A provision in Alaska's new money transmission law could expose your gym to penalties 10 times higher than before—if you're not careful about how you handle payments.
Most Alaska gym and fitness studio owners don't realize they may already be operating under money transmission rules. And fewer still know that a buried provision in SB86 just dramatically increased the financial stakes for any violations.
Here's what changed, why it matters to your business, and what you should know before July 1, 2027.
Under the old Alaska law, a gym or fitness studio that violated money transmission rules faced civil penalties capped at $1,000 per day per violation. Starting July 1, 2027, that cap jumps to $10,000 per day per violation—a tenfold increase.
But that's not the only cost. The new law (Section 37 of SB86, amending AS 06.55.605) also requires violators to pay the state Department of Commerce's attorney fees and investigation costs. Combined, these changes create serious financial exposure for small businesses.
You're potentially subject to these rules if your gym or studio:
• Accepts credit or debit card payments (most do)
• Offers membership prepayment plans
• Holds customer funds for classes, training sessions, or other services
• Uses any form of virtual currency or digital payment system
These activities can qualify as "money transmission" under Alaska law, even if you don't think of yourself as handling money in a regulated way. The state defines money transmission broadly to include receiving money from customers with the obligation to transmit or hold it.
The new penalty structure applies to violations of "any provision" of Alaska's money transmission chapter. Common issues include:
• Failing to maintain required surety bonds or net worth standards
• Not keeping customer funds properly segregated
• Inadequate record-keeping or reporting
• Operating without required licenses or registrations
Many small fitness businesses operate in a gray area—they follow standard payment processing practices but may not realize they're technically subject to money transmission rules.
The increased penalties take effect July 1, 2027. That gives you time to review your current payment handling practices and ensure compliance before the new rules kick in. If you're currently operating in violation, the clock is ticking to fix it before the higher penalties apply.
Review how your gym handles customer payments and funds. If you're uncertain whether you're operating as a money transmitter, contact the Alaska Department of Commerce, Community, and Economic Development. They can clarify your obligations under state law.
If you do fall under these rules, audit your practices against the requirements in Alaska Statutes Chapter 06.55. Compliance now is far cheaper than facing $10,000-per-day penalties later, plus attorney fees and investigation costs.
The full text of SB86 is available through the Alaska Legislature website. Section 37 (the penalty increase) appears on page 37 of the bill.
This explainer is for informational purposes. Consult with a compliance professional or attorney about your specific business practices and obligations under Alaska money transmission law.