation and sign official reports to the Department of Revenue (AS 05.15.112). The must also:
Applications for a permit must be sent to Department of Revenue and the office of the nearest municipal government to the game's location. The municipal government is then given the opportunity to comment on the application to the Department of Revenue. In practical terms these comment(s) would not block issuance of the permits unless they identify serious legal problems (AS 05.15.030).
Organizations qualified to receive a permit include: municipalities and qualified political, charitable, educational, civic, or service organizations, police or fire departments, and a number of other non-profit organizations, such as a dog musher's association (AS 05.15.690(36)). To qualify for a permit, an organization must be operated "not for profit," must have been in existence for at least three years, and must have at least 25 members (AS 05.15.690(36) and 15 AAC 160.020).
Use of proceeds is subject to the limitations spelled out in AS 05.15.150 and includes only ordinary, necessary and reasonable expenses and donations (AS 05.15.150-.160)
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Who is allowed to offer gaming activities, such as bingo and pull-tabs?
Gaming activities may be conducted by a "qualified organization" as defined in AS 05.15.690 if the organization has a current permit issued by Department of Revenue and has a "member in charge" and alternate who have passed Department of Revenue's examination (AS 05.15.020). Frequently, municipalities, tribal governments, and non-profit community "improvement corporations" are the qualified organizations that conduct gaming in a community; however, there are other entities that can also qualify.
In order to continue to qualify for a permit, the municipality or qualified organization must maintain certain activity records, file reports, and keep the financial records of gaming activities separate. Local Government Specialists with DCRA can provide assistance to municipal governments on setting up gaming records. The permittee must also use the proceeds from gaming activities for only those eligible uses identified in statutes and regulations and authorized by Department of Revenue. There must be a separate bank account set up for gaming activities.
Can someone other than the qualified organization that is issued the permit conduct the games?
Gaming permits are not transferable to another entity. The organization or municipality that received a permit can, however, allow a "vendor" or "operator" to conduct the gaming activity on their behalf for a set fee (AS 05.15.165; AS 05.15.188). The vendor or operator must be registered with or licensed by the State of Alaska.
Once a municipality obtains a permit what geographic area is it good for?
AS 05.15.040 limits municipal gaming operations to within the boundaries of the municipal government that holds the permit. The municipality should have a map showing its municipal boundaries. Local Boundary Commission staff within DCRA also maintains an inventory of municipal boundary maps and descriptions.
Is there a limit to the number of bingo games that may be held within a specific time frame?
Yes. AS 05.15.060 (a)(7) limits any permittee to 14 Bingo sessions a month and 35 Bingo games a session. State regulations further limit the number of sessions that an operator may hold to 11 and no more than 4 sessions within a 24 hour period with a one hour break between sessions (15 AAC 160.580).
Local ordinances may also place certain restrictions on when and how often gaming activities may occur (AS 05.15.124).
Can a community prohibit gaming within its boundaries?
Yes. AS 05.15.620 authorizes a community to hold an election to vote on whether to prohibit gaming. If the residents of a municipality or established village hold an election and the vote favors a prohibition on gaming, no gaming operations may be conducted within five miles of the boundaries of the municipality or within the perimeter of the established village (AS 05.15.620). Municipalities use the election procedure in the municipality's local election ordinance to conduct this type of election. For unincorporated communities the Division of Elections conducts the election.
May a municipality limit who gets permits to conduct gaming within its municipal boundaries?
AS 05.15.030 requires that a municipality be notified by an applicant for a gaming permit if the activity will take place within its boundaries. A municipality may submit a resolution protesting the issuance of a permit and stating the reasons for the protest. This protest does not guarantee that a permit will not be issued; however, the Department of Revenue gives careful consideration to such a protest when deciding to issue a permit.
A municipality may regulate operators or vendors who conduct games for permittees. AS 05.15.124 authorizes a municipality to prohibit by ordinance an operator or a vendor from conducting gaming activities within the municipality.
Are there reports that a permittee must file?
Yes. AS 05.15.080 describes quarterly and annual reports and fees required of municipalities and qualified organizations to maintain their permits to conduct gaming. AS 05.15.020 may require payment of certain fees based on the information contained in these reports. Even if an organization with a gaming permit does not conduct any gaming activity during the year, the organization must still file the annual report showing "zero" financial activity.
Under this statute, quarterly reports must be filed by the 45th day following each calendar quarter in which the permittee had gross receipts of $50,000 or more from gaming activities. The quarterly report must include the type of activity conducted, the date and location of the activity, the amount of gross receipts, the amount of authorized expenses, the value of prizes awarded, the amount of net proceeds, and other information the department may require. If, however, the only activity conducted during a calendar quarter is a raffle or lottery, then the report can be filed after the raffle or lottery is completed.
An annual report must be filed with Department of Revenue by March 15 following the year in which activities were conducted, accompanied by the payment of any fee required under AS 05.15.020(b). The report must list the types of activities conducted, and, for each activity, the total amount of gross receipts, the total amount of authorized expenses, the total value of prizes awarded, and the total amount of net proceeds.
Forms and instructions are available on the Department of Revenue's Tax Division, Gaming Section website.
Are there restrictions on who may be the "member in charge"?
Yes. AS 05.15.112 requires, among other things, that each permittee has a "member in charge." This person is responsible for ensuring that the games are conducted according to the state's regulations and statutes. The member in charge must be a member of the qualified organization, or the board of directors, or an employee of the municipality if the permittee is a municipality. The member in charge must be familiar with the gaming regulations and laws and successfully pass a test established by the Gaming Unit of the Department of Revenue.
Individuals with certain types of criminal convictions may be prohibited from gaming involvement and serving as a member in charge. Under certain circumstances this prohibition may be removed. (AS 05.15.105)
Are there restrictions on the use of the proceeds?
Yes. AS 05.15.150 limits the use of net proceeds to political, educational, civic, public, charitable, patriotic, or religious uses. There are specific activities that cannot be supported through charitable gaming revenues including: the direct or indirect payment to a lobbyist; the erection, acquisition, improvement, maintenance, or repair of real, personal, or mixed property unless it is used exclusively for one or more of the permitted uses; or the direct or indirect payment of any portion of the net proceeds of a charitable gaming activity, except the proceeds of a raffle and lottery; to aid candidates for public office or groups that support or oppose candidates for public office, or to a political party or to an organization affiliated with a political party; or to a group, as that term is defined in AS 15.13.400, or a political group, as that term is defined in AS 15.60.010, that seeks to influence the outcome of an election.
The proceeds must also be spent within a year, with a few exceptions. The ability to carry money over past a year must be granted by the Department of Revenue.
Recommended web site search topics:
Alaska Administrative Code