A top Alabama lawmaker introduced a bill Tuesday proposing a constitutional amendment to legalize iGaming and sports betting in the state. State Senator Del Marsh unveiled a plan to expand gambling in the Yellowhammer State through a bill that would allow casino-style gaming and sports betting under a lottery instituted for this purpose. The proceeds from the gaming industry, including net revenue, license fees, and taxes generated by the lottery and casinos, would be reimbursed to support general welfare programs.

The bill, SB 214, advanced to the Senate floor on Wednesday following an 11-0 vote from the  Senate Tourism and Marketing Committee. The bill can now be taken up by the full Senate. To become a constitutional amendment, the gambling bill needs the approval of 60% of both the Senate and the House. Once that happens, Alabamians will vote on the measure, most likely in 2022.

What Changes Does SB 214 Seek?

SB 214 seeks to establish the Alabama Education Lottery, to be administered by the Alabama Education Lottery Corporation. The proposal also aims to form the Alabama Gaming Commission to oversee the legalized gaming and sports betting emanating from the amendment.

Casino gaming and sports betting would be restricted to five designated sites in Alabama state, in addition to federal lands held in trust for the Native Tribe (Poarch Band of Creek Indians). Four casinos already exist at the greyhound tracks in the state: the Birmingham Race Course, Greentrack in Green County, VictoryLand in Macon County, and the Mobile Greyhound Park. The fifth site would be operated by the Parch Band of Creek Indians at Jackson or DeKalb counties in Northeast Alabama.

The proposed amendment that seeks to legalize Class II gaming at these facilities would also call for a new compact between the governor and the Poarch Band of Creek Indians. Under this, the tribe will be allowed to offer full-scale casino offerings at its three resorts in Atmore, Montgomery, and Wetumpka. Currently, these casinos only offer electronic bingo.

Mobile Sports Betting Looks Promising

The bill also allows for mobile sports betting, and there is currently no mention of an in-person registration requirement to place wagers online. This is good news for the state who will be able to capitalise on the grom mobile sports betting market and compete with neighboring state Tennessee, whose online-only sports betting has been hugely successful since it’s launch.

Similar to New Jersey‘s industry, up to three online skins would be permitted at each land-based gambling venue, allowing for up to 15 mobile operators to go live in the state. Operators have to pay an upfront licensing fee of $100,000 per applicant which must be renewed every 5 years. The bill also states the commission “shall accept licensing by another jurisdiction that has similar licensing requirements, as evidence the applicant meets management services provider licensing requirements,” which could potentially accelerate the timeline for approval among operators.

Where Will Gaming Revenue Be Used?

Alongside initial licensing fees and renewals, SB 214 would levy a 20% tax on the net gaming revenues from the five licensed casinos.

The gaming revenue will be reimbursed to multiple funds. For instance, 75% would go to Alabama’s General Fund, and 20% would go towards a newly formed Gaming Trust Fund. Another 3% would be reimbursed to the county commission of the jurisdiction where each facility is licensed, and 2% would go to the governing body of the municipality where each facility is licensed. The rest of the revenue would remit extra funds to the county commission in cases when the gaming facility is not situated in a municipality.

The funds reimbursing to the state’s General Fund would be used for specific uses such as scholarships, rural healthcare, mental health, and broadband internet expansion. Furthermore, lottery revenues would go toward education in order to fund scholarship programs based on a combination of need, merit, and workforce requirement in the state.

Marsh said that his legislative proposal is likely to generate around $700 million annually in taxes and license fees.

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