The Alabama Crimson Tide made it into the college football playoffs. Residents from the Heart of Dixie are no doubt relieved and beyond excited to watch them take on the Oklahoma Sooners. But they can’t be excited to wager on the action, because Alabama sports betting remains illegal.

It is, in fact, that time of year again: when the absence of sports betting in Alabama looms incredibly large. 

Indeed, it is glaring in general. Especially throughout the rest of the college football season. But its absence is particularly conspicuous when the NCAA football playoffs begin, in large part because the Crimson Tide are routinely among those contending for the national championship. 

This is before even getting to the relative ubiquity of online sports betting in the United States. With Missouri sports betting having launched at the start of December, Alabama is now one of just 11 markets without some form of legal sports gambling. 

The questions on this matter are the same as ever: Why does Alabama sports betting remain illegal? When will that change? Do the current laws make a difference? And most relevant to this time of year, what is the impact of Alabama’s current sports betting laws? 

Alabama Sports Betting Laws Are Leaving Money on the Table…Especially Now

The peak of betting on the college football playoffs is always a lucrative time for both sportsbooks and the markets in which they operate. It can be an especially lucrative revenue-driver for states that have prominent teams competing in them. 

According to The Athletic, last year’s National Championship game between Ohio State and Notre Dame saw someone place a $1.5 million bet on their own. And that is just the tip of the iceberg. Six-figure wagers during the college football playoffs are not unheard of.

However, even on a smaller scale, Alabama is missing out on plenty of potential revenue. Most notably, the college football playoffs now feature 12 teams. That is up from the initial model of four schools, which was officially changed in time for the 2024 postseason bracket.

Extra participants means additional games. That means more betting opportunities for sports fans. Even though Crimson Tide fans will be focused predominantly on Alabama’s games, they’ll be locked into college football at large. There is little doubt that bets on other college football playoff games would roll in like an avalanche.

This gets to the heart of why the absence of Alabama sports betting is so front-facing now: December, in all likelihood, would be the most lucrative month for business. 

Sure, there’s a chance it spills into January, as well as February. This period would cover betting on the NFL playoffs as well as betting on the Super Bowl. But this merely drives home the point: Alabama is entering what would be the most lucrative quarterly span for in-market sports betting. And yet, they won’t be capitalizing on any of it.

Sports Betting Concerns are Valid, but Alabama’s Laws Have a Limited Impact

To be absolutely certain, there are valid concerns when it comes to Alabama sports betting legalization. Officials have made that clear on numerous occasions. The issue, remember, has been discussed on multiple occasions during legislature meetings. It will be near the top of the agenda again, along with The Crimson State’s lottery ban and casino laws, when sessions reconvene next year. 

Whether officials ultimately show more support for Alabama sports betting remains to be seen. And while we must acknowledge the legitimate worries they have, we must not pretend as if the state has enough guardrails to stop gambling altogether.

People have always flocked to offshore online sportsbooks as workarounds to their state’s gaming laws. In recent years, they have also been able to cross state lines, into parts of the country where sports betting is legal. Depending on where Alabamians are located, they could easily head over to bet on sports in Florida, Tennessee or Mississippi.

Alabama will Have to Reckon with Sports Prediction Markets, Too

Even more recently, the fast and furious rise of prediction markets in the United States has provided another alternative. These transactions are presented as “yes or no” contracts. Customers invest in one of those outcomes. One example would be: Will Alabama beat Oklahoma in the college football playoffs? 

The payouts on these “event-based contracts” are determined by the public. That is why prediction-market operators liken their business model to the stock market rather than sports betting. This differentiation is hazy—at best. But it’s holding up so far. Prediction markets are active in all 50 states as you read this, regardless of their sports betting laws. Companies like Kalshi, Polymarket and Robinhood are subject to federal regulation rather than state oversight because they’ve secured a "derivatives" classification for their transactions. Though we expect this interpretation to come under country-wide soon, it is holding up well enough for sports betting sites like FanDuel and DraftKings to enter the prediction-market business themselves.

All of which complicates the future of Alabama sports betting. There is a chance the rise of prediction markets creates an urgency to legalize sports betting. At this point, however, sportsbooks have to consider whether they’re better off operating as prediction markets rather than subjecting themselves to higher tax state tax rates. 

Rest assured, this is bound to come up during Alabama legislature meetings. The extent of its impact is unknown. The same goes for the appetite among legislators to legalize Alabama sports betting. Whatever happens, it won’t change how the next few months are viewed. We are entering the peak of Alabama sports betting. Alabama itself just won’t be capitalizing on any of it.

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