Underground casino plan ups the ante

Underground Atlanta is ready to roll the dice.

The operator of the downtown attraction said he has brought a proposal to the Georgia Lottery Board for a casino that would fund the HOPE scholarship and bring millions in tax dollars to the city.

While the idea of a downtown casino has been kicked around for years, this is the first concrete plan brought forward by a developer and presented to the institution that can make it a reality.

In an interview with The Atlanta Journal-Constitution on Tuesday, developer Dan O’Leary, who holds a 50-year lease on Underground Atlanta with partner John Aderhold, outlined a $450 million proposal that would completely gut and redevelop Underground, adding upscale restaurants and retailers, a new 29-story hotel and 5,000 video lottery terminals.

O’Leary estimates the casino would generate gross receipts of $600 million. Half of that would go to the lottery. And, he said, he’d spend $30 million a year marketing the facility.

“In order to truly change the perception of Underground,” he said, “we do have to bring a very significant element to that property that it doesn’t have now —- a big draw. VLT machines would be an anchor tenant that would bring folks in.”

State law prohibits Las Vegas-style casinos with card games like poker. But the lottery’s charter does not expressly prohibit video lottery terminals. The terminals look like slot machines, but operate like scratch-off tickets that the lottery already sells, such as “Slots of luck” and “Hold ‘em poker.”

No one from the lottery board would speak on the record. But in a statement, the board said, “It is incumbent upon us and our responsibility to review concepts as potential sources of new revenue.”

Atlanta boosters said that a casino would be a welcome attraction. One tourism expert said it would be a boon for meeting planners, although some would take their meetings elsewhere because of gambling. The proposal likely will stir up controversy in a state that doesn’t allow Sunday alcohol sales.

O’Leary, however, stresses that video lottery terminals would benefit the HOPE scholarship directly at a time when the state’s budget is suffering and HOPE has been wildly popular. And, he emphasizes, the machines are not Las Vegas-style gambling. The lottery board would own and operate the machines.

O’Leary’s idea may not be as pie-in-the-sky as it sounds.

O’Leary said he has a letter of intent with Dover Downs, a publicly traded company, to operate the proposed casino at Underground. The company operates a four-star hotel and casino with video lottery machines in Delaware.

William Pate, president of the Atlanta Convention & Visitors Bureau, the city’s tourism and convention arm, said if Atlanta offers gaming, his organization would promote it. Many of the city’s competitors, such as Las Vegas and New Orleans, already have gaming.

Atlanta has about 93,000 hotel rooms, and the city’s tourism industry is the state’s largest with an economic impact of $11.4 billion.

Tom Bell, chairman and CEO of Cousins Properties and chairman of the Central Atlanta Progress board, said he thinks it “would be a good thing for the city of Atlanta.”

“We are slowly developing an increasingly strong offering as a tourist destination,” he said, noting the coming Center for Civil and Human Rights. “Having an additional major attraction downtown would be a benefit.”

Atlanta City Councilman Jim Maddox, who’s been pushing for some form of casino gambling in the city for about two decades, said he was “very delighted” to hear about the proposal.

“I think it’s long overdue.” He noted the casino also would bring more jobs to the city and region, and that Underground would be an ideal site for the video terminals.

In December 2006, Mark Woodworth, president of PKF Hospitality Research in Atlanta, studied the impact legalized gaming would have on Georgia. The study found that just one 200,000-square-foot casino could have a net economic impact of $1.67 billion a year.

The study also found that, in states with gambling, crime, personal bankruptcies and divorce increased, Woodworth said. Those numbers, however, began to decrease after authorities adjusted policing methods.

Ron Fennel, who represents the state’s hospitality industry to the Georgia Legislature, said anything that will draw conventioneers and tourists would be welcome, but he’s reserving comment until he sees something tangible from the lottery board.

“This subject [gambling in Atlanta] has been discussed many times, so what I’m waiting for is action,” he said. “I’m eager to see it. It’s all great, but let’s get something on the record.”

Staff writer Eric Stirgus contributed to this article.