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Analysis | The gambling bill: A breakdown

There are a lot of criticisms of the gambling bill. Here’s an explanation for why most of them fall flat.

On Thursday, the Alabama Legislature’s penultimate day in session, the much-discussed gambling bill will finally make its way to the House floor for consideration. It is the final leg in what seems like an epic journey that began sometime in the previous century — and in some respects, that’s true. 

It is a bill that began this session in the Senate, died there, came back to life there, and was eventually passed there. It has advanced out of House committee this week and now lacks only House passage before Alabama residents can vote in Nov. 2022 on whether to legalize a statewide lottery, six full casino locations and sports wagering. 

As is typically the case with gambling legislation, however, the bill has been criticized and praised by those on either side of this debate. Some have legitimate reasons for doing one or the other, but most have a personal ax to grind or personal fortune at stake. 

In the interest of full disclosure, I am in favor of the expansion of legalized gambling in this state. Not because I stand to personally gain — I don’t, unless a hold-’em room opens up near me, in which case, I probably still won’t — but because our current state of affairs is remarkably stupid. We have legal gaming in this state, with hundreds of thousands of our citizens participating every week, but we receive no revenue from it. Additionally, there are lotteries and casinos all around us, and you can go online morning, noon and night and place sports wagers. 

We’re losing nearly a billion dollars annually by not expanding and properly taxing legal gaming. We’re also missing some 12,000 to 15,000 good-paying jobs by not expanding. 

But all that aside, there have been a number of criticisms of this bill that need to be addressed, if for no other reason than to give lawmakers and citizens a better understanding of exactly what’s reality and what isn’t. 

So, let’s break a few things down, and go point by point. 

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What does the bill actually do? 

The bill legalizes six casino locations — at the four current dog tracks in the state, at Dothan’s Country Crossing and at a new location in Northeast Alabama. It also legalizes a statewide lottery, with all the electronic bells and whistles, and authorizes sports wagering, including online betting. Also among the package of bills is one creating a new gambling commission that will oversee all of this and handle enforcement of rules and oversight of operations. Another bill also establishes new laws for illegal gaming, aiming to shut down the back-of-the-gas station operators. 

Why is the state picking winners and losers? 

This is probably the most common attack on the bill — that by limiting locations to the six sites listed above, the state is essentially shutting out competition and giving in-state operators a leg up. And they say that as if it’s either uncommon or bad practice. Almost every state that has offered up casino licenses for bid has also given an advantage of some sorts to in-state operators. Several states, particularly those that have entered compacts with Native American tribes, have flatly offered in-state operators a monopoly. There are countless advantages to local ownership, starting with accountability and oversight. 

Won’t the limited sites hurt growth and reduce potential state revenue? 

That’s unlikely. In fact, one of the things that has hurt casinos in other states — particularly in Mississippi — is that so many are clustered into the same areas, all of them pulling from the same customer pools. Spreading Alabama’s sites around, even after the three Poarch Creek locations are ultimately allowed to grow into full casinos through a compact, gives the state an advantage. There will be solid customer bases for all of them, but enough competition within driving distance to encourage development and continued growth at each site. Again, other states that have legalized gaming have all found that limited licensing is the most successful approach. 

But aren’t we giving the dog tracks too much? 

This is another popular argument, because it relies on outdated stereotypes of dog track owners to portray an air of nefariousness. However, there are some very good reasons for placing the casino locations at the tracks. First and foremost, those tracks are strategically spread around the state, have been operating gaming for decades and had their gambling operations approved by the citizens of their respective counties by way of constitutional amendments. And contrary to the stereotypes, the owners/operators of those locations are well-known and respected businesspeople in this state. Additionally, most of the tracks employ large numbers of people in counties with high poverty and unemployment rates. And the elected officials of those districts fight like hell to keep those businesses open. 

Why fix the locations to the dog tracks? 

Because those businesses have been operating within the state longer than many people have been alive, and placing the limitations on site locations does two things: it ensures that the Alabama business owners get, at the very least, fair market value for their property (or potentially a partnership) if they don’t win the license, and it makes it easier for the bill to pass. You can have the greatest piece of legislation in the world, but if it doesn’t pass, it’s as good as a blank piece of paper.   

Is it fair to shut down these other casinos in Lowndes and Greene counties?

The casino operators in Greene County have every right to bid on the license being offered in that county, so they’re not being shut down. As for Lowndes, it was less an issue of fairness and more one of location. Lawmakers were obviously on the fence about Lowndes, since the Senate allowed it to be put into the original gaming bill — the one that died. One reason that it was ultimately removed is because too many casino locations are grouped in that general area, with VictoryLand in Shorter and the two PCI locations in Montgomery and Wetumpka. Something had to go. The state can’t shut down a PCI casino, and when you compare location, facilities and potential for growth, VictoryLand is clearly the better option.

Will this give the Poarch Creeks, or anyone else, a monopoly? 

Nope. The bill specifically limits any entity from owning more than two casino locations. That’s also another reason why the state is adamant about giving the dog track owners an advantage — it’s unlikely those people who have been operating the tracks in this state for decades would be willing to sell out or try to form questionable partnerships with outside entities. 

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Doesn’t this give the Poarch Creeks too much control, with essentially five locations?

Not really. The three locations they currently own aren’t part of the deal, and by agreeing to private ownership terms, the tribe is actually giving up potentially billions. Tribes in other states have pressed forward in recent years with new casinos not on tribal lands, but on lands purchased by trust funds. There are still a lot of legal questions about that action, but to date, no casino has been closed. PCI could have easily attempted such a move with its Mobile location and on any lands it purchased in Northeast Alabama. Under such a deal, it wouldn’t be subjected to state and federal taxes. Instead, though, the tribe is agreeing to pay millions annually in standard taxes to operate two private casinos. PCI’s other three casinos will fall under a state-tribal compact and a revenue-sharing agreement will be part of that deal.

Josh Moon is an investigative reporter and featured columnist at the Alabama Political Reporter with years of political reporting experience in Alabama. You can email him at [email protected] or follow him on Twitter.

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