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Alabama Evaluates Lottery, Indian Gambling Compact Findings

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Alabama remains an isolated state in that it is the last of its neighbors to consider adopting state gaming industries.

Mississippi became the latest bordering state to offer lottery games and tickets to residents. Last year the state tallied a total of 1,600 retail locations providing lottery tickets to play such games as Powerball, Mega Millions and more than a dozen other instant games.

That’s not to say the topic has not emerged in the state Legislature in the past. In fact, legislators make an attempt to pass laws enabling the practice every year. Each year, their efforts prove unsuccessful. This year, a total of 70 House members have signed on in favor of the most recent bill. However, the rise of COVID-19 quickly put a stop to any progress for that legislation.

Nevertheless, an opportunity to raise valuable and dependable capital for the state in a time of upheaval cannot be ignored.

Alabama lottery panel

Earlier this year, Gov. Kay Ivey assembled a panel of 12 former clergy, politicians and business owner to hear what experts on the matter had to say. Former Montgomery Mayor Todd Strange heads up the group.

The most current economic and social impact reports predict that such an industry could raise as much as $1 billion annually in sales, with about $280 million of that making its way into state coffers.

The numbers are based on per-capita lottery sales in other states. David Barden, CEO of the New Mexico lottery, compiled the data. He was consulted to complete the report due to his extensive industry experience that includes operations in Arkansas and South Carolina.

Among the reported data, Barden also suggested the state consider avoiding unnecessary restrictions on a lottery industry. He affirmed the lottery should be able to expand technology and provide new offerings as it saw appropriate. This would include the increasingly popular trend of adding online ticket and instant game sales.

Ultimately, he said, legislators and industry representatives should work it out in the beginning. On the subject, Barden stated, “You can do it at different levels. It might be that you only want to have certain types of games online like Powerball and Mega Millions.” He went on to emphasize transparency and keeping the public informed of how funds reach beneficiaries, like social services, the elderly and educational funds.

Barden said he expects that the state could anticipate retailers earning commissions in the range of 5% to 6% for lottery sales. According to Barden, lotteries tend to operate in one of two ways. The first is through a state-owned corporation with a board appointed by the governor or other officials. The second is through a state agency.

Tribal gambling discussion

Alongside the report delivered by Barden, panel members heard from three federal officials in regard to gambling agreements shared with Native American tribes in the region. According to the Indian Gaming Regulatory Act, tribes can offer bingo, including electronic bingo, with no obligation to the state. Troy Woodward, senior policy adviser for the Office of Indian Gaming, delivered his remarks on the Poarch Band of Creek Indians’ bingo operations at the tribe’s current gambling locations.

To that effect, the Poarch Band of Creek Indians submitted a request to the state to operate Class III games. Under the act, Class III games include slot machines, table games and card games. In this case, a compact with the state is required for tribes. The request includes provisions for the tribe to provide Class III games at its current resorts in Atmore, Montgomery and Wetumpka, and two new locations in Jefferson County and northeast Alabama.

In the event of such an agreement, the state would receive reimbursement for the costs associated with regulating duties. The new casinos would also have to pay state license fees and a 25% tax on net gambling revenue.

 

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