With Georgia gambling legislation likely, no agreement yet on the spoils

By Maggie Lee

When it comes to gaming, the odds are always in the house’s favor — so when the government taxes the house, it’s a win for the government.

But wrangling over the not-yet-existent spoils will lower the odds against any gaming bill passing in Georgia next year.

A conference room full of people

A standing-room-only crowd of a few dozen lobbyists and the like filled a meeting room at Georgia lottery headquarters on Aug. 27 for a gaming hearing. Credit: Maggie Lee

State Senator and U.S. House candidate Brandon Beach opened an Aug. 27 state Senate study committee meeting with a mention of a U.S. Supreme Court decision last year that’s opened up sports betting to states besides Nevada.

“So I thought, when that happened, it would be important for us to not only look at sports betting, but a holistic approach to gaming. If we’re going to look at sports betting, we should look at the whole gaming industry,” said Beach, R-Alpharetta.

He’s among the handful of state lawmakers who have filed bills that would legalize various kinds of gaming in the last few years, but under a Republican governor who fought casino gambling. New Gov. Brian Kemp, also a Republican, has said that while he personally is against casino gambling, he wouldn’t stand in the way of a casino vote, if the money goes to education.

One important political detail: Georgia voters would have to approve any casino or pony-betting proposal; and first those those would need a two-thirds majority vote in the state Legislature. It’s possible sports betting might not require a public referendum — and if it doesn’t, it could get through the state Legislature with a simple majority vote.

But still there are a lot of questions about what legislators might do. And a lot of constituencies speaking up for the spoils.

First, the state would collect who-knows-how-much from gambling. It would depend on what’s allowed, and the tax rate.

A study done by several consultants and academics for Central Atlanta Progress/Atlanta Downtown Economic Development District in January 2017 put a casino at worth something like $320 to $400 million to the state. (But the same report pointed out that other cities have not met their revenue estimates, and it’s unclear how much would be “new” spending, versus people choosing to spend money at the casino instead of on other things like shopping and movies.)

Anyway, right now, lottery money goes to Pre-K education and to pay for folks getting certificates and degrees at Georgia’s technical colleges and universities. In the year that ended in June, that amounted to $1.2 billion.

But it doesn’t pay full freight for higher education. Gambling revenue might be set aside for more full rides to college, and maybe even more full rides for poorer students.

State Sen. Ed Harbison, D-Columbus, has been in politics long enough to remember when when HOPE first passed the Legislature in 1991, and voters the following year.

He pointed out that the program shifted from being needs-based to academics-based.

So now, anyone with the grades can qualify for HOPE money if they have the grades — whether their family income is stratospheric or nonexistent. There used to be a family income cap of $100,000 on qualification.

Harbison said there’s nothing wrong with an academic scholarship but that Democrats would push for some changes.

“We think there should be some kind of equal footing between need for those children who otherwise could do academically, but don’t have the money,” said Harbison.

Beach said he’s not opposed to expanding needs-based scholarships.

Or gaming money could go into the state’s “general fund:” basically, the state’s main bank account, where the money could go to pay for nearly anything the state does.

Or what about health care; or targeted health care in rural communities where hospitals are closing and doctors are few and far between? Some rural legislators have made a point of pushing for new gaming money to go somewhere besides HOPE.

The State Capitol. Credit: Kelly Jordan

The State Capitol. Credit: Kelly Jordan

And heck, rural economic development is one of the arguments for horse racing — it takes staff and pastures to support those ponies.

Savannah Republican state Rep. Ron Stephens is also a longtime supporter of casinos. He’s chairing a committee on the House side that he also said would be a holistic look at gaming. And yep, maybe at spending some of the money on health care.

“Is education the only thing that we’re going to look at? The two issues that are going to come up in this next election … are education and health care,” Stephens said last week.

And if one of the arguments for casinos is that they mean jobs, Columbus for one is, well, chomping at the bit.

Columbus’ city council has already endorsed the idea and an area businessman already has a piece of land where he’d propose build it.

“Montgomery’s killing us,” Harbison said. “People want to gamble. They go to Cherokee, they go to Montgomery.”

The money might as well stay in Georgia, say gaming bill fans.

A 2017 casino gaming bill filed by both Beach and Stephens would have licensed two casinos, probably one in metro Atlanta and one in Savannah. Most of the money would have gone to HOPE, including a bigger need-based program; part would have gone to rural health care and part was uncommitted.

Beach spoke up for a casino for the Atlanta tourist and convention crowd. No city of Atlanta politician has joined that chorus in any loud way, but there are other jurisdictions in the metro.

(For the record, Beach also said that, “On any horse racing or casino gaming, there will be no state tax incentives at all. It’ll all be private investment, no abatement or building parking lots or parking decks. It’ll all be built with private money.” It’s an interesting point in a state that offered $2 billion in various breaks and incentives to Amazon; and about that much in state and local breaks to a company that’s promising a mixed-use development in Atlanta’s Gulch.)

Beach’s committee will meet several more times; and Stephens’ committee is set to start work next month. Both will probably have recommendations for the state Legislature by December. The annual legislative session starts in January and will probably end by April.

It may sound like enough time to come up with a negotiated bill, but legislative time goes by fast.

Documents:

CAP/ADID report Casino Gaming in Georgia, January 2017 (large PDF)

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.

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