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Gambling laws are complicated.
Whenever there’s big gambling news in the state – as there was this week with the sale of the Birmingham Racecourse – it tends to spark an onslaught of questions that are a stark reminder of just how convoluted and complicated our gambling laws are, and how confused much of the general public, and even our state lawmakers, are when it comes to those laws.
Over the past few days, since the announcement that the McGregor family was selling the Birmingham Racecourse to the Poarch Band of Creek Indians, I have fielded calls from a number of legislators, received dozens of messages from friends and readers and heard accounts of other conversations on just what it all means. And the questions are again reminders that there remains a lot of confusion.
Now, I don’t claim to have all of the answers or to be some sort of an expert on gaming laws. But I’ve been around, tried to learn the ins and outs the best I could and I feel like I have a decent enough understanding of that (admittedly) complicated world. (And if I don’t know, I know a few really good attorneys I can ask).
So, since gambling is almost certain to dominate a portion of the 2025 Legislative Session, I thought it might be a decent time to answer some of the questions posed over the last week in a column, and hopefully it might help clear up potential confusion before it ever happens.
Most of the questions have fallen under two broad categories – taxes and what games can be offered. So, I’ve combined a bunch of questions into two very broad ones in the hopes that the explanations provided give a better insight into how things work. And away we go …
Do the Poarch Creeks have to pay taxes on the Birmingham property?
Yes. The reason the tribe doesn’t pay state taxes on gaming business at their three casinos in Atmore, Wetumpka and Montgomery is because those properties are located on lands held in trust by the federal government. PCI is considered a sovereign entity and not subject to state taxes. However, the tribe also owns and operates a number of businesses that aren’t located on tribal lands, including the Birmingham Racecourse once that deal is finalized. For all of those, PCI pays the regular taxes that every business in Alabama pays.
You’d probably be surprised by the number of businesses, and the types of businesses, that the tribe operates now, and at the astronomical size of their yearly tax bill. It’ll only grow with the Birmingham site.
Also, to be clear, the tribe will not enjoy any sort of immunity at the Birmingham location. The Racecourse and its employees will be subject to all state laws – the same as any other business.
Can the Poarch Creeks operate full casinos/electronic bingo at Birmingham?
No. Again, the difference in the law is determined by the location. On trust property, the tribe is governed by federal laws and not subject to state taxes or most laws. Off trust properties, they operate the same as any other Alabama citizen.
The Birmingham Racecourse was allowed to operate historical horse racing machines, which act and function similarly to a slot machine, because those machines are based on previously run horse races, which constitutes pari-mutuel wagering. The Birmingham Racecourse, like the state’s three other dog tracks, has a pari-mutuel license.
The facility fought for years for the right to operate electronic bingo games, but state courts – after literally making up laws – determined those games were illegal. The Poarch Creeks are allowed to operate electronic bingo games at their casinos on trust properties because the federal government’s laws – and specifically, the Indian Gaming Rights Act – governs those operations and states that tribes have the right to operate any games that are legally being played in the state. Alabama allows gambling on paper bingo in numerous counties, but bars electronic bingo. The feds determined long ago that just like the blackjack game you play on your phone, bingo can be played electronically and grants the tribe the right to operate those games.
Why are the Poarch Creeks allowed to operate a monopoly, and why don’t they have the state’s best interest at heart?
The Poarch Creeks don’t actually operate a monopoly, but they have enjoyed a big advantage when it comes to state gaming laws. That’s not their fault, though. The state has had every opportunity to pass legislation that leveled that playing field. Instead, the general public sat back and allowed a former governor and activist state Supreme Court justices to make up laws in order to hamstring private casinos and override legally passed constitutional amendments. PCI was always going to make money, because they offer a good product in a professional, safe, high-class environment, but a couple of other owners – namely, the late Milton McGregor at VictoryLand and the Birmingham Racecourse – were offering similar experiences at their facilities. And the state of Alabama raided them and shut them down. That left PCI with a distinct advantage they were more than happy to accept.
Of all the incredibly misguided things people say about the state of gambling in Alabama, the protest that the Poarch Creeks aren’t looking out for Alabama is maybe the goofiest. First, asking any Native American person to look out for others above themselves, given American history, is the height of gall. Not to mention, when has anyone ever asked any other business leader not to advocate for themselves? I’ve never heard anyone ask Toyota/Mazda to put the state first over its profits. In fact, we gave them – one of the wealthiest corporations in the world – some pretty awesome tax breaks and cash handouts just to do business here.
In addition, the Poarch Creeks have been more than willing to work with the state on a gaming compact that would have provided considerable annual funds. State leaders have continuously rebuffed those overtures.
Speaking of state leaders, it’s worth reminding everyone that those state leaders are the ones who are supposed to be looking out for Alabama. The businesses are going to lobby and are going to push for laws and regulations that most benefit them. It is lawmakers’ job to do the work for the people, or at the very least provide people with the opportunity to vote on important issues. And it’s the voters’ job to hold them accountable.
