It’s off to the races again as far as gambling legislation is concerned, and the loser will be the General Fund budget if a $2.5 million tax break is given.
In a matter of six days, a bill reducing the tax on the betting handle at the state’s four dog tracks was introduced in the House, passed through committee, called up for a vote on the House calendar, passed by a 54-43 vote, sent to the Senate, voted out of committee and poised for a Senate vote.
“The bill is moving faster than a greyhound on steroids around the track,” said Dan Ireland, executive director of Alabama Citizens Action Program.
Currently, bettors pay a 1 percent tax on pari-mutuel wagering whether betting on live dog races or simulcast horse races. This bill, H.B. 867, would take that down to one-half percent.
The legislation would also affect the additional 1 percent tax that is placed on bets involving three or more dogs or horses, said Norris Green, Senate fiscal officer. “This bill takes all taxes down to one-half percent.”
In pari-mutuel betting, the winners divide the total amount bet after deducting management expenses, according to the Alabama department of revenue. The current privilege tax on dog tracks is one percent of the pari-mutuel pool on all pari-mutuel races. In addition, there is also a one percent levy on the pari-mutuel pool on all races requiring the selection of three or more racers.
So, the basic tax is cut by 50 percent and the second tier of the betting handle tax is cut by 75 percent.
“The tax is on all wagering at the tracks,” Green said. “We currently take in about $3.8 million,” he said. “We estimate we will lose $2.5 million if the bill passes.”
The Department of Revenue could not release individual track tax records because each track is protected as a taxpayer, but several sources noted that the Birmingham and Macon County tracks bring in the most taxes.
Also, the Birmingham Race Course and VictoryLand in Macon County, both owned by Milton McGregor, ranked No. 9 and No. 10 respectively in the nation in 1998 for the amount of money bet on live dog races. The Mobile track came in number 15. These figures, as published in the Feb. 28 issue of The Birmingham News, came from the American Greyhound Track Operators Association. Greenetrack in Greene County, which suspended live racing because of financial struggles, fell far behind in the nation.
With these figures in hand, gambling opponents question why the Alabama pari-mutuel industry lobbies the state Legislature like it does for legalized video poker and tax breaks. And so far, dog track owners are refusing to prove their losses by making their accounting books public.
“The Senate is being asked to give Milton McGregor a tax break when he won’t even open his books for public view,” said Lt. Gov. Steve Windom. “How do we know he needs a tax break? We don’t know that he does.”
Needed for jobs
Supporters of the bill claim the tracks need it to stay alive amid declining attendance and sagging profits.
“It’s a difficult thing any time you look at losing revenue in the General Fund. But we would lose more if they go out of business,” Sen. Roger Bedford, D-Russellville, told The Birmingham News in an April 28 article.
Bedford, who could not be reached for comment, is chairman of the Senate Finance and Taxation General Fund Committee and a member of First Baptist, Russellville. His committee voted 11-2 for the bill April 27 after he called a spontaneous committee meeting during lunch.
Sen. Tom Butler, D-Madison, said he voted for the bill to come out of committee because he is concerned about the people who might lose their jobs.
“This will help those families who are having to work there,” said Butler, a member of University Baptist, Huntsville. “I’m not willing to let the legs get cut off of families in those jobs until we can provide other jobs.
“It can’t be just black and white,” he said. “We have to transition.”
Sen. Bill Armistead, R-Columbiana, was one of the two votes against the bill. “It is a shame the Senate would stoop to legislation that would cut taxes for the biggest gambling industry in Alabama,” he said. “I would rather give (the areas) the $2.5 million than prop up gambling.” That would at least provide an avenue for recruiting new industry, he noted.
Armistead, who said the bill probably would not come up before May 4, noted, “I am going to lead a filibuster on the bill.”
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