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Ivey study group: $700 million in revenue, 19,000 new jobs if gambling expanded

By CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – An extensive report from Gov. Kay Ivey’s study group on gambling policy released on Friday said if all forms of gambling were allowed in the state, Alabama could see up to $700 million in annual revenue and as many as 19,000 new jobs.

“Gambling will work in Alabama and we feel that the advantages outweigh the disadvantages, in that endeavor,” said former Montgomery Mayor Todd Strange, who chaired the study group, at a news conference announcing the report.

The study group was established by executive order in February to examine existing gambling policy and enforcement, as well as the potential costs and benefits of legalizing various activities, so the Legislature could use the findings in crafting proposals. Each year, lawmakers grapple over the gambling issue – from existing slot machine casinos at dog tracks and Indian land to a more expansive turn toward a lottery and table games – but never find a consensus as the disparate interests involved cannot agree.

Ivey said she hoped a thorough report with conclusive findings could elevate the debate.

“After initial discussions with them regarding their report, I believe their research will be pivotal as gambling policies are being considered, debated and potentially voted on,” Ivey said in a statement. “As my team and I pour over the findings, I encourage the Legislature and the people of Alabama to do the same. The potential to act on gambling is an opportunity that cannot be accomplished solely by a governor or solely by the Legislature. It is incumbent on us to work together to provide the citizens of Alabama their opportunity to determine the future of gambling in Alabama.”

The 876 page report includes what possible forms of gambling could be allowed in the state; what are the economic, fiscal, social, political or otherwise benefits of allowing gambling; what are the costs to the state; what regulatory structure and practices should the state adopt to maximize benefits; as well as public input from various interested parties.

The group estimates that a lottery could each year bring in $200-$300 million in state revenue, with casinos bringing in $300-$400 million and sports betting adding another $10 million. Alabama is one of five states without a lottery.

The report doesn’t address the legal issues surrounding existing casinos at dog tracks or give recommendations on a compact between the state and the Poarch Band of Creek Indians, which operates three casinos statewide. Indian casinos are regulated by the National Indian Gaming Commission and are restricted from expanding their offerings beyond what the state allows without a compact.

“What has to be in the compact has to be negotiated in good faith and it has to have an economically viable concession to the tribe that would be negotiating the compact with the state, and all of that is in the eye of the federal government,” Strange said.

Some potential costs the report mentions if gambling were expanded could include government-sponsored addiction treatment, prevention, and education services costs; societal family, economic, and judicial costs; and displaced tax revenue costs.

The report estimates over 66,000 Alabamians could develop a gambling disorder but qualifies that by stating that gambling already exists in Alabama so this would not be a new problem for the state.

Joe Godfrey, executive director of the anti-gambling Alabama Citizens Action Program, said pro-gambling forces always underestimate the costs and over-promise on the benefits of their games.

“All taxpayers will be affected when taxes have to be raised to cover the lost income and revenue that always results from expanded gambling,” Godfrey wrote in an email to ALCAP members Friday. “Legalized gambling, whether in the form of a state-sponsored lottery or state-sanctioned casinos, or a combination of the two, has failed to raise the standard of living in every state where it has been initiated.”

A poll commissioned by the Governor’s Office found that 67% of Alabamians generally support expanding gambling in the state while 28.8% oppose it and 4.2% aren’t sure. The poll by John McLaughlin and Associates surveyed 500 general election voters and had a margin for error of +/- 4.5%.

The study group recommends that a single independent authority be the regulator, administer and enforcer of state rules. The report suggests a board of trustees that is appointed by the governor and approved by the senate would be the regulating body for gambling.

The study group did not offer a recommendation on what the new gambling revenue should be spent on but does note that over half of states with a lottery use it to fund education initiatives.

Strange said after surveying other states, the most beneficial situations for lottery revenue have come from only funding a few specific initiatives.

“Some of the more successful situations have only three or four uses of those monies,” Strange said. “If you try to nickel and dime to fill holes in general funds, that’s generally not successful.”

Ultimately, the report lays out five options for the state: do nothing; prohibit gambling but create a state body to enforce existing laws; allow a lottery only; allow a lottery and limited gambling or allow full expansion of gambling.

Since the next general election isn’t until November 2022, legislation surrounding a lottery wouldn’t have to be an immediate concern for the Legislature to take up in the upcoming regular session, which begins Feb. 2.

Rep. Steve Clouse, R-Ozark, told Alabama Daily News earlier this week that he isn’t sure if he will re-introduce his lottery legislation in the upcoming session but said he is leaning more towards creating a college scholarship fund with lottery revenue.

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