Tuesday, February 27, 2007

Pull-tab profits may be yanked

A dispute between a local pull-tab operator and a property owner could end up costing a handful of Fairbanks nonprofit, labor and service organizations tens of thousands of dollars in potential revenue.
Emerald Isle Pull-Tabs, which up until last summer operated pull-tab games at a location on the Old Steese Highway for at least five Fairbanks organizations including the Alaska Dog Mushers Association, the UAF Tip Off Club and the Tanana Valley State Fair Association, is involved in a rent dispute with the owner of the Old Steese building, Qwik Three Inc.
Last summer, officials from Qwik Three locked the building, taking possession of all the contents, including the pull-tabs.
Pull-tabs are one of the few forms of gambling allowed in Alaska. State law mandates strict regulations surrounding the games. The pull-tabs themselves are the property of nonprofit organizations. Pull-tab parlors, like Emerald Isle, operate the games on behalf of the nonprofits. The two then split the profits from the games.
With the pull-tabs locked up, however, there haven’t been any profits from them for more than six months. The Alaska Outdoor Council, for example, would have received about $20,000 from its pull-tabs in Emerald Isle’s parlor during that time.
“It’s certainly cutting into our fundraising,” said Rod Arno, the nonprofit council’s executive director. “Actually a fair amount.”
Arno said in any given year the Outdoor Council can pull in $50,000 from pull-tab games at various parlors.
“It’s easily a fourth to a third of our funding,” he said.
Alaska Outdoor Council is one of 11 Fairbanks nonprofits involved in a lawsuit against Qwik Three Inc., in an attempt to get their pull-tabs back. All of the 11 nonprofits use Emerald Isle to coordinate their games, but not all of them had pull-tabs at the Old Steese Location, a fact that is complicating the suit, which Arno described as “a slow-moving mess.” Emerald Isle has three other locations besides the Old Steese parlor. All 11 nonprofits were included in the suit because there was some question in the mind of officials at Qwik Three as to which Emerald Isle clients had games at the Old Steese location.
Other organizations didn’t have quite so much money tied up in Emerald Isle’s operation but are still looking at a loss of revenue. According to documents filed in court, the Laborer’s Local 942 usually earns several thousand dollars each month from its pull-tab games. The money from the games is largely used for the union’s scholarship fund.
The Alaska Dog Mushers Association had $13,799 worth of pull-tabs in the parlor.
“That’s 10 percent of our budget,” club president Shannon Erhart said. “It could have helped us with our racing season.”
Hollis Hall, the acting general manager of the Tanana Valley State Fair Association, said his organization is out about $2,000 because of the dispute.
David Lambert, the owner of Emerald Isle, stated in an affidavit that there was $115,399 worth of pull-tabs in the building when it was locked.
With the nonprofits already facing tight budgets, the dip in revenue is hurting some services.
“We use that money for education,” Arno said. “We use that money to inform our membership, which is about 12,000 statewide, of state and federal (outdoors) regulations.”
The Alaska Outdoor Council usually publishes four newsletters each year, Arno said. This year, because the pull-tabs weren’t sold, the group will only have enough money to put out three.
The Interior Horse Council, member Leigh Carlson said, uses the revenues from its pull-tab game to build facilities at the Tanana Valley Fair Ground and for educational programs. The group is trying to find ways to work around the funding hiccup caused by the pull-tab dispute.
“We still have revenue; we’re doing other fund raisers, we’re still trying to continue on,” she said. “Luckily, we didn’t have that much tied up to (the pull-tabs).”
Jason Crawford, the attorney representing Qwik Three, said the parties are close to working out a way to distribute the games back to the nonprofits.
“One of the main things is we want them to get back to the rightful holder, the permit holders,” Crawford said.
Qwik Three recently got a list of the permit numbers associated with the various games in their possession, Crawford said, and was checking those numbers against the games they have so they can get the right games to the right nonprofits.
Even if the pull-tabs are returned to the nonprofits, the groups may not be able to make any money off of them. Pull-tabs are usually dated, and the older the pull-tabs, the harder to sell them, Erhart said. There are also rumors that some of the pull-tabs may have been stolen since the building was closed. A police report from last August said someone broke into the building and took an Automatic Teller Machine and possibly some pull-tabs as well.
“There’s a whole room full of pull-tabs, so it’s hard to know if a few of them might be missing,” Crawford said.
It’s going to be difficult for anyone who might have stolen pull-tabs to cash them out, but even so, Erhart said, no one is going to want to buy any of the remaining pull-tabs.
“They’re basically tainted at this point,” she said.
As far as Arno is concerned, he just wants to get his games back, even though he’s pretty sure he won’t be able to use them to raise any funds for his organization.
“The quicker the settlement on it the better,” he said, “so we can consider our loses and we can try again.”
http://newsminer.com/2007/02/27/5553/
Contact staff writer Robinson Duffy at 459-7523 or rduffy@newsminer.com.
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