Georgia’s Final Pass At Sports Betting In 2023


Georgia’s Final Pass At Sports Betting In 2023

A Senate committee substitute for House Bill 237, Georgia’s last-ditch effort at legalizing online sports betting, offers an increased tax rate and a Jan. 31, 2024, launch target date.

Rep. Leesa Hagan, who sponsored HB 237 with the intention of designating an official state soap box derby, asked to have all such language stripped from the bill when the sports betting language was added, essentially transforming it into a standalone online sports betting bill.

Georgia sports betting had previously been killed off in the House and Senate before Crossover Day, but, as Georgia House Speaker John Burns hinted last week, the door hadn’t been slammed yet. 

The HB 237 committee substitute follows a similar trajectory as Sen. Bill Hickman’s failed Senate Bill 57, which circumvented the constitution by amending the Official Code of Georgia, but it makes a few notable changes.

Sports betting could arrive before the next Super Bowl

The most notable addition to this new bill is the inclusion of a target launch date.

The Super Bowl represents the single-largest sports betting event in the country. The American Gaming Association estimated that 50 million Americans would bet $16 billion on this year’s game. That estimation more than doubled its previous year’s projection. Any market set to launch will have that kind of revenue firmly in its crosshairs when planning a start date. 

Georgia lawmakers clearly did in HB 237, as it includes new language indicating that all operators who submit their application in a timely manner can launch “not later than January 31, 2024.” That would establish a launch deadline under two weeks before the Super Bowl in 2024, scheduled for Feb. 11, 2024.

Previous sports betting legislation in the House and Senate included no such deadline.

However, should HB 237 ultimately win the favor of the Georgia Legislature, such a deadline may be unreachable. Without a sports betting infrastructure in place, and only a matter of months to get one up and running, a Super Bowl 2024 deadline for online sports betting in Georgia may be a wish more than a goal. 

HB 237 bumps up the tax rate while maintaining allowances for promo deductions

The second notable addition to HB 237 comes via a change to the tax rate.

Under the new legislation, the Georgia Lottery would be responsible for not only regulating sports betting in Georgia but also allocating sports betting tax revenue. This is roughly the same system as established in SB 57 except that SB 57 called for creating a “Sports Betting Division” of the Georgia Lottery. HB 237 doesn’t establish a dedicated sports betting division. It also levies a higher tax.

SB 57 established a 20% “privilege tax” on adjusted gross revenue, which included the allowance for promo deductions, such as sign-up bonuses, bet credits and other promo offers for new customers.

HB 237 maintains the same language surrounding promotional deductions but bumps the tax rate to 22%. This two percentage point uptick could correlate to roughly $12 million-$14 million in added tax revenue per year allocated to the Georgia Lottery for Education Account.

Aside from funding a general education account, HB 237 shores up an education reserve fund with the Georgia Lottery consistent with SB 57.

Other notable differences between HB 237 and SB 57

HB 237 leaves off facilities that have hosted international sports car racing events from its list of eligible licensees. Stock car tracks, such as Atlanta Motor Speedway, though are eligible.

The legislation breaks down the 16 Type 1 sports betting licenses in the following manner:

  • Five licenses for pro sports teams
  • A license for the Georgia Lottery
  • A license for the PGA
  • A license for a national stock car racing venue (Atlanta Motor Speedway)
  • A license for the owners of a golf venue on the pro tour (Augusta Country Club)
  • Seven remaining licenses for untethered online sports book operators

Licensing fees between the two bills vary slightly. Whereas SB 57 applied an across-the-board $100,000 licensing fee and $1 million annual renewal fee to all licensees, HB 237 gives the seven untethered online operators a reduced renewal fee of $750,000. HB 237 also sets the validity of a Type 1 sports betting license for five years instead of the 20 years assessed in SB 57. 

Finally, in funding the Georgia education shortfall reserve fund, SB 57 planned to establish its new reserve funding efforts in 2025. HB 237 moves that up to 2024. This may be consistent with the January 2024 launch date.

Time running out on Georgia Sports Betting in 2023

With a little more than a week remaining in Georgia’s legislative session, sports betting proponents have limited time to secure a victory for Georgia sports betting.

Since HB 237 was amended in Senate committee, it will have to secure a simple majority in the Senate and then return to the House for their approval of the added sports betting language. 

As Burns indicated, the door is indeed cracked for sports betting. The fact that a freshman representative’s soap box derby bill has been hijacked by sports betting proponents in the waning days of the legislative session suggests that conversations behind closed doors have been going on and the votes may be there.

HB 237’s focus on online-only sports betting pares away some of the gambling content – pari-mutuel racing, casino gambling, retail sports betting – that cut down other legislation this session. In this regard, it resembles Sen. Bill Cowsert’s Senate Resolution 140, which focused on the online-only option but took the constitutional amendment route.

Cowsert’s amendment failed but received a simple majority vote in the Senate. Can HB 237 thread the needle where SR 140 couldn’t? And can it do so in both chambers by March 29

It’s got a chance.