David Delp, a table games dealer, shuffles cards at a blackjack table at the Hollywood Casino in Columbus, Ohio, on August 20, 2014. (Columbus Dispatch photo by )
Photo: Brooke LaValley
Photo: Brooke LaValley

Compromise to legalize casinos in Georgia moves ahead

A compromise to legalize casinos in Georgia is moving ahead in the state Legislature, with a scaled-back effort that would allow two gaming “resort destinations” — one in Atlanta and one in either Augusta, Columbus or Savannah.

The move comes as Gov. Nathan Deal signaled he may not stand in the way, and as developers begin jockeying for potential sites particularly in the capital city, including next to the world’s busiest airport.

The legislation is not yet available, but new details were confirmed from its chief sponsors, state Sen. Brandon Beach, R-Alpharetta, and state Rep. Ron Stephens, R-Savannah. They include support for the state’s HOPE scholarship, as well as a new needs-based scholarship.

The Atlanta Journal-Constitution will again have Georgia’s largest team covering the Legislature. Get complete daily coverage during the legislative session at myAJC.com/georgialegislature.

Also on Tuesday, the development team planning a major luxury hotel complex, offices and a travel plaza next to Hartsfield-Jackson International Airport was weighing the potential for a Las Vegas-style casino on the site.

The joint venture of California-based Majestic Realty and Atlanta-based Carter said Tuesday that the group also has been approached by a number of casino groups that are backing a proposed constitutional amendment.

Many casino boosters have pointed to the arena and convention district downtown as a likely landing spot for a casino, but some have pushed back on that notion. A recent series of studies by the downtown business coalition Central Atlanta Progress said an expansion of gambling could give state tax revenue a giant boost, but it would also generate new public safety, infrastructure and social costs for cities and counties.

None of that matters if Beach and Stephens cannot persuade their colleagues to go along. Two pieces of legislation are necessary: One is the so-called “enabling legislation” that would detail the tax rate, location, investment requirements and more. That bill would be subject to Deal’s veto, although the governor can also sign it into law or let it become law without his signature.

Deal on Tuesday told The Atlanta Journal-Constitution that he would not oppose the bill as long as it doesn’t devastate the current HOPE scholarship program funded by the state lottery.

“We need to be absolutely certain that if a casino bill passes, it doesn’t adversely impact a lottery program for the state,” he said. “That is the first big marker — to make sure that we don’t devastate what is probably perceived as the most successful lottery program in the country.”

The second piece of legislation would be a proposed constitutional amendment that would require two-thirds majorities in the House and Senate.

Passage in the House and Senate is not a sure thing. Beach and Stephens will have to cobble together a coalition of Republicans and Democrats to get enough votes to clear the higher bar of a constitutional amendment. Lawmakers on both sides of the aisle have concerns: Many Republicans oppose gambling on moral grounds. Some object to needs-based scholarships. Many Democrats, too, worry that gambling breeds crime and hurts inner cities the most. Yet others would want to see proceeds from gambling spent on other needs, such as health care for the poor or rural Georgians.

“We’ve got to get the votes, and I think nobody was interested in six or seven casinos,” Beach said, referring to earlier plans. “When we pared it back down to two ‘destination resorts’ — and we struck that word ‘casino’; we’re not even using the word — that’s more appealing to my colleagues.”

If the amendment passes the General Assembly, voters would decide in November 2018 whether to approve. Local governments and local voters would then have to also agree before the first card is flipped or pair of dice is tossed.

Stephens and Beach will propose the state create a new five-member gaming commission modeled after Nevada’s. The commission would issue up to two licenses. One in the Atlanta area would require an investment of at least $2 billion, and a secondary state license for elsewhere in Georgia would need at least a $450 million investment.

The “resorts” would be taxed at 20 percent, well above the industry’s preferred rate of about 12 percent and much closer to Deal’s preferred rate of 24 percent.

Beach said 70 percent of proceeds from gambling would go toward the state’s popular HOPE scholarship, a merit-based, state-funded college scholarship program. The other 30 percent would go toward a new needs-based scholarship.

“Listen, this bill allows a $2 billion investment here and a $450 million investment in a secondary market that will create probably 5,000 jobs here and 2,000 in a secondary market — so anywhere from 7,000 to 10,000 jobs,” Beach said. “It will have no public money, and it will pay a 20 percent tax rate benefiting education.

“So when you’re creating jobs and you’re helping tourism and the economy and you’re reinvesting in education, I’ll sign up for that all day long,” he said.

Unlike earlier versions, the legislation would not legalize betting on horse racing. Beach said the scaled-back effort was more palatable to colleagues hesitant to expand gambling in Georgia.

The legislation will be introduced in both chambers. Stephens, the chairman of the Economic Development and Tourism Committee, will carry the bill in the House. He said it should be filed Wednesday.

“We’ve raised the bar way up there to where a $2 billion investment is now the floor,” Stephens said.

Stephens said both the proposed tax rate and the amount of proceeds that would go toward needs-based scholarships are negotiable.

“That’s the beginning of the conversation,” he said.

Nationally, state taxes on casinos range from about 7 percent in Nevada to up to 67 percent in Maryland, according to a 2015 study by the National Conference of State Legislatures.

Several major gaming companies remain interested in Georgia, even with the increased investment requirement and the higher tax rate, Stephens said.

“The spotlight on Georgia is red hot,” he said. “There are a handful, not that many, that are looking for that opportunity.”

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Staff writers J. Scott Trubey, Kelly Yamanouchi and Greg Bluestein contributed to this article.