The Alabama Legislature is once again considering legalization of a state lottery. It is a no-brainer, yet our regal legislators struggle with making a positive decision.
It just boggles the mind as to their reluctance to do that. The prison system is financially bankrupt, education is in dire need of financial support, and roads and bridges are crumbling. Alabama is facing a federal mandate to fix the prison system and remains one of the basket cases as far as educational support. Legislators are fiddling while Rome burns.
The need for additional money to support state programs is real, and the money will either come from more taxes or other sources. One of those sources could be legalized gambling, so why does Alabama always have to be the last stagecoach out of Dodge?
We are surrounded by legalized gambling, which pays state and federal taxes. Mississippi is enjoying the revenue generated by legalized gambling, and a lot of those tax dollars are coming from Alabamians who travel just across the border to enjoy the Mississippi casinos.
However, the Indian casinos in Alabama are federal and state tax exempt. Alabama realizes no tax income from those casinos.
Gambling on Indian reservations nationwide earned $26.5 billion in 2011, and ownership of casinos by 236 Indian tribes totaled 422 facilities across 28 states. This data is eight years old and the number has increased exponentially since then.
In 2017, Indian gaming revenue increased to $32.4 billion. By comparison, the Las Vegas strip had revenue of $17.8 billion, which counted dollars for rooms, food, beverages and gaming combined. Gaming revenue accounted for only $6 billion. Las Vegas revenue from gambling pales in comparison to the Indian casinos.
Gambling participants, namely winners of jackpots totaling $1,200 or more on slots, video poker machines and other games, pay federal taxes on winnings. Those taxes do not affect the casinos’ bottom line.
The difference between Las Vegas casinos and Indian casinos is that Indian casinos can set their own payment schedules and have no clear rules to display for the general public payout percentages. Las Vegas casinos are required by the Nevada gambling commission to pay a certain percentage of the gambling proceeds.
There also are social issues with having legalized gambling. Research has shown increases in suicide, theft and bankruptcy in areas within 50 miles of a casino. However, legalized gambling is already prevalent in Alabama and the pros far outweigh the cons.
The question is, will state legislators continue to allow the revenue from legalized gambling to line the coffers of Indian casinos with no benefit for the state, or will they pass gambling laws that will introduce Alabama to the 21st century?
Allocation of gambling tax dollars will always be an impediment to an agreement by state legislators. I have a simple answer to that dilemma; Simply earmark all the increased revenue to education.
Legislators know Alabama has one of the poorest school systems in the U,S. “Throwing money at the inequities of our school system is not the answer” is a common phrase. Well, let’s find out if that is a true statement. With proper allocation of increased taxes derived from legalized gambling, Alabama could have a great and exceptional school system.
Gambling is a form of entertainment. The casino environment is stimulating. But the first place to start is legalizing the lottery, which begins with a Legislature that continues to dither about what kind of lottery the state will have.
Gambling is here; are we smart enough to take advantage of its financial potential, instead of facing more new taxes?
John F. Floyd is a Gadsden native who graduated from Gadsden High School in 1954. He formerly was director of United Kingdom manufacturing, Goodyear Tire & Rubber Co., vice president of manufacturing and international operations, General Tire & Rubber Co., and director of manufacturing, Chrysler Corp. He can be reached at firstname.lastname@example.org. The opinions reflected are his own.