Lawmakers and state officials are working over the summer on proposals for video gambling machines and a lottery, both to help ease the state's budget problems. There is even starting to be talk about off-track betting parlors in Alaska.

Kott, a Republican from Eagle River, predicts that some form of gaming will move forward in the next legislative session, which starts in January.

"I'm assuming it's going to at least advance through the House and move into the Senate for their consideration," he said.

State senators are interested in at least discussing it. The Senate Labor and Commerce Committee is talking about holding a hearing in the next couple of months on gaming issues, in advance of the January start of the legislative session.

But Sen. Gary Wilken, R-Fairbanks, said there are complications -- including philosophical objections in the Legislature to gambling. Wilken, co-chairman of the powerful Senate Finance Committee, said he is personally reluctant to rush into an expansion of gambling in Alaska.

"I'd have to look long and hard at it," he said.

The idea of expanding gambling in Alaska has passionate opponents both in and out of the Legislature. They blocked gambling plans in the last legislative session and are vowing to fight even harder this time around.

There is a lot of buzz about gaming proposals nowadays, though.

The Alaska Department of Revenue, at the request of legislators, has launched a monthlong study that aims to get good numbers on how much money activities like video gambling and a lottery could bring to the state. The idea is that Alaska would join a multistate Powerball lottery.

Kott, a big lottery supporter, said he plans to send a member of the state House, Anchorage Republican Rep. Tom Anderson, to Newport, R.I., next month for a conference of the National Council of Legislators From Gaming States. It will be a chance to better explore the pros and cons of expanding gambling here, Kott said.

Anderson backed a bill in the last legislative session that sought to legalize video gambling machines in bars and clubs. The machines, which could include poker, keno and blackjack, would take quarters. They would return 85 percent in prizes. Of the rest, the state would take 30 percent, charities would get 30 percent and the local government in the area would get 10 percent.

The Anchorage Cabaret Hotel and Restaurant Retailers Association, a group that Anderson used to work for, has pushed hard for the video gambling machines. Bar owners in the association stood to gain from the bill.

Pull-tab operators fought bitterly against the video gambling idea, though, saying that it would devastate their industry. Other opponents said it would spawn social ills.

Kott said the social consequences of gambling need to be taken into account. But they must be weighed against the benefits, which include dollars for state and local governments, he said.

"Whatever income to the state this generates, that is one less dollar we are dventually going to have to tax our citizens," Kott said.

Anchorage Republican Rep. Mike Hawker, co-chairman of the House Special Committee on Ways and Means, agreed. Time constraints and opposition stalled gambling legislation last session in the committee, which was created to take the lead on solutions to the state's budget woes.

Hawker said he has been looking at gaming issues over the summer.

"I think gaming is a potentially significant source of revenue but obviously a very controversial source," he said. "I would like to explore it next session."

The state faces a recurring budget shortfall in the hundreds of millions of dollars and is in the midst of working up reliable numbers on gaming. But Deputy Revenue Commissioner Steve Porter said that previous talk of $40 million to the state each year from video gambling machines might be in the ballpark. Proponents have claimed a state lottery could bring in $10 million a year to the state.

No one has started to work on the potential revenue from off-track betting, which lawmakers like Kott are just starting to talk about as a potential alternative. The idea is that people could come into off-track betting parlors in Alaska and place bets on horse races that are telecast long distance from the Lower 48.

Rep. Harry Crawford, D-Anchorage, said the arguments that gambling would help the state budget are bunk. The state will end up paying a lot more to deal with the related problems of gambling addiction and increased crime, he said.

Crawford, who is originally from Louisiana, said he has seen how video poker, in particular, wrecked the lives of people in that state. And a Powerball lottery is just a way to suck people's money, he said. Nobody wins with gambling, the lawmaker said.

"I will do everything in my power to oppose it and try to marshal the same forces we did last time and more," Crawford said.

Another major figure in last session's fight against gambling was Tom Grey, head of a Washington-D.C.-based anti-gambling group, the National Coalition Against Legalized Gambling. Grey traveled the state, talking to churches, civic groups and others. He expects such organizations will mobilize to fight in the coming legislative session.

"If you're a betting person, bet that there will be a very solid liberal, conservative, business, church, political opposition to the plan," he said.

A big question mark is Gov. Frank Murkowski. He has so far pretty much steered clear of the battle over gambling, although he has "kind of expressed a general interest" in a lottery, said his spokesman, John Manly.

When the battle over video gambling raged in the Legislature last session, Murkowski said he thought it needed more study. The governor might weigh in if it looked like a video gambling bill was really moving in the Legislature, Manly said.

"I don't know that he has sat down to seriously consider what the implications of that would be," Manly said.