What Republican primary voters didn't know about the casino ballot question

Voters hoping to register an informed preference on the casino question (“Should Georgia have casino gambling with funds going to education?”) in the recent Republican primary were handicapped by an ocean of misinformation about just what the state’s take would be if commercial casinos were allowed in Georgia. Thanks to an open records request by the Atlanta Journal-Constitution’s Jim Galloway, news outlets in the state have access to a study done by the Spectrum Gaming Group for the Georgia Lottery Corporation.

With nothing to go on but news accounts, voters could have been excused for believing that commercial casinos are charitable organizations dedicated to the education of our children to the tune of an annual gift to them of a billion dollars. For example, one prominent newspaper columnist wrote, “Three casinos in metro Atlanta, Savannah and Jekyll Island…would generate nearly $1 billion a year for the state as quickly as 2014, according to a…report requested…by the Georgia Lottery Corporation.” And another said, “Three casinos, including one in metro Atlanta, could produce a billion dollars a year for state government predicts a study commission by the Georgia Lottery Corporation.” News of this bonanza was breathlessly repeated by news outlets all around the state.

To the surprise of no one, representatives of the gambling industry and their legislative enablers haven’t been shy about encouraging visions of sugar plums dancing in our heads. One of them assured us that his firm’s plans could generate “$1 billion annually for HOPE through 3,000 video terminals…”

I can’t be sure but maybe that was the prediction that captivated Rep. Ron Stephens, R-Savannah, Chairman of the Georgia House of Representatives’ Economic Development & Tourism Committee. A resolution he sponsored in the House claimed that “the offering of lottery games through video lottery terminals is estimated by some to be a source of an additional $1 billion in revenue for the lottery funded HOPE scholarships and pre-k programs….”  And Dan O’Leary’s proposed metro Atlanta development promises a $350 million a year “silver bullet” for HOPE.

We can discount the revenue estimates of gambling industry representatives. They’re hardly disinterested parties to this debate. And insofar as he took his cues from them, we can also discount Rep. Stephens’ rosy forecast.

That leaves the Spectrum Group’s study. I thought when I started working through it that it would be just more industry cheerleading. But it wasn’t. It was a sober, professional piece of work full of cautions and qualifications.

So what did it predict state government’s windfall from casino gambling would be? Nothing, nada, zero. I don’t mean it predicted that the state would enjoy no revenue boost. I mean it made no prediction about that at all.

Well, what’s this $1 billion for the state everybody’s hyperventilating over? I don’t know exactly what question the Georgia Lottery Corporation asked the Spectrum Group. But the one the Spectrum study answered was about privately owned, state-regulated casinos, not state-owned casinos.

And what the study predicted was $933,500,000 in gross gaming revenue for the privately owned casinos, not for “the state” or “state government.” Gross gaming revenue is more familiarly known in the industry as “the hold.” That’s the portion of a gambling operation’s total revenue that’s left over after winnings have been paid, the equivalent, according to the American Gaming Association, “of ‘sales,’ not profit.”  

So how much of “the hold” would go to the state’s coffers? Nobody has any idea and wouldn’t have unless and until a deal is actually struck between the government and casino operators. Since a lot would have to happen before we even get to that point, primary voters were taking a shot in the dark, casting their preference votes on the basis of very sketchy information, much of it in fact misinformation.

Having grown up in a family of small-stakes poker players, I have no moral or religious qualms about gambling. But if we’re going to go this route, we ought to do it with a clear head about the likely benefits, lest we discover some years hence that casinos are no more a “silver bullet” than the lottery has been.