Alabama Gaming Bill That Includes Sports Betting Awaits Senate Vote

The state of Alabama has taken its first steps towards legalizing sports betting as State Sen. Del Marsh’s bill to expand gaming advanced to the Senate floor Wednesday following an 11-0 vote of approval from the Senate Tourism and Marketing Committee.

Sports wagering is a component of SB 214, which calls for the authorization of a state lottery and the building of five casinos across Alabama. Four would be built at pre-existing sites where there are currently dog tracks — VictoryLand in Macon County; GreeneTrack in Greene County; the Birmingham Race Course; and Mobile Greyhound Park. A fifth would be located in either Jackson or DeKalb counties and operated by the Poarch Band of Creek Indians.

Any bill that expands gambling in Alabama requires an amendment to the State Constitution in order to be enacted, which means SB 214 would require 63 votes in the House and 21 in the Senate to advance. Voters would then get their chance to approve it as a ballot question in the 2022 general election that November.

Highlights of sports betting a part of Marsh’s bill

There is also a sports betting-exclusive bill currently in the House, with HB 161 referred to that chamber’s committee on Economic Development and Tourism after an initial reading earlier this month. A study released in December by the Governor’s Study Group on Gambling Policy estimated that gaming could generate as much as $700 million annually in tax revenue for Alabama, with sports betting accounting for $10 million of that total.

There are sporadic direct references to sports betting in Marsh’s bill since it is incorporated into casino-style gaming. It would likely provide the opportunity for the Poarch Band to offer in-person sports wagering, which usually falls under Class III gaming in a state-tribal compact.

The legal age for sports betting would be 21, and sports wagering would be regulated by a newly created Alabama Gaming Commission that would also oversee casino gaming, bingo, and charitable bingo. The term “sports wagering” as established in the bill “may include: single-game bets, teaser bets, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, straight bets, and any other bet authorized by the commission.”

There appear to be no carveouts prohibiting wagering on in-state college teams — a vital component of potential sports betting in Alabama given the rampant popularity of the Crimson Tide and Auburn in college football coupled with the state lacking a professional team in the five major sports leagues (MLB, MLS, NBA, NFL, and NHL) in the United States.

All casino net revenue save that generated through tribal gaming would be taxed at 20%, which for sports wagering would put Alabama equal with neighboring Tennessee and among the highest rates in jurisdictions with legalized sports wagering. To the west, Mississippi has a tax rate of 12% on sports betting revenue.

The sports wagering license fees are incorporated into casino license fees, and those proposed appear ambitious — especially for VictoryLand and what the bill labels “Jefferson County,” which would be the Birmingham Race Course. While covered operators at GreeneTrack and in Mobile would be charged $5 million, the license fee for VictoryLand is $50 million and Jefferson County would be $100 million.

All four sites, though, would pay those license fees in more manageable 10 annual equal installments, which means $500,000 per year for GreeneTrack and Mobile; $5 million per year for VictoryLand; and $10 million per year for Jefferson County.

Prospects appear good for mobile sports betting

That sports wagering license would also allow covered operators to offer mobile/online betting, and there is no mention of a provision requiring in-person registration to obtain access to mobile wagering. Similar to New Jersey, three online skins would be permitted at each venue, which means there could be as many as 12 potential mobile operators in Alabama.

Management services provider license fees to offer mobile sports betting are $100,000 per applicant, and if applicants are awarded licenses, they would be renewed every five years provided the licensee is in good standing. 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.

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