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3/1/2010 - March 2010 SLI Educational Update - Proposed Gambling Monopolyy - HB507 and SB380

AN EDUCATIONAL UPDATE FROM

THE SOUTHEAST LAW INSTITUTE™, INC.

To: SLI Supporters

Date: March 2010

From: A. Eric Johnston

Re: Proposed Gambling Monopoly – HB507 and SB380

The purpose of these legislative bills is to make legal what the Supreme Court of Alabama has now clearly found to be illegal electronic gambling in Alabama. While these bills expand and monopolize electronic bingo gambling, their primary purpose is to keep Alabama gambling casinos from being closed down. The following sections as numbered correspond to the sections in the bills:

  1. The definitions combine to define bingo as an electronic game of change (pp. 3-6). The nature of the definition makes this bingo virtually unlimited gambling, which permits slot machines.

A “point of destination” is a facility, including a racetrack, with 1,000 bingo machines and an infrastructure of over $100,000,000 (p. 8).

3(a). Any of the 67 counties may authorize limited bingo through a local constitutional amendment.

3(b). The bingo allowed is not prohibited by any of the following: Section 65 of the Alabama Constitution prohibiting games of chance; any of the 18 constitutional amendments permitting local limited charity bingo; Title 13A, Ch.12, the Alabama Criminal Code prohibiting gambling; or any judicial decision on gambling, which would include several Alabama Supreme Court decisions which limit games of chance and the recent Whitehall decision giving a very restrictive definition of bingo (pp. 10 & 11).

3(c). This bingo equipment may not be defined and prohibited as a “gambling device” or “slot machine” under the Alabama Criminal Code (p. 12).

4(a). The bills will provide exemption from all laws that are in conflict with it, including the Alabama Criminal Code (p. 13).

4(b). The gambling devices may be moved in interstate commerce without violating the federal law (p. 13).

5. Points of destination will include Houston County (Country Crossing), Whitehall, and the racetracks in Mobile, Macon, Greene and Jefferson Counties. The Gaming Commission( set up by the bill) may permit points of destination in the other congressional districts, so that each of the seven districts in Alabama will have a significant gambling casino (pp. 14 & 15).

5(c). The points of destination may share profits with each other (p. 16).

6. A meager 20% tax is permitted. It is on proceeds after many deductions and is below what other states assess. A similar 5% local tax is permitted. These taxes would be enshrined as a constitutional amendment, meaning the tax could not be increased without a constitutional amendment (p. 18). Houston County’s tax shall only be 7.5% for the first five years (p. 21).

7. The large casino “points of destination” are limited to seven, one in each of the congressional districts. Electronic bingo is permitted in each county on a smaller basis (see 3(a) above).

8. A state gaming commission is given sole authority for enforcement of the proposed amendment (p. 31).

The significance of these bills are:

► Expanded and unlimited “bingo” in the nature of slot machines is permitted without regulation.

► Existing large gambling casinos, viz., VictoryLand, Greene Track, Country Crossing, etc., are automatically accepted as points of destination, although every congressional district, as well as, every county could have the electronic expanded bingo. Every county could have limited bingo.

► Since this is a constitutional amendment, there is no limitation on the operation of this gambling. It is exempted from all constitutional, statutory and judicial restrictions and prohibitions.

► Only the gaming commission has authority to enforce any law. Therefore, the gambling facilities become a law unto themselves. With the exemptions from criminal punishment and the definitions allowing expanded bingo, enforcement is a joke.

► Though a tax is permitted, it is small and as a constitutional amendment, it virtually precludes any increase in the tax at a future date.

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