Georgia Senate clears bill to legalize sports betting with constitutional amendment

Georgia State Capitol on mostly sunny day

by Stanley Dunlap, Georgia Recorder, [This article first appeared in the Georgia Recorder, republished with permission]

February 2, 2024

On Thursday, the Georgia Senate passed a bill which lays the groundwork for the legalization of sports betting in the state after a constitutional amendment that would give Georgia voters the final say was added at the last minute.

Senate Bill 386 heads to the House chamber after receiving a favorable 35-15 vote, a large enough margin to meet the two-thirds majority required by the Legislature for legislation that amends the Georgia Constitution through a ballot referendum. The bill’s sponsor, Republican Sen. Clint Dixon, was among several lawmakers who on Thursday opposed adding the amendment clause, instead relying on the legal opinion of former Georgia Supreme Court Justice Harold Melton, who last year wrote as a partner in a private law firm that the state didn’t need a ballot referendum if sports gambling was operated like a lottery game.

The bill’s passage in the Senate marked a significant milestone for legalized sports betting in Georgia after several years of unsuccessful attempts to legalize sports betting, horse racing, and casinos in conjunction or individually.

There have been disagreements among legislators on a variety of topics, including the ills of gambling addiction, how revenue would be distributed and what forms of gambling should be permitted.

In a statement, Lt. Gov. Burt Jones, a Republican from Butts County, praised senators for bringing sports betting to a successful vote in the Senate.

“I was proud of the bi-partisan effort in the Senate today,” Jones said. “We are one step closer to providing tens of millions of dollars to education funding for the next generations of Georgia. I look forward to continued discussions to get this done.”

Under Dixon’s bill, the Georgia Lottery would oversee a sports gambling industry that pays a 20% tax on revenue to help fund higher education HOPE scholarships and pre-K programs.

On Thursday, more than 30 Democratic and GOP lawmakers joined forces to add the constitutional amendment language proposed by Athens Republican Sen. Bill Cowsert.

Cowsert has long been a proponent of opening up the sports betting industry to Georgia, but only if it follows the same path as the Georgia Lottery after voters ratified the constitutional amendment allowing a lottery system to fund higher education in 1992.

Several lawmakers noted on Thursday that conservative Georgia faith-based organizations are likely to sue the state if lawmakers legalize sports betting without amending the state constitution.

Cowsert surmised that expensive lawsuits will likely delay Georgia’s legalization of sports betting for many months before the courts likely call for a referendum that restarts the process.

Cowsert’s plan would allow people in Georgia to begin placing bets on Jan. 1, 2025, if residents vote this fall to ratify the law. Cowsert called it disingenuous to liken sports wagering to lottery games in order to push the bill through the Legislature with simple majority votes.

“There is no way the people in Georgia, when they passed that constitutional amendment for the lottery, believed it would authorize the General Assembly to say that sports betting is a lottery game,” Cowsert said.

The bill that cleared the Senate Thursday requires that Georgians must be at least 21 years or older in order to bet on sporting events. The measure prohibits people from wagering with a credit card, but allows bettors to electronically transfer money through debit cards and other online mobile payment services.

The bill proposes that the state issue 16 licenses that cost $100,000 to apply for and require companies to pay a $1 million annual fee, as well as a 20% tax on the revenue made off sports gambling.

A bidding process would be conducted by the Georgia Lottery to award seven licenses to sports gambling companies. The other licenses would be distributed among Atlanta’s five major professional sports franchises, NASCAR, Georgia Lottery, PGA and Augusta National.

Sen. Harold Jones, an Augusta Democrat, said the state’s projected $100 million collected annually in sports betting revenue is likely a conservative estimate. There are several thousand children on the waiting list for pre-K, a number that could be alleviated by tapping into an additional money, he said.

Jones said prior to Thursday’s vote, “We are leaving a source of funding on the table.”

On Thursday, several legislators expressed strong opposition to the bill because they argued it does not go far enough to separate the gambling industry from Georgia’s professional sports teams.

Roswell Republican Sen. John Albers said there should be stronger ethical standards in place instead of allowing teams to directly profit from people betting on their games. Albers failed to get an amendment added to the bill that would ban teams from having as much as a 25% ownership stake in a sports gambling business.

“All this does is put the ethical protections in place and make sure that the foxes aren’t in the henhouse,” Albers said about his proposal.

The push for legal sports gambling gained momentum in 2020 when four Atlanta professional sports franchises formed an alliance advocating for sports betting in Georgia. Since May 2018, nearly 40 states have legalized sports betting after the U.S. Supreme Court overturned a 1992 federal law banning commercial sports betting in most states.

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