On November 2, 2015, members of the Georgia House and Senate Study Committees on the Preservation of the HOPE Scholarship Program met to consider testimony relative to expansion of gaming in the state to include casino gaming and pari-mutuel wagering on horse racing to supplement the funding shortfall that threaten the continued viability of the program.
The Study Committees previously met in September for two consecutive days in Atlanta, during which time the focus was on issues relating to the revenue gap that needs to be filled to adequately fund the HOPE Scholarship Program and how the gaming industry might help address this shortfall through gaming fees and taxes.
The eighteen people who testified at the November hearing included gaming opponents from the Georgia Baptist Convention and a University of Illinois professor, among others, many of whose arguments against an expansion of gaming were largely based on outdated reports and stories gleaned from anecdotes from ancient history that no longer are relevant.
Testimony also was offered by, among others, the CEOs of Boyd Gaming, Hard Rock International and The Jockey Club, a Managing Director of Spectrum Gaming, and the Vice President and General Counsel of Gaming Laboratories, Inc. At the invitation of one of the Co-Chairs of the Study Committees, I testified about the licensing and enforcement process and the statutory and regulatory framework relating to same that are integral to the integrity of regulated casino gaming (I was the only practicing attorney invited to speak at the hearing).
During the November 2, 2015 hearing, gaming industry executives talked about how the gaming industry has matured into a legitimate economic engine in the United States producing 1.7 million jobs and $38 billion dollars in revenue for federal, state, and local governments. They added that the industry gives back to the communities in which their facilities are located through various eleemosynary causes and, in addition to gaming taxes and fees, the industry creates high paying jobs and spurs capital investment, urban renewal, procurement of goods and services from local businesses and tourism
Much of the discussion concerned the appropriate amount to tax casinos if casino gaming is authorized by the state. It was stressed by several of the casino gaming executives that the higher the rate, the less that can be spent on capital investment. Conversely, they said that a lower tax rate leads to increased capital expenditure which results in increased hiring and an increase in revenue for the benefit not only of licensees but also the state. This testimony helped the members of the Study Committees understand that there is a limit in the amount that can be charged licensees.
Testimony also focused on the need for the state to identify its public policy goals and then create a regulatory structure designed to achieve those goals. I and others testified that because of the foregoing, no one regulatory model fits all jurisdictions and that no single gaming control and enforcement system is perfect. I urged the members of the Study Committees to consider what has worked and not worked elsewhere with a view to ultimately adopting a regulatory and enforcement system that ensures the integrity of games offered and the suitability of operators and others granted gaming licenses and permits. I stressed the importance of giving this thorough consideration on the front end because if history has taught us anything relative to new jurisdictions getting into casino gaming, the time to get this right is now.
While a December 1 deadline was established for the Study Committees to make recommendations to the legislature, Co- Chair Rep. Ramsey, at the conclusion of the November 2 hearing, raised the possibility of holding another meeting of the Study Committees. All of the members of the Study Committees with whom I spoke appeared to have open minds relative to an expansion of gaming, whether in the form of casino gaming or pari-mutuel wagering on horse racing, or both, as generating the funds that are needed to ensure the continued viability of the very important HOPE Scholarship Program. The fact that the Study Committees met twice in September, and again on November 2 and, possibly, will meet a fourth time reflects a definite sense of urgency on their part.