FISCAL NOTE

Senate Bill 319 as introduced, proposes a constitutional amendment, which if ratified would allow lottery games of all types and allow video lottery terminals to be operated only at licensed facilities.

This amendment establishes the Alabama Lottery Corporation to administer and operate the Alabama Lottery and the Alabama Lottery Commission to regulate and supervise the Alabama Lottery Corporation. Once operational, and after the payment of prizes and expenses, the Alabama Lottery will generate an estimated $272-$358 million annually to be deposited into the Lottery Trust Fund and invested in accordance with state investment practices, all earnings accrued from the investment which shall also be deposited into the Lottery Trust Fund.

This amendment levies: (1) a 22% state tax on gaming gross revenues generated from video lotteries at each licensed facilities in the state, plus an additional 1% tax on gaming gross revenues from licensed facilities that own and do not lease video lottery terminals and equipment; (2) a 2% local tax on gaming gross revenues generated from video lotteries at each licensed facility in the state; and (3) a 4% vendor tax on the gaming gross revenue from video lottery terminals owned by vendors conducting business in the state. Receipts collected from the state, local, and vendor tax is estimated to be $376-$550 million annually from the taxes imposed on lottery revenues as authorized by the amendment. This amendment also authorizes a license fee of $100,000, for a 10-year period, upon licensed facilities, who wish to offer video lottery terminals, which will generate receipts to the Lottery Trust Fund by an undetermined amount dependent upon the number of licensed facilities that apply for a license and the number of licenses allowed to be transferred with consent from the Alabama Lottery Commission and payment of a fee of $100,000.

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.