Analysts Makes Bold Alabama Sports Betting Claim

With state legislature meetings now in session, the subject of Alabama sports betting is naturally coming up with increasing frequency. The Crimson State draws a ton of interest, in particular, because of the “will-they-or-won’t-they” dynamic they’ve established over the years.

That uncertainty extends into the latest round of sessions. Though sports betting in Alabama is yet again, it remains difficult to see which way policymakers will lean.

As ever, the most pervasive arguments tend to be financially driven. States with robust gambling markets can make a ton off tax revenue. The Alabama sports betting market is no different. One sports gambling analyst even recently told CBS 42 that The Crimson State could be leaving nearly nine figures per year on the table.

“[Sports betting analyst] John Longshore said Alabamians are wagering on sports overseas,” writes Ryan Hall of the CBS affiliate in Birmingham. “In a state-wide op-ed article, Longshore said dollars Alabama could be collecting on sports betting are going to other states and potentially criminal networks outside the U.S. He writes that lost revenue for Alabama could total upwards of $90 million.”

Similar cases for Alabama sports betting have been made before. Seldom, though, do we see exact numbers attached to it. Projecting $100 million per year in tax revenue qualifies as a bold claim. Is it accurate? And what should we expect from Alabama sports betting legalization talks this time around? Let’s try to unearth a few answers.

How Much Could Alabama Sports Betting Really Be Worth?

Finding a good analog for the Alabama market is difficult. States with similar general populations—such as South Carolina or Minnesota—have not had sports betting for long enough (South Carolina) or haven’t yet legalized it. Based on the projection, we also have to assume Longshore is accounting for online sports betting in the United States. That rules out the Wisconsin sports betting market, too.

Looking at the revenue generated from sports betting in Kentucky is the best course. Their population (4.7 million) is within sniffing distance of Alabama (5.2 million). And like The Crimson State, they do not have a professional sports team playing in the market.

Of course, the influx of betting revenue from Kentucky Derby gambling isn’t something for which we can account. But it’s reasonable to believe Alabama would offset some of the difference with its robust college football base.

Anyway, Kentucky sports betting generated $50.8 million in tax revenue for the 2025 calendar year. If we adjust that for their population, that comes out to about $10.80 of revenue per capita. (No, not every member of the population places bets. But narrowing the number helps us extrapolate estimates elsewhere.)

In order to get some figures for Alabama sports betting, we should also adjust for household median income. The two states are eerily similar. Alabama’s median household income checks in at $31,232. That’s about 99.2 percent of Kentucky’s median income of $31,481. If we adjust the per-capita number for this, we get to $10.71.

Apply to this to Alabama’s total population, and we get an expected annual revenue of close to $56 million. That isn’t even close to Longshore's $90 million projection.

This Does Not Mean the Alabama Revenue Estimate is Inaccurate

To be sure, our forecast isn’t gospel. This is a rough projection. There are a couple of variables at play for which we can’t account.

The most notable of those is the proposed Alabama sports betting tax. We do not know where it would land. Kentucky’s hovers somewhere between 9.75 percent (retail) and 14.25 percent (online). Alabama could look to implement a higher tax rate and earn more money that way.

How much higher they must go remains to be seen. Let’s be generous and say they could net $60 million using Kentucky’s tax brackets. Relative to the $90 million projection, this means they’d need to increase rates by a factor of 50 percent.

That is…not unreasonable. It sounds like a lot, sure. But it would put the Alabama sports betting tax’s highest bracket at just under 21.4 percent. That is far from an outlier compared to the rest of the country.

The Crimson State could also choose an in-between tax rate and apply in blanketed fashion. For instance, it could implement an 18 percent sports betting tax whether revenue is coming from retail sportsbooks or online betting sites. That could help make up the difference because they’re effectively doubling their return (relative to Kentucky) on retail revenue.

Revenue Projections are Not Alabama’s Biggest Problem

All in all, a $90 million tax revenue projection for Alabama sports betting is ambitious. It is not implausible. It may take a couple of years to get there, but that’s how market maturations work.

The bigger hurdle is actually legalizing Alabama sports betting at all.

General sentiment continues to seem woefully split. Legalization also feels dependent on lawmakers’ desire to expand casino gaming and create a state lottery. Adding layers of decisions to the equation enhances the chances that something goes wrong.

Previous efforts to legalize Alabama sports betting are ironclad proof. Legislation has gained traction only to be scuttled by disagreements on one of the other two issues. This isn’t to say the sports betting structure has universal support. It doesn’t. But those deviations in opinion are easier to overcome when they’re the sole focus. The Crimson State so far has not tackled the subject in that vein.

If we had to guess, that isn’t going to change this year. And that, in turn, is bad news for anyone who wants Alabama to legalize sports betting.

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