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Lottery

The Alabama Lottery debate is officially back. In the 2019 Legislative Regular Session, Alabama lawmakers will have at least two bills, the first two being introduced in the Senate by Jim McClendon.

The Bills

Alabama’s Constitution currently prohibits lotteries and gift enterprises. So, in order for State Legislators to even think about passing a law creating a lottery, you, the voter, have to give them permission.

SB 130 – Amending The Constitution

SB 130 is the bill that, if approved, will put the Lottery on the ballot for you on March 3, 2020. This is also the Presidential Primary date. Here is what SB 130 would do:

  • Creates the Alabama Lottery Corporation to oversee all aspects of the lottery.
    • No employee of the corporation can be a state employee or entitled to any benefits of a state employee.
    • The Corporation must be self-sustaining and cannot be funded by the General Fund or Education Trust Fund.
  • Creates the Alabama Lottery Commission which will consist of five board of directors. The Alabama Lottery Commission will be responsible for the management of the Alabama Lottery Corporation.
    • Members of the board must be Alabama residents, United State citizens and prominent persons in their business or profession.
    • Members cannot be any of the following:
      • Convicted of a Felony
      • An officer of our occupy an official position in any political party.
      • An elected official
      • Actively engaged in the business of or have a financial interest in a licensed facility.
    • Members are to be appointed as follows:
      • Two members are appointed by the Governor
      • One member by the Lieutenant Governor
      • One member by the President Pro Tempore of the Senate
      • One member by the Speaker of the House of Representatives
    • The first 5 board members are not required to be confirmed by the Senate. Any future board members will require Senate confirmation. If a vacancy happens when the Senate is not in session, then an interim appointment will be made and then confirmed in the next session.
    • The first board members will serve the following terms:
      • Three years for the member appointed by the Speaker of the House.
      • Four years for the member appointed by the President Pro Tempore of the Senate.
      • Three years for the member appointed by the Lieutenant Governor.
      • Four years for the members appointed by the Governor.
    • For every member after the initial board members and after confirmation by the Senate, they are eligible to serve two four year terms.
    • Each member is subject to the Ethics Law, the Open Records Act, and the Open Meetings Act.
  • Creates The Lottery Trust Fund.
    • After all expenses related to running the lottery are paid, such as operating the lottery and paying out winnings, the remaining balance is to be held in a separate account in the State Treasury called the Lottery Trust Fund.
    • The Lottery Trust Fund will receive monthly surplus payments.
    • Separate Legislation determines how the surplus money is spent (discussed in the next bill).
  • Lottery Prizes are subject to Alabama State Income Tax
  • No one under the age of 18 can purchase a lottery ticket but can receive one as a gift. The legal guardian will accept the winnings on their behalf.
  • Lottery tickets can be given by businesses as a means of promoting goods or services.
  • Which Games will be allowed?
    • All types of lottery games that include but are not being limited to draw lotteries of various types, unique to Alabama draw lottery, interstate lotteries such as Powerball and Mega Millions, instant winners such as scratch-offs, Keno, and iLottery or any other lottery offered in another state.
    • Video lottery terminals are allowed but only at certain licensed locations.
  • What Games Are Not Allowed?
    • Casinos or similar gambling establishments are prohibited as well as any game played with playing cards, dice, dominos, slot machines, or roulette wheels. Any game using live dealers is strictly prohibited.
    • Video Bingo is being phased out
      • Licensed facilities, as determined by the lottery commission, may legally continue to employ video bingo terminals until such times as the lottery commission mandates as the termination date. This change must occur within twelve (12) months of the effective date of this amendment.
  • For a business to conduct the lottery a license fee of $100,000 for 10 years is required.

SB 116 – Alabama Lottery Act

SB 130 above laid out most of the technical details on how the lottery is to be run. SB 116 is going to get into the more finer details. Let’s take a look.

  • Alabama Lottery Commission Duties & Powers
    • The commission will choose a chairman from its board members.
    • Travel and reasonable expenses are reimbursable.
    • The commission will appoint a CEO and the CEO serves at the pleasure of the commission.
      • The CEO cannot be a member of the commission.
    • The CEO and Commission essentially will work as any private sector company with a board and CEO and assume similar responsibilities within the Alabama Lottery Corporation.
    • The commission will decide what games will be playable, how they are played when any drawings occur and the prices of the games.
    • No officer, director or employee of the Alabama Lottery Corporation may participate in or contribute to a Political Action Committee.
  • Where will the profits of the lottery go?
    • 50 Percent to the State General Fund
    • 50 Percent to the Education Trust Fund
  • There will be no stores solely dedicated to the lottery.
  • Lottery machines must be visible by store employees at all time unless in a place that requires everyone to be 18 or older to enter.
    • Exception for lottery machines with ID verification
  • The law transfers the prize money to the estate of a deceased winner if the winner fails to claim their prize before their death.
  • The law refuses to pay for prizes issued in error.
  • If more than one winner, the prize is split evenly.
  • If you win an Alabama Lottery game you have 1 year to claim
  • Multi-State lottery tickets are given 180 days to claim.
  • Unclaimed Prize Money
    • Any unclaimed prize money may be retained and added to the pool for future prizes or be used for special prize promotion.
    • Unclaimed prize money can also be appropriated by the Alabama Legislature for any public purpose.
    • $200,000 of any unclaimed prize money is directed to the Alabama Department of Public Health for the treatment of compulsive gaming disorder and for educational programs related to compulsive gaming disorder.
  • These people can not buy tickets and no prize would be paid:
    • Any member of the board of directors, officers or employees of the corporation.
    • Any vendor
    • Any spouse, child, brother, sister or parent residing as a member of the same household in the principal place of abode of any person listed above.
  • Anyone who wins more than $250,000 may choose to remain anonymous.
  • This bill only can become active if SB 130 is passed.

SB 220

A new lottery bill has been filed by Greg Albritton and co-sponsored by Del Marsh. The key differences between this bill and the Jim McClendon bill are that SB 220 allows for only a paper lottery. McClendon’s bill had allowed for limited video lottery terminals to be installed at certain licensed businesses in the state.

SB 220 also changes where the money goes from the lottery. All initial earnings will go completely to the Alabama Trust Fund for the repayment of transfers made to the State General Fund in the fiscal years 2013, 2014 and 2015.

Upon full repayment, the lottery earnings will go half to Alabama Trust Fund and a half to the General Fund.

McClendon’s bill sends the money half to the Education Trust Fund and a half to the General Fund.