ATLANTA (AP) — A developer is betting that Georgia residents are ready for a gambling lottery facility, and he's unveiled plans to build a sprawling new complex near Atlanta that he hopes can give a jolt to the state's economy and infuse the popular HOPE scholarship program with much-needed cash.
Dan O'Leary told The Associated Press on Tuesday he wants to build a $1 billion entertainment complex near Norcross that includes a towering hotel, a spacious theater and a game floor with 7,500 video lottery machines.
Gambling proposals have emerged in recent years in Georgia and other states hard-hit by the economic downturn. It's been a tough sell in Georgia, where conservative groups and legislators fear it could erode family values and lead to increases in crime and divorce.
O'Leary said the development could funnel $350 million each year to the struggling college scholarship program.
"Our project will completely solve the HOPE problem and will help Georgia in a huge way. It can start building back up HOPE's reserves, send more kids to college, send more kids to prekindergarten — and we can do it today," he said.
It isn't the first time that O'Leary has rolled the dice on an ambitious gambling project. He had a plan in 2009 to transform Underground Atlanta, the downtown attraction he operates, into a casino with restaurants, shops and a hotel. The project was scuttled amid opposition from then-Gov. Sonny Perdue.
O'Leary said his new project won't need legislative approval because it involves video terminals already permitted under state law. But it will need the backing of the Georgia Lottery Board, which would regulate the gambling machines, and whose members are appointed by Gov. Nathan Deal.
It's unclear where Deal stands on the project, but records obtained through the state's sunshine laws indicate O'Leary met with Deal and his chief-of-staff, Chris Riley, in January. O'Leary said he presented the details of the project to Deal at the Jan. 9 meeting, which took place on the first day of the legislative session.
Deal's office didn't comment on the project, saying only that the governor holds hundreds of meetings each year to hear ideas and proposals. In an earlier interview Tuesday, Deal said that he generally doesn't think Georgia is "compatible with a casino-type environment."
"That's a discussion that we have not had with the lottery board," he said when asked about his views on video lottery terminals. "I have some concerns about it, obviously. I do not support the casino-type concept. I don't think that is good for our state. And I've also said I do not support other forms of gambling that some have suggested as a revenue measure."
O'Leary, who is careful not to call his project a casino, said it wouldn't expand gambling in Georgia. State law bans Las Vegas-style card games like poker, but the state lottery charter doesn't specifically outlaw video lottery terminals. The Georgia attorney general's office said in a March 2010 letter that the terminals are "generally permitted" under state law.
The lottery board didn't immediately comment. The board's chairman, James Braswell, has said he believes his agency has the legal authority to add the machines. But he has said it couldn't do so without a broader discussion with politicians and the public.
The struggles of the HOPE scholarship program give O'Leary an opening to make his case for the machines. Lawmakers made massive cuts to the program and the state's prekindergarten programs last year, doing away with full scholarships for all but the highest-performing students and slashing 20 days out of the pre-k calendar. Deal said he hopes to restore funding for some of those days.
The scholarship program also no longer pays for books or campus fees, meaning that students must shell out thousands of dollars more each year to attend college in Georgia. Deal has said the cuts were needed to prevent the increasingly popular programs from going bankrupt after demand for the scholarships and pre-k outpaced lottery sales.
The complex would be built on 122 acres O'Leary has a contract to buy from fiber optics manufacturer OFS, which will keep a facility on site. It sits off Interstate 85 and features a rail line that could one day connect to the Doraville MARTA station.
The proposal calls for a top-notch complex that includes stores, restaurants and attractions for gamblers and others, O'Leary said. He projects the development to draw five million visitors each year.
"Our facility will be world class. It will be first class. But it won't be the glitzy Las Vegas Strip," he said. "It will have a very posh feel. And it will be something the state of Georgia is tremendously proud of."
The first phase of the development, estimated to cost $400 million, will feature a towering 24-story hotel with 500 rooms, the gambling floor and a parking garage. The second phase would build another hotel tower with an additional 1,000 rooms, a 5,000-seat theater and another parking garage.
The terminals resemble video slot machines, which are hooked into a centralized computer system that would be owned and regulated by the lottery board. Supporters compare the games to instant-win tickets that are sold by the lottery and offer immediate payouts. The machines would spit out receipts that can be redeemed for money.
They are being used in at least eight states and proposals are pending in several others.
O'Leary said he has a letter of intent with Dover Downs, a company that operates a hotel and casino with video lottery terminals in Delaware, to develop the project. The Delaware Lottery says it has raised $2 billion from video lottery terminals at Dover Downs and other casinos since 1995. That facility now includes Las Vegas-style games like poker, a sports book and horse racing. O'Leary said he has no plans to expand his proposal into other areas of gambling.
All told, O'Leary said the complex is estimated to cost about $1 billion, create 2,500 new jobs, generate 1,000 additional construction jobs and set off a new boom that could revitalize the downtrodden area where it will be built. He said the first phase can be up and running within 18 months of getting the green light to build.
The developer estimates his project will generate $700 million in annual revenue, half of which will go to the lottery.
Charlotte Nash, who chairs the Gwinnett County commission, said she is considering the proposal and was intrigued by a recent visit to Dover Downs.
"From my initial views, there's a substantial potential impact related to job creation," said Nash, who said the commission is still vetting the project. "And we certainly see the fact that the HOPE scholarship needs help on a long-term basis. The hope is that this could help."
The proposal comes after a study late last year found a trio of casinos built in metro Atlanta, Savannah and Jekyll Island could produce nearly $1 billion in revenue each year for Georgia.
O'Leary, who has been pushing video lottery projects in Georgia for eight years, acknowledges he has a battle ahead of him. But he sees his proposal as a bold solution to the HOPE scholarship dilemma.
"We have one of the best-run lotteries in the country. But it's a mature business," O'Leary said. "One more scratch-off game isn't going to do it."
Associated Press Education Writer Dorie Turner contributed to this report.