Oaklawn Opens Gate to Online Gambling

by Mark Friedman  on Monday, Jun. 2, 2014 12:00 am  

The state of Arkansas receives 1 percent of the amount wagered on the simulcast races when the bets are made on the grounds of Oaklawn. But if Arkansans were betting through websites set up by out-of-state firms, the state of Arkansas missed out on that tax money.

Kelly, the SUNY professor, said that if states don’t legalize online betting for horse racing, gamblers will just find an online site from some other state — or even offshore. And that jurisdiction will receive the tax revenue, he said.

The tax argument was one reason state Sen. Bill Sample, R-Hot Springs, sponsored the bill to allow Oaklawn to offer online betting. “For years you could bet, but all that tax money was going to Kentucky,” Sample said.

Sample told Arkansas Business last week that there wasn’t much discussion on the legislation when it was introduced in 2013. The bill passed the Arkansas House of Representatives 84-0 and in the Senate, 35-0.

A Small Part of the Take

Geiger said that after Oaklawn received legislative approval, it started looking for a partner to launch the website because creating one from scratch would be too costly, though he declined to specify the cost. “It was going to be way more than it was going to bring back to the bottom line,” Geiger said.

Oaklawn eventually partnered with TwinSpires.com, a subsidiary of Churchill Downs of Louisville, Kentucky.

Because it was already 10 years behind the other betting websites, “Oaklawn couldn’t come into the market with a product that was inferior,” Geiger said. “It had to be as good as the national brands.”

He said that the website has all the tools to verify that someone is an Arkansas resident and is older than 18 before the account is created.

Online betting, however, remains a small portion of Oaklawn’s overall business, even though there are numerous races on some days from 7 a.m. until 9:30 p.m. For the 53-day live racing season this year, which extended from mid-January to mid-April, Oaklawn’s website generated $9.1 million in wagers. The state of Arkansas collects 1 percent of that revenue and the revenue generated by the other races at Oaklawn.

Oaklawn’s live simulcast wagers during that same period generated $9.5 million, which was down 16.4 percent from the same period in 2013, according to the Arkansas State Racing Commission. (2013’s live racing season was a day longer at 54 days.) In 2014, $37.4 million was wagered on live racing, down 7.4 percent from the live racing season a year ago.

The $9.1 million in online wagering in 2014 live racing season more than offset the $5.1 million decline in wagers from the simulcast and live racing.

 

 

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