The Alabama gambling expansion effort is making progress, but the House and Senate are at odds about which gambling products should be included. The Senate has passed a modified version of the House bill which removes sports betting and commercial casinos. Now it’s up to House lawmakers to decide if they’re willing to pass a bill that includes some, but not all, of what they wanted. Alabama voters will get their say on gambling expansion this fall, but only if the two legislature chambers can agree.
In what has been the most significant push in recent years, the Alabama House of Representatives passed two bills in February. The proposed legislation would establish commercial casinos, a state lottery, sports betting, and tribal casinos. It would also create regulatory agencies like the Alabama Gaming Commission (AGC).
Bill sponsors estimate the proposal could generate over $1 billion in tax revenue. It received backing from influential political figures like Governor Kay Ivey and House Speaker Nathaniel Ledbetter. During her 2024 State of the State address, Gov. Ivey expressed her support and said she hopes voters get to decide.
After the bills passed the House with little pushback, many hoped for the same in the Senate. The upper legislative chamber has historically been more open to gambling expansion, even passing a bill in 2021 similar to the latest efforts.
Senate Removes Sports Betting, Retail Casinos
On March 6, the Senate passed the two bills, each requiring a minimum of 21 votes. Subsequently, HB151, a constitutional amendment, passed 22-11. Meanwhile, HB152, which lays out the specifics of the gambling expansion, passed 23-10. However, the Senate version that’s returning to the House is very different than the original proposal:
Specifically, the revamped bill:
- Removes sports betting
- Removes commercial casinos but allows pari-mutuel betting on horse or dog racing and historical horse racing machines at seven locations.
- Sets a 20% and 28% tax rate on pari-mutuel betting and historical horse racing machines.
- Determines where tax revenue would go. Until March 30, 2029, it will go into existing infrastructure and capital improvement projects. After that, one-third will go to education, one-third to infrastructure projects, and the remainder will be earmarked for the general fund.
- Requires Gov. Ivey to negotiate a Class III gaming compact with the Poarch Band of Creek Indians for their three casinos.
- Removes local constitutional amendments on gambling and prohibits future local amendments.
- Moves vote from November elections to Sep. 10.
The fiscal note of the modified Senate bills estimates that the lottery will bring in between $305 million and $379 million. Meanwhile, the seven pari-mutuel locations will generate between $99 million and $132 million.
Assuming the gaming compact with the Poarch Band of Creek Indians will generate $300 million (based on the House proposal estimates, which included an option of a fourth tribe casino), the total tax revenue will be between $503 million and $811 million—significantly lower than the estimates for the House proposals of $935 million to $1.2 billion.
Changes Don’t Address Illegal Gambling Concerns
Ultimately, the Senate’s reasoning for removing sports betting and commercial casinos is unknown. Still, Sen. Greg Albritton (R-Atmore), the Senate sponsor of the bills, says the adjustments were necessary to pass the legislation. He added that the changes will give the state “some control” over gambling.
However, it might not do enough to tame the illegal gambling currently thriving in the state. Fighting illegal gambling has been a uniting factor for lawmakers, including Gov. Ivey and Ledbetter. In November, the latter said that gambling expansion is less about gambling and more about fixing the problem in the state.
Much of that illegal activity includes gambling parlors inside gas stations and convenience stores. As part of a pro-regulation ad hoc committee, Rep. Andy Whitt, one of the bill sponsors, traveled across the state to get a first-hand sense of the situation. He says he witnessed 12 illegal gambling operations on a one-day trip.
In addition, many Alabamians are already betting illegally on sports. According to GeoComply, a cybersecurity and geolocation software provider, over 35,000 mobile devices from Alabama attempted to access sports betting apps during the 2024 Super Bowl. GeoComply also identified over 5,000 mobile sports betting accounts in the state, marking a 69% increase over 2023.
According to the Alabama Political Reporter (API), state residents placed over $2 billion in sports betting wagers in 2023. The news outlet says the figure is based on information that authorities provided to lawmakers. In addition, popular sports betting apps like FanDuel and DraftKings blocked more than two million attempts to place a wager in Alabama in 2023.
House Rejection Would Leave Bills One Last Chance
Because of the significant changes made by the Senate, the House must vote again. However, this time, there are indications that the stripped bills will not succeed. Some critics say the Senate put together the bills quickly without thought, while the House has spent months in preparation. Other reports suggest that House members were irritated by the Senate’s lack of communication. According to API, three members said Speaker Ledbetter had assured them there would be no agreement on the Senate’s changes.
If that happens, the bills will head to a conference committee. There, six lawmakers, three from each chamber, will work on a compromise. If they can’t reach one, this year’s gambling proposal will die before reaching voters.
Senate Minority Leader Bobby Singleton (D-Greensboro) expects the House will reject the changes. He’s anticipating a conference committee where differences could be worked out. He added,
We’ll sit there like men and women and work it out. I don’t know what that’s going to look like. But we will have a comprehensive game plan hopefully.
Singleton also said that pari-mutuel betting and historical horse racing might not attract many people.
About the Author
