Georgia House halts horse racing

A legislative committee Thursday rejected a proposed statewide referendum to legalize pari-mutuel betting on horse racing in Georgia amid questions on both its wording and lack of details.

Members of the House Economic Development and Tourism Committee questioned the last half of the wording of the proposed ballot question at the end of the constitutional amendment.

After asking Georgia voters whether betting on horses should be legalized, the referendum went on to ask whether “to increase the minimum funding requirement for the educational shortfall reserves.”

The language referred to a provision in the constitutional amendment developed by Rep. Stacey Evans, D-Atlanta, aimed at securing some of the excess reserves that have been accumulating in the Georgia Lottery for the last decade.

In 2011, the state both increased the percentage of lottery funds dedicated to HOPE scholarships that must be set aside as reserves to cover any potential shortfalls and reduced the percentage of tuition covered by HOPE, Evans explained to the committee at a hearing earlier this week.

“We made it less likely we would need the reserves, and we increased the reserves,” she said.

As a result, more than $1.3 billion in reserves has piled up, Evans said. The state could safely plow back $730 million of that into HOPE scholarships, she said.

“This state did not approve a lottery just to have a lottery,” Evans said. “This money should not be sitting in an account.”

But on Thursday, Rep. Penny Houston, R-Nashville, said adding language on educational shortfall reserves to a referendum on horse racing would be misleading.

“It sounds like a trick question to me,” she said.

Other committee members asked why such issues as where racetracks would be located and what steps would be taken to protect racehorses from abuse weren’t included in the constitutional amendment.

Rep. Ron Stephens, R-Savannah, the committee’s chairman and the resolution’s chief sponsor, said those details would be addressed in a longer “enabling” bill that would be introduced next year if the constitutional amendment passes.

Under this year’s legislation, 10% of a state tax on the proceeds from horse racing would go toward health care, while 50% would go toward a new “Opportunity Fund” supporting college scholarships for Georgians with family incomes of less than $58,000 a year. The other 40% would go into the state’s general fund budget.

Stephens said the economic benefits of legalizing horse racing in Georgia would spread far beyond the racetracks themselves to let farmers in South Georgia who suffered crop losses from Hurricane Michael in 2018 get into the businesses of horse breeding and hay farming.

“It’s an opportunity to create a brand new industry in parts of our state,” he said.

But Rep. Randy Nix, R-LaGrange, who opposes legalized gambling, was skeptical.

“This pie-in-the-sky … will not take care of South Georgia,” he said.

The defeat of the horse racing measures leaves some other avenues for legalized gambling still alive in the General Assembly.

But a bill aimed at legalizing sports betting without changing the constitution has yet to reach the House floor.

A subcommittee of the House Regulated Industries Committee approved a constitutional amendment Wednesday encompassing casinos, horse racing and sports betting. But it has yet to be taken up by the full committee.

Time is growing short for action on legalized gambling. Crossover Day in the General Assembly – the deadline for bills to clear either legislative chamber to remain alive for further consideration – will fall on Monday.

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