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SB18 • 2026

Taxation; state privilege tax on revenues of pari-mutuel wagering activities, levied

Taxation; state privilege tax on revenues of pari-mutuel wagering activities, levied

Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Beasley
Last action
2026-01-13
Official status
Pending Committee Action in House of Origin
Effective date
Not listed

Plain English Breakdown

The official status shows the bill passed both chambers but is pending committee action; however, the effective date clause relies on final passage and Governor approval which has not yet occurred.

Tax on Historical Horse Racing Wagering

This bill creates a new four percent state privilege tax for businesses that manage or facilitate historical horse racing betting, replacing other existing taxes for this specific activity.

What This Bill Does

  • Creates a new state privilege tax of four percent on net gambling revenue from pari-mutuel wagering on historical horse racing.
  • Requires the Department of Revenue to collect this tax from licensees managing or facilitating these activities.
  • Defines 'net gambling revenue' as total money received minus free bets, promotional credits, federal excise taxes, voided wagers, and prizes paid out.
  • Replaces any other state privilege taxes currently imposed on historical horse racing pari-mutuel wagering with this new tax.
  • States that existing tax rules for live greyhound or thoroughbred racing remain unchanged.

Who It Names or Affects

  • People and businesses managing or facilitating pari-mutuel wagering on historical horse racing
  • The Alabama Department of Revenue

Terms To Know

Pari-mutuel wagering
A betting system where all bets are pooled together, and winners share the pool after taxes and fees.
Historical horse racing
Betting on past race results rather than live races happening at that moment.
Net gambling revenue
The total money taken in from bets minus free bets, promotional credits, federal excise taxes, voided wagers, and prizes paid out.

Limits and Unknowns

  • This law does not allow any new forms of gambling beyond what was legal on January 1, 2026.
  • The tax becomes effective on the first day of the second month after the bill is passed and approved by the Governor or otherwise becomes law.

Bill History

  1. 2026-01-13 Senate

    Pending Committee Action in House of Origin

  2. 2026-01-13 Senate

    Read for the first time and referred to the Senate Committee on Tourism

Official Summary Text

Taxation; state privilege tax on revenues of pari-mutuel wagering activities, levied

Current Bill Text

Read the full stored bill text 
SB18 INTRODUCED
Page 0
SB18
ZQSDPKK-1
By Senator Beasley
RFD: Tourism
First Read: 13-Jan-26
PFD: 28-Aug-25
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ZQSDPKK-1 08/13/2025 CMH (L)CMH 2025-2341
Page 1
PFD: 28-Aug-25
SYNOPSIS:
Under existing law, there is a state privilege
tax that is levied upon every person engaged in the
business of conducting pari-mutuel wagering at a race
track.
This bill would establish a new state privilege
tax of four percent of the net gambling revenues of
licensees conducting pari-mutuel wagering on historical
horse racing, which would be in lieu of any other state
privilege taxes.
A BILL
TO BE ENTITLED
AN ACT
Relating to taxation; to add Section 40-26A-2.1 to the
Code of Alabama 1975, to levy a state privilege tax on the net
gambling revenues from certain pari-mutuel wagering
activities.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-26A-2.1 is added to the Code of
Alabama 1975, to read as follows:
§40-26A-2.1
(a) There is levied on every person engaged in the
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SB18 INTRODUCED
Page 2
(a) There is levied on every person engaged in the
business of managing or facilitating pari-mutuel wagering on
historical horse racing a state privilege tax of four percent
of the person's net gambling revenue. The tax shall be
collected by the Department of Revenue.
(b) For purposes of subsection (a), "net gambling
revenue" means the total amount of money or value in any form
received as a result of any pari-mutuel wagering on historical
horse racing activities, excluding free bets, free plays, and
promotional credits, less federal excise taxes, voided wagers,
and the total money or value in any form paid as prizes or
winnings.
(c) The state privilege tax levied under this section
is exclusive of and supersedes any other state taxes now
imposed on historical horse racing pari-mutuel activities,
including but not limited to the state privilege tax imposed
by Section 40-26A-2, Code of Alabama 1975.
(d) Nothing in this section shall change the existing
state tax structure for live greyhound and thoroughbred racing
as well as simulcast live greyhound and thoroughbred racing.
(e) 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 January 1, 2026.
Section 2. This act shall become effective on the first
day of the second month following its passage and approval by
the Governor or its otherwise becoming law.
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