ATLANTA – Counting on sports betting as a revenue stream may be more of a gamble than state officials want to believe, according to a new report.

The report released last week by the Pew Charitable Trusts found that while revenue from gambling is up in some states, that pot of money is unreliable in the long run. The revenue will probably also become less abundant as competition increases, according to the report.

The report “Are Sin Taxes Healthy for State Budgets?” comes as some states rush to legalize and regulate sports betting in the wake of a U.S. Supreme Court ruling that struck down a 1992 federal law that banned sports betting in most states. 

“If sports betting does behave similarly to other types of gambling, states could experience short-lived gains followed by downward pressure on revenue as more and more states legalize,” said Mary Murphy, Pew’s project director.

The report also noted a cannibalizing effect, with most states with older casinos seeing an overall drop in revenue while states with new facilities enjoyed an early windfall. 

In Georgia, Rep. Ron Stephens, R-Savannah, said in an earlier interview that he was energized by the Supreme Court’s decision and what it may mean for his proposal to allow a limited form of casino gaming here.

Sports betting, he said, could be a component of a massive entertainment venue he calls a “destination resort.” 

“The momentum is there,” Stephens said. “The court ruling will continue to stimulate the conversation.” 

Among his peers on the right, casino gaming remains politically controversial. Whether the recent Supreme Court ruling has an impact on Georgia may largely hinge on the outcome of the November election.

The two Republican gubernatorial candidates competing in the July 24 runoff, Lt. Gov. Casey Cagle and Secretary of State Brian Kemp, both say they oppose sports betting. Cagle says he opposes any expansion of gambling. 

The Democratic nominee, Stacey Abrams, appears open to the concept, with a caveat – if new casino gaming revenue goes toward need-based scholarships. 

Stephens’ most recent proposal would have devoted the majority of the revenue to sustaining the state’s lottery-funded HOPE scholarship, which is merit-based right now. About one-third of it would have gone to a need-based scholarship.

But if lawmakers go all in on gambling, Murphy cautioned against depending on the revenue for ongoing expenses. Doing so, she said, could create budgetary imbalances in the long term and leave the state in a bind. 

All told, Pew’s report, which also looked at taxes on tobacco, alcohol, e-cigarettes and marijuana, found that only a small portion of state-level revenue – about 2 percent in 2015 – comes from so-called sin taxes. But it noted a tendency on the part of lawmakers to turn to these revenue sources as budget fixes. 

Georgia, the report found, had the 12th highest share of revenues coming from sin taxes, with 5.4 percent of its revenues coming from these sources. At 12 percent, Nevada had the highest. Even so, less than 1 percent of Nevada’s overall budget comes from the sin tax proceeds. 

Gambling represents the largest chunk of sin tax revenue in the country, according to the report. Nationally, about two-thirds of the money came from lotteries, but that revenue has fallen flat in recent years.

Georgia may be the exception on that front. On the same day the report was released, Gov. Nathan Deal’s office announced the Georgia Lottery Corp. had transferred $1.1 billion in profits to fund HOPE scholarships and pre-K education.

It is the largest transfer in the state lottery’s 25-year history, according to Deal’s office. It was also the third consecutive year where Georgia Lottery profits have exceeded $1 billion in profits.

Jill Nolin covers the Georgia Statehouse for The Valdosta Daily Times, CNHI’s newspapers and websites.