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Lottery constitutional amendment, enabling legislation filed

Bill Britt

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A constitutional amendment filed Tuesday morning by State Sen. Jim McClendon, if approved by the Legislature, will allow for the people to vote on a statewide lottery by this time next year.

Polling data from multiple reputable sources finds that an overwhelming majority of voters wants an opportunity to vote yes or no on the issue.

McClendon also introduced a legislative act on Tuesday that further outlines the rules and regulations under which the system would operate.

Currently, lotteries exist in 44 states plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

Alabama has a thriving gaming industry; however, the sole beneficiaries are the Poarch Band of Creek Indians, which does not pay taxes on its billion-dollar operation.

During the process of creating the Alabama Lottery Act and enabling legislation, McClendon said the pros and cons, successes and failures of other state lotteries were carefully considered before crafting an Alabama-tailored solution.

McClendon said he wants the highest number of voters to decide the measure and has set the vote to coincide with the presidential primary in March 2020.

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The constitutional amendment will be marked as Amendment 1 on the ballot.

An analysis of the proposed act shows that it establishes a state lottery and a corporation to operate the lottery, outlines what games are permitted, how proceeds will be taxed and distributed, as well as multiple safeguards.

Alabama Lottery Commission

The act creates Alabama Lottery Commission with members appointed by the governor, lieutenant governor, the president pro tem of the Senate and the speaker of the House.

The five-member board of directors must be residents of the state and prominent business people. Additionally, no member can be a felon, political party officers, elected officials or have an interest in a licensed facility.

The Commission will issue an RFP for a private corporation management team to oversee the lotteries’ day-to-day operations. There are only three companies that manage lotteries in the U.S.

No officer or employee of the corporation can have a financial interest in any vendor.

The lottery management company may not contribute to political action committees or candidates.

The corporation is also subject to the Open Records, Open Meetings and Administrative Procedures Acts.

Revenue and Taxes

State gross receipts tax amounts to 24 percent with 22 percent going to the state and two percent to local government. Licensed facilities who own games pay an additional one percent in state tax for a total of 25 percent from those locations.

Proceeds from the Alabama Lottery and proceeds from Video Lottery Terminals are deposited into the Lottery Trust Fund. The Lottery Trust Fund will disburse all income equally to the Education Trust Fund and the General Fund. No funds are earmarked.

Games Permitted

The corporation may allow all types of lottery games including draw lotteries, Powerball, Mega Millions, scratch-offs, Keno and iLottery.

Retail outlets may sell tickets purchased from employees, vending machines or kiosks.

Video Lottery Terminals are only authorized for licensed facilities.

Mobile platforms allow for ticket purchases only.

Games Not Permitted

The Lottery Act forbids casino live dealer games such as cards, dice, dominos, roulette, etc., and slot machines are strictly prohibited.

Video Lottery Terminals Licensing

The Act allows the commission to issue one license per county for Video Lottery Terminals in Mobile, Greene, Lowndes, Macon and Jefferson counties.

Charitable bingo is unaffected by the constitutional amendment.

Helping Those with Needs

In enabling legislation, money is set aside for the Department of Public Health to help those with compulsive gaming disorders and public education.

Additional Action: Sports Betting

According to the law, the commission is to focus on full implementation of the Alabama Lottery before considering sports betting.

Additional action by the Alabama Legislature will be required to implement sports betting.

Republican House and Senate leaders, along with Gov. Kay Ivey, have previously stated that they want the people to be given an opportunity to vote on a lottery.

Over the past several years, McClendon worked to understand the pitfalls and profitability that has surrounded successful lotteries. His efforts culminated in the constitutional amendment and enabling legislation filed today.

Gaming is already here in the state. The question remains: will the state profit from it or continue to bury the idea to please a small group of opponents?

Voters want a chance for their voices to be heard; McClendon’s act is offering them the opportunity.

 

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