MGM leads behind-the-scenes casino push

How casino gambling might become legal

Casino gambling would face a gauntlet of votes laid out in the 127-page legislation introduced by state Rep. Ron Stephens, who chairs the House’s economic development committee.

Lawmakers would first have to OK a constitutional amendment seeking to legalize gambling by a two-thirds vote, setting up a statewide referendum. If it passed, county or city leaders would have to decide whether to put a question on their local ballots, giving local voters another chance to approve or reject.

The legislation allows six casino licenses throughout Georgia — two in metro Atlanta. A company must shell out $25 million and vow to invest at least $1 billion to qualify for the main license for the Atlanta market, or $200 million for the other five. It also sets up a “Problem Gaming Fund” to treat gambling addicts.

MGM Resorts International has spent months laying the groundwork to bring Las Vegas-style gambling to Georgia, including a behind-the-scenes push to woo influential leaders and trips to scout potential sites for a $1 billion complex, interviews and documents obtained by The Atlanta Journal-Constitution show.

Supporters of the effort to expand gambling insist there’s a pathway to put a constitutional amendment to legalize casino gambling before Georgia voters as early as 2016, despite signs of opposition from Gov. Nathan Deal and key lawmakers.

MGM officials have toured property near Centennial Olympic Park and “the Gulch” in downtown and are also interested in bringing gambling to Savannah, according to documents obtained through the Georgia Open Records Act.

The casino giant has crafted a pitch that gambling can help revive Georgia Lottery-funded programs like the HOPE scholarship that have cut rewards amid increasing demand. Advocates also claim casinos under the proposed legislation could create more than 10,900 jobs statewide.

MGM and its supporters sense that political winds have shifted in recent years, with a slim majority of GOP voters voicing support for casino gambling in 2012 and some traction this year to allow horse racing.

“We like the concept of putting a resort somewhere in the metro Atlanta area,” said Lorenzo Creighton, the president of the MGM National Harbor in Baltimore and a member of the team scouting Georgia. “It all starts with the HOPE scholarship, which would be the primary benefactor. It’s a win-win.”

To get there, supporters of expanded gambling must overcome obstacles that have scuttled a litany of previous proposals. Efforts to build gambling complexes in Underground Atlanta, in suburban mixed-use sites and in hard-hit neighborhoods fell flat amid political opposition.

They face critics such as Deal and state Sen. Judson Hill, a Marietta Republican 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.

Kicking the tires

As casino supporters prepare their public pitch — a legislative committee is set to study the idea this year — MGM and its allies have met with senior Georgia World Congress Center officials. MGM joined the Metro Atlanta Chamber and the Georgia Chamber of Commerce, despite having no major operations here.

The president of MGM Resorts, Bill Hornbuckle, toured the World Congress Center on April 30 with a team of company executives. Mark Zimmerman, the center’s general manager, wrote Hornbuckle the next day that it was “very exciting” to hear about the company’s developments.

“I look forward to this journey and hopefully being a key resource for data and information so that you and your organization can make an informed decision on what is best for the Congress Center and Atlanta,” Hornbuckle replied.

A spokeswoman for the Georgia World Congress Center Authority said the convention center does not have a position on expanded gambling in Georgia.

In a statement, Frank Poe executive director of the GWCC Authority, said “At the request of MGM, we met with their executives to learn more about their business. The Authority has not requested, received, nor offered any proposal for development with MGM on our campus.”

People with knowledge of the situation have told the AJC that MGM is most interested in sites near the Georgia World Congress Center and future Falcons’ stadium because of the high tourist and convention traffic.

The company has examined the site of the current Georgia Dome, but Kim Schreckengost, a top aide to Falcons owner Arthur Blank, said that site will be a parking and tailgating site for fans. She declined further comment.

Creighton, the MGM executive, confirmed multiple locations are under consideration.

“We are putting some thought into what we do, what potential locations we’re looking at,” said Creighton. “But it’s not unusual for us to do that, now that the conversation has started.”

The casino company is also talking up the financial impact. One projection sent by MGM lobbyists to the Georgia Lottery showed more than 10,900 statewide jobs could be created if six casinos are built. (Total casino revenue projections were redacted from the document to protect sensitive MGM information, a lottery spokeswoman said.)

State officials are doing their own due diligence. The GWCC has vetted MGM and its new developments in Massachusetts and Maryland, and asked a noted hotel consultant to determine how other convention centers are affected by casinos. They also obtained a joint marketing agreement between MGM and a Massachusetts agency that operates a convention center in Springfield.

‘A lot of juice’

The prickliest question involves how to overcome the objections of the governor, who has repeatedly said he opposes expanded gambling.

Deal wouldn’t have to sign off on the ballot question seeking voters’ approval for casinos in Georgia. But he would have to approve legislation that lays out the nuts-and-bolts of how it works.

The governor’s top aide, Chris Riley, pointedly predicted that won’t happen while Deal is in office. His term ends at the end of 2018.

Supporters hope to change Deal’s mind and win over lawmakers by depicting the debate as crucial to the future of the HOPE scholarship, which has had to cut awards to students in recent years as lottery sales struggle to keep up with high demand and rising tuition costs. This comes despite record profits from the lottery for the fourth consecutive year.

The casinos would be required to pump revenue into an education account that, according to one industry estimate, could generate $250 million a year for the program — about a quarter of the money the lottery pumped into pre-k and HOPE in fiscal 2015.

Creighton points to the National Harbor complex taking shape in Prince George’s County, Md., as an example. The company says it will have 12 restaurants, a luxury hotel, spas and stores, and a 4,000-seat entertainment venue. Some 3,600 employees will be on the payroll.

“We build resorts, and resorts are different than the traditional concept people see in a casino. We think this fits well in Atlanta’s tourist mix,” said Creighton. “It’s totally different than just putting slot machines in a building.”

A study committee will meet this year on the future of the scholarship. Co-chair Sen. Brandon Beach, R-Alpharetta, predicted the findings will focus on an expansion of gambling.

“It’s pretty clear we have to look at other funding streams beyond the lottery,” said Beach. “That brings us to horse racing and casino gambling.”

State Rep. Ron Stephens, a Savannah Republican who sponsored the legislation, said the legislative push could begin in earnest in January.

“There’s a lot of juice behind this,” Stephens said.