Legalizing sports betting could divert an estimated $4.8 billion a year Georgians now spend wagering on games illegally, tax it, and put a portion of the proceeds toward education, supporters said Thursday.
The state Senate Regulated Industries and Utilities Committee held a hearing on legislation that would legalize online sports betting in Georgia under the jurisdiction of the Georgia Lottery Corp.
“Over 2 million [Georgians] are doing it now,” said Sen. Jeff Mullis, R-Chickamauga, chief sponsor of Senate Bill 142. “Do you know who’s in control of it? The bookies.”
Mullis’ bill is similar to sports betting legislation before the Georgia House of Representatives.
Both measures would put the state Lottery Commission in charge of licensing at least six operators such as FanDuel or DraftKings to run online sports books in Georgia. The companies would pay annual licensing fees of $900,000.
But the bills also feature some key differences. While the licensed operators would pay a tax of 14% of their adjusted gross revenues toward Georgia’s HOPE Scholarships and pre-kindergarten programs, the Senate version calls for a tax of 10%.
The House bill would limit bettors to using debit cards, a provision intended to keep potential problem gamblers from getting in their over their heads.
The Senate measure, however, would allow both debit cards and credit cards.
Josh Mackey, an Atlanta-based lobbyist representing FanDuel and DraftKings, said illegal offshore sportsbooks typically allow customers to use credit cards to place bets. Not allowing credit cards when placing bets legally under a new Georgia law would act as a disincentive, he said.
“We’re trying to get people to move away from [illegal bets] to legalized betting,” he said.
Sen. Lindsey Tippins, R-Marietta, a member of the committee, said legalizing sports betting would divert revenue away from the lottery.
“[Sports betting] does not return the state nearly the amount of money the lottery does,” he said. “I think we need to take that into consideration.”
But Mullis said most people who play the lottery don’t engage in sports betting.
“It doesn’t take away from the lottery,” he said. “It’s extra money.”
The bill’s opponents argued sports betting cannot be legalized in Georgia without a constitutional amendment.
Virginia Galloway, regional field director of the Duluth-based Faith and Freedom Coalition, cited a 2016 opinion from the Georgia attorney general’s office to that effect.
But Robert Highsmith, a lawyer representing the Atlanta Hawks, said the state Constitution only expressly prohibits casino gambling. Sports betting only requires the legislature to pass a statute authorizing the Georgia Lottery Corp, to add sports betting to its current operations, he said.
Going the constitutional route also would delay sports betting because it would have to go on next year’s statewide ballot for Georgia voters to decide, Highsmith argued.
“It would be cleaner and eliminate that debate,” Highsmith acknowledged. “But if we do that, it would be at least 2023 before it could be effective.”
Committee Chairman Bill Cowsert, R-Athens, suggested that Mullis prepare a constitutional amendment to introduce next week in case lawmakers decide it’s necessary.
Mullis said he has one ready to go.