The COVID-19 pandemic stopped any chance for legislation to propose a lottery in Alabama in 2020, but decisions about that and other forms of gambling await lawmakers in the new year.
Gov. Kay Ivey’s Study Group on Gambling Policy issued a report Dec. 18 estimating the state would net up to $300 million a year from a lottery, up to $400 million from casinos, and $10 million or more from sports betting. The report said gambling could create up to 19,000 jobs.
The study group said the current patchwork of gambling in Alabama wastes time and money on political fights, court cases, and law enforcement with little, if any, benefit for the state. The group recommended a single regulatory authority over all gambling.
Alabama’s Constitution prohibits lotteries and most forms of gambling, so the Legislature has to approve a constitutional amendment to make major changes, such as allowing a lottery or casinos. Voters have the last word.
Alabama has three casinos with electronic bingo run by the Poarch Band of Creek Indians on tribal lands, bingo in 16 counties where voters approved constitutional amendments, and betting on dog and horse racing in Jefferson, Mobile, Macon, and Greene counties.
Legislators and others in the debates over gambling praised the study group for being thorough. The report spells out the history and legal issues that frustrate efforts for a uniform policy in Alabama. It outlines policies in other states and makes recommendations based on what has worked best.
Some said the report did not reveal much that is new about the stalemate that has blocked legislation to allow a statewide vote on a lottery since 1999. That’s when voters rejected Gov. Don Siegelman’s proposed lottery by 54% to 46%.
House Speaker Mac McCutcheon and Senate President Pro Tem Del Marsh have said they want discussions about gambling legislation to include a lottery, the local bingo operations, and the Poarch Creeks.
The pandemic could put those discussions on hold. It will limit access to the State House for meetings and hearings on an issue the public cares about. The legislative session starts Feb. 2, months before vaccines will be widely available.
Rep. Steve Clouse, R-Ozark, who chairs the General Fund committee in the House, sponsored a lottery bill in 2020 that had about 70 co-sponsors in the 105-seat House. It takes three-fifths of the House and Senate, 63 representatives and 21 senators, to pass a constitutional amendment to send to the ballot for voters.
Despite the support, Clouse’s bill had no chance after the pandemic interrupted the session in March. Ivey’s appointment of the study group might have put it on hold anyway.
Clouse said he has not decided if he will sponsor a lottery bill in 2021. He said a key reason for proposing it in 2020 was to try to get it on the ballot in November and take advantage of the high voter turnout.
“I think that’s the best time to vote on it, during a general election,” Clouse said. “But we don’t have another one until November of ’22. So this year is not as time-sensitive. We could do it in the ’22 session.”
Clouse said the 70-plus cosponsors to the 2020 bill shows a lottery bill would pass the House.
As for the comprehensive approach to include casinos, sports betting, and a compact with the Poarch Band of Creek Indians, Clouse said that’s worth considering.
“It’s not a bad idea to try to do something comprehensive,” Clouse said. “The problem is the votes start falling off in the Legislature when you start talking about the comprehensive part. So, that becomes an issue then. I’m not saying you can’t get 63 in the House and you can’t get 21 in the Senate. I think it’s a possibility, but it gets close.”
Senate Minority Leader Bobby Singleton, D-Greensboro, praised the report and supports the comprehensive approach. Singleton is optimistic about a breakthrough this year unless the pandemic disrupts the session.
“I would like to see the solution be lottery, gaming, and sports gambling,” Singleton said. “That’s what I would like to see as a solution. What the bill is, how much taxes we are going to pay, all of that is going to be a legislative function and we’re all going to sit down as men and women together and hopefully we’ll put our input in and see can we make it all work. What’s best for the state of Alabama?”
