Gambling hearings head to a coast cautious about Georgia casinos

Amid coastal Georgia’s natural beauty and antebellum charm, some people see an opportunity: a new casino, maybe even a racetrack and the lure of another draw for tourists in a region flush with them.

Lawmakers deciding whether to expand gambling in Georgia take their show Monday to Savannah, where for the first time they'll allow opponents to testify against the flashy casino interests that have already taken the state Capitol by storm. But there is no clear sign this piece of the South's Low Country wants it.

The Savannah area’s leading business advocacy group has taken no position on the concept. Residents seem leery. And even some of the state’s most powerful political voices seem to see little point.

“Frankly, I think that time has passed by some of the success for casinos, given the closures in New Jersey and Mississippi and the building of multiple new casinos in different states,” state Sen. Jack Hill, R-Reidsville, the powerful chairman of the Senate Finance Committee, said in a recent email.

Atlanta has drawn much of the spotlight in recent months over a Las Vegas-style effort by the gaming industry, including a $1 billion concept for downtown. But the proposal affects the entire state, from Middle Georgia straight down I-16 into what’s been dubbed the “Hostess City of the South.”

Monday’s all-day hearing is the third by lawmakers, who met on the issue for two consecutive days in September. Then, they heard only from proponents focused squarely on how to move ahead with approval. The casino industry has already hired more than a dozen lobbyists to help make its case.

And when those study committees of both the state House and Senate met two months ago, it included tantalizing testimony of the potential effect of legalized gambling. One estimate suggests at least $280 million annually in new state tax revenue from casinos, while racing advocates claim up to an additional $25 million in new tax revenue could come annually from parimutuel betting on horses.

All that money has been proposed as a boost toward the state’s premier education programs, including the HOPE scholarship for college students and early childhood pre-k classes.

But the news since then has been more tempered. Gov. Nathan Deal for the first time last month said he planned to openly oppose the effort when the General Assembly convenes in January. He left the door open to a change of heart, but only if the industry agreed to a significantly higher tax rate than the 12 percent currently proposed.

Concerns raised on Jekyll Island

Jekyll Island residents Mindy and David Egan are clear: Casinos don’t belong there. Yet, they are still worried.

David Egan said he believes Deal will not allow a casino on the island, but he’s also keenly aware that Deal’s term ends in a few years. While the Jekyll Island Authority, the state panel that oversees what happens on the island, also opposes the idea, a new governor would have the power to name a new board.

“We get a new governor and everything changes,” Egan said.

In fact, they said, a friend recently spotted on Jekyll a large, black SUV with license plates from the Muscogee Creek Nation tribe of Oklahoma, which operates a casino. That, coupled with the news that Las Vegas casino mogul Sheldon Adelson recently met with Lt. Gov. Casey Cagle and Speaker David Ralston, R-Blue Ridge, and locals down on the coast are concerned.

Mindy Egan said the director of the Jekyll Island Authority, Jones Hooks, asked them for help in solidifying a case against gambling. Hooks shared an email from Hill. In it, Hill said he, too, opposes casinos.

Hooks first emailed Hill in early October.

“In my opinion, we definitely don’t need to look at casino gambling on Jekyll Island as an option to support HOPE,” Hooks wrote. “Such activity would undermine all of our conservation, preservation, and education activities on Jekyll. … When you consider that more than $300 million in public and private money will have been spent on Jekyll Island once revitalization is completed to enhance facilities and to attract Georgia families again, in my opinion, casino gambling on Jekyll Island just isn’t a good match.”

Hill agreed.

Yet, David Egan said, a new convention center now open on Jekyll is precisely the concern.

“We keep hearing little dribs and drabs that there is a concern with the state having pumped $50 million into this convention center, that it’s underpreforming and what better place to have some family-friendly casino gambling than a convention center that has too many echoes in it too many days,” Egan said. “Draw additional convention business, hotel customers here, and a different (authority) board or different governor were in place, there’d be a powerful fiscal argument from people in Atlanta.”

Proposal calls for six casinos

According to the proposal now on the table, up to six “destination” casino resort licenses could be allowed across five geographic zones in Georgia: Atlanta, Savannah, Columbus, Macon and South Georgia. The proposal sets aside two licenses for a broadly defined metro Atlanta zone, although one would be more limited than the other.

The minimum private investment required to win a license: $1 billion for the primary Atlanta license and $200 million for all the others.

Business advocates as influential as the statewide Georgia Chamber have acknowledged a stake in the outcome — companies publicly embracing the concept particularly in Atlanta have included MGM Resorts International. Business groups outside Atlanta, however, appear more cautious.

“We are still in the process of setting our 2016 legislative agenda,” said Ansley Threlkeld, the Savannah Area Chamber’s director of government affairs. “As to the issue of expanding casinos and gambling in Georgia, we are in the process of learning more about the issue and have not taken a position at this time.”

John Kindt, a professor of business and legal policy at the University of Illinois, is one of the nation’s top researchers on the impact of gambling on society. He’s testified before Congress and has studied the issue for decades. He also has a home in Bartow County, where his children and grandchildren also live.

Kindt attended the first hearing of the study committees and asked to testify. He said he called the office of state Sen. Brandon Beach, R-Alpharetta, one of the chairmen, but was ultimately not allowed to speak then — although he’s currently third on the list for Monday.

September’s testimony, however, left an impression.

“It was nothing but pablum from the pro-gambling interests,” Kindt said. “It was a stacked deck. If people are getting a stacked deck, the committee itself needs to be criticized for a stacked deck in the first two hearings.”

Had he been allowed to speak, Kindt said, he would have told the committee that gambling leads to major social ills, such as spikes in addiction, increases in bankruptcies and foreclosures, and more crime.

“When you bring in gambling facilities, the studies show the number of gambling addicts will double around the areas and gambling addicts cause social costs similar to hard drug addiction costs,” Kindt said.

Bankruptcies increase by 18 percent to 42 percent and crime tends to increase 10 percent every year, he said.

“You add up all these costs, the social costs to taxpayers are at least $3 for every $1 in new revenue,” Kindt said. “All these social costs, it’s a lose-lose for the taxpayers.”