Gaming could bring in about $700 million in annual tax revenue to the state of Alabama, according to a study released Friday by the Governor’s Study Group on Gambling Policy. According to the report, a state lottery could generate up to $300 million in tax dollars, casinos could generate up to $400 million, and legal sports betting could result in up to $10 million in tax revenue.
“The benefits of expanded legalized gambling in Alabama are almost purely economic in the form of job creation and potential economic development opportunities — and fiscal in the form of revenue generation for the State,” reads the report.
Alabama, alongside Alaska, Hawaii, Nevada, and Utah, is among the few U.S. jurisdictions without a state lottery. It does have a handful of tribal casinos operated by the Poarch Band of Creek Indians. Horse racing and daily fantasy sports contests are currently legal in Alabama, but voters rejected the addition of a lottery in 1999, according to the study. The results of the study, commissioned in February, were released on the steps of the state Capitol on Friday.
The study group did not recommend whether the state should move forward with gambling, and neither did Gov. Kate Ivey. Gambling is currently illegal under the Alabama constitution, meaning a referendum would have to go to voters. Three states legalized sports betting via referendum in November 2020 — Louisiana, Maryland, and South Dakota — while Nebraskans legalized “all games of chance.”
“I continue to maintain the final say on gambling belongs to the people of our great state, and if and when I have a recommendation regarding a specific course of action, I will do so in full transparency to the people of Alabama, working hand-in-hand with the Alabama Legislature,” Ivey said in a statement.
Two border states have legal sports betting
Since the Professional and Amateur Sports Protection Act was overturned by the Supreme Court in May 2018, two of Alabama’s border states — Mississippi and Tennessee — have legalized sports betting, while Georgia lawmakers have taken up the issue several times but not yet acted on it. Mississippi was the third state where operators went live with sports betting in 2018, with bets only placed within casinos. The reverse is true in Tennessee, where casinos are not legal: the first state-licensed sportsbooks in Tennessee launched on Nov. 1, exclusively for mobile/internet wagering.
Gov. Kay Ivey’s Study Group on Gambling Policy estimated that Alabama could raise $510 million to $710 million from a lottery, casinos, and sports betting. Would you approve of a constitutional amendment expanding gambling? https://t.co/rMhhUM3bQP pic.twitter.com/ZgUSkVUA8e
— AL.com (@aldotcom) December 21, 2020
Besides projecting tax revenue, the study group pointed out that introducing gambling could bring with it problem gambling issues, but also that gaming could create 19,000 new jobs.
“We feel the advantages outweigh the disadvantages in that endeavor,” former Montgomery Mayor Todd Strange, who headed up the study group, said Friday. “There is $600 to $700 million to start and stabilize growth. There are new jobs created that are twice what the per capita income is on an annual basis.”
While the study group recommends adding a lottery in addition to casino-style gambling, it does suggest creating an independent regulatory body — such as a gaming commission — to oversee gambling. A handful of legal sports betting states put sports wagering under the lottery, which has proved challenging. States with existing gaming infrastructure and regulatory bodies have, generally, been able to develop regulations and launch operators more quickly.
Operators make pitch for online/mobile sports betting
Though the Alabama study group made no recommendations about whether or not gambling should be legalized, it did list the types of games that could be considered — banked card games, jai alai, single-game sports betting, state lottery, and a multi-jurisdictional lottery. The study also notes possible venues for gaming could include card rooms, commercial casinos, or tribal casinos.
The group also suggests gambling could be approved on a spectrum from only legalizing a lottery to allowing limited gaming or full gaming. The group commissioned a survey that revealed that 67% of those surveyed support legal gambling. Five hundred Alabama voters were surveyed between Nov. 17-19. According to results of the survey, 71% support a state lottery while 52% support legal sports betting.
The report includes a section dedicated to sports betting in which executives from DraftKings and FanDuel, as well as a lobbyist, make the case for digital wagering and estimate that more than 1 million Alabamans currently sports bet illegally, resulting in up to $35 million in potential tax revenue flowing out of the state.
House Ways and Means General Fund Chairman Steve Clouse, who filed a lottery bill in 2020, would be the likely author of any gambling bill. The 2021 Alabama legislature will be in session Feb. 2-May 18.
