A new front in Georgia’s fight over gambling: Sports betting

August 13, 2019 Atlanta: Atlanta Braves catcher Brian McCann tags New York Mets Todd Frazier out at the plate on a throw from Ronald Acuna Jr. during the sixth inning in a MLB baseball game on Tuesday, August 13, 2019, in Atlanta.   Curtis Compton/ccompton@ajc.com
August 13, 2019 Atlanta: Atlanta Braves catcher Brian McCann tags New York Mets Todd Frazier out at the plate on a throw from Ronald Acuna Jr. during the sixth inning in a MLB baseball game on Tuesday, August 13, 2019, in Atlanta. Curtis Compton/ccompton@ajc.com

Credit: ccompton@ajc.com

Credit: ccompton@ajc.com

The fight over gambling that's about to begin in the state Capitol may look like the same tired confrontation that we've seen year after year after year.

It’s not.

Earlier this month, House Speaker David Ralston issued a press release announcing a Special Committee on Economic Growth. Little deciphering was required.

This House panel is to look at new industries that would “require legislation creating a new regulatory framework.” One of the committee’s leaders will be state Rep. Ron Stephens, R-Savannah, a long-time advocate of allowing casinos – er, destination resorts – to operate in Georgia.

In his statement, Ralston referred to budget cuts that Gov. Brian Kemp has ordered up. “We would be remiss if we did not explore options for new sources of revenue to continue funding priorities while keeping the tax burden on Georgians as low as possible,” the speaker said.

On Tuesday, Brandon Beach, R-Alpharetta, will convene the Senate Study Committee on Gaming and Para-Mutual Wagering on Horse Racing and Growing Georgia’s Equine Industry. Beach, who is also running for Congress, is a veteran advocate of horse-racing, which he argues could generate jobs in rural Georgia.

“They’re back!” warned the Georgia chapter of the Faith and Freedom Coalition, a perennial opponent.

For the last five years, Mike Griffin, the lobbyist for the Georgia Baptist Mission Board, has been in the middle of every Capitol fight over gaming.

“What they don’t tell you is that every dollar raised in revenue costs three dollars in social expense,” he said. “What’s being totally overlooked is that Georgia’s doing well economically. They’ve done it with no gambling.”

By now, Griffin’s arguments have become well-honed. Yet what’s coming is no kabuki ritual.

In the House, Stephens hasn’t given up on casinos, nor has Beach abandoned horse-racing on the Senate side. But both lawmakers say the priority of their committees will be to examine whether Georgia should join a massive, national rush toward sports betting.

It’s a stampede made possible by last year’s U.S. Supreme Court decision that overturned a federal ban on sports betting in most states other than Nevada.

Three months ago, the Tennessee legislature approved an online-only sports betting system, the first of its kind in the nation – and the result of heavy lobbying by the National Basketball Association and Major League Baseball. Sports wagering is now legal in 11 states.

Speaker Ralston has expressed interest in the Tennessee venture.

The annual tax revenue from that state’s sports gambling industry is estimated at $50 million – not an insignificant sum, especially when a difficult math problem is on the horizon. Come January, Georgia lawmakers will be asked to help Gov. Brian Kemp fulfill his promise to raise public school teacher salaries by $5,000, approve significant budget cuts, and take the state income tax down a notch.

Senators will get the first crack at sports betting. The initial meeting will occur Tuesday in the offices of the Georgia Lottery Commission. It is a second, post-Labor Day hearing that will bear closer watching.

That will happen at SunTrust Park, home of the Atlanta Braves. The proposed witness list is impressive: Derek Schiller, president of business for the Braves; Rich McKay, president and CEO of the Atlanta Falcons; and Steve Koonin, CEO of the Atlanta Hawks. (We reached out to all three organizations, which declined comment.)

“They will come talk about it, and explain how it might work,” Beach said. “What they’re trying to do is drive attendance. The fans want it. The franchises need it.”

In researching this column, a skeptical GOP leader told us that the push to expand gambling in Georgia has always lacked the voices of “local people of influence.” Atlanta’s three largest pro sport franchises might fill that gap.

Their argument is that high-definition television has made sports enthusiasts far too comfortable in their living rooms. On-site betting would be a new way of keeping ticket-holders engaged and in paying seats.

The Tennessee online-only example offers an alternative to those opposed to casino gaming, fearful that brick-and-mortar operations serve as hubs for sex-trafficking and other bad behavior.

Participants will be able to place bets on smart phones from any location, whether stadiums or sports bars or home. “Geo-fencing” will allow Tennessee to require that bets be placed only by those inside the state.

Those same digital fences could be made much smaller in a Georgia version, perhaps restricting bettors to State Farm Arena, SunTrust Park and Mercedes-Benz Stadium. Those brick-and-mortar casinos wouldn’t have to be build. They would already be an established part of the landscape.

We understand that sports betting has some support from local metro Atlanta interests who hope a portion of the revenue might be applied toward the ballooning expenses associated with hosting such major events as the Super Bowl or the NCAA Final Four.

But Beach, the Alpharetta senator, notes what might be considered a fault by state lawmakers. “What I understand is that sports betting is good for the franchises, but it doesn’t draw a lot of revenue for the state,” he said. “If we’re talking about funding the HOPE scholarship or health care, the revenue is going to be in casino gaming or horse-racing.”

Casinos and horse-racing would require the passage of a state constitutional amendment on a November general election ballot. Plus two-thirds majorities in both the House and Senate – a very steep hill.

But there are those who believe that sports betting is something that could be approved by a simple majority in each chamber – with no constitutional amendment required.

“We already have a mechanism in place, if we allowed it legislatively. But the lottery commission isn’t going to move on anything unless we give them direction,” said Stephens, co-chair of the House panel looking at “new industries.”

“They’ve got the infrastructure already in place for sports betting. It’s there. It’s just another game,” he said.

Stephens, who is also chairman of the House economic development committee, said a beefed-up, highly independent gaming commission would have to be part of any legislation.

The flaw in Stephens’ simple-majority scenario is that such legislation would require the signature of Gov. Brian Kemp, which would be unlikely.

Even so, there’s still a reason that sports betting might be an attractive issue in some quarters of the state Capitol next year. We are on the verge of an intense, expensive fight for control of the 180-member House. Republicans have a mere 15-seat advantage over Democrats, and are sweating the after-effects of this year’s passage of a highly restrictive anti-abortion bill.

Both sides will require millions of dollars in campaign contributions, and individuals associated with the gaming industry have been known for their generosity.

There are many bridges to cross, but it would be somewhat ironic if Georgia’s controversial “heartbeat” law were to help push the state toward the first expansion of gaming seen in nearly three decades.

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