Alaska Moves a Step Closer to a State Lottery

Sunday January 19th 2020

Alaska will draw the first winners in a new state-wide raffle on Tuesday, January 28, giving residents a taste of what a future state lottery might be like. 

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$199 Million
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The difference between a raffle and a lottery is that a raffle must have winners, but a lottery is not required to.

The top prize is $17,396, funded by the 8,698 tickets Alaskans purchased for the Permanent Fund Dividend Education Raffle, which was set up to benefit schools in the state. 

The second prize will be $8,698, third $4,349, and fourth $2,174.50. These amounts are lower than preliminary figures released in April 2019. The $869,800 raised by the raffle is also lower than predicted by more than $100,000 - in April the state announced that Alaskans had donated $976,400.

However, the initial numbers were expected to change, according to Anne Weske, director of the Permanent Fund Dividend division. The state needed time to determine whether applicants were due a dividend payment and whether they owed money such as child support payments.

The drawing for the raffle will be held at 4:00pm in the library of Harborview Elementary School in Juneau. Winners will be drawn from a rotating drum, "with special precautions taken that will include a chain of custody procedure to include a state trooper, as well as an auditor, all of whom will be in attendance," said Weske. 

As for who will have the key role of picking the winning names, the raffle law leaves this unclear, stating only that "the commissioner shall conduct a public drawing." Weske said that the draw will be conducted by "state officials."

All residents who chose to chip in some of their 2019 dividend for the raffle will receive notices by email, and the governor's office will stream the event live online.

The idea for the raffle came from Sen. Click Bishop, Republican of Fairbanks, and became law in 2018. The legislation stated that education funding would not be cut as a result of the extra income from the raffle - the raffle funds would be added to the existing education appropriations. 

The raffle was launched in 2019 and Alaskans age 18 and above had the option to purchase entries via their Permanent Fund dividend (PFD), a cash amount which is paid yearly by the state. Tickets were only available to purchase from a PFD payout.

Each entry cost $100, so for example, a resident with a PFD payment of $1,722 could purchase up to 17 entries, and receive the $22 left over as his or her PFD for the year. 

The raffle cost $35,000 in state funds to launch, and after that is designed to be self-funding through ticket sales.

The distribution of funds raised by the raffle will be as follows:

  • 50% ($434,900) will go to K-12 schools in Alaska this fiscal year. The breakdown of funding is based on how many students are enrolled in each school district.
  • 25% ($217,450) will be invested by a new state educational endowment fund, and will eventually be given to schools.
  • 25% ($217,450) will go into a raffle fund to increase the prize values in the next raffle.

Prize payouts are percentages of the raffle prize fund, which retains 25% of the money from ticket sales, so the dollar amount of the payouts will grow each year. First prize is 8% of the prize fund; second prize is 4%; third prize is 2% and fourth prize is 1%.

Alaska is one of a dwindling group of states without a lottery - the others are Alabama, Hawaii, Nevada, and Utah.

At the other end of the country, Mississippi was the latest state to launch its own lottery last November. On January 30, the Mississippi Lottery will expand its offerings to include Powerball and Mega Millions tickets, with more games to follow. Can Alaska be far behind? 

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