Arkansas Looks to Be on the Brink of Casino Legalization

Arkansas Capitol Building in Little Rock, AR

With many states acting to legalize sports betting, Arkansas is focused on another pursuit. Almost 100,000 people signed a petition to place an amendment to the state constitution on the November ballot. If approved by voters and the state legislature, the amendment would allow resort casinos in four locations.

Gambling in Arkansas history

Gambling laws throughout the United States have changed a lot in recent months, after the Supreme Court ruled to allow the legalization of sports betting nationwide.

However, Arkansas traditionally has been a state in which gambling has been very restrictive, with only betting on dog and horse races allowed. There are no Indian-owned casinos in the state and gambling houses are not allowed at all.

The only exceptions are a couple of “racinos” in West Memphis and Hot Springs. They have a small selection of casino games alongside their dog and horse race offerings. Electronic gaming machines were allowed when the 2005 Local Option Horse Racing and Greyhound Racing Electronic Games of Skill Act was passed.

There has been a push in recent months to open up the state to integrated resort casinos at four main locations.

Potential Arkansas casino changes

Things are looking up for those in support of changing the casino laws in the state. According to an affidavit signed by the chairman of the Arkansas Jobs Coalition Ballot Committee Don Tilton, there were 96,170 signatures from registered voters backing the proposed constitutional amendment.

July 6 was the deadline for these petitions to be turned in. To be on the general election ballot on November 6, proposed constitutional amendments needed to have at least 84,859 signatures from registered voters. There were also minimum requirements for the number of signatures from each of 15 counties.

This amendment proposes that the Racing Commission issue licenses to casinos located in Jefferson County, Pope County, Southland Racing Corp., and Oaklawn Jockey Club. Both Southland and Oaklawn are currently allowed to offer electronic games of skill, so this proposed amendment would allow them to increase the scope of their operations.

The new casinos in Pope and Jefferson Counties would be subject to application fees. The applicants would have to show that they have some experience in the gambling industry and they would need a letter showing support from a county judge or a county quorum court resolution.

In addition, if a casino is to be located in a city, the mayor of the city would need to submit a letter of support. The secretary of state’s office needs to verify signatures on the proposal within the next 30 days. If a proposed an amendment has received 75% of its required number of signatures, backers are given another 30 days to raise the rest.

The team behind this proposed amendment is made up of the Driving Arkansas Forward committee and the Arkansas Jobs Coalition. They believe they have a high rate of validity for their signatures, but they are continuing to collect signatures just in case there are any issues.

Consequences of an amendment?

While there will be people opposed to this proposed amendment on a moral level because they believe that gambling should not be encouraged, there are those who understand that there could be significant economic benefits.

Jerry Cox, the president of the Family Council and an outspoken anti-gambling advocate, said recently:  “If we were to see something that is glaringly wrong with the amendment, I wouldn’t rule out a legal challenge.”

The state can make lucrative revenues if this amendment is approved. Early estimates say that approximately $120m (£90.5m) could be raised annually in the form of tax revenues for the state. The net gambling revenues of a casino would be subject to a 13% tax for the initial $150m (£113m) and the rest would be taxed at 20%.

These revenues would be allocated in a few different ways. About 55% would go toward the state’s general revenue fund, with 17.5% going towards the Racing Commission for dog and horse racing purses.

Around 8% would be given to the county in which the casino is located and 19.5% would be given to the town or city in which the casino resides. If the casino is not located in a city or town, this portion would also go to the county. If the proposal successfully goes on the ballot in November and voters are in favor of it, the amendment would go into effect on November 14, 2018.

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