Singleton represents one of the key factions in the debate. His district includes Greene County, a small county where electronic bingo helps support public schools, ($750,000 a year), the county hospital and nursing home ($600,000 a year), the County Commission ($1.4 million a year), the sheriff’s department and jail ($700,000 a year), plus funding for municipal governments, volunteer fire departments, meals on wheels, and other programs. Greene County bingo representatives presented those numbers to the study group during a meeting in June.
From 1980 to 2004, voters in Greene County and 15 other counties approved constitutional amendments allowing bingo, creating part of the gambling patchwork the study group described.
State attorneys general have tried to shut down electronic bingo, played on machines that look like slot machines. The Alabama Supreme Court has ruled they don’t fit the definition of bingo and are illegal. But advocates in Greene and Macon counties point out that they are the same as the games at the Poarch Creek casinos. Federal law allows tribes to offer electronic bingo in states that allow bingo in any form.
Singleton and other lawmakers have sought protection for the gambling revenue in their counties as a condition of their support for lottery bills. That has made it harder for advocates of a stand-alone lottery to round up the three-fifths vote they need.
Singleton said the pandemic has drawn attention to needs in Alabama that will require more funding, such as expansion of broadband internet access. He said that could help build support for a plan that includes a lottery, casinos, and sports betting.
“As we move closer to the session, I think you’re going to start to hear conversations about it and then we’ll look at how we lay it out, how many licenses they give out, where will the casinos be, if in fact they’re going to be in the state,” Singleton said. “And so, all those things are legislative questions that we have to answer. And I think now that this task force has brought back some answers to some questions that we’re ready to tackle those questions.”
“I feel very optimistic about it and I’m going to utilize as much energy as necessary to try to make it happen,” Singleton said.
Sen. Greg Albritton, R-Atmore, sponsored a lottery bill that passed the Senate in 2019 but stalled in the House. Albritton, chairman of the Senate’s General Fund committee, does not see any reason to be more optimistic about lottery or gambling legislation than before.
“I don’t know why that would be so,” Albritton said. ” We’ve been fighting it for 20 years. And like I said, the study group the governor put together confirmed we have all the information that’s out there.
“I don’t see that there’s been any changes from the past two, three, five years. We’ve still got the same people that want to do it. We’ve got the same controversies that’s out there. We’ve still got the gaming that’s going on without regulation. And to many people, that’s what they want. So, I am just not optimistic that we will be able to put together a plan that will pass.”
During the 2020 session, Albritton introduced a bill making the Poarch Band of Creek Indians’ proposal to the state, one that the tribe had promoted in television ads. The tribe’s reservation is in Albritton’s district.
The “Winning for Alabama” plan would have expanded what the Poarch Creeks offer at their casinos, giving them exclusive rights to full-fledged casino games — slot machines and table games such as blackjack and craps. They would operate those games at their three locations on tribal lands in Atmore, Wetumpka, and Montgomery, plus new locations in Birmingham and northeast Alabama. They would pay the state $250 million license fees on the two new resorts, good for 25 years, plus a 25% tax on net revenue from the games at the two new resorts.
The tribe’s plan included a lottery to benefit education and an Alabama Gaming Commission to regulate all gambling. It would have required a constitutional amendment approved by voters and a compact between the Poarch Creeks and the governor.
The Legislature took no action on Albritton’s bill in 2020.
Robert McGhee, vice chairman of the Poarch Band of Creek Indians Tribal Council, said the tribe has withdrawn that proposal.
“Right now we have nothing on the table because that was last year of course and it was one of those things that didn’t go anywhere,” McGhee said.
He said the Poarch Creeks are ready to negotiate but for now plan to let others make the next move.
“We were told early on, wait and see, the governor wants this report,” McGhee said. “We respected that. We said OK. And of course, the pandemic and COVID happened, so it really did put a lot of things on the back burner. Like everybody else, we had to focus on other things. And that’s what we’ve been having to do.
“And now that the report is completed, I don’t know if the governor has a plan. The administration may actually have a plan based upon the report itself. But we have not been a part of any type of discussions in talking about that.”
