The Alabama Senate Tourism and Marketing Committee recently voted 5-3 to approve a bill sponsored by Senate President Pro Tem Del Marsh that would authorize a state lottery and casinos at four dog tracks, and encourage Governor Robert Bentley to pursue an agreement with the Poarch Band of Creek Indians. The committee rejected an amendment to add the former Country Crossing site in Houston County to the four casino sites.
The bill now moves to the full Senate. Three-fifths of the legislature would have to approve the measure followed by approval of a majority of voters statewide in September, since the bill is a constitutional amendment. “I’m not a gamer, as a Republican I’ve never been big behind gaming, but I think gaming is here in the state. I looked at a piece of legislation that dealt with those entities that were in the state now, not expanding gaming, but making sure that we as a state see fair revenue for these facilities in lieu of tax increases,” Marsh said.
He added, “This is a very big piece of legislation. It’s a controversial piece of legislation, but I think it’s an option that should be out there. As these budgets proceed, and as the pressure builds from agencies who feel they are not going to be adequately funded, people may change their mind on that option of gaming. He added he did not know if he had the 21 votes required to pass the measure in the 35-member Senate.
House Speaker Mike Hubbard said, “I don’t think there’s much chance of it passing the Senate. My prediction down here was it has a very low chance of passing.” State Senator Dick Brewbaker, added, “I think that we’re going to have to write a lot better bill before it will have a prayer in the Senate. And you know, there are still senators, and I’m one of them, that believe you are never going to build a good society by funding government on the premise that we’re just going to take advantage of our citizens. I mean, we’re looking at the public the way wolves look at sheep.”
The four racetracks that would allow casino gambling are: VictoryLand in Macon County; GreeneTrack in Greene County; Birmingham Race Course, which would have slots and table games; and Mobile Greyhound Park. However, the Poarch Creeks, owners of the facility, have said Class III gambling there could hurt the tribe’s Wind Creek Casino in Atmore.
Marsh said an Auburn University study showed the lottery and casinos would generate $400 million–$332 million from the lottery–in annual new revenue for the state and create up to 11,000 jobs. The money is needed to help fill Alabama’s General Fund deficit of at least $265 million next year; the budget that covers all state agencies except education.
Bentley, who won re-election last year on a no-new-taxes promise, has proposed $541 million in tax increases, mostly on cigarettes and car sales. He called Marsh’s bill “the worst piece of legislation I have ever seen.” Another plan, offered by the House GOP, would raise various taxes by $129 million. “Do we raise taxes or do we find new sources of revenue? We have hundreds of millions of dollars leaving this state to fund gaming facilities in other states,” Marsh said. “Republicans, by and large, aren’t big advocates of gaming. But they sure as hell don’t like taxes.”
Earlier, the Senate committee held a public hearing at which bill supporters said their communities need economic help. Speakers from Houston and Macon counties, in particular, strongly urged committee members to pass the bill. Drew Thompson, a Macon County Commissioner, said the closing of VictoryLand in 2010 was economically devastating. “I’m where the rubber meets the road with the VictoryLand closure. It has been very difficult since the closure of that facility to keep the lights on. I can’t tell you all the negative things that have gone on as result of the closure of VictoryLand and the loss of 2,000 jobs there,” Thompson said.
VictoryLand, located 15 miles east of Montgomery, was the nation’s largest electronic bingo casino with 6,400 machines. In 2010, several senators and lobbyists, including VictoryLand owner Milton McGregor, were acquitted of charges of buying votes for a similar gambling bill that would allow bingo casinos like VictoryLand to remain.
Opponents of the bill said legalizing gambling would negatively impact the state and increase crime and addiction. Joe Godfrey, executive director of Alabama Citizens Action Project, said, “It is a tax. It’s a tax on the poor. It preys on the people who can least afford to pay it.”
Since Alabama voters rejected a lottery, the state remains one of seven without one. Mississippi and Utah have rejected a lottery primarily because of religious objections to gambling. In Nevada, casinos consider a lottery competition and have lobbied against it. And in Alaska and Hawaii the argument does not apply that residents can cross stateliness to buy lottery tickets.
Bentley has noted Marsh’s proposed lottery could not be established in time to generate revenue for the next budget year. However, Marsh has said the state could borrow against future lottery revenues to cover the 2016 budget.
Marsh’s legislation also would establish a five-person statewide gaming commission. And it encourages Bentley to pursue a gambling agreement with the Poarch Creeks, the state’s only federally recognized Indian tribe, which could generate immediate revenue since the Poarch Creeks have offered a payment of $250 million in exchange for exclusive rights to offer gambling at its three reserve casinos plus the right to construct a fourth casino. The House Republican caucus has endorsed a gambling proposal that would essentially allow the Poarch Creeks to keep the electronic bingo they have. Bentley’s office has had some talks with the tribe, but the governor said he does not believe gambling will fix the budget challenges.
Tribal Government Relations Director Robert McGhee spoke against the Marsh’s bill at the hearing. Since their competitors have shut down, business at the Creeks casinos has flourished. Alan P. Meister, author of the Indian Gaming Industry Report said Indian gambling revenue has grown faster in Alabama than in almost any other state in recent years. The Poarch Creek tribe has renovated casinos, built new restaurants and last year opened a 286-room hotel featuring a giant shark tank.
“It comes down to this. The racetrack owners are individuals with no mandate to serve others. We have a legal and moral responsibility to tribal members,” McGhee said. Tribal Chairwoman Stephanie Bryan also commented, “We of course heard from state legislators that the deficit is constantly growing. So there may be interest that there’s something that gaming can do for the state.”
However, observers said the state already is trying to stop gambling allowed at the Creeks’ casinos in Atmore, Wetumpka and Montgomery.
Attorney General Luther Strange, who has worked for years to try to shut down the Poarch Creeks casinos, said, “There are a lot of legal issues out there involving the Poarch Creeks and it’s very clear why they’re trying so hard to reach a deal so that they can remove those challenges.”
Tribal spokeswoman Sharon Delmar said, “None of our efforts to assist the state with the budget deficit is related in any way to any pending litigation.”
Strange sued the Poarch Creeks, claiming the electronic bingo machines in their casinos are illegal slot machines. Tribal officials said their gaming machines are legal according to National Indian Gaming Commission. U.S. District Judge Keith Watkins ruled last year that the state has no authority to regulate gaming on Indian lands, and the 11th Circuit Court of Appeals has yet to rule on the state’s appeal. Strange said he does not expect the appeals court to rule on the legality of the machines, but on whether the state has jurisdiction to take the Poarch Creeks to court.
