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Georgia Lottery considers casino options

Georgia LotteryGeorgia Lottery: Georgia Lottery considers casino options
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Plan aims to increase jobs, scholarship money

Underground Atlanta's developers have put their cards on the table to bring casino-style gaming to Georgia.

Dan O'Leary and John Aderhold, the leaseholders of Underground, have approached the Georgia Lottery board with plans for a half billion-dollar casino and hotel complex that would inject cash into the HOPE Scholarship and generate millions of tax dollars for the region.

The leaseholders of city-supported Underground and Delaware horse track and casino company Dover Downs Gaming & Entertainment Inc. (NYSE: DDE) plan to launch gaming via video lottery terminals (VLTs) at the struggling downtown entertainment center, said O'Leary, who along with Aderhold holds a 50-year lease in Underground.

"It would be Underground Atlanta no longer as people see it and it operates today," O'Leary said. "It would be completely different."

The proposed gaming venture would transform the special entertainment district, O'Leary said. Underground has long been a financial albatross to the city. Its city-backed $141 million redevelopment in the late 1980s reinvented the 12-acre complex, but Underground has failed to become the tourism and entertainment boomtown it was intended to be.

The plan, if approved by the Georgia Lottery board, could be a shot in the arm to Atlanta's hospitality industry. Hospitality generates $11.4 billion for the economy and employs more than 100,000 people, but business and leisure travel have been severely affected by the recession.

The first phase of the project includes a $50 million overhaul of the existing Underground that O'Leary said could be completed in 12 months. O'Leary said the master plan calls for a second phase that would have a $450 million hotel, arenas for Las Vegas-style shows and concerts and up to 5,000 gaming terminals.

O'Leary claims to have funding commitments for the first phase, but has not entered the financial market for the second phase.

O'Leary estimates the lottery could generate $150 million a year for HOPE and state-run Pre-K programs in the casino's first phase. A second phase, which would include a $450 million 29-story hotel and entertainment complex, could generate $300 million annually for lottery-funded programs.

Demand for HOPE and Pre-K will soon outpace the lottery's ability to fully fund the programs, according to O'Leary's proposal to lottery officials.

The plan would require approval of the Georgia Lottery board, but would not require a change to the state's constitution, the Underground partners said. Under the proposal, the gaming operations, essentially electronic slots and card gaming, would be operated with approval of the Georgia Lottery board under the authority of its enabling legislation, O'Leary said.

But approval by the lottery board, appointed by Republican Gov. Sonny Perdue, a teetotaling Christian who has not shown support for gaming, is not a sure thing.

The proposed VLTs are virtual scratch tickets and as proposed would be controlled by the lottery's computer system. Players would receive paper receipts to redeem winnings.

The lottery would own and maintain the machines, while Underground and its partners would maintain and operate the facilities. The lottery would receive half the revenues under the plan, and Underground, which would be renamed, would pay administrative fees to Dover Downs.

As an entertainment destination, the complex would attract new revenues from tourists and conventioneers and would not cannibalize the lottery's current income, O'Leary said. The terminals "tend to be the most entertaining form of delivering a ticket."

Lottery CEO Margaret DeFrancisco was not immediately available for comment.

In an e-mail release, lottery spokeswoman Tandi Reddick said: "We receive proposals, ideas, concepts from sources all over the globe on a fairly routine basis, as do all other lotteries. Many involve new or different methods of selling and distributing lottery products. While every idea may not merit implementation, it is incumbent upon us and our responsibility to review concepts as potential sources of new revenue."

VLTs are used in eight states: Delaware, West Virginia, Florida, New Mexico, New York, Oregon, South Dakota, Iowa and Rhode Island.

Dover Downs started video lottery gaming in 1995. The casino has hundreds of slot machines under the authority of the Delaware State Lottery. Dover Downs also includes a 232-room conference center hotel and a NASCAR race track.

"We have been going around and meeting with the usual suspects of business, civic and community leaders and we believe there's a ground swell of support for this concept," O'Leary said. A casino at Underground could generate 2,000 jobs and billions in economic impact for the city, according to the proposal.

For decades, casinos have been one of the most talked-about ideas for boosting Atlanta's appeal to tourists and conventioneers. Fulton County Commissioner Robb Pitts, a 30-year supporter of gaming, has been a vocal supporter of casino gaming in the city as a driver for economic development in a souring economy.

Though a few bills have been proposed in the General Assembly and the Atlanta City Council has included casino gambling in legislative proposals, action towards casinos has never ventured far beyond cocktail conversation.

Other city and business leaders have quietly said they might support gaming at Underground, though some ideas of a mega casino complex with a massive hotel and transit linkups have been floated for the downtown railroad gulch.

According to a 2007 study by PKF Consulting Inc., just one Las Vegas-style casino in downtown Atlanta could generate $1.7 billion in economic impact, create 10,800 direct jobs, fill tax coffers with $135.3 million annually and add nearly $3 million to the city's hotel-motel tax fund.

A downtown Atlanta casino could lead to a massive redevelopment of the central business district, spanning from near CNN Center along Marietta Street to Underground Atlanta.

Atlanta has been courting companies for conventions and losing to cities with gambling such as Las Vegas and Chicago, some in the hospitality community have said. PKF has said three convention cities in 2005 were also in the top 20 gambling markets.

Las Vegas had $6 billion in casino revenue. Chicagoland, Ind., ranked third with $5 billion, and 16th-ranked New Orleans with $534 million, in 2005, according to PKF.

William Pate, the president and CEO of Atlanta Convention & Visitors Bureau, which markets the city for convention and tourism business, said the bureau has no formal position on gaming.

"If the city and state approve gaming beyond the lottery, then we would market that as an asset as we market all assets of the city," Pate said. "We'd market to grow convention and tourist traffic."

Pate said he did not know how much economic impact of the proposed Underground project, but "anytime you have new news or a new product if you will, it will generate interest."

Underground officials have worked on a plan to bring gaming to the complex for four years, and O'Leary said he was hesitant to bring the plan forward because of potential opposition from within and outside the state.

Several Southeastern states -including Florida, North Carolina, Alabama and Mississippi-have some form of gaming generating $200 million in annual revenue from players hailing from the Peach State alone, O'Leary said.

Many casinos are in the process of expansion and others have been hurt by the recession.

"They're going to try to squash this because it will affect them if they don't," O'Leary said.

Exterior of proposed hotel and casino at Underground Atlanta.
Exterior of proposed hotel and casino at Underground Atlanta.

Atlanta Business Chronicle

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9 comments. Last comment 8 years ago by AriesDaRam.
Page 1 of 1
dumars798's avatar - batman17
Atlanta
United States
Member #28656
December 20, 2005
5675 Posts
Offline
Posted: January 14, 2009, 3:36 pm - IP Logged

Sounds like a good way 2 bring

the city of ATL some loot. I hope

they have 24 hour security patrol.

Will downtown marta trains

all night?

        Smart bets...... Equal Phat Pocket$!

                     

             





    Avatar
    Talking Rock, GA
    United States
    Member #60369
    April 15, 2008
    398 Posts
    Offline
    Posted: January 14, 2009, 4:05 pm - IP Logged

    I would love to see this happen......not just VLTs, but I'd love to see table games (e.g. blackjack, craps, etc.) as well.

    A Gold account on Lottery Post:  $4.95

    A Millionaire Jumbo Bucks scratcher:  $20

    Airfare and hotel in March 2007 to see The Price Is Right before Bob Barker retired:  $600-something

    Winning something to get a trip to a district office:  Priceless Big Grin

      STORM's avatar - Rean
      Ga Fl Sc Nc All States 819* 290 160** 1958 Ryde!
      United States
      Member #57922
      January 23, 2008
      9314 Posts
      Offline
      Posted: January 14, 2009, 4:06 pm - IP Logged

      Sounds like a good way 2 bring

      the city of ATL some loot. I hope

      they have 24 hour security patrol.

      Will downtown marta trains

      all night?

      Sounds like a good way 2 bring

      the city of ATL some loot.     Thumbs Up

        Avatar
        Buford. GA
        United States
        Member #4
        April 19, 2001
        853 Posts
        Offline
        Posted: January 14, 2009, 5:24 pm - IP Logged

                            W O R K S   F O R   M  E!!!!!!!!!

           

               however let me say this, "ah hopes someone with a good head on their shoulders

              designs a excellent security plan for that area!"

         "as long as you win more than you lose...gamblins' not a problem"

          diamondpalace's avatar - Untitled 2.jpg
          Dallas, TX
          United States
          Member #60284
          April 12, 2008
          3856 Posts
          Offline
          Posted: January 14, 2009, 6:20 pm - IP Logged

          Sweet. It's going to be like 5 mins from my studio apartment.

            BaristaExpress's avatar - BaristaExpressMX zpsfb0d8b5d.png
            Magnolia, Delaware
            United States
            Member #18795
            July 20, 2005
            789 Posts
            Offline
            Posted: January 14, 2009, 9:27 pm - IP Logged

            I would love to see this happen......not just VLTs, but I'd love to see table games (e.g. blackjack, craps, etc.) as well.

            You won't have craps or blackjack! Just like here (Dover, Delaware where Dover Downs is located) we have computer 3 card poker and blackjack tables, there is no live/person dealers! Yup, that's what I said, no real dealers! The machine is a huge thing and it projects the likeness of a person (with some realism) and your cards on to a screen! I don't and won't play something like that, to me it's no different than playing a computer generated lottery game! I don't trust the game to be fair to the player (cards stacked against you before you even play the game)! 

            Keep dreaming the impossible dream, it just may come true! Thumbs Up

              winwoman's avatar - Lottery-062.jpg
              New Member
              Atlanta
              United States
              Member #44924
              August 11, 2006
              12 Posts
              Offline
              Posted: January 15, 2009, 1:21 am - IP Logged

              SURE LOOKS LIKE A GOOD DEAL. FOR EVERYBODY....I AM TIRED OF ME AND MY BUD'S  DRIVING TO SHOTER ALABAMA TO GIVE

              THEM OUR CASH. THEN , ON THE WAY HOME FROM THE TWO HOUR DRIVE SLEEPY. WITH NOTHING TO SHOW. FOR THE DRIVE AND

              THE CASH SPENT.

              SURLY, GEORGIA WOULD BENIFIT.

              LET, STOP OUR MONEY FROM GOING TO NEIGHBORING CITIES. LET KEEP IT HERE, UNDERGROUND NEEDS A SHOT IN THE ARM. YES,THIS NEEDS

              TO HAPPEN.

              DON'T WAIT.

              TO MUCH MONEY GOING OTHER PLACES.

              GEORGIA NEEDS SOMETHING TO BRING ON THE HIGH ROLLERS.

              LET'S VOTE ON IT.

              LET'S DO IT,.

              Don't Second Guess Your First Instinct. Go With You First Intuition. Jester

                susie545's avatar - Lottery-034.jpg
                Lux
                United States
                Member #67800
                December 5, 2008
                156 Posts
                Offline
                Posted: January 15, 2009, 10:04 am - IP Logged

                SURE LOOKS LIKE A GOOD DEAL. FOR EVERYBODY....I AM TIRED OF ME AND MY BUD'S  DRIVING TO SHOTER ALABAMA TO GIVE

                THEM OUR CASH. THEN , ON THE WAY HOME FROM THE TWO HOUR DRIVE SLEEPY. WITH NOTHING TO SHOW. FOR THE DRIVE AND

                THE CASH SPENT.

                SURLY, GEORGIA WOULD BENIFIT.

                LET, STOP OUR MONEY FROM GOING TO NEIGHBORING CITIES. LET KEEP IT HERE, UNDERGROUND NEEDS A SHOT IN THE ARM. YES,THIS NEEDS

                TO HAPPEN.

                DON'T WAIT.

                TO MUCH MONEY GOING OTHER PLACES.

                GEORGIA NEEDS SOMETHING TO BRING ON THE HIGH ROLLERS.

                LET'S VOTE ON IT.

                LET'S DO IT,.

                just crazy for you to assume maryland without the same problems one dayz.Smile

                who is oprahSun Smiley

                  AriesDaRam's avatar - nw gingfighter.jpg
                  Stone Mtn
                  United States
                  Member #64518
                  August 30, 2008
                  1157 Posts
                  Offline
                  Posted: January 15, 2009, 10:31 am - IP Logged

                                      W O R K S   F O R   M  E!!!!!!!!!

                     

                         however let me say this, "ah hopes someone with a good head on their shoulders

                        designs a excellent security plan for that area!"

                  I Agree!