If Alabama approves a state-sponsored lottery, it will be heading down a well-worn path — one trod by 44 states so far.
But one element of the lottery proposal by Sen. Del Marsh, R-Anniston, remains unusual: the Legislature would be able to spend the cash at its own discretion, rather than marking the money for a specific purpose, such as college scholarships.
"It is uncommon for states not to earmark the money," Thomas Garrett, a University of Mississippi economist who studies state lotteries, wrote in an email to The Anniston Star. "Most states earmark for education or economic development."
Marsh, the president pro tempore of the Senate, introduced a bill last week that would create a state-run lottery, which Marsh claims would bring $332 million in new revenue into the state budget. Marsh's bill would also allow tabletop gambling — now prohibited under state law — at four dog tracks in Alabama, and would authorize Gov. Robert Bentley to begin talks with the Poarch Creek Band of Indians on a compact to allow, and tax, gambling at casinos on tribal land. A public hearing on the bill is scheduled for Tuesday in a Senate committee.
(See GOP proposal would open door to lottery, casinos in Alabama, Lottery Post, May 5, 2015.)
It didn't arrive out of the blue. Alabama faces a deficit of at least $265 million next year in its General Fund, the budget that covers all state agencies except for schools. The budget gap has even normally anti-tax Republicans considering tax hikes — Gov. Robert Bentley has proposed $541 million in tax increases, while a House GOP plan would raise various taxes by $129 million.
Scholars who study gambling say it's not so unusual for states to turn to lotteries when budgets are tight. What is usual, though, is to campaign for a lottery without setting aside at least some of the money for a specific purpose.
Industry-driven
Many lottery states — including Georgia, Florida and Tennessee — market their state-run games as "education lotteries" reminding customers that the proceeds will go to college scholarships or K-12 classrooms. Many other states split the money, with some for the general fund, some for schools, and some for economic development, senior services or state parks.
There's a reason for that, said I. Nelson Rose, who teaches gambling law at Whittier College in California. The rise of state lotteries in the past 50 years, he said, is part of a "third wave" of legal gambling in American history — one driven largely by lobbying by the companies that make scratch-off tickets and other lottery-related equipment.
"The spread of lotteries was facilitated by companies that were involved with lotteries," Rose said. "They would go state-by-state and find a group they could partner with, a constituency that wanted lottery money."
With money for a proposed lottery earmarked to a specific group, Rose said, lottery proponents could tie the passage of a lottery to a specific policy goal and a group of voters.
By 1999 — the last time Alabama held a statewide lottery vote — lotteries had become nearly synonymous with state-funded college scholarship programs, but that tie wasn't enough to convince voters, who rejected the lottery plan.
The state remains one of seven without a lottery. Mississippi and Utah, like Alabama, are widely believed to have rebuffed the lottery largely because of widespread religious objections to gambling. In Nevada, arguably the nation's most gambling-friendly state, casinos have lobbied against the lottery as potential competition. In Alaska and Hawaii there's no neighboring state where residents can slip across the border to buy a ticket — an argument that has helped lottery proponents in other states.
'With our money'
Marsh made exactly that argument in an op-ed column he released last week. In the column, Marsh wrote that Alabamians are already giving away hundreds of millions of dollars by driving to Georgia, Florida and Tennessee to play the lottery.
"They receive those benefits while creating new jobs for their people, new investments for their towns and cities, new hotels, restaurants, entertainment facilities, new tourism dollars," Marsh wrote. "All for them and none for us. With our money."
Attempts to reach Marsh were unsuccessful. Marsh has in the past said that the lottery could create a "growth source of revenue" for the General Fund which has often faced budget shortfalls because it draws its money from slow-growing taxes.
Garrett, the University of Mississippi economist, isn't so sure.
"State lotteries are not a panacea for budget woes," he wrote in an email to the Star. Garrett said states with lotteries tend to have budget problems similar to states without lotteries, largely because of an unwillingness to control spending.
Other games to play
Critics of the Marsh lottery plan have also pointed out that a lottery couldn't be set up in time to generate revenue for the next budget year, though Marsh has said the state could borrow against future lottery revenues to cover the 2016 budget.
The proposed pact with the Poarch Creeks, however, could generate immediate revenue. The Creeks have offered a payment of $250 million if the state declines to expand gambling at sites outside its tribal casinos — in essence, preserving the Creeks' share of the market for gambling.
The tribe is now engaged in a legal battle with the state over the gambling already allowed at its casinos, and critics of the proposed deal claim the Creeks are trying to head off a loss in court.
"Why would we want a gambling compact with the Indians when we have a chance to shut their casinos down?" said Joe Godfrey, executive director of the Alabama Citizens Action Program, an anti-gambling group.
Attempts to reach Poarch Creek officials for comment were unsuccessful.
Any proposal being floated now, by either the state or the Poarch Creeks, is still an opening offer. Just where negotiations would take a gambling compact is hard to predict.
It's possible a deal could bring state and tribal leaders back to the negotiating table regularly. In 2007, Florida's governor, facing a budget crisis, inked a deal with the Seminoles, but it took years for lawmakers to agree on a compact. Now that deal is expiring and the state is back at the negotiating table.
Still, outcomes vary from state to state, in part because some states deal with multiple tribes, said Susan Nolan, director of the National Coalition of Lawmakers from Gaming States, a group that represents legislators in states with legalized and regulated gambling.
