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Dip In Oil Revenue Prompts Alaska Governor To Propose State Lottery Bill

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A state that has long been reliant on the revenue generated from oil, Alaska faces a growing budget deficit while its main source of income appears to be drying up. As the gap between what oil revenue covers and the state budget continues to grow, Gov. Mike Dunleavy has proposed a state lottery to fill the void.

Dunleavy attempted to cushion the budget by making cuts last year, but public outcry convinced him to withdraw those proposed spending cuts. The move to propose the lottery should come as no surprise. The governor received serious pushback from his constituents, but also his colleagues when he alternatively proposed dipping into savings to close the deficit in the coming fiscal year.

Two Alaska lottery proposals

A lottery would draw in considerable revenue for the state, depending on which types of lottery games can be played in Alaska. The current administration has estimated that allowing draw games alone could raise between $5 million and $10 million. Two bills have been brought forward this year, one by Dunleavy and House Majority Leader Steve Thompson. While Dunleavy’s bill included provisions for any kind of lottery game, Thompson’s was a bit more restrictive.

The former’s proposal includes both in-state and multi-state draws, examples of which include the Powerball or Mega Millions, which multiple states participate in. The governor’s bill also outlines provisions for scratch cards, sports betting, all casino gaming avenues and consumption mediums. The bill also specifies a lottery profit fund to deliver educational endowments and aid social programs directed toward domestic violence, drug abuse, senior services, foster care and homelessness.

Thompson’s bill would allow for a state lottery and participation in a multi-state lottery. However, his legislation bars a lottery board from authorizing scratch-off tickets or video terminals.

Additional ideas

The proposals have received a mixed response. While more revenue would be a plus for the state coffers, some lawmakers have questions about the governor’s overall fiscal plan, even with his plans for the enterprise.

State Sen. Jesse Kiehl of Juneau told reporters in a recent interview that, “It still doesn’t solve Alaska’s fundamental fiscal problem,” regarding Dunleavy’s lottery bill. Kiehl proposed that changes to the Alaskan oil tax structure would provide some relief, as the state levies no personal income or statewide sales tax.

Dunleavy’s attempt to install a state lottery is not the first instance of proposed gaming legislation in Alaska. In each previous case, proposed legislation gained no momentum and eventually stalled. Currently, Alaska is one of only five states in the US without a state lottery.

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