ATLANTA – The Georgia Senate passed a constitutional amendment Friday asking voters statewide to decide whether to legalize online sports betting.
Senators voted 41-10 to approve the measure, three votes more than the two-thirds majority needed to pass it and send it to the state House of Representatives.
Friday’s floor vote marked the most progress any proposal to legalize any form of gambling in Georgia other than the lottery has made in the General Assembly in more than a decade of failed efforts.
As has been the case with attempts to put casinos and pari-mutuel betting on horse racing on the ballot, supporters argued Georgians should have the right to vote on sports betting.
“I have never had any problems with allowing the people to vote,” Sen. Jeff Mullis, R-Chickamauga, the constitutional amendment’s chief sponsor, said on the Senate floor.
Mullis said an estimated 2 million Georgians already are betting on sports illegally and spending more than $4 billion a year, money that goes into the pockets of bookies instead of the state.
Under Senate Resolution 135, a state tax of 16% on the proceeds from online sports betting would be divided between need-based scholarships, rural health and broadband deployment.
Originally, the constitutional amendment did not specify what percentage of the proceeds should go toward each of those three purposes.
“I feel like we ought to let the legislature have a little latitude in deciding what’s most important to us,” said Sen. Bill Cowsert, R-Athens, a cosponsor of Mullis’ resolution.
However, senators amended the resolution on the floor to specify that at least 50% of the proceeds go to need-based scholarships. The lottery-funded HOPE Scholarships program originally was need-based but later began offering awards strictly on merit.
Sen. Elena Parent, D-Atlanta, who proposed the amendment, said need-based scholarships would help Georgia meet its workforce needs.
“We need many more people who can afford to matriculate to some form of higher education,” she said.
Some lawmakers have pushed this year for legalizing online sports betting by statute rather than a constitutional amendment because statues only require a simply majority to pass. A bill pending in the Georgia House takes that approach.
But Cowsert cited legal opinions that legalizing sports betting and putting it under the jurisdiction of the Georgia Lottery Corp. requires changing the state Constitution because sports betting doesn’t meet the legal definition of a lottery game.
“It’s cleaner and uncontroversial to let the voters decide,” he said. “We’re not imposing our will on the state without letting them be heard.”
After passing the constitutional amendment, the Senate voted 34-17 to approve an “enabling” bill specifying how sports betting would operate in Georgia.
Senate Bill 142 requires companies interested in running sportsbooks to pay the lottery corporation a nonrefundable application fee of $10,000. At least six companies would be selected and would pay license fees of $100,000 per year. The license fees had been set at $900,000 under the original bill.
Cowsert said the lower fee would prevent giant operators such as DraftKings or FanDuel from monopolizing the business in Georgia.
“Reducing that to $100,000 allows Georgia businesses to offer sports betting, not just Las Vegas,” he said.
Senators approved two amendments to the bill to ensure that women-owned businesses and businesses owned by veterans get a shot at licenses and to make sure the enabling bill would not take effect until the beginning of 2023, and only then if voters approve the referendum in November of next year.
Cowsert, who played a major role shaping both measures as chairman of the Senate Regulated Industries Committee, said he opposes casinos and made sure sports betting in Georgia would be online only.
“It’s something that’s not [going to be] in land-based facilities,” he said. “It doesn’t have crime associated with it.”
The enabling bill also prohibits minors from betting, and bettors would have to be physically inside Georgia, a provision that would be enforced through geofencing technology.
To participate, bettors would have to open an online account and could not deposit more than $2,500 per month into the account. Also, betting on credit would be prohibited.
“I want to make sure we protect people from themselves,” Cowsert said. “They don’t bet the mortgage. They don’t bet the groceries.”
The vote on the constitutional amendment was bipartisan. Although need-based scholarships was an important provision Democrats wanted to see in the measure, three of the 10 “no” votes came from Democrats.
The Georgia Professional Sports Integrity Alliance, a coalition of Atlanta’s four major pro sports teams, issued a statement praising Friday’s vote.
“A new state law with strict regulatory requirements that protects consumers will bring significant new revenue to the state; strengthen HOPE Scholarships; and protect the integrity of professional sports, a multi-billion industry in Georgia,” the statement read. “The people in Georgia overwhelmingly support sports wagering and we are confident the legislation will become law.”