Small Gambling Operators in Alabama Fighting for Inclusion

The Alabama Senate is expected to vote today on Senator Del Marsh proposed gambling bill to legalize sports betting, a state lottery and casinos in 5 locations around the state.

Other Gaming Establishments Feel They Need to Be Included

However, there are more than five gambling operators in the state and they are concerned for their businesses and the repercussions the act could have on their communities.

According to White Hall Entertainment manager Jason Hendrix, the proposed bill could have devastating effects on the electronic bingo hall they run in Lowndes County.

Currently, the 1901 Constitution forbids lotteries and games of chance in Alabama. However, electronic bingo machines operate at some sites under local constitutional amendments or are run by the Poarch Band of Creek Indians who operate under federal law.

A bingo amendment was accepted by Houston County in 1994 and Lowndes County approved two amendments, in 2000 and 2002 to allow media bingo at White Hall.

If introduced, the new bill would allow slot machines and table games in five places: GreeneTrack in Greene County; VictoryLand in Macon County; the Birmingham Race Course, and Mobile Greyhound Park. The fifth site, located in DeKalb or Jackson counties, would go to the Poarch Band of Creek Indians.

Other operators are trying to have the bill be revised to include them stating that they provide jobs to local citizens and tax revenue to their communities.

Melody Lee spoke for The Crossing at Big Creek, outside of Dothan commenting that the Wiregrass area seems left out of developmental plans. Legislators from the regions also express worries about the economic and social implications the act could have on their communities.

Senator Opposes Bill’s Amendment     

Amending the legal text however, proves a challenge for the Senate as Del Marsh stated in a committee discussion that he believes ultimately there has to be only a limited number of gambling establishments with a capable gaming commission to keep them in check.

The proposed bill aims to establish a state lottery as well that is estimated to bring $194 to $279 million in revenue which would be used for educational scholarships. A further $260 to $393 million a year could be made from the casinos.

Hendrix at White Hall criticized the idea of a casino in northeast Alabama, saying it would benefit residents of Chattanooga, Tennessee which is not bad however it would hurt Alabamians in need.

Both Hendrix and Lee asserted millions of dollars more could be brought to local governments if their establishments could have table games, sports betting and slot machines. The operators claimed they are willing to provide the needed improvements to infrastructure as well or already have some of them in place.

Senators Voice Concerns about Bill’s Potential Unwanted Effects

Selma Sen. Malika Sanders-Fortier, wrote a letter to the committee earlier this month asking the members to include White Hall in an amendment. Sen. Donnie Chesteen, R-Genevwhose district includes Houston County, had questions for Marsh in a subsequent debate over the measure. 

Senators Fortier and Chesteen for their respective counties, appealed they be included in an amendment with Chesteen saying he would not support the bill without The Crossing being named in it.

Alabama Governor Kay Ivey supports the bill’s passing even though she has not been up for expanding gambling in Alabama so far.

She changed her mind apparently after appointing a research group last year that was to collect data about a potential lottery and means of expanding gambling. According to the study group’s report filed in December, Alabama has no benefit from the current organization of wagering in the state.

Meanwhile, lawmakers in Georgia vote to raise the tax rate on gambling to 20% which is considerably high compared to other states.

High Tax Rate Proceeds to Go to Education Scholarships

The rate increase talk in Georgia comes days after Tennessee voted sportsbooks be taxed 20$ from the 1^st of November. Only five other states have such a high tax rate on gambling at the moment: Pennsylvania, Virginia, Delaware, New Hampshire and Rhode Island. Delaware, New Hampshire and Rhode Island sit at about 50% tax however this is including a revenue-sharing policy where the state gave exclusivity rights to a single operator.

While a 20% tax rate won’t keep operators out of a state, it’s considered high. At least a dozen states with legal sports betting have tax rates of 15% or less.

Another twelve states at least have a tax rate of 15% or less on wagering so for Georgia to become the 7^th state with such a high levy is questionable.

The state’s last gambling bill was passed in 2019 when the local NBA, MLB and NFL teams united in support of legalization for mobile sports betting.

Lack of Updated Legal Text Regarding Minority Participation

Yesterday’s hearing discussed the text of the bill around minority representation with Rep. Winfred Dukes stating the language was dated:  “The minority participation language placed in there is from 1992. Is it not true that many of us would like it to reflect 2021?”

Adding new language, however, would fall foul of the present Lottery decree and would ultimately require a constitutional amendment which would stall the bill’s passing for several years.

Rep. Robert Pruitt, proposed the bill mandates a way of revenue to be kept inside the state. Although Stephens did not address the matter directly he did state the way to capture revenue for the local government would be through the proposed tax increase.

The Senate proposed a similar bill that would call for a 10% tax rate and would allow credit card funding of bets. Both acts aim to bypass a constitutional amendment that would not go into voting until 2022 and would ultimately stall the legalization process.