By Daniel Wallach
March 5, 2023
After years of debate at the Capitol, Georgia sports fans may finally have a chance to bet on sports legally from the comfort of their living rooms. As competing bills to legalize sports betting make their way through the Georgia General Assembly ahead of Monday's crossover deadline, a path forward is becoming clear.
On Thursday, the Senate voted down a bill legalizing horse racing that also included online sports betting – underscoring the appetite among political leaders for a sports betting-only bill headed to the Governor's desk.
Meanwhile, Georgia Governor Brian Kemp has signaled a willingness to legalize sports betting, and polling shows voters are enthusiastic about the prospect – no doubt seeing how their friends and families in other states have the freedom to place bets on big SEC days.
HB 380, which authorizes sports betting and puts the Georgia Lottery in charge of regulating it, appears to have the best chance of passing – and giving fans the chance to place bets on next year’s Super Bowl.
Other legalization frameworks have been considered by the General Assembly, including proposals to pass sports betting by constitutional amendment. But a legislatively proposed constitutional amendment would require a two-thirds affirmative vote in both chambers of the General Assembly before it can be presented to the electorate, and, even if that high threshold can be cleared, the earliest that it would be able to be placed on the statewide ballot is November 2024
A constitutional path would delay the implementation of sports betting by at least two years.
By contrast, a legislatively authorized sports betting framework – which would require only majority approval to pass – could be implemented as soon as this year.
Georgia Constitution limits only specific kinds of betting or gambling
Some have opposed a legislative path, arguing that it would violate the Georgia Constitution.
But the Georgia Constitution does not stand in the way of the legislative authorization of sports betting. It prohibits only "pari-mutuel betting” and “casino gambling" – while authorizing the state lottery.
I am a gaming law practitioner and professor who specializes in gaming law, sports wagering and state constitutional issues, and I have seen how other states have utilized their state-run lotteries to effectively regulate and administer sports betting.
Georgians need to look no further than Tennessee to find a state lottery-administered sports betting marketplace that is working and generating tens of millions of dollars in revenue for the state. West Virginia and five other states all have lottery-run sports betting frameworks.
A 2019 legal opinion from the Office of Legislative Counsel acknowledges the viability of the state-operated lottery option for sports betting, observing that “it appears that the General Assembly has given the [Georgia] Lottery Corporation the authority if the Corporation so chooses, to allow sports betting as an official lottery game.”
The specific carveout for the Georgia Lottery would insulate a lottery-run sports betting framework from constitutional attack.
But even without that carveout, the legislative authorization of sports betting still wouldn’t run afoul of the Georgia Constitution.
While some have erroneously cast the constitutional prohibition as a “wholesale ban” on all betting (aside from the state lottery and non-profit bingo), the reality is that the remaining prohibitions on pari-mutuel betting and casino gambling are limited in scope. Even the Office of Legislative Counsel acknowledged in its 2019 opinion that pari-mutuel betting and casino gambling “have limited and specific meanings.” Neither species of gambling encompasses sports betting.
Sports wagering is not a form of pari-mutuel betting
Pari-mutuel betting is a form of betting in which the aggregate amount of all wagers is “pooled” and then distributed (less management fees and taxes) to those holding winning tickets.
The essential feature of pari-mutuel wagering is that participants do not bet against “house” (as they do in sports betting). Rather they wager against each other and determine the “odds” for an event, which are not known or knowable in advance, by their betting among themselves.
Originated by Joseph Oller in Paris in the early 1860s, “pari-mutuel” means “to wager among ourselves.” In this form of wagering, players are pitted against each other instead of the odds being fixed by a bookie or the house.
In pari-mutuel betting, a player’s odds change based on the wagers placed by other players and the amount those other players bet. By contrast, in sports betting, the odds are agreed to by the bettor and the bookmaker in advance and are not affected by the bets placed by other bettors.
So, as long Georgia lawmakers enact a sports betting regime which excludes “pooled” horse racing-style betting from the menu of permitted wagering formats, there is zero risk that sports wagering would run afoul of the state constitutional ban on pari-mutuel betting.
Sports betting is not casino-style gambling
Casino gambling connotes a physical structure for gambling, consistent with the original public meaning of the term “casino” at the time of Georgia’s 1992 constitutional amendment prohibiting casino gambling. At that time, “casino” was generally defined as a “building or room for gambling.” (Casino, WEBSTER’S NEW INTERNATIONAL DICTIONARY (3d ed. 1993)).
Georgia law likewise recognizes that casino gambling is synonymous with a physical location for gambling. While Georgia’s Constitution does not supply a definition, the General Assembly has defined “casino gambling” to mean a “location or business for the purpose of conducting illegal gambling activities.”
The Georgia Court of Appeals has interpreted this statutory definition as focusing on “where” the gambling takes place. In Jackson v. Georgia Lottery Corporation, the Court of Appeals held that the state-lottery-operated games of “Cash Three” and “Quick Cash” did not fall within the definition of “casino gambling” because “there (was) no contention . . . that these disputed games are played in locations for the purpose of conducting illegal gambling activities.”
The requirement of a physical location logically eliminates internet-based sports wagering (the exclusive focus of HB 380) as a form of gambling that would be subject to the constitutional ban against casinos, which by definition is limited to brick-and-mortar facilities.
Regardless of the delivery channel, the national consensus is that sports betting is a different category of gambling than casino-style gaming. The federal government — in a host of federal statutes and in two landmark gambling studies commissioned by Congress — as well as numerous state attorney general opinions from across the country have made clear that sports betting is a very different species of gaming than casino gambling. Players aren't pulling a lever or rolling the dice when they place a sports bet – they are sizing up teams and players, weighing odds, and looking at the latest line-ups. West Virginia (which has a similar casino-game ban in its state constitution), Colorado, and Michigan have ruled legal sports betting is not casino-style gaming and requires a degree of skill and knowledge that do not exist in casino-style games.
I have studied this issue closely for many years and testified before several state legislative bodies (including those in New York, Kentucky, Connecticut, and California) as a subject matter expert on the interplay between state constitutions and sports betting laws. More recently, I analyzed the issue of whether sports betting constitutes casino-style gambling as part of a just-published article assessing whether the legislative authorization of sports betting would violate state constitutional prohibitions against casino gambling. My detailed legal analysis – concluding that it falls outside the scope – is dispositive of the issue in Georgia.
That view is shared here in the Peach State by former Georgia Supreme Court Chief Justice Harold D. Melton, who recently opined that a state lottery-run sports betting market is well within the confines of the state's constitution.
Elected leaders in Georgia have long viewed a lottery-run sports betting framework as well within their constitutional authority. Three years ago, then State Senator and now Georgia Lieutenant Governor Burt Jones introduced an online-only sports betting bill that was very similar to the one being considered currently in the Georgia House.
Legal online sports betting in Georgia is expected to generate in excess of $100 million in state tax collections in just the first year alone.
If Georgia lawmakers pass HB 380 out of the House this week, Georgians will be one step closer to being able to legally place bets and generate revenue for important Georgia priorities.
This article was originally published in Forbes.com on March 5, 2023.