After Tuesday’s elections, we are closer than ever to seeing an expansion of gambling in the state of Arkansas. Voters approved a constitutional amendment to would allow gambling authorities to issue licenses for four new casinos.
Issue 4 amended the Arkansas Constitution to issue the four licenses to specific licensees, as follows:
- “To Southland Racing Corporation (Southland) for casino gaming at a casino to be located at or adjacent to Southland’s greyhound track and gaming facility in Crittenden County;
- To Oaklawn Jockey Club, Inc. (“Oaklawn”) to require casino gaming at a casino to be located at or adjacent to Oaklawn’s horse track and gaming facility in Garland County;
- To an applicant to require casino gaming at a casino to be located in Pope County within two miles of Russellville; and
- To an applicant to require casino gaming at a casino to be located in Jefferson County within two miles of Pine Bluff.”
Interestingly, Issue 4 includes sports betting as a legal form of gambling, which means that the four new casinos will be allowed by law to offer wagers on sports.
An intense campaign to have Issue 4 passed was run leading up to the vote, and it is estimated that over $9 million was spent on these efforts, mainly by tribes. The Quapaw Tribe spent $3.7 million, while the Cherokee Nation gave $2.3 million. Delaware North, which owns Southland Racing Corporation, gave $3 million.
The next step is for the Arkansas Racing Commission to start accepting license applications to operate sports betting by June next year. It is also not a given fact that all four casinos will offer sports betting.
Some of the highlights of the approved Issue 4 are as follows:
- Casino revenue will be taxed at 13% on the first $150 million.
- After $150 million, taxes will be 20% of casino revenue.
- Licensing fees may not exceed $250,000.
- Sportsbook operators will not pay extra licensing fees.
The current tax rate on casino gambling in Arkansas is 18%, and this lowering of the rate will result in a loss of around $36 million to the state.
Governor Asa Hutchinson was never a fan of Issue 4 and following the results of the votes said: “I did not support this initiative, and I continue to have great concern over the immediate and negative impact on the state’s budget. But the people have spoken and I respect their will. Time will tell as to what this means for our state, and it remains to be seen as to whether the communities affected will consent to the gambling initiative.”
