A Georgia legislative study committee has until December 1 to make recommendations to lawmakers about finding new funding sources for the HOPE scholarship program, which has helped more than 1.7 million Georgians pay for college since 1993. One way would be to allow casino gambling and horse racing in the state. Committee members considering state Rep. Ron Stephens’ proposed constitutional amendment allowing up to six casinos. The proposal by Stephens, chairman of the House economic development committee, would charge interested operators million upfront; they also would have to invest at least billion to qualify for the main license for the Atlanta market, or 0 million for any of the other five. It also sets up a “Problem Gaming Fund” to treat gambling addicts.
Gross gaming revenue would be taxed at an annual rate of 12 percent, of which at least 90 percent would be directed to “educational programs and purposes,” with HOPE scholarships as a top priority.
Supporters said the six proposed casinos could raise $280 million per year for HOPE and pre-k education programs and create 10,900 jobs statewide.
The constitutional amendment first would have to be approved by a two-thirds majority of state lawmakers before going before voters. If approved, voters in each of five regions would be allowed to decide whether to allow a casino there. Metro Atlanta, one of the largest metropolitan areas in the U.S. that does not offer Las Vegas-style gambling, would be allowed to have two casinos. Gambling proponents hope to an amendment on ballot statewide in 2016.
Chip Lake from the newly created support group Committee to Preserve HOPE Scholarships noted, “It is a limited bill that allows for destination casinos around the state, so you will not see a replication of Atlanta City here and you will not see a replication of Las Vegas here.” Lake said more than $300 million leaves Georgia each year for casinos in Alabama, North Carolina and Florida.
Governor Nathan Deal recently noted the benefits of casinos don’t “outweigh” the negatives.
“Money is not everything. Society has to sometimes deal with the consequences of how you generate it,” Deal said. But he indicated his signature would not be required if voters approve a constitutional amendment on gambling.
Committee members recently heard from members of the gaming industry as they review their options. Jim Murren, chairman and chief executive officer at Las Vegas-based MGM Resorts International, told committee members the Atlanta market could easily support a $1 billion casino resort and that Hartsfield-Jackson International Airport and Atlanta’s popular tourist attractions makes it an ideal location.
“The infrastructure you have in Atlanta is unique to any place I’ve seen in the United States from a standpoint of developing a robust regional resort,” Murren said.
MGM unveiled a poll during this year’s legislative session indicating Georgians support casino gambling and legislation that would allow it. The gaming giant has hired 16 heavy-hitting lobbyists to work the legislature.
Murren noted, “There’s no public financing, there’s no public incentives. These are private enterprises and we think we would generate a tremendous amount of jobs, good-paying careers with no burden to the taxpayer.” The MGM proposal would create 3,500 jobs, Murren stated.
Atlanta Mayor Kasim Reed said he’s generally opposed to MGM’s casino proposal, but added, “It would be fiscal malpractice not to meet with them. I believe that Las Vegas is in Las Vegas for a reason, and I just have real issues with putting a facility in Atlanta where working folks can get off work and walk into a gaming casino, as opposed to having to go a destination for it. ”
Boyd Gaming Corporation, operators of casinos in eight states, also has hired three Georgia lobbyists to promote casino gambling in the state. Penn National Gaming, operators of casinos and racetracks in 18 states, also is known to be looking at Georgia but as yet has not hired lobbyists.
Parimutuel betting also offers new revenue streams for HOPE. Dean Reeves, owner of Reeves Thoroughbred Racing and president of the Georgia Horse Racing Coalition, told lawmakers the industry could generate $25 million for education through a racetrack with “boutique meets” presenting live racing events 20 days out of the year. “We would have very strong, large purses, attract the finest horses here, have top-shelf racing and we think that it would be packed-house events for every day of our racing,” Reeves said.
Speaking against Stephens’ legislation, Georgia Lottery Chief Executive Officer Debbie Alford said the lottery will raise more than $1 billion for the HOPE and Georgia Pre-k next year. “We are coming off a very, very strong year with record proceeds. We’ve had with the Georgia Lottery Corporation record proceeds every year but two years since our inception.” But she noted profits have shrunk from 36 percent in 1995 to 24.8 percent this year because players are more interested in scratch-off games, which cost the lottery more in payouts, as opposed to drawings. Alford said the lottery would regulate expanded gambling if forced to do so by law. “We stand ready to execute any responsibilities that they give us quite honestly,” she says. This summer, an Atlanta Journal-Constitution investigation found that the lottery corporation was struggling to manage the explosion of coin-operated “amusement” machines across the state.
Also opposing gambling in Georgia is state Senator Judson Hill, who said lawmakers should be focused on reducing regulatory burdens and cutting spending rather than seeking “unproven solutions. This is not in the best interests of Georgia,” Hill said.
