Dunleavy gambles on Alaska's future, without looking at downside of casino industry

Every so often someone has the bright idea of turning Alaska into North Las Vegas, where casinos and big-time gambling would help bankroll state government.

It’s usually pitched as a painless tax, an easy way to create jobs, sanitized under the euphemism of “gaming,” a word that makes it all seem somehow like child’s play.

Thirty years ago, political consultant Bill McConkey promoted a vision of casinos and quarterhorse racetracks from Anchorage to Fairbanks and hundreds of millions in new dollars for the state treasury.

Alaska voters rejected the gambler’s paradise by almost two-to-one, but the idea comes up again and again. Gov. Mike Dunleavy is the latest to see dollar signs in the betting world.

Things have come a long way since 1960, when Gov. Bill Egan vetoed a bill that legalized the Nenana Ice Classic, fearing that officially blessing the ice-guessing contest would open the way for casinos, etc. The Legislature overrode the veto and Egan’s fears never materialized.

Illegal gambling had been a major part of territorial life in Alaska and remained popular after statehood. Along with the Nenana Ice Classic and other events, the state allowed bingo, pull-tabs and other forms of gambling, softening the opposition by requiring proceeds to go to charities.

Unlike Egan and other governors who were justifiably wary of legalized gambling, Dunleavy is a cheerleader for the idea, seeing it strictly as a state revenue measure and a way to create jobs in casinos, etc., the closest thing anyone can imagine to free money.

"This session, I'll be supporting legislation to bring gaming to Alaska. Alaska can no longer afford to deny itself a revenue stream available to nearly every other state in the nation,” Dunleavy said in his State of the State speech in January.

"Along with enhancing revenue, gaming could create hundreds of high-paying jobs in some of our communities, and we would join a long list of states that have embraced gaming for some time."

Dunleavy hired a consultant for nearly $400,000 to come up with a plan for legalized gambling, suggest locations for casinos and tell him how many tourists might be attracted here to gamble.

While the state specifically told bidders that no consideration should be given to the downside of large-scale gambling, the contract with the Innovation Group, a Colorado concern, mentions public safety and social impacts. This was probably added for purposes of political cover, as the main thrust of the work is to endorse Dunleavy’s decision that gambling is a great idea and the state can’t possible lose.

The 14 elements listed as deliverables for the “comprehensive socio-economic study” do not mention the wide range of negative aspects of gambling.

The Innovation Group claims to be the “premier” consultant for gambling interests, so don’t expect it to raise too many difficult questions about the industry, crime, addiction, and how charities would be funded once nonprofit gambling ends.

The consultant is not going to be finished by August—its contract runs until December and may be extended for a year—but the state claims that gambling is one of the revenue proposals the governor wants lawmakers to deal with during the August special session.

“You all know that the gaming initiative is under way,” Revenue Commissioner Lucinda Mahoney told the House Finance Committee June 8.

“We are working right now with our consultant who is in the process of developing revenue estimates. As well as, what is more important about that initiative, is the economic impact of that industry on our, in our economy,” she said.

“And the potential to diversify the economy. That’s just one small new revenue measure that we will be discussing. And like I said there will be a few more.”

This is hardly the groundwork necessary to allow a decision on the future of big-time gambling to be made in August. This is the latest serving of baloney from Mahoney.

The lack of analysis by Dunleavy and Mahoney is in keeping with the Dunleavy administration aversion to details and the governor’s desire to avoid taking responsibility for anything.

The most thoughtful take I’ve seen on the Dunleavy gambling plan is from a former state gambling investigator and auditor, Joseph Koss, who wrote in the Anchorage Daily News that whatever choice the governor makes would kill the current system that funds charities.

If the state joined the Powerball of Megmillions lotteries, “we would only increase the prizes paid to Outside winners — the odds of an Alaskan winning are vanishingly small.”

There are also the social impacts of gambling that Dunleavy has refused to recognize. Pretending there are no negatives with casinos and big-time gambling is a fool’s errand.

“The introduction of commercial gambling will change the Alaska I know and love, and not necessarily for the better. In fact, expanding gambling in the state will itself be a gamble — one that will be far too expensive when it fails. If it somehow does succeed, then, in addition to state revenue, it must replace all of the revenue lost with the destruction of charitable gaming, or directly pay for the functions that the permittees now perform with their gaming revenue. Any way you look at it, commercial gambling is expensive, and I believe that we cannot afford the cost,” Koss said.

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