The debate in the conservative state over asking voters to approve casinos and a lottery as an alternative to raising taxes is producing some unlikely bedfellows
The gambling proposal poses an awkward dilemma: ‘You’ve got to understand, whereas Republicans may not favor gaming strongly, they definitely oppose higher taxes.’Photograph: Oleksiy Maksymenko/Alamy
Past efforts to loosen Alabama’s gaming restrictions have largely fallen on closed ears. But the times could be changing. A new proposal to legalize traditional casinos and establish a lottery, two forms of gambling that have traditionally encountered backlash in the heart of the Bible belt, has surfaced at the behest of conservative lawmakers.
State lawmakers are being forced to close the state’s more than $250m short-term budget gap during the current legislative session. Governor Robert Bentley, who so far has resisted calls for direct budget cuts from the legislative branch, has proposed raising $541m in new taxes to address both immediate and long-term budget shortfalls.
Alabama residents, long opposed to increases in both gaming and taxes, could be forced to choose the lesser of two evils.
“You’ve got to understand, whereas Republicans may not favor gaming strongly, they definitely oppose higher taxes,” says Marsh, who currently serves as the Alabama senate president pro tempore. “When you’re left with the option of the governor increasing taxes, I think it’s only fair to let the people vote on it. The taxes would not. Let the people make that decision before we tax them.”
Marsh says his bill would give voters the chance to legalize class II and class III gambling – which include slot machines, blackjack, poker, craps and other table games – near the state’s four greyhound tracks. Currently, the Poarch Band of Creek Indians, the state’s lone federally recognized tribe, has smaller-scale casinos in Atmore, Montgomery and Wetumpka that offer electronic bingo that looks like slot machines but is legal. Gamblers seeking a traditional gambling experience with slot machines or roulette must leave the state to cash in their chips.
Three-fifths of state lawmakers would need to approve the constitutional amendment in order to place the proposal on a statewide ballot. If voters passed the measure, Alabama would levy a 13% tax on gross casino gambling revenue, which would go toward the general fund. An additional 1% tax would be split among the counties where the casinos are located. The bill also calls for a 4% tax on casino equipment vendors.
The gambling bill would also establish Alabama’s first-ever lottery to plug the budget gap. Alabama, one of six states without a lottery in the United States, is no stranger to such proposals over the years.
Back in 1998, Democrat Don Siegelman was elected governor largely on the promise of letting residents scratch lottery tickets to provide free in-state tuition to Alabama high school graduates – a model other southern states such as Georgia and South Carolina now have in place. Facing strong church opposition on moral grounds, residents ultimately rejected the lottery proposal the following year. The ill-fated plan later landed Siegelman a six-and-a-half year prison sentence for corruption charges related to the sale of a state regulatory board seat in exchange for a $500,000 lottery campaign donation.
A recent Auburn University at Montgomery study found both a lottery and casino could generate a total of nearly $400m in annual revenue. According to Marsh, the expanded gambling could lead to $800m in economic development. With Alabama residents driving to other states to gamble, he says officials are missing a major opportunity to boost the state’s economy and solve the budget crisis.
Alabama could be heading for a little bit of Las Vegas. Photograph: Kumar Sriskandan/AlamyRepublican state senator Trip Pittman doesn’t buy into the potential benefits of the gambling plan. He plans to filibuster the legislation on the senate floor arguing that it won’t solve the state’s immediate budget needs. Pittman says lawmakers should instead consider alternatives like further streamlining of the state’s retirement costs, capping healthcare spending, and revisiting the use of taxpayer incentives given to private-sector companies.
“Losers gamble,” Pittman says. “If you have a budget problem, you should change things so you don’t end up in the same place. What good are gambling or raising taxes if you don’t change the issues needed to solve the problem.”
Pittman is willing to consider some kind of tax increase and is not alone. Some members of Alabama’s Tea Party, known for steadfast resistance toward taxes, have even suggested potential tax hikes as part of the bigger solution rather than drastic cuts slashing essential programs.
At a recent public hearing, the vice-chair of the Poarch Band of Creek Indians tribal council, Robert McGhee, voiced his opposition to the constitutional amendment that would allow competing casinos to operate in the state. He blasted the measure for its lack of regulations and shortsighted approach.
“That’s like handing your teenager a credit card with no rules attached and then being surprised when you get a bill that, well, looks like Alabama’s budget deficit,” McGhee said at the public hearing.
The Poarch Band of Creek Indians have since countered with an enticing proposal: a $250m loan to help cover the budget shortfall. What’s the catch? The tribe would need to become the state’s exclusive gambling partner. A Poarch Band of Creek Indians spokesperson did not return the Guardian’s request for comment.
The full senate and house of representatives still need to sign off on Marsh’s constitutional amendment, which passed through the senate tourism and marketing committee. If lawmakers approve the bill, the constitutional amendment would be placed on the statewide ballot in September.
Some lawmakers, who are bracing for a special session to address the budget needs, have questioned whether the gambling would even solve the immediate deficit.
Alabama’s potential gambling vote would not just determine the outcome of this year’s budget talks.
It would serve as a litmus test of the state’s shifting political spectrum. Charles Bullock, a political science professor at the University of Georgia, says residents have become increasingly moderate since the state’s referendum on gaming. With the influence of fundamentalist churches slowly declining, he says younger voters might be open to casinos and a lottery.
“Maybe voters have become more comfortable with that vote,” Bullock says. “Maybe they’ve gone to Mississippi casinos as well as bought lottery tickets in Georgia. Maybe it’s less alien to a share of the electorate today.”
Republican state senator Greg Albritton, who represents a south Alabama district where one of the Poarch Band of Creek Indians bingo casinos is located, questions whether Alabama voters are ready for both forms of gambling at the same time. But there’s one thing he’s willing to wager on: a lively debate on whether blackjack or taxes make the most sense the resolve the state’s funding problems.
“It will be a bloody fight on the floor,” Albritton says. “Will it get through? I don’t know. If it were just a lottery, it’d probably get through. If it were just private gaming, it’d have less of a chance but possible. But with both, I don’t know what will happen.”
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