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After more than a year of work on a comprehensive gambling package, the Alabama House of Representatives easily passed in March two bills that would have allowed voters to approve a lottery, up to 10 casino licenses, sports wagering and a new gaming commission to crack down on rampant illegal gambling around the state.
The Alabama Senate undid it all in less than a week, passing a gambling bill that contained only a lottery, a potential compact with the Poarch Band of Creek Indians and historical horse racing machines at seven other locations around the state.
Both houses have proclaimed their legislation to be “what the people want,” and each claims that the gambling tax revenues can do big things. So, let’s take a look at what each bill does and what benefits each brings to the people of Alabama.
The Basics
The House Bill: A statewide lottery, seven traditional casino licenses, three potential casinos via a compact with the Poarch Creeks, sports wagering online, a gambling commission with a law enforcement entity to police illegal gambling and regulate/oversee legal gaming.
The Senate Bill: A statewide lottery, three potential casinos via a compact with the Poarch Creeks, possible sports wagering via the Poarch Creek compact (but possibly only on-site sports wagering), historical horse racing at six locations, a gambling commission with a law enforcement entity to police illegal gambling and regulate/oversee legal gaming.
The Revenue
The House Bill: Up to $1.2 billion annually. That broke down to around $200-$350 million for the lottery, $300-$400 million from casino wagering, up to $300 million from the Poarch Creek compact (depending on terms), up to $100 million in sports wagering (assuming online availability).
The Senate Bill: Up to $425 million. That’s $200 million for the lottery, $25 million for the pari-mutuel wagering, and $200 million from the Poarch Creek compact. (The Poarch Creek compact could generate more – up to another $50-$75 million – if certain limitations were removed and/or the tribe was allowed to offer online sports wagering statewide.)
The Benefits
The House Bill: The bill was designed to be transformative for the state. Utilizing lottery revenue, lawmakers planned to make two-year college attendance free for most state residents, including for many job training/certification programs. Other college scholarship programs for low-income students were also on the table, as was providing security for public schools around the state. Other gambling revenue was to be used to expand mental health care services, expand rural health care services (and possibly Medicaid expansion), provide funding for designated infrastructure projects and provide raises for teachers and state retirees. Additionally, the funds would have been used to pay for the implementation of the lottery and the expenses associated with creating and maintaining the gambling commission and its law enforcement entity.
The Senate Bill: After funding the lottery and gambling commission, the remaining funds will be split equally among infrastructure, education and the general fund. (During debate, lawmakers indicated that a portion of the revenue would be used to build a new prison.)
The Jobs
The House Bill: The comprehensive House bill was an economic windfall for the state in a number of ways, not least of which was new jobs. In total, because of requirements that the 10 casino locations spend minimum amounts (the bill required $35 million within the first year) in upgrades and create destination resorts, the package was expected to create some 12,000 to 15,000 new, permanent jobs in the state. That figure did not reflect the temporary construction jobs created by building new casinos.
The Senate Bill: There is no study to cite for that bill, but because new casinos would be placed only at current Poarch Creek casino locations – and those locations are already considered top-level destinations – job creation would be significantly less. PCI would hire considerably more employees, and would likely become the state’s top overall employer (it’s already the state’s top hospitality industry employer), but nothing close to the 12,000-15,000 jobs under the House bill.
Overall
Both bills approve a state lottery and create a gambling commission and law enforcement entity. Both bills also legalize 10 casinos – the Senate version simply reduces the kinds of gambling that can take place at seven of those locations to only historical horse racing games (basically slot machines). There will still be 10 casinos, but only $225 million in annual revenue as opposed to more than $700 million in annual revenue from the same locations. Additionally, the state likely will still have a massive illegal sports wagering market – a market that did a projected $2 billion in business in 2023 – under the Senate bill, which doesn’t address sports wagering, other than possibly allowing it at Poarch Creek facilities. Basically, the Senate bill has the same amount of gambling around the state as the House bill, but with control of an illegal market and a loss of $600-plus million in annual revenue.
