ATLANTA — Developer Dan O'Leary already has several key pieces in place for a $1 billion lottery gambling facility in suburban Atlanta: A contract on a 122-acre tract of land for the complex, a deal with a gambling company to help run it and an opportunity to win political support by pumping new revenue into the struggling HOPE scholarship.
But O'Leary has yet to win approval for the Norcross project, and faces some challenges getting it. He must persuade local officials and win the backing of the lottery board, which would own and regulate the video lottery terminals.
And he must overcome opposition from gambling opponents who fear these types of facilities could erode family values and lead to increases in crime.
"It appears to be a tall hurdle to get over, but I've never given up on this," said O'Leary, who has been working on similar proposals for eight years. "How could you look at the trouble the HOPE Scholarship is in, and say no to this project?"
O'Leary has a contract to buy the property in Norcross and build a complex that would include a towering hotel, a spacious theater and a game floor with 7,500 video lottery terminals. He's careful not to call it a casino.
The terminals, which resemble video slot machines, would be owned and regulated by the lottery and could funnel $350 million each year into the struggling college scholarship program, he said.
The lottery board wouldn't comment on the proposal, but members have said they are reluctant to add the machines without a broader discussion with policymakers. Gov. Nathan Deal's office also wouldn't comment on the proposal. But he said in an interview that he generally doesn't think Georgia is "compatible with a casino-type environment."
O'Leary has shied away from saying "casino" ever since his 2009 proposal to transform Underground Atlanta, the downtown development he operates, was abandoned amid opposition.
Georgia law bans Las Vegas-style card games like poker, but the state lottery's 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, and O'Leary said his proposal wouldn't require legislative approval.
Still, some legislators are already signaling their support for the effort. State Rep. Ron Stephens, R-Savannah, said a resolution urging the lottery board to support video lottery terminals has attracted dozens of co-sponsors from both parties.
Gambling companies have long wanted to tap into the roughly 5 million residents of metro Atlanta, who are hours away from the nearest casinos in North Carolina, Alabama and Mississippi, analysts said. They said video lottery terminals often work a bit more slowly than traditional slot machines and there's less variety, but they still tend to do well when they're the only game in town.
"Gaming, at the end of the day, is really about convenience," said John Maxwell, a senior gaming analyst for Jefferies & Co. "It's one of the main drivers for how well a facility performs. And the closer you put it to a population base, the better it is."
Michael Paladino, the lead gaming analyst for Fitch Ratings in New York, said many of these "convenience gamblers" would stop making out-of-town trips to nearby casinos even if those developments offer more choices.
Gwinnett County business leaders say they've been pleasantly surprised by the proposal by O'Leary, who also has a letter of intent from Delaware gaming firm Dover Downs to develop the project.
"The more information we get about it, the more excited I get about it," said Chuck Warbington, executive director of the Gwinnett Village Community Improvement District, which includes the Norcross site. "It's the total package — a resort, a spa and a hotel as well as a gaming facility. It will be a totally transformative project for the entire area."
Stephens said it should be up to the locals, not state lawmakers, whether to accept the project.
"If a county decides and votes to do this, who are we as legislators to get in the way?" he said.
So far, local leaders sound cautiously optimistic about the project. Charlotte Nash, who chairs the Gwinnett County Commission, said she and other officials traveled to a Dover Downs casino and she's eager to learn more about O'Leary's project.
"We need to fully vet it through and do due diligence," she said. "We're not ready to sign off on it yet, but we definitely think it's worth considering."
Expect a stiff fight from conservative groups still smarting from the failure to halt Sunday alcohol sales in many cities and counties across Georgia. Jerry Luquire, president of the Georgia Christian Coalition, said his organization will urge Deal to block the project.
"The governor has said he doesn't favor an expansion of gambling," said Luquire. "And we will hold him at his word."