Charitable gaming takes a hit due to COVID-19
October 8, 2020
Pull-tab sales are down in the Chilkat Valley and statewide due to the COVID-19 pandemic.
Pull-tabs, a type of charitable game regulated by the state, must be affiliated with a nonprofit organization or municipality that holds a gaming permit. For these permit holders, revenue from pull-tabs can represent a significant portion of the organizationâ€™s overall revenue in a year.
â€śItâ€™s about twenty-five to thirty precent of our budget,â€ť Haines Chamber of Commerce executive director Tracey Harmon said. She said as soon as COVID-19 hit, she scaled back her hours, anticipating a major reduction to the organizationâ€™s budget.
So far, sales are down this year, but much better than expected, Harmon said, declining to provide specific numbers.
â€ś(Pull-tab) sales were down the first quarter, and then they evened out the second quarter due to a spike in July,â€ť she said.
In a normal year, Chamber pull-tab sales increase in the second quarter due to summer tourism, but the real spike comes in October because of the Permanent Fund Dividend (PFD), Harmon said. She attributes this yearâ€™s July spike to the PFD, which hit bank accounts July 1, and the temporary $600 boost to unemployment.
Harmon said she thinks revenue will decline this fall since there likely wonâ€™t be the traditional PFD spike, and in general, peopleâ€™s discretionary spending will dwindle as winter approaches.
Other Haines organizations that rely on pull-tab revenue are also hurting.
The Chilkat Snowburnersâ€™ pull-tab revenue is down 50% this year, Jerry Lapp said. The Snowburners, Chamber and Uglys of Haines all have their pull-tabs sold at the Fogcutter, which was closed for several months at the beginning of the pandemic. Fogcutter owner Kelly Jessup declined to comment for the article.
The Snowburners use a portion of their pull-tab sales to make donations to charitable organizations like the Salvation Army, Lapp said. â€śReduced sales will affect how much they can give to them.â€ť
The American Legion, the only other place in town that sells pull-tabs, has seen a 56% decline in pull-tab revenue compared to this time last year. Unlike the Chamber, Uglys and Snowburners, the Legion is licensed to sell its own pull-tabs.
â€śWe were closed for over ten weeks, so that whomped the hell out of us,â€ť American Legion Commander Chuck Mitman said. Even with the Legion open, â€śpull-tab sales arenâ€™t what they used to be. Ours is more of an older clientele, so we donâ€™t quite have the customers that we used to.â€ť He said he thinks this is because older people are going out less due to COVID-19 concerns.
Pull-tabs help fund the Legionâ€™s scholarships and charitable work, Mitman said, citing a recent eye exam paid for on behalf of a homeless veteran. â€śWe normally do four-thousand to six-thousand dollars worth. With sales down, weâ€™ll do less,â€ť he said.
Statewide, pull-tab sales are down, according to the Alaska Department of Revenue.
â€śWe believe the decline in pull-tab tax revenue is attributed primarily to the COVID-19 pandemic and the closure of businesses that sell the pull-tabs,â€ť the department said, adding that in a normal year, they typically see a fall boost to sales, which they donâ€™t expect this year, given the timing of the PFD.
The state collects a 3% tax on each game sold. In 2019, the state collected $2.1 million in pull-tab taxes. In the first six months of 2020, the state collected approximately $0.7 million. If this rate persists, pull-tab sales will be down roughly 35% co
In 2019, pull-tabs generated $24 million in profits for organizations and municipalities statewide.