A recent gambling study says revenues from gambling — if expanded in the state — could reach $700 million and bring Alabama 19,000 jobs but the committee’s report minimizes gambling’s social costs, critics say.
“The committee, while acknowledging the negative impacts of expanded gambling in the state, seems to downplay the social and fiscal costs and over-estimates the fiscal ‘benefits’ to the state,” said Joe Godfrey, executive director of Alabama Citizens Action Program (ALCAP) for 13-plus years.
In his initial comments, Godfrey said he had just started analyzing an 800-plus page report from Gov. Kay Ivey’s Study Group on Gambling Policy, which released its findings Dec. 18 during a press conference on the Alabama Capitol’s front steps.
The report included five options Alabamians have before them in deciding the future of gambling in the state: maintain the status quo, prohibit gambling and provide enforcement, prohibit all gambling except a lottery, allow limited gambling or allow full gambling.
Former Montgomery mayor Todd Strange, who served as chairmen of the study group, noted bingo games are prevalent, but there is no current way to regulate/enforce the business.
Estimated revenue
Strange said the group estimates a state-run lottery would bring in around $200 million and would grow rapidly to $300 million.
He estimated that casino style — everything from slots to table games to card rooms — would be a $300–400 million revenue stream and sports betting, which is in only a handful of states, would begin at $10 million.
All of those together would be $500–700 million annually. With a 4.9 million population in Alabama, Strange estimated 2.3 million “would likely play.” The group’s evaluation determined that less than 3% of those who would play are estimated to be problem gamblers, with .6% compulsive gamblers.
“Gambling will work in the state of Alabama,” Strange declared, but did stress that governance should be “a single authority that can regulate and administer and enforce” with the highest ethical standards. The group recommended a corporation run by a board of trustees and approved by the Alabama Senate.
While Alabama is one of only a few states with no lottery, the Poarch Band of Creek Indians runs casinos in Atmore, Montgomery and Wetumpka (operating under federal law). Electronic bingo operators have been in constant battle with the state over the legality of the Poarch Creek operations.
Godfrey emphasized that Strange admitted the “bulk of revenue generated by potential casinos will come from residents within a 50-mile radius of each casino,” meaning “no new dollars” would enter the state. Local citizens “will shift their spending away from other purchases in order to gamble,” he said.
Impact on lower-income neighborhoods
Godfrey noted most lottery ticket outlets would be in lower-income neighborhoods.
“Because of this, sales tax revenue will drop, hurting the State Education Trust Fund Budget, which gets $0.04 of every sales tax dollar, as well as hurting local municipalities and counties which receive additional portions of the sales tax dollars,” Godfrey said.
“When people spend money gambling instead of buying goods and services, small businesses will also be negatively impacted.”
Godfrey recalled images of Atlantic City, New Jersey, after casinos were legalized: “Local restaurants and other small businesses across the streets from the big, flashy casinos closed and boarded (except for pawn shops, and ‘fast cash’ and ‘title loan’ businesses which opened in large numbers).”
Senate Majority Leader Greg Reed (R-Jasper) told Montgomery NBC affiliate WSFA-12 News, “Regardless of where one stands on the gaming issue, you have to recognize that Alabama has an inconsistent patchwork of laws and virtually no regulatory structure in place to deal with the gaming facilities operating here today.”
In the same WSFA story, Senate President Pro Tem Del Marsh (R-Anniston) said, “It is time to address the issue.”
Godfrey believes pro-gambling forces will flood television and radio with millions of advertising dollars to support expanded gambling.
“The people of the state will basically hear only one side of the story,” Godfrey said, while churches, the primary voices of opposition, will be vastly outspent because they are trying to put their money toward missions endeavors. “Christians and churches need to do everything they can to stop the expansion of legalized gambling in this state,” Godfrey stressed.
Churches could be affected
Godfrey predicts churches will be inundated with members of the community seeking help to pay bills or aid in fighting a gambling addiction.
“All tax-payers will be affected when taxes have to be raised to cover the lost income and revenue that always results from expanded gambling,” he said. “Legalized gambling, whether in the form of a state-sponsored lottery or state-sanctioned casinos, or a combination of the two, has failed to raise the standard of living in every state where it has been initiated.”
Godfrey reminded Alabama citizens of the promises made by the Birmingham Race Track that schools would never want for money if the citizens of Jefferson County would just pass a constitutional amendment legalizing the track.
But Strange said “the advantages outweigh the disadvantages.” He considers the costs to be “manageable.”
For gambling to be legalized, legislation calling for an amendment as well as the wording of the amendment would have to be approved by three-fifths of the members of the House of Representatives and Senate. That amendment would then be put on a ballot for voters.
Gov. Ivey formed the study group in February with an executive order. The group included leaders in health, business and politics, Ivey said, and was charged with gathering “facts” about gambling in Alabama and exploring how an expansion would impact the state.
Read the study group’s report by clicking here:
https://governor.alabama.gov/assets/2020/12/FINAL-GSGGP-GAMBLING-REPORT.pdf
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