Alabama Lottery Bill Would Give Proceeds to Education

Wednesday January 29th 2020

The Alabama legislature will consider a new lottery bill that would use revenue for education, split between the state's pre-kindergarten program and college scholarships.

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Republican Rep. Steve Clouse of Ozark will introduce the proposal to authorize a state lottery when the new legislative session begins next week.

The proposal needs to clear several hurdles before a lottery is implemented. The bill must pass the House and Senate with at least a three-fifths majority. Next, it would go on the ballot to be voted on by citizens. In order for a lottery to be created, voters would need to change state laws to allow Class III gaming.

Alabamians last voted on whether to create a lottery in 1999, when then-Governor Don Siegelman was in favor of using lottery proceeds to fund education. However, voters rejected the measure and no new proposal has been put on the ballot since then.

Alabama is one of just five states in the country, and the only one in the Deep South, without a lottery. Last November, neighboring Mississippi started its own lottery with scratch-off games, and is rolling out multi-state games Powerball and Mega Millions on Thursday, January 30. Alabama's other neighbors, Florida, Georgia, and Tennessee, also have lotteries.

"We're surrounded, and it's to the point now where it's ridiculous that we don't have a chance to let our constituents vote on this issue," Clouse said.

Public opinion may have changed, at least judging by a Twitter poll conducted by Alabama TV station WVTM13 asking, "YES or NO to a lottery in Alabama?" 94.6% of respondents voted Yes, with just 5.4% voting No.

Many Alabama residents cross state lines to buy lottery tickets, leading proponents of a lottery to claim the money should be going to Alabama instead. Mississippi, for example, raised $2.5 million in its first day selling scratch-off tickets.

The Legislative Service Agency estimated last year that a paper lottery would generate $166.7 million per year, while Clouse believes it could be much more.

A lottery bill is introduced during almost every session of the Alabama legislature. In 2019, a bill squeaked through the Senate with no votes to spare, but failed in the House. Under that proposal, most of the lottery revenue would have gone to Alabama's General Fund, with a smaller share going to education.

Past bills failed due to long-standing opposition to gambling and disagreements over electronic gaming. Competing factions "make it easier to kill something than to pass something," said Sen. Greg Albritton, who sponsored last year's lottery bill. He said that a new lottery bill should try to get through the House first this time. "That's where the last two we've sent have died," he said.

The new bill would give half the lottery's revenue to Alabama's pre-kindergarten program, First Class, and half to needs-based college scholarships. 

"I do think the general sentiment is that it needs to go to education," Clouse said. "All of the states around us have theirs dedicated to education except Mississippi. Theirs is going to roads and bridges."

In 2019, First Class was ranked the highest-quality pre-K program in the nation by the National Institute for Early Education - its 13th year at the top. However, the program still doesn't have enough funding to roll out across the state.

According to Clouse, students would be able to access the college scholarships after they had applied for other scholarships and grants. He would like the scholarships to focus on technology-related fields, filling a gap in the state's workforce.

Meanwhile, the Poarch Band of Creek Indians, who run casinos in Alabama operating under Class II gaming laws, are campaigning for the state to grant them the exclusive right to own and operate Class III gaming, including table games like Blackjack. The tribe also supports a state lottery.

The tribe predicts gaming would generate $1 billion for Alabama in its first year. The Poarch Creeks would make a one-time payment of $225 million, and project that the state would receive $350 million per year in revenue and $750 million from license fees and economic growth. However, lawmakers from districts with dog racing tracks are under pressure not to grant the tribe a state compact.

The new legislative session runs from February 4 to May 18.

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