Alabama Postcard

Alabama Gambling Bill Passes Senate Committee

A bill which would greatly expand legalized gambling in Alabama has passed through a state Senate committee, much to the chagrin, presumably, of the state’s Governor.

The Alabama Senate Tourism and Marketing Committee approved of Senate Bill 8 by a 6 to 2 vote Tuesday, clearing the way for the bill to potentially advance to a vote on the Senate floor. The most significant part of the bill is arguably the creation of a state lottery, a first for Alabama. Alabama is one of just six states – the others are Hawaii, Alaska, Utah, Mississippi, and Nevada – that have no lottery of any kind. Hawaii and Utah have no legalized gambling at all. The lottery’s primary revenue-raising goal would be to benefit education in the state, specifically, “to establish and provide for a fair and honest lottery to generate revenue for the Education Trust Fund and postsecondary education scholarships.”

alabama postcardAccording to the bill’s text, many Alabamians travel to neighboring states to purchase lottery tickets and the majority of the state’s residents support the creation of a lottery. As a resident of Georgia, I can personally attest to the fact that Alabamians come next door to buy lottery tickets when the jackpots are astronomical (we’re talking $300 million range, not this piddly $12 million stuff – people have got mouths to feed, you know). Gas stations on the border sometimes see lines for blocks when the jackpots are attractive enough.

SB 8 also seeks to legalize Class III gaming at the state’s four dog tracks: Birmingham Greyhound Racing, Greentrack Greyhound Racing, Mobile Greyhound Park, and Victoryland. Class III gaming is a type of gambling defined by the Indian Gaming Regulatory Act (IGRA) as essentially traditional casino gaming – things like slots, blackjack, and craps. Class I is traditional Indian gaming, which consists of games that may be part of Native American celebrations and ceremonies or social gaming with minor prizes. Class II gaming as defined by IGRA is bingo and similar games and, perhaps interestingly:

…card games that are explicitly authorized by the laws of the State, or are not explicitly prohibited by the laws of the State and are played at any location in the State, but only if such card games are played in conformity with those laws and regulations (if any) of the State regarding hours or periods of operation of such card games or limitations on wagers or pot sizes in such card games…

Those card games, though, cannot be games that are “banked,” that is, games in which the player competes against the house, like baccarat or blackjack. Thus, by the above definition, poker is Class II game. For this discussion, though, that is unimportant, as poker is not explicitly a part of Alabama Senate Bill 8.

Class III games are games that are neither Class I nor Class II.

So, while this bill does not appear to do anything about poker in Alabama, it would, if passed, create a much more robust gambling industry than currently exists. It would fill a void in the section of the “Bible Belt” that covers Alabama, Georgia, and South Carolina. South Carolina does have one or two cruise ships that operate off the coast, but for the most part, aside from those Alabama race tracks, there is not much in the way of “Las Vegas style” gambling to be had in those states.

The idea behind expanding legalized gambling in the state is to help cut into severe budget problems Alabama is experiencing. According to a May article in the Montgomery Advertiser, the “General Fund budget faces a shortfall of at least $290 million next year,” and Governor Robert Bentley’s office has pointed out that long-term budget problems could grow to as much as $700 million.

The Governor, though, does not see gambling as a solution. He lashed out against the bill in May, saying, “It is one of the worst pieces of legislation I have ever seen.”

He also said that lotteries – and gambling in general – take advantage of the poor. I would argue against that being the case for all gambling, but he is right about the lottery.

“To think we have to depend on some of the most dependent people in our population to fund our government when corporations won’t even pay their share — we’re better than that,” he said.

In March, Governor Bentley presented a proposal that he says would bring in $541 million in revenue. The plan included increases to car and cigarette taxes, the eradication of some tax credits for insurance companies, banks, and utilities, and the closure of corporate income tax loopholes.

Bentley wanted the cigarette tax to be increased by 82 cents, but his proposed hike was reduced to 25 cents before being sent to a vote. The Alabama House Ways and Means Committee voted against that increase by a count of 8 to 7 yesterday.

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