Alabama legislators are looking to gambling once again as a fix for the state’s financial woes, and this time the proposal is coming from those who have traditionally opposed legalized gambling in the state.
The news came in an April 27 press conference held by Republican state Sen. Del Marsh, president pro tempore of the Alabama Senate, at the State House. Marsh said the potential impacts of expanding gambling in Alabama are too significant to ignore.
“At a time when we are talking about either massive budget cuts or higher taxes, this is certainly something we need to take a look at and consider,” Marsh said.
Marsh was referring to the “Assessment of Lottery and Gaming Programs Across the U.S. April 2015,” an economic analysis of the impact of state-sponsored gambling conducted by the Institute for Accountability and Government Efficiency at Auburn University at Montgomery, at Marsh’s request.
The assessment examined lotteries in Alabama’s border states and around the U.S. It also profiled states that have entered into casino-style gaming compacts with American Indian tribes. The analysis included a look at revenue generated, prizes awarded, administrative costs and proceeds available to the states.
In the report researchers estimated that a state-run lottery system could generate up to $331 million annually for the state's general fund. They also estimated that casino-style gambling, specifically the addition of gaming tables and slot machines at Alabama’s four greyhound tracks in Birmingham, Mobile, Macon County and Greene County, could produce around $74 million in state and local taxes that would be paid on casino revenue. Finally the researchers estimated that expanding legal gambling in the state could create more than 10,000 new jobs, jobs that Marsh said will “positively impact families throughout our state.”
An expansion of gambling is commonly seen as one way to increase revenue without raising taxes, but that line of reasoning, according to John W. Kindt, “couldn’t be further from what reams of research tell us about the true costs of gambling.” Kindt is professor emeritus of business administration at the University of Illinois in Champaign, Ill., and author of the 2013 book “The Gambling Threat to World Public Order and Stability: Internet Gambling,” the fourth in a series of books on Internet gambling.
According to Kindt, more gambling is a recipe for continued economic stagnation.
Defeating the bill
“When you increase the opportunities to gamble you’re creating more social problems, which likewise strain taxpayer dollars,” he said. “You’re also draining jobs away from the consumer economy. All of that money that could be used to buy big-ticket consumer goods — cars, appliances and electronics, for example — is being flushed down slot machines, video poker machines and, increasingly, the legal gray-area of Internet gambling. More blackjack tables and more roulette wheels don’t create jobs. They are job killers that also destroy the communities they’re located in.”
Marsh’s press conference came after weeks of speculation about the effects of proposed cuts in state services and predictions that most of Alabama’s state parks would close May 1, and legislators wasted no time in moving forward.
On April 28, Marsh told The Montgomery Advertiser that Senate Republicans had given him approval to draft the bill, noting that a few members of the caucus were “adamantly opposed.”
On April 30, Marsh released a draft of the proposed bill that included the following provisions:
- To establish an Alabama Lottery and the Alabama Lottery Corporation
- To authorize and regulate gaming at the four existing racetracks
- To levy a state gross receipts tax and a local gross receipts tax on gaming revenue of the racetracks
- To levy a tax on vendors of gaming equipment
- To provide for the disposition of lottery proceeds and state gaming tax proceeds
- To create the Alabama Lottery and Gaming Commission to implement, regulate, and administer gaming and regulate and supervise the Alabama Lottery and Alabama Lottery Corporation
- To authorize the governor to negotiate a compact for gaming with Poarch Band of Creek Indians (PCI)
The bill also called for a Sept. 15 vote on the amendment.
Republicans in Alabama have traditionally opposed efforts to legalize gambling in the state. Another prominent Alabama Republican, Gov. Robert Bentley, disagrees with Marsh’s approach to the budget crisis.
In a phone interview April 30 the governor said he was “totally opposed” to any bill that would expand gambling in the state. Alabama needs to approach its current and future budget needs the “right” way, he said.
“You do it right by paying your debts, finding the money that is necessary through fair revenue and fair taxes, and by asking individuals to pay a small amount on certain things like automobiles and cigarettes and asking huge corporations to pay their share.”
That is not to say Bentley will oppose a lottery vote if Marsh’s bill makes it through the Legislature.
“I don’t believe gambling is the way we should go about this, but I have to look at it from the people’s perspective,” Bentley said. “I believe in the people’s right to vote.”
During the 2014 gubernatorial election Bentley said his own polling showed overwhelming support for a lottery among Democrats and Republicans in the state. At that time Bentley said about three-fourths of Alabamians and more than half of Republicans wanted another chance to vote on a state lottery. A vote held in 1999 failed by a 54–46 margin after religious groups, including Alabama Citizens Action Program (ALCAP), actively campaigned against it.
ALCAP Executive Director Joe Godfrey takes issue with elected officials who want to pass the decision back to the voters.
“We have already voted,” Godfrey said. “We live in a representative republic. We voted on these house members and senators to go to Montgomery to represent the people of Alabama. If they can’t make decisions, then let us vote on the budget and every other issue. We won’t need a legislature.”
Godfrey also is concerned about the haste at which gambling proposals are being introduced, especially since a lawsuit brought by Alabama Attorney General Luther Strange is still pending in the 11th Circuit Court of Appeals. The state’s suit in Alabama v. PCI Gaming Authority asks the court to decide whether casinos operated by the Poarch Creeks in Wetumpka, Montgomery and Atmore are in fact operating on federal trust land. The case also asks the court to interpret whether the state has authority on tribal lands to enforce a 2014 Alabama Supreme Court ruling that found that electronic bingo machines do not meet the definition of bingo games and are therefore illegal in Alabama.
Strange’s suit calls into question the status of the Poarch Creeks, who were not federally recognized as a tribe until 1984. In a previous case, Carcieri v. Salazar, the U.S. Supreme Court ruled that tribes recognized after 1934 do not qualify under the Indian Gaming Regulatory Act passed in 1988.
‘Let the courts decide’
A compact between the Poarch Creeks and the state would make the lawsuit a moot point, Godfrey said. A decision in favor of the state would allow Strange to shut down operations at all tribal casinos.
“We need to wait and let the courts decide,” Godfrey said. “That takes time, but once they decide that case we can make a decision. But we should not circumvent the federal courts on this issue.”
Godfrey said Alabama Baptists and other concerned citizens should call and email their representatives in the state House and Senate as soon as possible and respectfully ask them to oppose all pro-gambling legislation, including a pre-emptive compact with the Poarch Creeks, which he believes would be a step in the wrong direction.
“That will just open the door for more gambling too. They will always be expanding, always wanting more,” he said.
For his part, the governor said the issue is more about long-term solutions than short-term fixes.
“We have to be good stewards of the people’s money. I don’t want us to go down the path of some states believing that gambling will solve our problems.”
To read an article about predatory gambling written by Joe Godfrey, ALCAP executive director, click here.
To read about a possible compact with the Poarch Band of Creek Indians to help limit gambling, click here.
To read about Gov. Bentley's desire to limit the expansion of gambling, click here.
Share with others: