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The Alabama House could pass sweeping gambling expansion legislation legalizing sports betting, casinos and a lottery as early as Thursday.
Rep. Andy Whitt told PlayUSA that the House Economic Development and Tourism Committee, which he chairs, will vote to advance the gambling bills on Wednesday.
“My goal is to have it on the floor Thursday,” Whitt said. “It will be sent on to the Senate if successful.”
Whitt, who sponsors the legislation along with Rep. Chris Blacksheaer, held an hour-long hearing on HB 151 and HB 152 in the committee Tuesday, where about an equal amount of people testified for and against the legislation.
The Economic Development committee passed both bills by voice vote Wednesday with minor amendments, setting up the potential floor vote. Additional changes are needed to gain the support of the state’s biggest current gaming stakeholder, the Poarch Band of Creek Indians (PCI).
Details of Alabama gaming expansion
HB 151 amends the state constitution to allow for a state-education lottery, casino-style games and sports wagering, pending Alabama voter approval in the November election. HB 152 provides the implementation language. Together, the bills:
- Establish the Alabama Gaming Commission and Alabama Lottery Corp.
- Allow for up to 10 casinos, six open to a competitive bidding process with a minimum bid of $5 million and no cap.
- Set a 15-year time frame for the initial license.
- Allow the commission the flexibility to extend the license beyond 15 years for companies that invest $500 million or more into the project.
- Require construction to begin within 12 months of receiving a license.
- Locate the six competitive bid casino licenses in Greene, Houston, Jefferson (Birmingham City), Lowndes, Macon and Mobile counties.
- Set the casino gaming tax rate at 24%.
- Require the governor to negotiate a Class III gaming compact with the Poarch Band of Creek Indians.
- Allow PCI to operate an additional casino in northeast Alabama, outside tribal lands.
- Create a Gaming Enforcement Division to go after illegal gaming in the state. Increases fines and penalties for illegal gambling from misdemeanors to felonies and establishes eight new gaming crimes, all felonies. Penalties and fines increase with each occurrence.
Alabama State Treasurer Young Boozer backed the legislation. He participated in Gov. Kay Ivey’s 2020 study group on gambling policy and said the legislation adopted many of their suggestions.
“My summary of the study and this bill is gaming will work in Alabama and it will be worth it,” Boozer said. “… Alabama is late to the game. Lotteries are offered by 45 states. Casinos with Class III gaming are operating in 44 states and sports betting is legal now in 38 states.”
Specifics of Alabama sports betting language
In the proposal, Alabama creates separate retail and online sports betting licenses. Details include:
- Each casino can apply for a brick-and-mortar sports betting license.
- Sports betting operators can apply for an untethered online sports betting license.
- Sets the Alabama sports betting tax rate at 17%.
- Provides the commission leeway to determine the sports betting licensing fee and decide how many licenses to award.
- Allows Talladega Superspeedway to acquire a temporary three- or four-day sports wagering license for events.
“For sports betting, you must go to your app store and download the app,” Blackshear explained. “It’s not automatically uploaded to your phone once you have your next IOS update. So it’s not predatory on every single phone in the state of Alabama.”
Changes made in committee
Before advancing the bills, sponsors accepted a friendly amendment to HB 151 and made one of their own to HB 152.
The amendment from the bill sponsors made the following changes:
- Adds fraternal societies to the groups that may offer traditional raffles and bingo as charitable games.
- Makes it so members of the Alabama Gaming Commission may have no ownership stake in gaming entities doing business in the state, down from 1%.
- Clarifies that members of the gaming commission may only be removed “for cause.”
- Removes language that casinos for Houston County and Lowndes County can be moved, requiring the licenses to stay attached to those counties.
- Establishes that lottery retailers keep 7% of revenue from lottery tickets sold.
Gambling expansions could raise more than $1 billion annually
In the latest fiscal note, the Alabama Legislative Services Agency projects the gaming expansion would bring in between $935 million and $1.21 billion annually at market maturity.
The fiscal note breaks down potential state gaming revenue as:
- Between $315 million and $492 million from commercial casinos.
- Between $305 million and $379 million from the lottery.
- $300 million from the tribal compact.
- Between $15 million and $42 million from sports betting.
The last time a gambling expansion went in front of voters, Alabamians rejected a lottery in 1999.
Blackshear said it’s time to put the decision on expanding gaming back in front of voters.
“If you think about it, it’s been a quarter of a century since the last time the citizens got to express their opinion on this matter in the state of Alabama. Bill Clinton was President and I think the last thing we were worried about in the business industry was that Y2K was going to send us back into the stone age when 1/1/2000 hit. Well, look where we are almost 25 years later.”
Rep. Rolanda Hollis agreed and struck back against the people who testified in opposition for religious reasons.
“We have so many of our constituents that travel to the state line, outside the state, for lottery tickets, to go gaming. And when they do this, it puts so much money into the other states. We’re putting kids through other states through schools, we’re doing their infrastructure, so on, so on. I am a Christian and I read all the time. But there is not one place in that bible that speaks against gambling.”
Indian tribe opposes the current bills
With three existing Class II bingo facilities that would convert to full casinos and a fourth casino outside Indian lands, the Poarch Band of Creek Indians could be the biggest winner from Alabama expanding gaming options.
However, Robbie McGhee, vice chairman for the PCI tribal council, said the tribe could not support the bills in their current form.
The tribe has been a driving force behind the legislation, so its opposition could be fixed with a few changes.
Committee chairman calls out one of staunchest opponents
The Alabama Farmers Federation has been one of the biggest opponents of expanding gambling in Alabama, bombarding legislators with an opposition campaign recently.
Preston Roberts, a lobbyist for the group, explained:
“The Alabama Farmers Federation is opposed to gambling in all forms. … This is rooted in our members’ belief that gambling is bad public policy that weakens communities, targets the vulnerable and fuels crime.”
Whitt silenced Roberts by pointing out that Alfa Insurance, started by the AFF in 1946, had its annual retreat in Las Vegas last year. Whitt asked him if Alabama legalized casinos, would Alfa hold its conference in Alabama rather than going to Las Vegas. Roberts said he didn’t make those decisions.
“I just find it a little hypocritical on my side when you’re in opposition to gambling legislation, and yet you have a conference last year in Las Vegas,” Whitt said.
FanDuel executive has a personal connection with Alabama
FanDuel President Christian Genetski told committee members that he isn’t just an executive at the biggest online sports betting operator. He’s also a proud Alabama native. He grew up in Birmingham and his parents still live there.
“So I’m here professionally today as the president of FanDuel,” Genetski said. “I’m personally here in support of HB 151 and 152 because I’ve got a lot of friends and classmates who are really telling me they’re ready to start betting legally in Alabama.”
The personal tie helped him highlight what he called a huge desire for sports betting in Alabama.
“Last year, there were 2 million attempts to place a legal bet here in Alabama and every single one of those were blocked. And when those users were blocked from betting in a legal market, they either drove to Tennessee, Mississippi or Florida, where sports betting is legal, or they simply switched to one of the illegal offshore sites that’s already available on their phone.”
While the proposed gambling expansion would be monumental for the state, Alabama online casinos are currently not part of the discussion. You can keep track of legislation in Alabama and other states with our online casino bill tracker.
