Alabama Gambling Report Estimated Gambling Would Bring $700M

Legalizing gambling in Alabama could generate hundreds of millions of dollars for the state coffers and create tens of thousands of new jobs, a committee set up by Gov. Kay Ivey reported Friday.

Benefits Outweigh Disadvantages

Formed earlier this year to assess the effect of a legal act in favor of gambling, the Study Group on Gambling found out legalizing the activity in the state could have a positive effect on the amount of $700 million in tax revenue annually and up to 19,000 jobs.

The comprehensive 876-page report also acknowledged legalizing gambling would come with a social price tag, but former Montgomery Mayor and chair of the committee Todd Strange noted during a press conference the advantages outweigh the costs.

“It is important to note, however, that while there are costs associated with gambling, the taxation of regulated gambling activities creates an opportunity to dedicate public funds to gambling treatment, prevention, or education services.”

Study Group on Gambling Report

The committee noted in the report that a state-run lottery would generate between $200 million and $300 million per year for the state budget, while tax revenue from 5 to 7 casinos would be between $300 million and $400 million. Sports betting legalization was projected to generate $10 million to the state.

Legal Status of Gambling

Gambling in Alabama is forbidden by the constitution, the state does not have a state-run lottery and the debate whether the government should deal with the issue is still ongoing due to major conflicting interests.

Casinos in Atmore, Wetumpka, and Montgomery are operated under federal law by the Poarch Band of Creek Indians, and while local constitutional amendments facilitated electronic bingo at dog tracks in Macon and Greene counties, lottery attempts hit the brick wall in the Alabama legislature.

The Poarch Band is against any effort to solidify the legal status of electronic bingo at dog tracks, legislators from communities with dog tracks oppose a lottery, arguing it will allow the tribe access to electronic machines the operators of the dog tracks cannot have, and on top of this, several Republicans are known for having moral objections to gambling.

The Way Ahead

A gambling bill was planned for the start of the 2020 legislative session but Gov. Ivey requested a data-supported analysis of the impact before any bill was passed in the legislature. She issued a statement noting the committee’s report would be pivotal for any further consideration and debates on the issue.

The study group proposed 5 different options for legislators: do nothing; prohibit gambling but enforce existing laws by a state regulatory body, which will have its members nominated by the governor and confirmed by the Senate; legalize lottery only; legalize lottery and limited gambling such as sports betting; and, allow full gambling.

Any legalization effort would have to go through a constitutional amendment which will need 60% vote in both chambers, before voter approval. The report did not address how funds generated from gambling would be spent, though.