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It would seem Georgia’s neighboring Southern state Tennessee set a trend legislating controversial high taxes within their initial sports wagering rules. At first, it seemed dubious and highly debatable but with their early success, it might be difficult to argue against. At least Georgia decision-makers seem to think so.
Meeting on Monday a Georgia House committee took the next key step moving sports wagering forward by amending a tax rate up to 20% rate on gross revenue (GGR). The move was accomplished after sponsoring Representative Ron Stephens (R) of Savannah, GA introduced the legislative move saying, “we should be as good or equal to Tennessee.
Tennessee is among a group of US states with sports wagering tax of 20% or higher including Virginia (20%), Pennsylvania (36%), Delaware (51%), New Hampshire (51%), and Rhode Island (51%). In Delaware, New Hampshire, and Rhode Island the tax percentage is shared where the local lottery provides a single operator a minority.
This new bill is quite similar to one passed by a House committee earlier in the month by a group of senators in the state led by Republican Senator Jeff Mullis. In both bills allow for wagering by anyone 21 or over for all professional sports and on all college wagering except for universities within the state.
Mullis estimates that if Georgians were permitted to wager on professional sports online it would contribute $40 million a year for The HOPE Scholarship. His current bill has bipartisan support, but it has been questioned by uncertainty over whether Georgia voters would have to approve sports wagering through a constitutional amendment. A separate action allowing sports betting under the umbrella of the Georgia Lottery.
In commenting about the sports wagering issue and the potential constitutional challenge for Georgia, Mullis said:
Sports wagering is currently legal in 22 states. Around us: Tennessee, Mississippi, Louisiana and Florida is taking it up this year as well. Some say ‘don’t need one’ – some say it would make it cleaner, so the whole debate is all around us.
Like many other NFL, NHL, NBA, and Major League Baseball teams have joined partnerships with leading sportsbooks including DraftKings Sportsbook, FanDuel, BetMGM and others, Georgia professional sports teams sense an excellent opportunity as well.
Teams including the Atlanta Falcons, Hawks, Braves, and United are helping to provide positive momentum for legalized sports wagering. Together they have formed the Georgia Professional Sports Integrity Alliance, working with state legislators to move the agenda forward ASAP.
The Sports Integrity Alliance has estimated $1.5 billion is wagered illegally per year in Georgia. Based on that figure would rank them 12th in the US. Stephens said even a modest 10% tax on legal sports wagering revenue would produce $46 million each year for the state. Under his proposal, each licensing fee would cost $900,000.
Stephens also reviewed questions regarding minority participation during Monday’s Georgia House committee meeting. There was a proposed “needs-based” amendment that was not added to the new bill. According to many GA representatives, the section of the bill that addresses minority participation is outdated.
Representative Miriam Paris (D) of Macon, GA added during the meeting:
Minority participation is very important to us, but the lack of language in this bill is of concern to us. We are not getting our fair share and we are participating heavily with the Lottery. This isn’t beating a dead horse; this horse is alive and kicking.
In response Stephens said any new language involving minority participation would conflict with established Georgia Lottery rules and thereby would require a constitutional amendment, delaying any potential legalization many years. However, he promised that once the bill passed, he would continue all discussion for minority participation in full force.
The Georgia General Assembly remains in session until April 2. The legislative deadline for a sports wagering bill to pass out is the 28th day of the session. The next step would be for the bill to be sent to the Rules Committee. Should it pass there, it would then go to the House Floor for a vote.
The main goal of both bills would be an opportunity to eliminate any constitutional amendment, by expanding the incumbent power of the Georgia Lottery. Should a constitutional amendment be necessary, it would not appear on the ballot in the state until 2022.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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