Three casinos in metro Atlanta, Savannah and Jekyll Island, equipped with 10,000 video lottery terminals, could generate nearly $1 billion a year for the state as quickly as 2014, according to a daring, 84-page report requested and received by the Georgia Lottery Corporation.
It may be the first time a state entity has, in an official paper, broached the possibility of establishing state-licensed gambling houses in Georgia.
The $91,000 study was quietly handed to Gov. Nathan Deal last week. Just returned from a trip to China, the governor has yet to review it, a spokesman said Wednesday.
Which means you can read it before the governor does by clicking here. (Journalistic compadres: You, too, can download the report. But please credit this newspaper.)
In metro Atlanta, the report gauged the potential productivity of six locations in downtown Atlanta, Cobb, Clayton, DeKalb counties and at Lake Lanier. Savannah and Jekyll Island were the only coastal locations examined.
“Georgia, in particular the Atlanta metropolitan area, would be viewed by the gaming industry as one of the most prized opportunities in North America, largely because it has one of the largest, most affluent, untapped markets, with excellent air and highway access,” the study said.
Declines in revenues over the last two years, plus increased demand, this year forced state lawmakers to cut the reach of lottery-funded HOPE scholarships. But don’t look for casinos to be your kid’s ticket to a free ride through college. Not anytime soon.
There is some legal debate over whether the Georgia Lottery Corporation could take the state down Casino Road on its own authority. But Jimmy Braswell of Macon, chairman of the lottery commission, said no such move is anticipated.
“Our position has always been – whether we could or couldn’t, really doesn’t matter. It’s not something the Lottery is going to step out and do on its own,” Braswell said. “We’ve always viewed this type of concept as a public policy decision. And it’s not something that a seven-member appointed board should unilaterally decide to do.”
“It would have to be something that the governor and the Legislature would have to lead on,” he said.
And that leadership isn’t likely to be immediately found at the top levels of the state Capitol. This year’s legislation to allow communities to repeal a statewide ban on the Sunday retailing of alcohol already has injected the GOP’s conservative Christian base with a heavy dose of insecurity.
Despite his immediate silence, the governor hasn’t looked favorably on an expansion of gambling in Georgia. Neither has Lt. Gov. Casey Cagle. Earlier this year, House Speaker David Ralston raised questions about current legislation to permit pari-mutuel betting in Georgia, pointing out that most horse tracks now require the presence of slot machines to guarantee profitability.
And he didn’t want slot machines.
So why do such a study? Enough talk was going around, said Braswell, that he wanted some hard facts in hand. “I wanted somebody to independently take a look at this and quantify this concept — so that I would have a comfort level, rather than hearing everything third hand,” the commission chairman said.
The report was conducted by the Spectrum Gaming Group of New Jersey, and examined 20 government agencies that oversee gaming operations, in the U.S. and abroad. Among the findings:
– Perhaps one in five Georgians would be willing to walk into a casino. The average gambler would spend between $500 and $800 a year.
– Casinos would create a “different” experience than buying a lottery ticket, and thus would attract a wealthier clientele – and more money. “Visiting a casino that offers [video lottery terminals] requires a commitment of both time and money,” the report said. “This effectively means that VLTs offer multiple revenue streams that simply do not exist with traditional lottery products.” In other words, the construction of hotels and associated entertainment venues would mean increased tax revenue that could be used for more than HOPE scholarships.
– An immediate boon to the state could come through the auctioning of a handful of licenses to private casino companies.
– The Georgia Lottery Corporation would need to evolve into an agency that actively regulated casino operations. The report suggested a firm whip hand from the outset. “This allows the state to peel away or revise regulations over time, as regulators gain confidence in the operations and the integrity of the operators,” the study recommended.
– Singapore was cited as a potential model for the rules that govern casinos. Family members can require gambling houses to bar relatives who are spending grocery money. And no ATMs are allowed within casino walls.
– The report pointedly warned that casinos could aggravate political corruption.
Braswell said he also wanted the casino study in order to measure the number of “gray machines” in Georgia – computer terminals and slot machines in convenience stores and Internet cafes across the state. The illegal operations compete with the state lottery, and are thus a drain on its revenue.
Citing law enforcement officials around the state, the report estimated that 10,000 illegal slot machines now operate in Georgia. The same number of machines that, under state-licensed casinos, could bring $933 million a year.
But this study is about more than a lottery board chairman’s curiosity. What will startle lawmakers in the state Capitol is the leap it takes, far beyond past discussions of gambling in Georgia.
Legislators went pale this spring when Dave Garrett, an Atlanta real estate developer and the lottery board’s first chairman, suggested making up a HOPE scholarship shortfall by installing video lottery terminals in convenience stores – where scratch-off tickets are now sold.
The Spectrum study doesn’t even consider the convenience store question. ”The concept that was always kicked around to me was more of the casino approach,” Braswell said.
So someone has done some kicking. More than likely, it’s someone who’s willing to bet a good deal of money that American attitudes toward gaming are changing. It’s a good bet.
Five years ago, former Christian Coalition leader Ralph Reed’s run for lieutenant governor was deep-sixed by GOP voters, in large part because of his connections to anti-gambling campaigns – paid for by casinos trying to protect their turf.
Yet for several weeks this spring, casino mogul Donald Trump found himself the darling of the Republican presidential pack. His fall from grace, which led him to decline a formal candidacy, had little to do with his gaming connections.
In Washington, House Republicans this week held a hearing on a bill to legalize Internet poker. Testimony this week estimated that American gamblers are sending between $4 billion and $6 billion offshore each year – cash that could be taxed and applied to a giant federal deficit.
Another GOP presidential candidate, U.S. Rep. Ron Paul of Texas, has endorsed the idea – as has Trump.
The measure is sponsored by U.S. Rep. Joe Barton, R-Texas. “Poker is the all-American game. I learned to play poker, believe it or not, in the Boy Scouts,” Barton testified Tuesday. “If you learned something in the Boy Scouts, it has to be a good thing.”
That’s not a line of reasoning that will satisfy a Southern Baptist preacher, but it is one that apparently appeals to a growing number of Republican voters.
- By Jim Galloway, Political Insider