Alabama’s Supreme Court Rules Against an Electronic Bingo Hall

Alabama prohibits different types of legal online betting that other states in the U.S. allow. Even so, electronic bingo is a popular form of gambling in some sections of the state.

The state's Supreme Court made a Greenetrack ruling stating that Greenetrack's charity activities in its electronic bingo operations don't exempt it from paying tax. The ruling is likely to have long-term impacts beyond Greenetrack's back-taxes bill.

More About the $76 Million Back-Taxes Bill

Alabama first sued Greenetrack more than a decade ago as it accused the gaming operator of evading tax and illegal gambling. But, there are no additional appeals now, as the Alabama Supreme Court recently weighed in on the issue.

Steve Marshall, Alabama's Attorney General, stated that judgment against the facility adds up to $76 million. He added that the state arrived at that figure after assessing Greenetrack's bingo operations, considering its interests and fines.

The attorney referred to the bingo games as an illegal betting enterprise that runs under a scheme which employs several nonprofit organizations. He added that Greenetrack distributed 2.5 percent of its total take in 2007 to various charity partners and retained about $69 million.

The Supreme Court ruled that the bingo and racing facility's deals with nonprofits didn't make it immune to taxes. It has been operating bingo games under laws that might be reviewed soon.

How Greenetrack Got to Its Current Situation

Alabama requires all local bookies and gaming operators to adhere to its gambling laws. Its distinct legislative system requires the legislature to pass all county-specific laws. So, the state's constitution has some amendments with unique language to specific counties about charity bingo, including Greene County, in which Greenetrack operates.

The regulation permits nonprofits that have charity components to raise funds by offering bingo games. Jason Morton from the Tuscaloosa News argues that Greenetrack isn't supposed to pay sales taxes since it provides its nonprofit partners with facilities to operate the casino games.

The gaming operator claims that it has made charitable contributions for a long period.

Even so, Greenetrack has a failed argument. It is uncertain whether the $76 million tax bill will end its operations in Alabama. The state is now keen on implementing its bingo laws.

Are Other Local Bingo Halls at Risk?

The ruling's impact on other local bingo halls largely depends on their locations in the state. Some counties banned all bingo games, including those with charitable components. Yet, the ruling is a crucial development for other gaming facilities in Greene County.

Greenetrack probably had a notice that the court would not uphold its interpretation of the gambling law. The Alabama Supreme Court ruled in 2017 that the state was allowed to seize some of Greenetrack's bingo.

Alabama claimed that machines didn't fit within its gambling statute's parameters as they closely resembled slot machines. Generally, it is tricky for bingo halls to translate localized statutes' languages. An operator might lack a clear definition of a legal machine.

The Supreme Court's recent ruling puts gaming facilities in a dilemma about the amount of bingo games revenue that they can retain without violating Alabama's gambling law. For instance, former Alabama Attorney General Troy King, and the state's former Governor, Bob Riley, once argued in public about electronic bingo regulations as the then governor and AG claimed that all counties had prohibited electronic bingo games.

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Ryan

A sports enthusiast, Ryan helps cover sports betting news from around the country, highlighting some of the more interesting events going on in the USA.