REPORT: Expanding gambling in Alabama can work, could bring over $700 million in revenue

Alabama News

MONTGOMERY, Ala. (WDHN) — A study group formed by Gov. Kay Ivey announced that expanding gambling in Alabama can work, bringing over $700 million in revenue to the state.

The group’s report took information by examining other states and five casinos running in Alabama.

Strange said that creating a state-run lottery would bring around $200 million in annual revenue at first with a potential to grow to $300 million.

“It has to be a competitive adventure,” he said. “You don’t want to pay out of 45 percent, and Mississippi’s doing 65 percent so you gotta be competitive”.

Casino gambling, which includes slots, table games, etc, would bring in $300 million to $400 million in tax revenue. Strange said that around the nation, 75 percent is from slot machines.

Sports betting is expected to bring in around $10 million per year.

“Another thing we saw a number of times is there’s some supposition or statement that Alabama, on a per capita basis, has the highest per capita illegal sports betting in the United States,” Strange said.

In total, this could bring around $500 to $710 million annually to Alabama. While the study group did not say how the funds should be used, they did find that over half of the states with gambling use the funds for education.

Around 19,000 jobs would also be created, most of them would pay above the average annual income for Alabamians.

However, even with these benefits, Alabama could face some problems.

This would mostly be in paying for government-sponsored treatment for people with gambling disorders. Money would also be spent on preventing people from developing problems and educating them.

Society may also pay a personal cost as families and individuals are harmed by the risks gambling disorders pose. The group’s report estimates that around 66,375 people in Alabama could be problem gamblers while 13,733 can be compulsive gamblers.

Only eight percent of these people may seek treatment, according to the report.

Social costs could include

  • Crime, including law enforcement, corrections, and judicial costs;
  • Business and employment, including displaced workers, lost productivity, and unemployment
  • costs
  • Bankruptcy
  • Illness and suicide
  • Social services and regulatory costs
  • Family costs, including divorce, domestic violence, and child abuse and neglect
  • Abused dollars, which is often a cost associated with unreported theft
  • Political costs, which could be manifested in the form actual or perceived undue political influence.

However, the total costs caused by the legalization of gambling are hard to estimate as most people are responsible, and illegal gambling has always existed in Alabama, providing problem gamblers an outlet anyway.

Alabama currently has no organization to regulate gambling, but the group recommends that instead of a state agency, a corporation would regulate gambling instead. This could corporation would be run by a governor-appointed board of trustees, which would be approved by the Alabama Senate.

“That’s what a number of the more successful states have done,” Strange said.

Currently, there are five options the group has proposed:

  1. Do nothing and keep the status quo
  2. Prohibit gambling, but put the regulatory authority in charge of enforcement
  3. Allow lotteries only
  4. Allow limited gambling, which would allow only certain types of gambling according to type and location
  5. Allow full gambling

Any solution would be formalized by the draft created by Alabama Legislature, which would be then approved by Alabama voters.

““I continue to maintain the final say on gambling belongs to the people of our great state, and if and when I have a recommendation regarding a specific course of action, I will do so in full transparency to the people of Alabama, working hand-in-hand with the Alabama Legislature,” Ivey said.

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