Legal sports betting could bring $38M economic boost for Georgia in first year
(The Center Square) – A proposal to legalize sports gambling under the Georgia Lottery could increase revenue for the state by nearly $38 million in the first fiscal year, state officials estimate.
House Bill 86 would legalize online sports betting as a lottery game. It would be offered through vendors licensed by the Georgia Lottery Corp. (GLC). Vendors would be subject to license fees and a 16% tax on their profits. The fees would be used to support the GLC, and the tax collections would be transferred to the state’s Lottery for Education account.
While accounting for administrative costs and supporting programs, the state’s budget office and auditor estimate sports gambling could generate an annual revenue net increase between $23.8 million and $37.9 million in fiscal year 2023, the first year of operations.
“Revenue would increase over time as additional licensees are added and sales increase,” state officials said.
HB 86 would allow Georgians age 21 and older to bet on a variety of professional sports games. The proposal would allow eight licensed vendors to offer sports gambling in fiscal years 2023 and 2024, a dozen in fiscal years 2025 and 2026 and 16 in fiscal year 2027.
State officials estimate Georgia could gain $14.6 million in revenue from the licenses in 2027. Gaming licenses alone could generate a total of $36 million in gross revenue for the state in the first five years. The state also could see $43.8 million in tax revenue by fiscal year 2027, officials estimate.
To implement the program, the GLC, a state organization, would have to increase administrative costs to process licenses and oversee the games. GLC estimates sports gambling could cost them $1.1 million to $3.6 million to oversee in fiscal year 2023 and $1.3 million to $3.6 million by 2027.
Rep. Ron Stephens, R-Savannah, who introduced the bill, said it also would offer support to state sports teams that have seen a drop in game attendance because of the COVID-19 pandemic. Stephens said about 2.2 million Georgians already bet on sporting games illegally.
“Most people would favor to legalize it so that we can legitimize it if you will, through the lottery just as we do with any other lottery game,” Stephens said. “That would create about $433 million in gross receipts from sports, and it would put about $43 million into our HOPE scholarship.”
More than 1.8 million Georgia students benefit from the lottery’s scholarship program, Helping Outstanding Pupils Educationally Scholarship Program, better known as HOPE. The program offers grants to eligible students to pursue associates and bachelor’s degrees, technical certificates and GEDs. It also offers a career grant that rewards students enrolled in technical courses for jobs that promote the state’s economic growth.
Some lawmakers fear that legalizing sports betting could lead to an increase in gambling addiction. The proposal calls for a state gambling addiction program to administered by the Georgia Department of Behavioral Health and Developmental Disabilities (GDBHDD).
GDBHDD estimates it would cost about nearly $2 million a year for the new program. GLC would cover $200,000 a year from the gaming proceeds, but GDBHDD would need a 3% increase in annual state funding to manage the program across the state.
It is not clear how far HB 86 will get in the General Assembly. The measure was approved by the Economic Development and Tourism by Rules Committee on Feb. 3, but it was bounced back by the House Committee on Rules on Feb. 10. A senate version, Senate Bill 142, however, was presented in the Senate Committee on Regulated Industries and Utilities on Thursday, but it has not been placed on an agenda for discussion.
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