Arkansas: The Land of Gaming Opportunity?

During the 2018 midterm elections, Arkansas voters weighed in on Issue 4, a referendum to amend their state constitution to allow full-scale casino gambling.  Voters approved the measure by an 8.2% percent margin.

The amendment authorized up to four casinos to operate in Arkansas in four separate counties. Before the amendment’s passage, only two racinos in the state were permitted to offer its patrons limited electronic gambling services.

Under the new law, the Arkansas Racing Commission—the entity that will oversee the anticipated casinos—must begin accepting applications for casino licenses by no later than June 2019. The amendment also mandates that fees for the licenses not exceed $250,000. Once these casinos are operational, their revenue will be taxed at 13 percent on the first $150 million of net casino gaming receipts, and 20 percent on any revenue greater than that threshold.

Notably, Issue 4 defined “casino gaming” to include “accepting wagers on sporting events” as a permitted activity. As a result, any casino that eventually opens in the state can accept in-person sports bets. Arkansas will join a number of states that have moved to legalize sports gambling following Murphy v. NCAA, a Supreme Court decision in 2018 that paved the way for state-by-state sports wagering.

As of now, however, any plans for potential casinos are still in the early stages. The Racing Commission has yet to draft casino regulations, which it must do by March 2019.

Certain parts of the Natural State will impose other hurdles for prospective casino operators.  Applicants looking to operate in Jefferson and Pope Counties—two of the four designated counties—must obtain a letter of support from either the respective county judge or a resolution from the respective county quorum court.  Applicants in these counties must also submit a letter of support from the mayor of the city where the casino is to be located.

The prospective casinos have received a mixed reception.  In December 2018, Jefferson County officials voiced support for the Quapaw Tribe’s casino application in Pine Bluff. In Pope County, however, residents are moving to block a proposed casino in the area. The state’s governor, Asa Hutchinson, has also publicly stated his opposition to the vote results, though he does not intend to mount any challenge against the measure.

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