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New Study Questions Impact of Casino Legislation In Georgia

georgiaA report backed by a business coalition group in Atlanta has revealed that while the plan to introduce four new casinos in the state of Georgia would generate hundreds of millions in tax revenue, it is unclear how much of it would be new revenue and how much would simply be a diversion from other expenditure.

Hospitality consultants HLT Advisory and Horwath ATL carried out the study after being commissioned by Central Atlanta Progress (CAP), a downtown business group.

The report which was released last week has focused on understanding the impact of the proposal to build four new casinos in the state.

CAP’s CEO, A.J. Robinson said that the study was carried out in an attempt to get independent data on issue as lawmakers continue to debate on the legislation. The bill to amend the state’s constitution to allow up to six casinos was introduced last year in the state’s General Assembly. The bill was later changed to reflect four casinos. It however stalled after Gov. Nathan Deal indicated that the tax rate on the gambling revenue needed to be higher than what was proposed by the casinos.

Under the provisions of the bill, the tax revenue from the state would fund the HOPE Scholarship and pre-k programs. Projections made at that time stated that six casinos having a 12 percent tax rate would result in funds of over $280 million annually for the HOPE program and generate close to 10,900 jobs across the state.

According to estimates released by CAP, the size of Georgia’s casino market is estimated to be around $2.2 billion to $2.5 billion per year. It has also stated that each year the state’s residents spend over $570 million in out-of- state casinos.

CAP’s report has said that with the 20 percent tax rate currently proposed, the four casinos would generate around $320 to $400 million annually in revenue for the state. The tax revenue of the Georgia Lottery is likely to be hit but would be compensated by the casino revenue. As per the report, while the casinos would retain some of the outgoing revenue they are unlikely to improve tourism at an overall level. Additionally new hotel rooms built by the casinos could impact the existing hotels.

MGM Resorts has already explored locations in downtown Atlanta for a casino but Robinson believes that locations that were around two hours away from Atlanta would be more attractive than downtown. CAP is also expected to carry out additional studies focusing on the proposal’s impact on property tax values, job creation, sales tax collections, social impacts and discretionary spending is planned.

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