Closings & Delays across the Tennessee Valley

Road to Riches: Will new I-269 corridor pave the way for a lottery discussion in Alabama?

The next Powerball drawing jackpot this week is $107 million, and the Mega Millions -- $106 million. And as those numbers grow, so does the number of Tennessee Valley residents traveling just over the state line for tickets.

With an election cycle comes new talk about bringing a state lottery here to Alabama.

By the end of 2019, Alabama will be surrounded on all borders with lotteries and other gaming. At this point, does it make sense for the state to jump on the bandwagon?

The billboards have been popping up across north Alabama. Tunica is betting the house with the new I-269 corridor and sports gambling. The flashing lights of Tunica, Mississippi have found it harder in recent years to lure gamblers with dreams of hitting the jackpot.

In the early 90's, 14,000 people worked at casinos there. Today, that number has dropped to 7,800.

"People from Mid-America really flocked here. Today, every American is within a two-hour drive of a casino," said  Webster Franklin, President and CEO of the Tunica Convention and Visitors Bureau.

The heydays saw $1.2 billion in revenue generated. The latest numbers show a drastic decline, down by 50%, so gaming officials are swapping the spinning wheels of the slot machine for cold hard cash.

Sports betting has been legalized in Mississippi casinos. Numbers in August show $645,000 in taxable revenue was put into state coffers. That same month, the state legislature approved a lottery bill.

"Alabama is one of the last places that doesn't do it," said Keith Malone. "So it is a popular topic for that reason as well as the potential to increase state funding at least, is the idea."

Keith Malone is an economics professor at the University of North Alabama and a self-proclaimed 'numbers guy'.

So do the numbers make sense?

Politicians thought a lottery would generate $332-million a year for the state economy. Malone reviewed the Auburn University of Montgomery report on the legalization of gambling in Alabama where they get the estimate. He says it`s full of holes.

"We just reviewed the problems with the study that was done a couple of years ago," he stated. "It was very narrow study, and it didn`t really do all the things similar studies do in terms of studying the full impact of gaming on the state of Alabama."

Malone says the AUM report consisted of two dozen pages. A similar study before Florida created a lottery was a book, more than 300 pages.

"Developing public policy kind of in a half-way measure is usually going to end up being bad public policy, which can harm the residents of the state," Malone said.

He says a big picture study should include both social and economic factors, as well as the potential of how much money the state could keep at home.

Let`s use Mississippi as an example, they were the latest state to approve a lottery. They crunched the numbers and did their research. If we draw an imaginary line with bordering states, they say more than $70 million crossed over it to get lottery tickets. We can`t find any similar numbers calculated by a state-sponsored study for Alabama. So right now, it`s just a guess.

In our bordering states, Florida grossed $6.1 billion in their education based lottery. The Georgia Lottery Corporation reported sales of $4.5 billion. For the same 2017 fiscal year, Tennessee saw sales of $4.2 billion.

The common denominator of all three: Education trust funds received almost 25% of the revenue brought in.

That's money some people in Alabama would like to cash in on.

"In terms of missing the ball, there`s potential benefit still there, Malone said. "Obviously as we have already talked about, recapturing the money that is currently leaving the state would at least be some benefit."

So going back to the much announced $331 million for Alabama; when Malone crunched the numbers, his revenue estimates ranged from $133 million to $249 million.

He says at this point, it is possible for a lottery to increase state funding, but it's no guarantee, making lottery money for Alabama anything but a sure bet.

Alabama House Speaker Mac McCutcheon has said the House is ready to at least take up a lottery bill in the next session. State Senators say where the money goes matters a lot, but right now, no one is saying whether it will be for education or more cash for the General Fund.