Alabama Gambling Could Bring in $700 million in Tax Revenue

It has been reported by The Study Group on Gambling that the tax revenue generated from gambling in Alabama could be over $700 million. The Study Group on Gambling is a committee that was set up by Governor Kay Ivey to analyze the impact of gambling before its legalization. The committee was put together earlier in the year solely for this purpose.

According to the report, the benefits of regulated gambling outweigh its disadvantages. The most prominent finding is in the area of tax revenue generation and job creation. Tax revenue that could be generated from the legalization of gambling stood at $700 million annually, according to the 876-page comprehensive report, released on Friday, December 18. The report also stated that up to 19,000 jobs could be created.

That said, the report also highlighted that the legalization of gambling would come with a social cost. However, the chair of the committee and former Montgomery mayor, Todd Strange, pointed out that the benefits outweigh the costs, according to their findings. An excerpt from the report reads, “It is important to note, however, that while there are costs associated with gambling, the taxation of regulated gambling activities creates an opportunity to dedicate public funds to gambling treatment, prevention, or education services.”

The revenue source was broken down into three different arms. First, it was pointed out that a state-run lottery would generate between $200 million and $300 million annually, which can be added to the state budget. The second area is the tax that will be gotten from casinos. If five to seven casinos exist in the state, the tax revenue from them will amount to $300 million to $400 million. Sports betting, which is the last arm, was projected to generate $10 million for the state.

Current Gambling Laws in Alabama

All forms of gambling in the state are prohibited and tagged illegal. There is an ongoing debate on whether the state should have a state-run lottery. It is worth noting that there are a lot of conflicting interests on the topic. Three casinos operated by the Poarch Band of Creek Indians are operated in the state but under federal law. These casinos are in Atmore, Wetumpka, and Montgomery. Electrical bingo is allowed at dog tracks in Macon and Greene counties, but all efforts to start up lottery anywhere in the state have hit a brick wall.

Legislators from communities with dog tracks are kicking against the approval of lottery in tribal casinos. The Poarch Band has also expressed its disapproval on any attempt to solidify the legal status of electronic bingo at dog tracks. The legislators from these dog track-owning communities are against the tribes getting access to the lottery as they will be granted access to electronic machines that dog tracks cannot have.

The start of the 2020 legislative session ought to see a gambling bill presented, but Gov. Ivey shut it down, requesting that the impact of gambling needs to be known first before the passing of any bill. Hence, the setting up of The Study Group on Gambling. Governor Ivey stated that findings from the report were going to play a huge role in consideration and progress on the subject.

At the end of the report, five options were brought forward;

  • Do nothing
  • Prohibit gambling but enforce existing laws by a state regulatory body, with its members nominated by the governor and approved by the Senate
  • Legalize lottery only
  • Legalize lottery and limited gambling such as sports betting
  • Allow full gambling
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