Alabama Lawmakers Face Stiff Opposition To Gambling Expansion

December 20, 2023
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With less than two months before the state legislature convenes for its 2024 session, the Alabama Policy Institute has published a new report detailing the conservative group's opposition to any bills to expand gaming in the Yellowhammer State.
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With less than two months before the state legislature convenes for its 2024 session, the Alabama Policy Institute (API) has published a new report detailing the conservative group's opposition to any bills to expand gaming in the Yellowhammer State.

The Alabama legislature is expected to take up the issue of legalizing commercial and tribal casinos, sports betting and a state lottery when the 2024 session convenes on February 4.

Alabama’s Speaker of the House of Representatives has been touring the state before the legislative session, warning business owners and residents of the need for gaming regulations because illegal gambling continues to plague the state.

Republican Speaker Nathaniel Ledbetter has been vocal about his support for gambling legislation.

State Representative Andy Whitt, a Republican, has been given the responsibility of drafting a bill to be considered when lawmakers convene at the State Capitol in Montgomery.

In a statement issued along with the 17-page report, the API made it clear that enforcement of current prohibitions or increased fines and penalties for illegal gambling “is a better answer” than changing the state’s constitution “to make what is now illegal legal.”

“Curtailing gambling is an honorable endeavor, the expansion of gambling isn’t,” the API said. “Online gambling—on sports or anything else—would turn every smartphone in the state into a portable casino.”

The latest attempt at comprehensive gambling expansion via a potential voter referendum follows Republican Governor Kay Ivey’s 2020 gambling policy report, which estimated between $200m to $300m in revenue from a state lottery.

The governor’s report also estimated $300m to $400m in revenue from casinos and approximately $10m from sports betting. Ivey has supported putting the issue of legalized gaming on the ballot for voters to decide.

Since 1999, some 180 gaming-related bills have all failed to pass in the state legislature, according to API research.

In line with past efforts, bills to legalize and regulate casinos, sports betting and a state lottery have all failed to pass the Alabama legislature during the last two sessions since the governor's report was published. Currently, pari-mutuel wagering at racetracks and Class II tribal gaming facilities operated by the Poarch Band of Creek Indians is legal in Alabama.

The API is a conservative think tank based in Birmingham. The report was authored by John Hill, an API fellow and resident scholar, as well as a professor of statistics and communication at Amridge University in Montgomery.

Hill said the goal of the report was to “set the record straight on the perils and exaggerations associated with bringing more gambling to our state.”

“The (API) presents this primer on the realities of expanding gambling opportunities to generate supposedly ‘free money.’ The historical costs of traditional forms of gambling are explored, as well as the hazards of legalizing newer forms of gambling, such as digital gambling and sports wagering,” Hill said.

Meanwhile, revenue from the creation of a state lottery is unreliable, according to Hill's research.

Hill cited a Georgia Lottery report that found the percentage of each dollar devoted to state initiatives had fallen from 34 percent to 29 percent since 2011, while the percentage of money devoted to prizes has increased from 62 percent to 67 percent.

“Put another way, lotteries must give away more funds as prizes to keep gamblers interested in their games at the growing expense of revenues for states counting on them to balance their budgets,” Hill wrote. “The Georgia Lottery admits as much: ‘Increased payouts = increased demand = increased benefits.’”

Hill also cited a Bankrate survey that found households earning less than $30,000 per year spent 13 percent of their income on lottery tickets, compared with just 1 percent for households earning $50,000 per year.

The report also includes data on state funding for gambling treatment in the U.S., estimates on the cost of new problem gamblers in Alabama, and Hill’s concerns that legalizing gambling is not a fix for state budgets.

“The total yearly cost to Alabama for legalizing casinos, a lottery, or two or more forms of new gambling would be approximately $141.7 million, $128.7 million, and $159.7 million, respectively,” Hill claimed.

Alabama voters have not had a chance to vote on a gaming measure since they rejected creating a state lottery in a 1999 referendum, with 56 percent opposed to the proposal supported by then-Governor Don Siegelman, a Democrat.

The state did come close to passing a lottery bill during a special session of the legislature in 2016.

The state's Senate did pass a lottery bill that year before the House of Representatives, then passed an amended version on its second vote. But because the House had amended the lottery legislation, it was sent back to the Senate, where it died without final approval.

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