Spirit of competition: Georgia lawmakers back competing views of legalized sports betting

Georgia State Capitol on mostly sunny day

by Ross Williams, Georgia Recorder [This article first appeared in the Georgia Recorder, republished with permission]

February 20, 2023

Sports fans will be scouting the state Capitol this week as three bills aimed at allowing Georgians to wager their money on games face vital committee hearings.

On Tuesday, the House Higher Education Committee is scheduled to hear a bill by Rep. Marcus Wiedower, a Republican from Watkinsville.

Wiedower’s plan would put sports betting under the purview of the Georgia Lottery and award 16 licenses to operate betting services.

One license would be available for the Georgia Lottery Corp. Five licenses are set to go to the state’s professional teams: the Atlanta Hawks, Atlanta Braves, Atlanta United, Atlanta Falcons and Atlanta Dream, each of which would team up with an online sports betting service. Three more are dedicated to the Masters Tournament, the Professional Golf Association and NASCAR, and companies would compete for the remaining seven licenses.

Each of the licensees would pay 15% of their adjusted gross income in taxes, which the state would be required to spend on education per the state constitution.

Wiedower said Georgia could bring in between $50 and $90 million in the first year if his bill becomes law, but he acknowledged the difficulty of the prediction.

“I contend that this is happening so prolifically behind the cover of darkness, if you will, it’s hard to put a number on that,” he said at a hearing of the House Higher Education Committee Thursday. “We don’t know how much exactly Georgians are betting, but we know they’re doing it in abundance. Going back to my original intent, I want to protect those that are doing it.”

Wiedower said placing sports betting under state control would allow the Legislature to set regulations aimed at preventing minors and those with gambling problems from accessing the services.

Can he do that?

Lawmakers have sought to increase Georgians’ ability to bet their money since voters first approved the Georgia Lottery in 1992, but for years, opponents have argued that expanding gambling would require a constitutional amendment. That would mean two-thirds votes in both legislative chambers and majority support from Georgia citizens in a referendum vote, a steep challenge.

Wiedower’s bill does not call for a constitutional amendment. Former Georgia Supreme Court Chief Justice Harold Melton, now a partner at the Troutman Pepper law firm, recently published a memo opining that such a change is unnecessary.

Alpharetta Republican Rep. Chuck Martin, a co-sponsor of the bill and chairman of the Higher Education Committee, said if the bill becomes law, it will be held up for legal scrutiny like every other piece of legislation.

“I don’t think there’s a black letter solution to this. I think we could probably line up a room full of people, half would tell us it’s OK constitutionally, the other half would tell us it’s not,” he said.

Georgia Baptist Convention spokesman Mike Griffin said he opposes a gambling expansion on moral grounds, but passing one into law without voter approval is even worse.

“I think there’s generally an integrity issue here,” he said. “People in 1992 were not voting on this, and I think going forward, if we’re going to be faithful to our constitution, this would have to be a constitutional amendment, and the people in the state of Georgia would have to make the final decision, not the legislature.”

In a statewide poll conducted last fall by the University of Georgia’s School of Public and International Affairs Survey Research Center, 45.6% of likely voters surveyed favored making online betting on professional sports legal in the state and 42.6% opposed with 11.8 answering “don’t know.”

Senate bill

Sen. Bill Cowsert, an Athens Republican, said he agrees with Griffin that voters should make the decision. The Senate Committee on Regulated Industries and Utilities, chaired by Cowsert, is set to hear his sports betting bill Thursday, which calls for a constitutional amendment.

“It is my strongly held opinion that the people of Georgia, when they passed the lottery bill, they did that in tandem with knowing that other forms of gambling, casino gambling – which in my view reasonably included sports betting. Nobody could have thought sports betting was a lottery game because sports betting was illegal nationwide – in conjunction with allowing the lottery, our voters thought that other forms, horse racing, which is done by parimutuel betting, and all the forms of casino gaming, were not going to be permitted in our state.”

Cowsert’s bill would set up a Georgia Gaming Corporation with seven members appointed by the governor, lieutenant governor and speaker of the House to oversee sports betting regulation and grant licenses.

The corporation would grant at least six licenses to service providers with one reserved for the Georgia Lottery, but there would be no upper limit. The Senate version would also allow the corporation to grant licenses to locations like bars and restaurants to install sports betting kiosks, while the House version only allows individual online betting.

Cowsert’s plan sets the tax rate for most bets at 20% of gross adjusted income, but riskier types of wagers would be taxed higher at 25%.

Going through a constitutional amendment is more difficult, but comes with some advantages, Cowsert said. Going through the lottery would mean funds could only be directed to the educational programs the lottery is mandated to pay for, but a constitutional amendment could direct the taxes from other licensees elsewhere, subject to voter approval.

Cowsert’s constitutional amendment calls for half the money raised by sports betting to go to needs-based scholarships for state public and private universities. A quarter of the money would be set aside for “health care, mental health, economic development, and the reduction of poverty” in rural and high-poverty parts of the state.

Another 15% would go toward preventing and alleviating gambling addiction, and the last 10% would be split evenly between soliciting, sponsoring and hosting major sporting events in Georgia and “innovational educational programs and services.”

Cowsert said a constitutional amendment would also mean Democrats would get a seat at the table, since neither chamber has a two-thirds Republican majority. Both Wiedower and Cowsert’s bills have Democratic and Republican cosponsors.

The ponies

Expanding Georgians’ gambling options to include sports betting would be a big win for gambling advocates, but Sen. Billy Hickman, a Republican from Statesboro, wants to go a step further.

He filed a sports betting bill that would not require a constitutional amendment and would also allow betting on horse races at up to three tracks around the state.

That bill is set to get a second hearing Monday before the Senate Economic Development and Tourism Committee.

Proponents say allowing horse racing could bring a new source of income to Georgia farmers, but horse racing has typically been a tougher sell to lawmakers, as it is opposed by the same groups who oppose other forms of gambling as well as animal rights groups.

Georgia Recorder is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Georgia Recorder maintains editorial independence. Contact Editor John McCosh for questions: info@georgiarecorder.com. Follow Georgia Recorder on Facebook and Twitter.