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Analysis | The gambling bill passed its first hurdle, but why is the state picking winners

Critics say the gaming bill is picking winners by limiting licensing locations. It’s also protecting local businesses.

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A comprehensive gambling bill moved quickly out of an Alabama Senate committee on Wednesday and is expected to see floor debate early next week. Neither the relative ease with which it received committee approval, nor the handful of protesters who showed up to speak against the bill were a surprise. 

The bill, sponsored by Sen. Greg Albritton, R-Atmore, is not much different than the version that nearly passed the legislature a year ago. 

That bill, like this one, gave voters an opportunity in November to approve a statewide lottery, sports wagering and full casino gaming, as opposed to the electronic gaming currently being played at several locations around Alabama. 

The 2022 bill would see five full casinos licensed by the state – four at current dog track locations and one new facility in northeast Alabama that will be operated by the Poarch Band of Creek Indians. Sportsbooks would have to be tethered to those locations, and two satellite casinos, which would offer only electronic games, would also be tethered to the five casinos and located in Lowndes and Houston counties. 

Those are the basics of the bill. I think it’s a mostly fair bill that has an opportunity to pass. But there are already attacks – some warranted and some idiotic – on the bill. It is expected to pass easily in the senate, but faces a major hurdle in the House, where numerous sources said they expect House leadership to block a vote on the legislation. However, there is also widespread belief among lawmakers that the bill has enough votes to “easily pass.” 

Earlier this week, I began examining some of the standard arguments against the bill in the hopes that we could possibly make sense out of what is a very confusing and complex issue. I started by addressing the arguments against gambling in general. 

Today, we’ll cover: “Why is the state picking winners and losers and limiting outside competition?”

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First, let’s define what people are talking about with this argument. 

In Albritton’s bill, it specifically limits the casino locations to the four current dog tracks – in Greene County, Shorter, Jefferson County and Mobile – and one additional location in northeast Alabama. This, of course, limits the number of people/companies who might be willing to bid on gambling licenses, because outside entities would be forced to buy both the license and negotiate a lease with the current track owners. 

It’s a fair argument, although I don’t know if it’s one that people have really thought through. 

But let’s begin with the question of fairness, since this argument implies that something unfair is occurring. Let’s say you’re operating a successful auto manufacturing plant in this state and have been for decades. You pay your taxes, support the local governments and employ a number of people in an economically depressed area. 

Then, one day, the state decides to make a change to the laws that will allow wealthier companies that have not been operating with your company’s restrictions to bid on exclusive licenses to operate new manufacturing facilities, which would certainly cause you to go out of business. Does that seem fair? 

Or would it seem more fair to give the in-state owners a leg up on the competition, and at the very least ensure that if an out-of-state company does make this purchase, the in-state guys don’t walk away with their lives ruined, most likely in bankruptcy?

Call me crazy, but the latter scenario seems more fair to me. 

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It’s also more fair to the citizens of the state. The locations that currently operate pari-mutuel wagering have been approved by the citizens of those counties to conduct such business. They want those facilities in their counties — fight for them, even — and that is simply not the case for some other counties around Alabama. 

In addition, the counties in which the current facilities operate are mostly very economically depressed and rely upon the tracks for vital tax dollars. 

So you wouldn’t simply be putting track owners out of business by allowing free-for-all bidding process on the gambling licenses. You would also remove jobs and revenue from counties that desperately need it and potentially place casinos in counties that don’t want them. 

But forget fairness, let’s talk money. Because that’s what this is all about, right? No one really cares who owns these casinos so long as we maximize our return on this investment and milk every tax dollar we can out of them, right? 

In Albritton’s bill, a license to operate costs $35 million for Jefferson County, $20 million for Macon County, $5 million in Mobile County and $2 million in Greene County.  

Considering that a license to operate a major casino in Boston went for $85 million a couple of years ago and a small casino license in Pennsylvania went for $10 million, I’d say these prices are fairly set. Maybe you could get another $10 million-$20 million here or there, but you’re not going to get some crazy number for a casino license in Alabama. You’re just not. 

And let’s also not forget that those licenses are for multiple years. So even if you get another $20 million, it’s a fraction of that annually. Don’t get me wrong, $2 million a year is a nice figure, but we’re not solving real problems with it. 

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Offsetting that additional revenue, though, is an owner who’s local. Who is keeping those profits in this state. Who’s propping up other businesses and charities. Who has local partners and local banks. And who has an actual interest in running a respectable business and ensuring the local communities stay safe and prosperous. 

So, yeah, you could probably make a bit more money with a bidding process that opened the state up and gave no weight to locals — which would be different than every other state that’s approved new gambling licenses in the last 10 years — but you’d also be opening up a number of potential risks and potentially running into a never-ending stream of legal challenges. 

So, yeah, you could make more money on the licensing process. But at what cost?

Written By

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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