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Its name is thought to come from "Allah" (Ala), the Islamic name for God (a reference to the Star Of David on Alakazam's Green sprite) and "Kazaam" (kazam), a reference to the 1996 film of the same name starring Shaquille O'Neal. In the movie Shaq plays a genie, a magical being, and since he is black, this may be a reference to "black magic", which psychics are thought to practice in some cultures.
