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HB262 INTRODUCED
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HB262
W1BJRE9-1
By Representative Lawrence
RFD: Economic Development and Tourism
First Read: 15-Jan-26
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W1BJRE9-1 01/13/2026 CMH (L)CMH 2025-3782
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First Read: 15-Jan-26
SYNOPSIS:
Under existing law, pari-mutuel wagering on
historical horse racing and bingo is conducted at
certain locations in the state.
Also under existing law, there is a state
privilege tax that is levied upon every person engaged
in the business of operating a race track equal to one
percent of the pari-mutuel pool. In addition, there are
local taxes levied on such pari-mutuel pools.
This bill would provide that such activities may
only be conducted at six certain named locations.
This bill would establish a new state privilege
tax of four percent of the net revenues of each
licensee conducting pari-mutuel wagering on historical
racing, which would be in lieu of any other state
privilege taxes.
A BILL
TO BE ENTITLED
AN ACT
Relating to historical racing computerized machines; to
amend Sections 40-26A-1 and 40-26A-2, Code of Alabama 1975, to
further provide for the state privilege tax on certain local
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further provide for the state privilege tax on certain local
gambling revenues; to establish a uniform local privilege tax
on certain local gambling revenues; to add Section 40-26A-2.1
to the Code of Alabama 1975, to restrict the operation of
historical racing activities to certain authorized locations;
and to repeal Sections 11-65-29, 11-65-30, 11-65-35,
45-32-150.13, 45-44-150.12, and 45-49-151.14, Code of Alabama
1975, levying local pari-mutuel wagering taxes and other fees.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-26A-1 and 40-26A-2, Code of
Alabama 1975, are amended to read as follows:
"§40-26A-1
For the purpose of this chapter, the following terms
shall have the respective meanings ascribed to them by this
section except where the context clearly indicates a different
meaning:
(1) AUTHORIZED LOCATION. The current location of the
pari-mutuel licensees in Greene County, Jefferson County,
Macon County, Mobile County, the current location of the Class
C Bingo Permit holder in Houston County, and the bingo
facility in Lowndes County that was open prior to October 1,
2023, with a square footage building of 40,000 square feet.
(1)(2) COMMISSIONER. The Commissioner of the Department
of Revenue of the State of Alabama.
(2)(3) DEPARTMENT. The Alabama Department of Revenue.
(4) HISTORICAL RACING. A form of racing that creates
pari-mutuel pools from wagers placed on previously conducted
horse or greyhound races. The term includes historical horse
or greyhound racing on computerized machines, without regard
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or greyhound racing on computerized machines, without regard
to the type of graphics on the machine used to conduct the
activity.
(5) NET REVENUES. The total amount of money received as
a result of wagers placed at the authorized location on
historical racing, excluding free bets, and promotional
credits, less federal excise taxes, voided wagers, and the
total money or value in any form paid as prizes or winnings,
including the cash equivalent of any merchandise or thing of
value awarded as a prize..
(3)(6) PARI-MUTUEL. A system of betting on races
whereby the winners divide the total amount bet, after
deducting authorized taxes, fees , and management expenses, in
proportion to the sums wagered individually.
(4)(7) PARI-MUTUEL POOL. The total amount wagered under
the pari-mutuel betting system in any particular race."
"§40-26A-2
(a) In addition to any and all other taxes imposed by
law, there is hereby levied, upon every person engaged in the
business of operating a dog race track in the State of
Alabama, a privilege tax of one percent of the pari-mutuel
pool on all pari-mutuel races.
(b) In addition to the tax levied by subsection (a) and
in addition to any and all other taxes imposed by law, there
is hereby levied, upon every person engaged in the business of
operating a dog race track in the State of Alabama, a
privilege tax of one percent of the pari-mutuel pool on all
pari-mutuel races requiring the selection of three or more
racers; provided that the commission received by said
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racers; provided that the commission received by said
operator, after deducting local taxes in effect on September
28, 1988, shall not be reduced below the amount that said
operator received prior to the imposition of this tax.
(a) Effective October 1, 2026, there is levied on every
person engaged in the business of managing or facilitating
pari-mutuel wagering on historical racing a state privilege
tax of four percent of the person's net revenues. The tax
shall be due within 20 days after the end of each calendar
month and shall be collected by the Department of Revenue. The
tax on the net revenues collected under this subsection shall
be in lieu of all other state or local taxes. Nothing in the
levy of the tax under this subsection shall change the state
tax structure for live greyhound and thoroughbred racing as
well as simulcast live greyhound and thoroughbred racing
existing on October 1, 2026.
(c)(b) Notwithstanding the provisions of any local or
general act to the contrary, any dog race track licensee
authorized to conduct pari-mutuel racing shall be entitled to
retain as a commission from the pari-mutuel pool (the "take
out") an amount equal to 19 percent of all pari-mutuel pools
where a bettor is required to select two or less racers and an
amount equal to 21 percent where a bettor is required to
select three or more racers. The tax levied in this section is
not imposed to the extent that it would require a licensee to
increase the commissions above said amounts in order to
receive such tax from the pari-mutuel pool."
Section 2. Section 40-26A-2.1 is added to Chapter 26A
of Title 40, Code of Alabama 1975, to read as follows:
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of Title 40, Code of Alabama 1975, to read as follows:
40-26A-2.1
(a) Wagering on historical racing computerized machines
may be conducted only at an authorized location.
(b) Nothing in this section shall be construed to
authorize, permit, or expand any form of gambling activity
beyond that which is permitted by law on October 1, 2026.
Section 3. The following sections are repealed:
(1) Section 11-65-29, Code of Alabama 1975, imposing
the state horse wagering fee in Class 1 municipalities.
(2) Section 11-65-30, Code of Alabama 1975, imposing
the commission wagering fee in Class 1 municipalities.
(3) Section 11-65-35, Code of Alabama 1975, relating to
certain racing taxes in Class 1 municipalities.
(4) Section 45-44-150.12, Code of Alabama 1975,
imposing a tax due on pari-mutuel pools in Macon County,
Alabama.
(5) Section 45-32-150.13, Code of Alabama 1975,
imposing a tax on pari-mutuel pools in Greene County, Alabama.
(6) Section 45-49-151.14, Code of Alabama 1975,
imposing a tax on pari-mutuel pools in Mobile County, Alabama.
Section 4. This act shall become effective on October
1, 2026.
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