After Alabama Lawmakers Reach Deal On Gambling Expansion, Senate Fate Uncertain

May 1, 2024
Alabama edged closer to authorizing a major expansion of gambling on Tuesday night after the House approved a compromise bill to authorize commercial and tribal casinos, but the Senate appeared to be one vote shy of teeing up a voter referendum.

Alabama edged closer to authorizing a major expansion of gambling on Tuesday night (April 30) after the House approved a compromise bill to authorize commercial and tribal casinos, but the Senate appeared to be one vote shy of teeing up a voter referendum.

The Alabama House of Representatives moved quickly Tuesday evening to pass two bills to authorize a state lottery, slot machines at commercial gaming facilities plus tribal casino gaming, in the wake of an agreement to reconcile conflicting proposals that had already been approved by the House and Senate in recent weeks. 

The Senate later voted 20-15 to also adopt a conference committee report recommending passage of House Bill 151 and House Bill 152, but was one vote short of the 21 votes required to formally approve the measures by the required three-fifths majority.

Senators elected to carry the two bills over for further consideration and potentially further votes later this week.

The House initially passed a more sweeping gambling expansion package in February, only for the bill to then be gutted by the Senate as senators favored a far more restrictive version limited to a state lottery plus historical horseracing terminals at specific locations.

The six House and Senate members designated to negotiate a compromise through a conference committee unveiled an agreement on Tuesday afternoon to allow for casino gaming strictly at pre-existing facilities across Alabama.

As approved by the conference committee and by the House, the two bills specifically would allow for slot machines or “electronic games of chance” at four established racetracks and three existing bingo facilities in different areas of Alabama.

That restriction to electronic games “means no tables, no cards, no dice, no dealers”, Representative Chris Blackshear, a Republican member of the conference committee and the bills’ chief sponsor, said on the House floor.

Casino gaming revenue would be taxed at an initial rate of 24 percent for five years and then within a range of 20 to 28 percent to be determined by the newly established Alabama Gaming Commission.

Licenses would last for ten years and require an upfront fee of $15m to $30m. Operators would be able to extend the license term to either 15 or 20 years if they invest more than $100m in developing a casino facility.

The two bills also would authorize the Alabama governor to negotiate a tribal gaming compact with the Poarch Band of Creek Indians, which already operate three major gambling facilities in Alabama that are limited to Class II electronic bingo games.

Blackshear stressed that authorized tribal gaming would be limited to in-person gambling taking place on tribal lands that have already been taken into trust on behalf of the tribe.

The legislation would further establish an Alabama state lottery limited to paper tickets, to include scratchcards and multistate games. Traditional raffles and paper-based charitable bingo games also would be expressly legal.

The conference committee’s report did make significant concessions to the Senate’s more restrictive approach by removing House-backed language to authorize state-wide mobile sports betting.

Beshear stressed that the compromise legislation “does not, and let me be clear, does not authorize sports betting. That was one of the biggest things; sports betting is removed.”

Senate Uncertainty Ahead Of August Referendum 

Alabama policymakers have grappled for many years with the state’s existing gambling laws as state officials have sought to shutter electronic bingo facilities that are being operated in accordance with county-level approvals, resulting in a long-standing saga of litigation.

Blackshear said that the compromise bills approved by the House on Tuesday would repeal appeal all local constitutional amendments that allow for legal gambling as of September 30, 2026, while prohibiting any new local authorizations going forward.

The legislation will also increase penalties for illegal gambling in Alabama.

“Our top goals were we must control, regulate and cap the illegal activity that has existed in this state and has plagued this state for a long time,” Blackshear said on the House floor.

Even if the legislation is ultimately approved by the minimum of 21 senators, legislative approval would still not be the last word on gambling expansion in the Yellowhammer State.

The establishment of the new regulator, commercial casinos, tribal gaming and a state lottery, plus the other legal changes, would also need to be approved by Alabama voters via a state-wide referendum that is slated to place in a special election scheduled for August 20, 2024, and not on the presidential election date of November 5. 

Although advocates are quietly confident of voter support, expanded gambling is set to face at least some opposition from conservative groups.

One conservative think tank opposed to expanded gambling, the Alabama Policy Institute, immediately expressed its opposition to the compromise legislation that emerged from the conference committee.

On the restriction of commercial gaming to electronic games of chance, the group wrote on X that “eliminating dealers doesn’t eliminate Vegas-style casinos, it just eliminates jobs.”

Alluding to new federal regulations on tribal gaming compacts, the think tank also said it was “disingenuous to say this package doesn’t include sports or digital betting. It will come from the Governor’s pen (enabled by this legislation) or from the Department of Interior once a compact is signed. The net effect will be a casino in every single pocket.”

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