FISCAL NOTE

Senate Bill 214 as introduced, proposes a constitutional amendment, which if ratified would establish the Alabama Education Lottery, allow casino-style games and electronic bingo to be operated only at covered locations, and allow sports wagering at covered locations or through an Internet sports wagering platform.

This amendment establishes the Alabama Education Lottery Corporation to administer and operate the Alabama Education Lottery and Alabama Gaming Commission to regulate and the Alabama Lottery Corporation and the conduct of bingo, charitable bingo, sports wagering and casino style games.

Once operational, and after the payment of prizes and expenses, the Alabama Lottery will generate an estimated $194-$279 million annually to be deposited into the Lottery Trust Fund and appropriated each fiscal year for a postsecondary scholarship program based on a combination of need, merit, and workforce needs in the state. This amendment further provides that a portion of any unclaimed lottery prize money will be used for agriculture grant programs established by general law.

This amendment levies 20% tax on net gaming revenues of the gaming operations in the state, excluding operations on lands held in trust for the Poarch Band of Creek Indians. Once operational, and after paying reasonable expenses of the Gaming Commission, receipts to the Gaming Trust Fund will be an estimated $260-$393 million annually from the 20 percent tax on gaming revenues as authorized by this amendment. This amendment further provides that funds in the Gaming Trust Fund shall be appropriated by the Legislature in an independent supplemental bill as follows:

1. 20% to remain in the Gaming Trust Fund;

2. 75% to the State General Fund and distributed as follows;

65% for Information Technology Infrastructure of which the first $1 billion shall be set aside for the statewide development and expansion of broadband

25% for the provision of rural health services; and

10% for mental health services. Provided however that once the $1 billion for statewide broadband has been distributed, the State General Fund receipts shall be distributed as follows:

25% to remain in the State General Fund;

25% to be appropriated for rural health care services;

25% to be appropriated to develop and maintain IT infrastructure;

15% to be appropriated for mental health services; and

10% to be appropriated for grants to be awarded for infrastructure improvements to municipalities and counties that do not have gaming facility in corporate limits;

3. 3% to the county commission of county in which an operator is licensed; and

4. 2% to the governing body of the municipality in which a covered operator is located or to the county commission of the county in which the operator is licensed.

This amendment also authorizes license fees upon covered locations which will also generate receipts to the Gaming Trust Fund by an undetermined amount dependent upon the nominal license fee established by the Alabama Gaming Commission for charitable bingo operations, by $16 million per year for a period of ten years for license fees from covered locations and by an estimated $5-10 million annually from the levying of a tax of 20 percent on the gaming revenues from sports wagering. This amendment provides that tax revenues from sports wagering, shall be used first to repay the Alabama Trust Fund under the People’s Trust Act, and upon completion of repayment, the tax on gaming revenues from sports wagering will be deposited (1) 75 percent to the State General Fund; and (2) 25 percent to the Alabama Trust Fund.

This amendment will increase the obligations of the Governor to execute and file the terms of a compact between the Governor and the Poarch Band of Creek Indians for the conduct and operation of casino-style games and sports wagering on lands held in trust by the United States for the benefit of the Poarch Band of Creek Indians which could increase receipts to the Gaming Trust Fund by an undetermined amount dependent on the terms of a compact.

This constitutional amendment, could increase the obligations of the State General Fund by an estimated $115,000, in the event the Governor calls the Legislature into special session to enact general laws to implement this amendment.

In addition, this bill will increase the proclamation expenses of the Governor, paid from the State General Fund, by an estimated $100,000 for the fiscal year ending September 30, 2023.