"It's different from state to state, and I don't know that there is a pattern," Nolan said.
This should be interesting to watch ............
I do believe Alabama will end up with a lottery since they are tired of seeing revenue leaving for other states. Besides the fact the voters are not going to want more taxes.
Bama wake up, you are lagging behind.
If they decide, yet again, not to have a state lottery, Alabamians will continue to play lotteries, other state lotteries!
Where"s ridge when you need him.Yes thats right,all the Tennessee money will now support Alabama..I will drive to support it,not as far as Georgia or Kentucky.When you spend thousands and thousands and never winning nothing,you get tired of it.
Wait a minute,lets see who will start it up first before I put my foot in my mouth.
Great just what we need is another state offering gambling. The industry struggles because it is spread to thin especially after the crash of 2008. Since then most people are to broke to spend money on gambling except geezers on fixed income. What Nevada, Ohio, New Jersey, Missouri, Louisiana, Iowa, and now Alabama? Cities like Birmingham went broke because of corrupt politicians supported by the real problem of the more corrupted voters in those cities. Gambling tax revenues won't save them from bankruptsy and they know it. Just one more avenue for corrupted bribery if you are in office i quess until the bankruptsy of these types of cities anyway.
I'd say restrict casino gambling, horse race gambling, poker gambling, sports gambling, et all to the city of Las Vegas only. Spreading it out to a 100+ cities makes everyone a loser. Since the future is internet gambling anyway let that be the wild west show not building more billion dollar gaming hotels in multiple states. It won't work financially. The economy is to bad since 2008 to support it. It will be the years 2025-2030 before we get out of this depression the country is going through. Let the original gambling city of Las Vegas prosper. Congress has acted before on gambling and id like to see a president get active on this.
Now don't get me wrong i do support megamillions & powerball in every state and city. However i would ban all other state draw games and scratchers. You want to gamble locally play megamillions & powerball. Otherwise get on a plane and go to Vegas or get on the internet. These scratchers are causing financial hardship to poorer people who can't afford to play. I can't count the times i've went in to buy ONE megamillions ticket and seen countless people sitting over at a table scratching $20 to $50 worth of tickets with "the fever" and looking like they can't pay for that months utility bills for their kids. Its terrible.
religious objections to gambling
Amazing how these nut-jobs say they believe in god and gambling is bad but allow animal abuse(dog tracks). I have a neighbor that rescues greyhounds and a lot of them come from down there. Florida has better luck. Go there if you can.
Anonymity for all winners! Physical ball drawings vs Random Number Generators!
I've been wondering where the RIDGE has been also! I haven't seen any post from him in a very long time! I hope he is ok!
Is there still a Greyhound track in Pensacola, FL? I used to go MANY years ago until I read about the abuse that goes on, thankfully Massachusetts outlawed dog racing. As for nearby Churchill Downs that this transplanted New England here in KY won't go there again.
The true is Marsh throw this bill together. Gov. Robert Bentley want to raise taxes to cover their out of control spending. Both these men want to continue to keep their hands in the tax payers pockets. Neither want to be accountable or responsible. Sen. Del. Marsh, R. doesn't really want a lottery here, he is using this piece of legislature as a lure or bargaining chip. free press. First of all his actions are deliberate. This is a definite planed , and carefully thought out scheme. A means to a end. He deliberately don't earmark where this revenue is to go. That why he don't make no comments about it when question about it. The way he set the bill up cover him and the Gov. Bentley, not the Ala. voters. If Ala. voters agree to a lottery right now , with the bill the way Marsh has it , with no specification or terms of any kinds about the new revenue earmark places to go. If you vote for the lottery this way, you've just given both men signed blank checks! You will hand them a credit cards , check where the sky is not the limit. You handing over to them, the power to do what ever they want with the money. Which means if either of this man a raise, new cars, summer homes....etc. They could do it then. Think about it. It doesn't mean the children here will get a better education, road repairs, emergency services will improve....etc. These two gentlemen aren't concern about the future of the children of ALA. voters, or the voters themselves they could care less. Now,if these two men do add any thing of real use to the bill just remember at your children , your families, what Ala. voters real need are after thoughts. Not giving the money a specific purpose, was indeed a deliberate act. Alabama politicians careless about what they're actually doing to the tax payers in Alabama. Their only concern is to keep you happy enough to continue to vote for them to get in these seats and get a pay check. In reality this piece of legislature is speaking loud & clear, just like it political writers. I don't want to be accountable or responsible with this money. Any housewife, business person, economic teacher, adviser know to stick to your budget. If you when over your budget you need to tighten your belt curve your spending until the budget is back on track. Both these politicians has made it clear, they want to continue to waste funds. They have already said, if give a bailout, they want to borrow against money they have not seen yet. A budget will not get on track this way. At this point all I can see is these two politicians laughing all the way to the bank, patting each other on the back , with tax payers money in hand. I guess the real question here should been. Why, such a responsible voter continue to hand over the rein to irresponsible & unaccountable politicians jobs they clearly don't do well or correct? Left this way mismanagement of funds is on it way, raise in taxes to come to cover another mistake. It pass time for them to become accountable and responsible to the tax payers. What services have they really render to Ala. voter, with the over the budget spending?