Does Alabama have a lottery? Not currently - Alabama is one of just five states that does not have a state lottery. The others are Alaska, Hawaii, Nevada, and Utah. These states are also not part of multi-state games like Powerball and Mega Millions.
Can you buy lottery tickets in Alabama?
If you live in Alabama, you can't buy lottery tickets within the state or online. However, Alabama residents often travel across the border to buy lottery tickets in neighboring states, which is entirely legal.
When neighboring Mississippi launched its lottery in November 2019, Alabama found itself entirely surrounded by states with lotteries. Retailers near the border in Mississipi, Georgia, Florida, and Tennessee do a brisk business, especially when a big jackpot creates extra excitement.
If an Alabama resident won the lottery on a ticket bought in another state, they would be able to claim their prize, but they would still have to declare their winnings as income. A big prize would put the winner in Alabama's top six percent tax bracket. The winner would not pay state tax in the state where they bought the ticket.
Many argue that the money currently spent on lottery tickets in other states should be spent in Alabama instead, with revenue from a lottery going towards education, roads, and other good causes within the state.
Alabama resident Thomas Hawkins gets his Powerball tickets over the border in Florida, but wants Alabama to legalize multi-state lotteries too. "I think it would help, especially with the General Fund," he said.
Will Alabama get a lottery?
The absence of a lottery has not been for lack of trying on the part of some state lawmakers. In almost every session of the Alabama legislature, a lottery bill is introduced but subsequently fails.
Gambling is outlawed in the state's 1901 constitution, and the state has a history of religious opposition to gaming. However, that hasn't stopped all forms of betting in the state entirely.
On April 13, 2021, the Alabama Senate passed a constitutional amendment as part of a comprehensive package of gaming legislation, allowing for the creation of a lottery as well as casino-style gambling.
However, the bill ran out of time to be put to a vote in the House before the legislative session concluded in May, amid disagreements among lawmakers about aspects of the proposal.
Any lottery bill would be subject to a three-fifths majority requirement to pass the House. Next, the constitutional amendment would be put to Alabama voters, who would need to give it the green light before a lottery could be introduced.
Gaming could bring Alabama $710 million annually
In February 2020, Gov. Kay Ivey created the Governor's Study Group on Gambling and requested the Legislature pause gaming bills until her group could "get the facts."
In December 2020 the group released a report projecting that gaming could boost state revenue by around $710 million per year. That figure is based on estimates that 60 percent of Alabamians would gamble, raising funds from a lottery ($300 million), casinos ($300-$400 million) and a sportsbook ($10-$15 million). The report recommended legalizing all forms of gambling.
"Gambling will work in Alabama and we feel that the advantages outweigh the disadvantages," said former Montgomery Mayor Todd Strange, the group's chair.
Strange said an agreement with the Poarch Band of Creek Indians, who run electronic bingo in two locations under federal law, would be discussed if the constitutional amendment passes the Legislature and is approved by Alabama voters.
Following the report's findings, including that illegal gambling was rife in the state, Ivey said she now supported gambling legalization.
What would lottery money be used for?
How best to spend the money from any Alabama lottery has been a long-standing subject of debate. The current legislation proposes using gaming revenue to support college scholarships, broadband implementation, mental health, and rural hospitals.
The state has entrenched budget problems, which led to the substantial transfer of money from the Alabama Trust Fund to the General Fund. Many argue that until these core issues of state finance are resolved, the lottery will simply be a Band-Aid that conceals the need for more fundamental changes in the way the state raises and spends money.
In a sign of the dire state of Alabama's budget, Sen. Jim McClendon, a longtime lottery supporter, said in 2019, “my motivation is not to solve fiscal problems in Alabama. There’s not enough money in the universe.”
What's next for a lottery in Alabama?
The creation of an Alabama lottery is by no means guaranteed. Legislation to authorize a lottery must confront a thorny group of constitutional, economic and political hurdles.
Even if the legislature approves a future bill, there is doubt about which way Alabamians would vote. A lottery was previously put to a public vote in 1999, supported by the then-governor Don Siegelman, and voters rejected it by 54 percent to 46 percent.
Adding to the uncertainty, there is tension between two groups that run gaming facilities in the state. The Poarch Band run casinos offering electronic bingo in Atmore, Montgomery, and Wetumpka under federal law, while Alabama's four dog tracks operate under state law.
With the huge amount of state revenue more legalized gambling could potentially generate, one thing seems certain - expect a new attempt to introduce a lottery in Alabama before too long.