Sports wagering is coming to Arkansas although its final form and true impact remain unknown.
Arkansas voters approved Issue 4 by a margin of 54 percent to 46 percent in November. The centerpiece of what is now Amendment 100 to the state constitution was allowing casinos in four counties, but the vote also legalized on-site sports wagering.
Oaklawn Jockey Club Inc. in Hot Springs and Southland Racing Corp. in West Memphis will be able to offer sports wagering to customers as soon as the state’s Racing Commission approves final rules and regulations. Shortly after the November vote, Oaklawn announced plans for a $100 million expansion that included a 200-room hotel and 28,000 SF of gaming space, which track executives said were all planned regardless of the Issue 4 vote.
On Thursday, Delaware North of Buffalo, which owns Southland, announced its own $250 million expansion plans for the greyhound track that includes a 300-room hotel and 96,000 SF of casino space. In its release, Southland mentioned, in passing, that “sports betting areas are also planned.”
See Oaklawn, Southland Plan Soaring Hotels, Bigger Gaming Areas
Oaklawn General Manager Wayne Smith said final decisions on how Oaklawn would run a sports betting book haven’t been finalized. Oaklawn has met with several sportsbook vendors and expects to choose one to run its operations after the Racing Commission sets the parameters.
According to Amendment 100, those rules and regulations must be adopted by March 14.
“When we get permission from the Racing Commission to allow us to become a full casino, our goal is to allow sports wagering,” Smith said. “We are working through seeing what our options are, relative to sports wagering [and] different companies we can partner with to do that. At this point in time, we don’t have the approval to do so, but we are actively pursuing what that might look like. We have nothing right now to report on.”
Big Money
There is no question that Americans love to bet on sporting events. Every year when the NCAA Basketball Tournament rolls around, office pools for selecting brackets are hugely popular.
It’s not just the $1 office pool. The American Gaming Association has estimated that Americans wager as much as $150 billion annually on sports. While some experts question the accuracy of that estimate, sports wagering is certainly a multibillion-dollar industry.
How much of that will transfer to Arkansas’ new casinos is anyone’s guess.
Byron Freeland, a partner with the Mitchell Williams Law Firm in Little Rock, is working with the Racing Commission to finalize the regulations for all the gambling and gaming expansions authorized by the new constitutional amendment.
Freeland said the amendment was written broadly as it relates to sports wagering, but it does specify that all wagers must be made on site — meaning a bettor has to be at a legal casino to put $10 on the New York Mets to win.
Of the current billions bet on sports, most of it is laid at gambling sites outside the United States or through a local bookie. Will someone in northeast Arkansas who bets regularly on a website based in the Caribbean decide to start making the drive to Southland to make bets in person?
“The amendment does allow sports wagering and so we will work toward being able to offer sports wagering,” Smith said. “It’s an amenity that we would be happy to offer to our patrons but, if we didn’t have it, we would have operated Oaklawn without it. It’s an amenity; it’s not a huge money-maker. It just is another offering we can offer our fans.”
Nate Steel is an attorney and former member of the state Legislature who spearheaded the effort to get the amendment approved. He said it is hard to quantify exactly how much revenue sports wagering would generate in Arkansas, but he said a casino in Tunica, Mississippi, had $10 million in tax revenue in its first month from sports betting.
“We tried to [research] but it is a completely new frontier,” Steel said. “There are no apples-to-apples comparisons.
“Sports wagering, in and of itself, is not as big a money-maker as slot machines or traditional table games, but it is an amenity that people expect to have these days at higher-end resorts and casinos.”
Sporting Chance
Freeland said once the regulations are adopted, casinos that wish to offer sports betting have to apply to the Racing Commission to have their vendor contracts approved as well as their sportsbook operation.
He said the amendment opened all sports to betting.
“Oaklawn or Southland would have to say, ‘This is what we want to do,’ and the commission would look at it and approve it if it is in accordance with the rules,” Freeland said. “The commission has to approve the contract, how much the contractor takes out, how much they pay them and what product they offer and how you make the bet.
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“It requires a full revealing of the vendor. It potentially allows sports wagering on all sports.”
Smith said Oaklawn wouldn’t make decisions about which sports to allow bets on and whether to restrict it to professional sports or allow collegiate sports as well. Much will depend on the vendor Oaklawn eventually partners with.
Southland issued a news release about its expansion plans but an executive able to speak to sports wagering was not available before Arkansas Business went to print.
“It will certainly be a collaborative effort in looking at what we should offer, when we should offer and how much should we offer,” Oaklawn’s Smith said. “At this point, we don’t have a true gauge on what all we should offer. It’s too early to tell at this point. We [will] decide on a vendor and collectively determine what does this offer look like?”
Steel said the amendment doesn’t prohibit mobile wagering but the current proposed regulations don’t allow it. The federal Wire Act prohibits electronic transmissions for interstate sports gambling.
“Mobile sports wagering is a totally different world than on-site sports wagering,” said Steel, who said revenue numbers could be “astronomical.” “That’s why we didn’t ban mobile wagering in the amendment because mobile wagering is a lot higher revenue producer. People do that every day. It’s not like we offered a new distraction. It is a pretty common practice. If the state wants to regulate and sanction it, there is a revenue source there.”
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