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KNOW THE FACTS

ABOUT THIS CONSTITUTIONAL AMENDMENT


HB507 [Rep. M. Black] /SB 380 [Sen. P. Bedford]

• Amends the Alabama Constitution to guarantee a handful of gambling bosses a constitutionally


protected monopoly on slot-machine casino gambling, as long as they call it “bingo.”
• This amendment is 42 pages of fine print, quite possibly the longest, most complex amendment
ever proposed to the Alabama Constitution.
• Legalizes the currently illegal gambling at casinos around the state.
• Initially authorizes a total of 10 Las Vegas-style slot-machine casinos across Alabama, putting
at least one in every congressional district.
• Then it allows every county in Alabama to have its own casino by referendum on local
amendments. Imagine that – 67 casinos spread all across the State of Alabama.
• The decision to have a referendum will be made in Montgomery. If the Legislature approves a
referendum, can your community raise enough money to stop the gambling interests from
putting a casino in your neighborhood?
• Defines “bingo” to include “slot machines” and other “gambling devices” so that casino owners
can’t be prosecuted for use of illegal gambling machines.
• Gives these casino owners immunity from criminal prosecution for violating ANY of Alabama’s
anti-gambling laws.
• Gives Las Vegas machine suppliers (and other out-of-state suppliers) immunity from criminal
prosecution for supplying or leasing their slot machines to these casinos.
• Strips Alabama courts of jurisdiction to review the operations at these casinos.
• Opts the State of Alabama out of the Johnson Act – a federal law that otherwise prohibits the
transport of illegal gambling devices across state lines. In other words, this bill gives machine
suppliers and Alabama casino owners immunity from federal criminal law against these
gambling machines.
• Guarantees racetrack casinos the right to conduct pari-mutuel and slot machine gambling 24
hours a day, 7 days a week, “as the operator determines to be necessary or beneficial for the
profitability of such racetrack,” regardless of any other laws or local ordinances.
• Allows profit-sharing between casino owners to “discourage predatory competition.” In
layman’s terms, this is called a monopoly.
• Legalizes the for-profit business agreements some casino owners currently have with
“charitable” front companies in violation of the Alabama Constitution.
• Lowers the current tax on casino profits and fixes a low tax rate into the Constitution so
that it would take a Constitutional Amendment to ever raise their taxes.
o Currently, casinos owe a state gross receipts tax of 4% of total wagers. So for every $100
wagered, the casino must remit $4 to the state.
ƒ Under this amendment, the state tax rate would be 20%, but only on the
gambling revenue left over AFTER payouts to winners. According to the gaming
industry, these machines generally have about a 90% payout ratio, meaning a
10% keep for the operator ($10 of every $100 wagered). A 20% tax on $10 is just
$2… HALF the tax casinos would have to pay under current law. At the proposed
20% tax rate, operators would have to lower the machines’ payouts to 80% to be
charged the same amount of taxes as required under current law.
KNOW THE FACTS
ABOUT THIS CONSTITUTIONAL AMENDMENT
HB507 [Rep. M. Black] /SB 380 [Sen. P. Bedford]
ƒ The amendment also includes a local tax rate of 5% on gross slot-machine
revenue. The local tax is apportioned and paid to the counties without “bingo”
amendments on the basis of population in order to garner more support for the
bill from local governments during difficult budget times.
o In most other states with similar forms of gambling, the tax rates are
much, much higher. Examples of effective tax rates:
ƒ Rhode Island: 74.28%
ƒ Pennsylvania: 47.11%
ƒ Maine: 49.56%
ƒ New York: 47.11%
ƒ Florida: 50%
• Establishes a 50% tax rate on “unauthorized” (i.e., illegal) casinos. Why not 100%?
• Gives Country Crossing a special 7.5% state tax rate for the first 5 years.
• Creates a 5-member “State Gaming Commission,” with the governor, attorney general,
lieutenant governor, speaker of the house, and chief justice each having one appointment.
But all appointments must be confirmed by the Senate.
• Prohibits the State Gaming Commission from seizing illegal gambling equipment until after a
hearing.