30-second summary:
- Arkansas has traditionally been a conservative state regarding gambling, allowing only betting on races for many years
- A proposal to legalize casinos in the state won approval in the November 2018 midterm ballot
- Four casinos are being permitted
- Two will be at existing racetracks, with the other two casinos being built in Jefferson County and Pope County, respectively
Gambling history in Arkansas
Arkansas has traditionally been conservative on gambling, and shied from expanding its gambling laws. For decades, the state has been happy with its dog and horse race betting. There has never been any sort of gambling facility in the state, tribal or non-tribal.
The racing industry has been in decline over the past few decades. In order for the racetracks to survive, since 2005 they are able to become racinos. They can install certain gaming machines in their facilities. This move was a big help to the West Memphis and Hot Springs racetracks.
There have been numerous efforts over the years to make commercial casinos legal, but to no avail.
In 2000, a proposal to issue six casino licenses and allow charity bingo and a state lottery was defeated. The vote was 544,000 against this measure, with 309,000 people supporting it.
Push to legalize casinos
There was a renewal in the desire for legal casinos in Arkansas in 2018. Many other traditionally conservative states were starting to venture into more expansionary forms of gambling. Many in Arkansas did not want their state to fall behind the competition.
A proposal for casino legalization did the rounds and got enough signatures to feature on the November midterm ballot.
Issue 4 called for the creation of a casino in four different counties. It got passage with 54.1% of the vote. This means that casinos will be coming to the Oaklawn horse track in Hot Springs and the Southland dog track in West Memphis. The two other counties able to open casinos are Jefferson County and Pope County.
There was a lot of financial backing to get this measure over the line. For example, the Quapaw and Cherokee tribes spent as much as $4m in their campaigning efforts.
Issue 4 also allows for sports betting. However, nothing official on this front has been done. The Driving Arkansas Forward group was a major driver behind this measure; it even commissioned a study into how much the state could benefit from casino legalization.
The research from the University of Arkansas Economic Development Institute estimates that the state GDP could rise by as much as $6bn in the next decade. There could also be more than 6,000 new jobs resulting from legalization.
The Arkansas Racing Commission is in charge of the regulation of the casino sector. There will be a tax rate of 13% on the initial $150m in net receipt earnings. Once operators meet this threshold, the tax rate will rise to 20%.
Issuance of the first two licenses
Arkansas gamblers will be able to gamble at a casino in their state for the first time ever on April 1, 2019. The Arkansas Racing Commission has given its approval to the Southland Park Gaming and Racing facility in West Memphis and Oaklawn Racing and Gaming in Hot Springs to begin their casino gaming offering.
These two racinos will have temporary facilities open for casino gaming on April 1. They are aiming to complete the transition into a casino by the time the summer comes around. The casinos will encompass a dedicated space for the sportsbook and a poker room.
A spokesperson for the Arkansas Department of Finance and Administration said applications for the other two casino licenses will be welcome from May onwards.
According to estimates, when the four casinos are up and running, the state could make as much as $66m each year from tax revenues. Monies will also go towards the counties where the casinos are based. The two main parties opposing casino legalization were the state governor and a conservative group known as the Family Council.