When Atlanta developer Dan O’Leary and his partners were stymied nearly three years ago in their attempt to bring video gambling to Georgia, they took it not as a “no,” but as a chance to retool their pitch.
Since mid-2009, O’Leary and his team have quietly worked for a better site and bigger vision. The partners, who have connections to one of Atlanta’s wealthiest families, are behind plans floated this week for a massive gambling and entertainment resort along I-85 near Norcross.
They say they’ve lined up financing -- though the bigger obstacle may still be getting the state to broaden gambling beyond the lottery.
The partners visited at least 10 potential sites and quietly wooed local elected officials and state lawmakers with their argument that the new gambling revenue can save the struggling HOPE Scholarship program.
“We think the project is right,” said Ed Sutor, who runs Dover Downs, a Delaware-based resort that is a model for O’Leary’s proposed complex and would run it under contract. “We’ve found the perfect location. We understand the financial trouble the HOPE scholarship problem is in.”
The partners have said the Gwinnett gambling resort they want to build would generate $350 million per year for HOPE in its first phase. O’Leary has promised it will also create 2,500 permanent jobs and 1,000 construction jobs.
Sutor said O’Leary and Dover Downs Gaming & Entertainment have commitments for financing from investment banks in California and New York, although he would not name the lenders. He said other key pieces already are in place should the Georgia Lottery board approve video lottery terminals (VLTs).
Despite its Delaware address, Dover Downs has Atlanta connections. R. Randall Rollins, chairman of Atlanta-based Rollins Inc., is on Dover Downs' board, as are two of Rollins' cousins. Randall Rollins and his brother, Rollins Inc. CEO Gary W. Rollins, own about 15 percent of Dover Downs shares.
Henry Tippie, Dover Downs' chairman, is an accountant, a close Rollins family friend and overseer of various Rollins trusts.
Sutor said the Rollinses haven’t played a direct role in the firm’s push for a gambling resort.
One of O'Leary's companies runs Underground Atlanta, where it wanted to add video gambling in 2009 but got nowhere with the idea.
It's unclear whether this pitch, coming at a time of financial trouble for the popular HOPE program, will fare better.
About two dozen House members signed a resolution Wednesday urging the state lottery board to approve video terminal gambling. But Gov. Nathan Deal said this week the proposal looks too much like casino gambling for his taste. Jerry Luquire, who heads the Georgia Christian Coalition, also opposes the plan and fears it will open the door to Las Vegas-style gaming.
O'Leary has 122 acres under contract, but the partners visited at least 10 metro sites, Sutor said, declining to identify the others.
He said some local officials traveled to Dover Downs to get them a sense of the Delaware operation, which includes a 500-room luxury hotel with a spa, concert hall and around a dozen restaurants.
“Gwinnett (officials) were not the only ones to come up,” Sutor said, though he declined to name the officials.
Dover Downs would have a nine-year management contract and could take up to a 10 percent ownership stake.
The Norcross resort would a target white collar clientele, ages 40 to 60, Sutor said, who have disposable incomes.
O’Leary's team has estimated that Georgians spend $200 million in out-of-state casinos, and Sutor said the resort would attract 5 million visitors annually to the state.
Dover Downs’ profit dipped 20 percent to $5.4 million for all of 2011, reflecting higher expenses. The company generated $217.4 million last year from gaming, which was flat from 2010.
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