Alabama Republicans turn to gambling expansion to patch budget hole

MONTGOMERY, Ala. — Republicans are prepared to introduce two gambling bills this week in the Alabama legislature, including one that will allow voters to approve a statewide lottery, and another authorizing Gov. Robert Bentley to enter into a compact with the Poarch Band of Creek Indians allowing table games in the casinos located on Indian land.

Republican leadership in the Alabama Senate will support a proposed constitutional amendment that will allow Alabamians to vote to legalize a state-sponsored lottery, with proceeds flowing into the state’s beleaguered General Fund budget, according to Yellowhammer sources.

The General Fund is facing a $250+ million shortfall for fiscal year 2016, which begins in October. Gov. Bentley has proposed patching the hole with a $541 million tax increase, sending conservative Republicans scrambling to find alternatives.

Cuts and reforms have been proposed, but significant campaigning by the Bentley administration and his affiliated advocacy group has led to threats of closures of everything from state parks to prisons.

A proposed constitutional amendment allowing an education lottery was defeated by 8 points in 1999. Only seven states do not currently have a lottery of some sort, including Alabama and its western neighbor, Mississippi.

Indian tribes have been granted sovereign powers and rights by the federal government to self-govern themselves on their land. However, the Indian Gaming Regulatory Act gives states in which Native American lands exist a role in regulating any gaming that takes place on tribal land. So the state entered into a “compact,” essentially a government-to-government relationship, with the Poarch Creek Indians detailing what types of gaming are allowed. Currently, Alabama allows only “class II” gaming on Indian land, enabling them to run electronic bingo machines. A new compact allowing “class III” gaming would approve table games such as blackjack, poker, roulette, craps, and slot machines. One expected point of debate will be what this means for other non-Indian gaming facilities around the state.

The proposals come after a report commissioned by Senate leadership and conducted by Auburn University Montgomery’s Institute for Accountability and Government Efficiency (IAGE) found that the state, should it approve a gambling compact and state lottery, would be expected to:

– receive $331+ million in annual lottery revenue;
– create 13,000 jobs;
– collect an additional $63-73 million annually from Indian casinos.

Alabama House Minority Leader Craig Ford, who has sponsored various state lottery bills for years, on Monday celebrated the news by saying in a column, “since the Republicans are embracing the Democrats’ legislative agenda, maybe Democrats didn’t lose the 2014 elections after all?”

Conservatives, particularly Christian evangelicals, have long opposed expanding gambling in the state, citing the toll it can take on the poor—who are more likely to gamble a large part of their income—as well as the corruption it can breed. Proponents say that Alabamians are going to gamble either way, they just drive to Florida, Georgia, or Tennessee and spend their money there.

Should the lottery bill pass both the House and Senate, it will need to be approved by a majority of voters at the ballot box.

Senate President Pro Tem Del Marsh (R-Anniston) is holding a press conference Monday afternoon to lay out the plan in more detail.