The Arkansas legislature’s Joint Budget Committee recently approved the racing commission’s proposed rule allowing the state’s casinos to accept mobile sports bets from gamblers inside Arkansas. As a result, Saracen Casino Resort in Pine Bluff, Southland Casino Racing in West Memphis and Oaklawn Racing Casino Resort in Hot Springs can launch sports betting apps by March 4, said Department of Finance and Administration spokesman Scott Hardin.
Currently, sports wagering is legal in Arkansas only if bets are placed on-site at one of the state’s three casinos. The rule changes will allow bets to be placed from smartphones or mobile devices from anywhere in the state by gamblers age 21 or older.
Saracen Casino Resort Chief Marketing Officer Carlton Saffa said, “We will launch BetSaracen, a first-class, Arkansas born-and-bred mobile wagering app before March Madness. It won’t be legal until March 4th, so that’s the earliest possible.” The other two casinos have not yet indicated when they expect to start accepting mobile sports bets within Arkansas.
The rule changes were approved by the Arkansas Racing Commission in December. They allow the casinos to have up to two online skins and a third party a third party to operate wagering, such as DraftKings or FanDuel. However, under the new rules, the retail casino is required to receive 51 percent of the revenue from the partnership with a third-party operator.
That rule has generated strong opposition from major sportsbooks. Speaking on behalf of a group of sports wagering operators, John Burris, a partner at the lobbying firm Capitol Advisors Group, said the rule goes against the Commerce Clause of the U.S. Constitution. He said, “That states that, essentially, in my layman explanation, that a state cannot discriminate against an out-of-state interest to the benefit of an in-state interest. I think it was clear that that was the intent of the rule here.”
Burris said the sportsbook operators agree casinos should be the ones to offer sports wagering, but the bookmakers want to be able to negotiate contracts with the casinos without the state limiting profit margins.
Casino operators, however, support the rule and believe it’s legal, said Saffa. “There are arguments this rule might violate the Commerce Clause, or it might violate the dormant Commerce Clause or the kitchen sink or anything else that can be thrown at it. With March Madness just around the corner, should we not proceed today, I’d imagine we’ll all get calls from people around the state asking what is taking us so long. The state will lose revenue from this extension of an already legal business and the casinos will lose, for us, what would be like Christmas shopping season for retail.”
Observers said, since the rule has been approved, it’s possible national operators like BetMGM, DraftKings and FanDuel will opt out of the Arkansas market, at least at first. And Arkansas bettors might use apps and platforms unlike those found in the rest of the country.
Some legislators also expressed opposition to expanded gambling. State Rep. Jim Wooten said, “You need to keep in mind every time we do something like this, we’re driving a moral stake through the moral spirit of this state.”
National sportsbooks like BetMGM, DraftKings, and FanDuel were strongly opposed to this provision during the rule-making process.
“In addition to the unprecedented nature of the proposed regulation, imposing such an artificial cap on vendors’ revenue share, in this case not more than 50%, is not based on any market considerations and would only serve to impede competition,” BetMGM wrote in a letter to the Arkansas Racing Commission before it unanimously passed the rule. “In short, the cap would make it impossible for sports betting platform providers to enter the Arkansas market and serve the state’s residents.”
