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In November, Alabama voters may finally get a second chance to vote on whether they want a state lottery. Online sports betting legalization and retail casino expansion could make their way onto the ballot as well.
SB 293 and SB 294 are almost ready for their third readings in the Senate Tourism and Marketing Committee. Legislators added bill amendments as recently as Monday. After the third reading, procedure calls for lawmakers to vote on the bills.
However, considering the Alabama Legislature is slated to adjourn on April 7, the bills need Senate and House approval soon.
Similar legislation failed last year for that reason because time ran out. Short legislative sessions are a problem for online gambling legalization efforts. Online Poker Report has previously found that states with short legislative sessions are less likely to see gambling expansion efforts succeed.
The task is all the more difficult in Alabama because it has a constitutional prohibition on gambling. If legislators approve this year’s proposals, they will head to the ballot for voter approval on the necessary amendments.
Alabama’s 5 million residents do have some legal gambling options, just not very many. Three tribal casinos, run by the Poarch Band of Creek Indians’ Wind Creek Hospitality, operate in the state. These are Class II casinos, meaning they can only offer certain types of games, including slots-like “electronic bingo” machines.
In terms of online options, the only legal ones are parimutuel wagering and daily fantasy sports.
In 2020, Gov. Kay Ivey commissioned a study that showed expanded gambling would benefit the state.
It gave the following revenue estimates for a few key product types:
If approved, SB 293 authorizes Ivey to negotiate with Poarch representatives to amend the state’s gambling compact with the tribe. The governor said she would support the measures if they reach her, according to Play USA.
The state’s online sports betting and retail casino expansion would be solely through the Poarch tribe. In many ways, the market would be similar to what Connecticut Gov. Ned Lamont did with the Nutmeg State‘s two tribes, except a monopoly rather than a duopoly.
In March, Lamont worked with the Mashantucket Pequot and Mohegan tribes in order to offer online casino, online sports betting, online poker and iLottery in the state. The tribes partnered with DraftKings and FanDuel respectively.
Tribal representatives agreed to allow the Connecticut Lottery Corporation (CLC) to run online and retail sportsbooks in return for the tribes retaining Connecticut online casino rights. For its partner, the lottery chose Rush Street Interactive, operating under its PlaySugarHouse brand.
State lawmakers then approved legislation to enact the agreement and the federal Bureau of Indian Affairs (BIA) signed off on the compact amendment.
The bills introduced on March 3 by Sen. Greg Albritton, R-Atmore, would introduce “the Alabama Education Lottery, casino-style games, sports betting, bingo and raffles.”
He also outlined creating oversight via what the bills call the Alabama Education Lottery and Gambling Commission, which would house a Gaming Enforcement Division.
Albritton, chairman of the Senate Finance and Taxation General Fund, included language to tax operators at 20% on their online sports betting revenue. That’s about average for US online sportsbook taxation – but far below Pennsylvania’s 34% and New York’s 51%.
The proposed legislation said “to limit the play of casino-style games to five licensed casinos.” Those casino-style games include poker, roulette and “all table games and electronic representations of such games.”
Retail and online sports betting operators would need to be licensed by those retail casinos, the bill said.
SB 293 outlines that the approved law would provide that: