by Steve Norton
CEO, Norton Management

Billionaire casino owner sets sights on Georgia

Tilman Fertitta has joined other Nevada firms in showing an interest in Georgia as a casino destination. Proposed legislation has gone from 6 casinos, with 2 in Atlanta, down to 2 statewide, with a single casino in Atlanta, probably located downtown; where it would be a great asset to existing hotel accommodations and the convention/ trade show demand.

Atlanta is one of five commercial cities in the U.S. that have over 90,000 hotel rooms; along with the worlds busiest airport. This makes Atlanta a wonderful destination for a casino resort that can depend on business travelers, city wide conventions and trade shows to keep mid-week occupancies and room rates high; with affluent guests in town for 2 to 4 nights; looking for evening entertainment.

If the state is looking for a multi billion dollar investment, then the tax rate needs to be realistic. Mr. Fertitta mentions Mississippi and other states where too many casinos were allowed, but in the cases of Atlantic City and Mississippi, even though locations were limited, the free market approach was followed, with no limits on the number of casinos developed; as long as minimum standards were met, financing in place and ownership and management suitable. But as neighboring states added their own casinos; it led to many failures in Mississippi and Atlantic City, including the first 7 casinos in Tunica.

Concerns about a negative impact on the state's lottery, which funds the Hope Scholarship program, are mistaken. Look at other states that have added casino gaming; only two, that I have studied, approved so much gaming that it negatively impacted their lotteries. These were Iowa and Louisiana, which each have gaming in all sections of their States, and allow casinos on riverboats and Indian reservations, and slots at racetracks, plus in Louisiana slots at bars and truck stops.

With Georgia's population, it would take 20 or more casinos to impact the State Lottery. Any study of state lotteries needs to consider: 1) limits on advertising; 2) type of games allowed (including Keno and Bingo); 3) number and locations of sales outlets; 4) frequency of games; and 5) whether they participate in multi state games, with hundred $ million jackpots.

As Georgia has probably already learned, the highest per capita lottery spend is in low income neighborhoods; which is a very different audience than the typical casino gambler, who is more affluent, and generally a trip, and possibly overnight stay, required to reach a casino location.