By Tom Brennan
Many non-profit organizations in Southcentral Alaska are eyeing the move to open a gambling casino in Eklutna with great trepidation.
If the casino becomes a reality, which is something of a long-shot based on historical precedence, it could conceivably be an economic boon to the estimated 70 people in the Alaska Native Village of Eklutna. That is the usual promise, but somehow the benefits of such developments rarely funnel down to the people who live in the community.
That has generally been the case in portions of the Lower 48 where indigenous populations have developed gambling casinos on their land. A lot of money flows through the casinos, but there is a significant downside to encouraging gambling and the dollar benefit to the people of the community is often minimal or goes into the pockets of unintended beneficiaries.
Much is at stake in the Eklutna casino discussion, including a major funding source for the area’s non-profit organizations. Under existing state law roughly half of the proceeds from bingo games, lotteries and pull-tabs must go to recognized and legally incorporated non-profit organizations.
To qualify for such funding the organizations must be exempt from federal income tax under section 501©3 of Title 26 of the federal tax code. Recipients include organizations such as the Shriners, Fraternal Order of Alaska State Troopers, VFWs and American Legions, and anti-domestic violence and children support advocacies. There are 278 charitable permits in Anchorage alone.
The Village of Eklutna is suing the U.S. Interior Department to allow a tribal gaming operation in the community 20 miles north of Downtown Anchorage and 17 miles by road from Wasilla. Eklutna has been pursuing the casino idea for more than 20 years and — despite a recent flurry of publicity — it remains, as they say in the gambling community, a long shot.
Those who enjoy slot machines and similar ways to get rid of your money may think having a casino close at hand would add value to the local community. But that view is not shared by everyone and such a venture would have some very bad aspects, including a heavy financial cost to non-profit organizations that rely on the existing system for funding.
Those who think the idea might have merit include Anchorage Mayor Ethan Berkowitz, but his enthusiasm is limited. Those who have talked to the mayor about the issue now think the mayor would give it careful consideration before deciding. He might or might not be in favor of it. And you can be sure that the loss of the non-profit funding would weigh heavily in any Berkowitz decision to back a casino.
The existing system of profit distribution to Alaska nonprofits would be unlikely to be duplicated in the Eklutna project. Such a casino would come under federal law and any government share of the profits would go to the feds. Though our congressional delegation would certainly work to bring a share of that money back to Alaska, they would be competing with their colleagues from the other 49 states.
A casino in Eklutna would not eliminate other forms of gambling in Southcentral Alaska, but it would almost certainly be a serious competitor and likely attract the lion’s share of gambling activity — to the detriment of organizations now benefitting from the system.
The existing distribution scheme was developed by the state after passage of the Alaska Native Claims Settlement Act of 1971. It was very well thought out and met an important need for the Alaska community.
Making up for such an enormous funding loss would be difficult to impossible, especially for a state struggling to balance its budget with revenues declining from its share of oil wealth.