Ivey has not said whether she will support a plan based on the study group’s report. The governor has not favored using a lottery or other gambling to fund government, but has also said that doing nothing carries a cost because of the political and legal conflicts and because Alabamians spend money gambling in neighboring states.
“The potential to act on gambling is an opportunity that cannot be accomplished solely by a governor or solely by the Legislature,” the governor said when the report came out. “It is incumbent on us to work together to provide the citizens of Alabama their opportunity to determine the future of gambling in Alabama.
“I continue to maintain the final say on gambling belongs to the people of our great state, and if and when I have a recommendation regarding a specific course of action, I will do so in full transparency to the people of Alabama, working hand-in-hand with the Alabama Legislature.”
The Legislature could pass a lottery bill and send it to voters without the governor’s approval. Proposed constitutional amendments do not require the governor’s signature.
McGhee said the tribe appreciates the study group’s work but does not yet see much progress.
The report said most states have more legal gambling than Alabama. Forty-five states have lotteries and 41 have full-fledged casinos. Twenty-five states have adopted legal sports betting after a 2018 U.S. Supreme Court ruling to allow it.
A poll included in the study group report showed 71% support for an Alabama lottery, 63% support for casino-style slot machines, 61% support for casino-style table games, and 52% support for online sports betting.
Sen. Jim McClendon, R-Springville, came close to passing a lottery bill in 2016. It was approved by the Senate but died after it was amended and passed by the House.
McClendon said the influence of the Poarch Creeks and advocates for the county bingo operations have undermined efforts to send voters a lottery proposal. He doesn’t see that changing after the report.
“I simply didn’t see any resolution to the Poarch Creek Indian influence,” McClendon said. “Or the influence of the existing, quote, bingo palaces that exist in several of our counties.”
The senator believes voters are mainly interested in a lottery.
“Not one person has ever come to me in my district and said, ‘I wish we had a casino. I wish we could get on a craps table,’” McClendon said. “Nobody says that. Nobody asks me to see what I can do about getting a roulette wheel. They come to me and they say, ‘We just want to buy a lottery ticket. That’s all we want to do. And furthermore, we don’t want to drive to Georgia to buy a lottery ticket.’ This is a frustrating topic.”
McGhee said the Poarch Creeks are not opposed to a stand-alone lottery. He questions whether it would be the best way for the state to raise revenue and regulate gambling.
“We have never been against a stand-alone lottery,” he said. “Now do we feel that that’s the best path forward? Meaning, if you’re going to vote on gaming for the state, maybe it’s probably best to have a complete package. But if not, a stand-alone lottery that gets an opportunity to go to the people, I think it will pass.”
Albritton, the sponsor of the 2019 lottery bill that passed the Senate but died in the House, said he is not sure he would now support a stand-alone lottery.
“The monies that would be brought in would be very, very limited,” Albritton said. “It would not give the state control over any other gaming or gambling. Whether it be sports gaming, that’s going to be a part of the issue in the next session, whether it be the local gaming and gambling that’s going on and who controls and benefits from that. There’s just too many other unanswered questions that complicate just a lottery.”
Clouse said the pandemic could make it hard to consider a subject that the public cares about as much as a lottery and gambling.
“To hold a session that has controversial legislation where public hearings are involved and committees where people want to testify, you really need to have the public full access of the State House,” Clouse said. “So, you know, I have no idea where we’re going to be on the 2nd of February with this thing.”
The House is working on plans to allow members to vote and participate in legislative business from overflow rooms outside the House chamber so it can space out representatives more safely.
Albritton said the pandemic should not stop lawmakers from debating gambling or other issues this year. He noted the arrival of vaccines and better treatments for people who get the virus.
“I think it’s time to stop being afraid and just move on with life,” Albritton said. “And if we catch it we get the treatments. We get the vaccine as soon as we can so we don’t catch it. I do not believe we need to shut down.”