Alabama Sports Betting More Likely Than Ever

Another Alabama sports betting bill is up for consideration. And this time, it may garner more support than ever before.

Believe it or not, this has little to do with the structure of the bill. The measure seeks to legalize sports betting in Alabama, right along with casinos and the lottery formation. Its setup is similar to initiatives from the past. That isn’t necessarily a bad thing, but it doesn’t account for the primary reason why this could be the year that The Crimson State Legalizes sports betting.

Instead, the increased urgency has everything to do with Alabama’s budget, and how much it has changed over the past year-plus.

Alabama Sports Betting Revenue Could be a Necessary Addition

Senator Merika Coleman is the primary sponsor of the latest Alabama sports betting bill. And as Mike Cason writes for AL.com, this proposal comes at a time when the state needs additional funds to throw around:

“An Alabama senator on Tuesday introduced a bill that would allow voters to decide whether to authorize a lottery, casinos, and sports betting. Sen. Merika Coleman, D-Pleasant Grove, said people in her district and elsewhere tell her that a lottery probably ranks second only to crime when it comes to the importance of issues for voters. A member of the Senate’s General Fund committee, Coleman said budget hearings have shown that Alabama faces a shortage of revenue to support key services, particularly with Congress and the Trump administration cutting federal assistance for food assistance and health care.”

Cuts to health care and food assistance are not issues unique to Alabama alone. Every state is feeling the squeeze of the current administration’s billionaires-first logic. More densely populated states may have the extra revenue to help offset the difference. That’s especially true of those that have already legalized sports betting. And if Alabama sports betting gets the green light, recent projections suggest The Crimson State can say the same.

Sports Betting Could be Worth Up to $100 Million Per Year to The Crimson State

A gambling analyst recently estimated that Alabama sports betting could generate up to $90 million per year in additional tax revenue. Even more recently than that, someone from the Sports Betting Alliance suggested that figure could hit $100 million.

These estimates feel a little ambitious. We previously pegged the Kentucky sports betting market as a good analog for Alabama. They generated “just” $50.8 million in tax revenue for the 2025 calendar year.

Even if Alabama sports betting proves to be more lucrative—which is debatable—it’s hard to imagine it being worth around two times as much as The Bluegrass State’s market. Maybe once the market matures for a half-decade or so it could eclipse that threshold.

Failing that, The Crimson State would need to implement a fairly aggressive tax to reach the $100 million marker. And it just so happens that might be the plan.

According to multiple outlets, the proposed Alabama sports betting tax clocks in at 25 percent. While this is within normal range for online sports betting in the United States, it is more than double the 9.75 percent rate Kentucky assesses to retail sportsbooks. That difference alone will ensure Alabama becomes a $100 million-per-year market. But we have to believe it is a major factor in the most recent projections.

How Likely is Alabama to Legalize Sports Gambling in 2026?

This is predictably a difficult question to answer. The budget deficits should certainly help sway some Alabama sports betting holdouts. It is not going to convince everyone.

Indeed, a greater interest in casinos and state-lottery formation has previously impeded the state’s sports betting push. One of the initiatives actually fell apart because the Senate removed all traces of casino or sports betting legalization in favor of a lottery-only structure.

If we are being brutally honest, this could happen again. And in that case, it stands to reason that sports betting supporters might relent. After all, the state lottery stands to add a ton of tax revenue to the annual coffers on its own. If the budget truly is in rough shape, policymakers could be anxious just to get any gaming expansion on the record.

Still, the current state of affairs should at least ensure Alabama sports betting garners as much discussion and consideration as ever. It might have already even been tracking in that direction. Remember, the rise of prediction markets has created a sense of urgency among states. They worry that sportsbooks will not be as keen to pay lofty tax rates and licensing fees if they have the option of running prediction markets, which remain federally regulated.

This urgency has only increased after FanDuel and DraftKings launched their own prediction markets in Alabama. They still run sportsbooks elsewhere, but we have seen companies pivot out of that industry in favor of prediction markets. Underdog is the latest example of that.

On some level, this will have an impact on Alabama sports betting discussions. Will that impact result in legalization? We should know in a few weeks’ time.

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