Internet Cafes Forcing Georgia Lawmakers To Take Harder Stance On Online Gambling

While a handful of states are considering the benefits of revenue increases brought about by legalizing online gambling, the state of Georgia seems to be going in the opposite direction. The Peach State does offer its residents a state lottery, bingo and raffles, but the only other legal gambling options Georgians have are two casino boats operating out of Savannah and Brunswick, and they have to sail into international waters before the gambling can begin.

However, Georgia residents have been flocking to Internet cafes throughout the state to play online poker and other games, which caught both the eye and the ire of Georgia Gov. Nathan Deal in August, 2011. With anywhere from 50-100 Internet cafes operating all over the state of Georgia, Gov. Deal promised a crackdown on the establishments catering to online gamblers who are using their terminals. “Our state law prohibits gambling.” Deal said. “The code is black and white on this issue.” The governor’s aggressive attitude toward thwarting illegal online gambling in the Internet cafes seemed to garner the support of the Georgia Bureau of Investigation as well as international gambling consultant George Joseph. The Internet cafes are attracting the gamblers in droves, but the players have no recourse if they can’t collect winnings from unregulated poker sites that are not on American soil. “Who are you going to go to?” Joseph asked. “Not law enforcement.”^[1]

Georgia lawmakers also don’t seem in a hurry to allow pari-mutuel wagering, despite the state’s sizeable horse presence. Legislators had a chance to establish a nine-member commission that would oversee pari-mutuel betting and its regulation. But House Bill 467, which was a proposal to legalize horse-racing in the state, did not even come up for a House vote in time for the bill to be passed to the Senate, which leaves the issue on the state legislature’s back burner until next year. And at the earliest, if the bill passes the House and the Senate, Georgia residents would have to wait until at least the 2018 General Election to find out if pari-mutuel wagering receives formal approval from lawmakers.^[2]

Despite the governor’s efforts to halt illegal online gambling in Internet cafes and the legislature’s non-committal stance on House Bill 467, the Georgia Lottery Corporation spent nearly $100,000 on a study it completed in October, 2011 that examined the potential profit the state would stand to gain if casinos were built in Atlanta, Savannah and Jekyll Island. The study estimated that Georgia could rake in as much as $1 billion by 2018 if the casinos got the green light. “Georgia, in particular the Atlanta metropolitan area, would be viewed by the gaming industry as one of the most prized opportunities in North America, largely because it has one of the largest, most affluent, untapped markets, with excellent air and highway access,” the study said.^[3]

Floating Casinos And The Georgia State Lottery–Georgia’s Limited History Of Gambling

Residents of the Peach State do not have any kind of land-based legal gambling venues within state borders, but that doesn’t mean they’re cut off completely. Gamblers in Georgia can wager on two different casino ships, the Emerald Princess II Casino^[4], and the Diamond Casino^[5]. The Emerald Princess II is located off of Gisco Point. Because gambling is illegal in the state of Georgia, the ship is required to sail into international waters before opening its two casino levels where patrons can play blackjack, poker, roulette, or slot machines. The Diamond Casino, which operates out of Savannah, has two casino floors and offers slots, poker, roulette and mini-baccarat.

The Georgia State Lottery, by far the state’s most consistent gambling revenue generator, was created in 1993 and sold its first ticket in June, 1994. Since its creation, the lottery has earned $39 billion in ticket sales, with $13.4 billion going directly to the State Treasury’s Lottery for Education Account.

In 2011, the lottery grossed $3.597 billion in ticket sales. Winners alone took home $2.1 billion. Not only does the lottery benefit the people lucky enough to buy the winning ticket or select the lucky numbers, but 2010 figures show that the Georgia State Lottery brought in $15.1 million in tax revenue, as well as an additional $356,000 in back taxes.

The lottery also boosts major retailers and small businesses, with 2011 numbers showing an average of $27,000 in earnings per retailer that sell lottery tickets. Of course, educational funding has also received a major boost since the lottery’s creation. Georgia’s pre-Kindergarten program received $355 million to help more than 4,000 pre-K classrooms statewide to give children a successful start to their education. The HOPE Scholarship’s $748.2 million allowed 256,000 high school graduates to attend college, which in turn creates a better educated workforce for the state. The Georgia State Lottery directly employs 280 workers statewide, and another 50,000 people are employed where lottery tickets are sold.^[6]

The success the state lottery would enjoy was evident from the very start. Georgia residents purchased 52 million tickets in the first week of operation. Five months later, the lottery exceeded its first-year sales goal, earning $463 million in sales. By the end of its first year, $1.1 billion in lottery revenue had been earned, $164.81 per capita, making it the most successful state lottery startup in history since Florida began its lottery in 1988.^[7]

Outlook For Gambling Legislation In Any Form In Georgia Not A Safe Bet

Despite the huge success of the Georgia State Lottery, the actions of Georgia legislators and the attitude of Georgia Gov. Nathan Deal leaves the impression that gamblers in Georgia shouldn’t bet the farm on a change in gambling laws any time soon.

Residents who gamble and play the lottery may find it difficult to understand why Georgia lawmakers aren’t taking a harder look at the potential revenue boost online gambling regulations could bring to the state. With Gov. Deal’s crackdown last year on Internet cafes that may or may not be fronts for online poker rooms, residents who gamble online may be more timid about going all-in as well. And after another failed attempt to bring pari-mutuel wagering to a state with many horse stables and a huge horse population, it is becoming clear that the Georgia legislature isn’t willing to place any kind of bet on the potential positive effect gambling legislation could bring to the state–online or otherwise.

Time will tell, but Georgia legislators will no doubt feel some pressure if other states such as New Jersey and Nevada manage to push online gambling bills through the legislative process and create untold amounts of additional revenue by succeeding in offering online gambling.

Citations and References

[1] State leaders vow to crack down on illegal internet gambling cafes – Atlanta Journal Constitution
[2] Georgians to wait until at least 2018 for regulated horse betting in the state – Throughbred Times
[3] Study finds massive earning potential for land based casinos in Georgia by Jim Galloway
[4] Emerald Princess Casino in Georgia – Casino Website
[5] Diamond Casino in Georgia – Casino Website
[6] Benefits of the state lottery in Georgia – Galottery.com Analysis
[7] About the Georgia State lottery – Galottery.com