Alabama House committee approves late-session lottery bill. Does it stand a chance?

·5 min read

The Alabama House will try to play the numbers.

A House committee Thursday approved two bills that would establish an Alabama lottery, with most of the proceeds going to small grants for postsecondary education.

The bills, sponsored by Rep. Chip Brown, R-Hollinger's Island, serve as House response to a more comprehensive proposal sponsored by Sen. Greg Albritton, R-Atmore, and reflects House Republicans' long-sought goal of passing a lottery without reference to gambling. That proposal has stalled in the Senate, in part due to concerns over which casinos would remain open.

Sen. Greg Albritton
Sen. Greg Albritton

"We honestly wanted to see what the Senate was doing as well," Brown said after the committee vote. "We had heard there were other bills coming and so at the end of the day, we brought this legislation, and we brought a good, clean lottery bill, just strictly as a lottery bill."

The measures must tread the narrow and razor-paved road of gambling politics in the Alabama Legislature, and do it with fewer than eight days left in the session. No lottery or gambling measure has made it out of the Legislature since 1999, due to the cold war between dog tracks and the Poarch Band of Creek Indians, as well as divisions within the majority Republican caucus.

The lottery bills, HB 501 and HB 502, would allow paper-based lottery games, including Powerball and Mega Millions, but not electronic ones. It would direct most of the lottery proceeds to three post-secondary scholarship programs. Proceeds also would provide 7.5% for bonuses for retired school employees (but not retired state employees); as much as $500,000 for fees for children to participate in private and public agricultural education programs, and $500,000 for services for problem gambling.

More: Greene County emerges as flashpoint in Alabama gambling legislation

The Legislature would decide how to split the money between the scholarship programs. If passed, the amendment would need approval from voters in November.

Brown's legislation would not address casino gambling or sports betting.

Alabama is one of only five states, and the only one east of the Mississippi River, without a lottery. The others are Alaska, Hawaii, Nevada and Utah.

"The people of Alabama have been playing the lottery for years," Brown said. "We've just been playing it in other states. So I think it's time we kept that money in the state and helped out the children of Alabama."

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Scholarships would be awarded to residents of Alabama who have graduated high school or earned an equivalency degree before turning 19. Residents who graduated from out-of-state schools while one of their parents served in the military would also be eligible. But the bill would not allow appropriations until the fund reached $250 million.

Two-year college students eligible to get scholarships would receive $2,500 or up to 90% of tuition and fees not covered by other aid.

Brown's legislation would offer four-year college students a scholarship program and a loan forgiveness program. The scholarship could be used until the student earned a bachelor's degree or equivalent; the loan forgiveness program for up to four years after graduation, but students would have to work in Alabama to qualify.

The award would be determined by dividing the lottery proceeds marked for the postsecondary programs by the number of eligible students. Financial need would not be a consideration. The Legislative Services Agency estimates that a lottery in Alabama would bring in a maximum of $285 million a year. According to the Alabama Commission on Higher Education, there were 83,926 students enrolled in the state's public four-year colleges and universities in the fall of 2021 who paid in-state tuition.

The Legislature would decide how to allocate the money between the different programs, but the actual awards to students are likely to be small. If the lottery pulled in the full $285 million; all of the $285 million went to the four-year scholarship grant, and 60% of in-state students took advantage of it, the award would top out at $5,702. The University of Alabama estimates direct and indirect costs of enrollment for in-state students living on campus at $31,054 for two semesters. At Auburn University, the cost is $33,650.

The award would decline still further if the money was split three ways between the programs. At $95 million for four-year scholarships, the award would be $1,900. In addition, revenues from lotteries tend be flat over time, while college costs have grown an average of 6.8% a year over the last 20 years.

The postsecondary awards would not be needs-based, which brought criticism from Rep. Neil Rafferty, D-Birmingham.

"I would want equity in that," he said.

Brown said after the meeting that he was "open" to those discussions, but said he believed his approach was fair.

"My goal was not to create special classes of citizens and just to have it equal across the board to all people in the state of Alabama," he said.

Albritton's Senate legislation would authorize a lottery and up to five casinos at the state's dog tracks and in northeast Alabama. It would also allow two "satellite casinos" in Lowndes and Houston counties. The bill passed out of the Senate Tourism Committee last week, but has run into opposition from bingo parlor operators in Greene County. The legislation would shut down all but one bingo parlor there — likely GreeneTrack outside Eutaw — and officials and operators say that could hurt the economy in an area that already struggles with poverty.

Contact Montgomery Advertiser reporter Brian Lyman at 334-240-0185 or blyman@gannett.com.

This article originally appeared on Montgomery Advertiser: Alabama House committee approves late-session lottery bill