A filing this week at the state Ethics Commission reveals the beginning of an effort to propose a constitutional amendment that would “authorize coin-operated amusement machines within the state of Arkansas to support the Arkansas Scholarship Lottery.”
The declaration comes in the filing of Arcade Arkansas, a ballot question committee. Its officers are Williams Beams of Hot Springs and James Johnson of Searcy.
David Couch, the Little Rock lawyer who stays on top of ballot question issues, sent me a copy of the filing last night. That’s all I know at the moment.
I know that amusement machine makers and would-be operators have been trying for years to legalize machines that pay off in valuable prizes. They pop up in operation from time to time and have been tolerated to varying degrees depending on local law enforcement. It is generally presumed that putting money in a machine in hopes of winning something of greater value is gambling and not legal in Arkansas (exceptions have been provided in law for the likes of Dave and Buster’s and Chuck E. Cheese). For now, we can’t say specifically what this proposal is about, but the presumption that it would involve something tantamount to gambling is strong. No constitutional amendment is necessary to legalize pinball and other game machines where the only prizes are a free play for a high score.
Dedicating a portion of the revenue from such an enterprise to the lottery scholarship fund would give the measure a gloss of respectability. After all, the University of Arkansas has now given its good name and valuable Razorback trademarks to encourage gambling. Scratch-off ticket sales (which prey on problem gamblers and low-income people) do provide some college scholarship money, though it is disproportionately distributed to white, higher-income students, statistics show. Dedication of money to the lottery does not mean the lottery is behind this venture. The legislature has been resistant to the idea of the lottery expanding into keno and other machine gambling at retail outlets.
Reminder: One of former Sen. Jeremy Hutchinson’s legislative endeavors on behalf of paying clients was working to advance the interest of amusement machines in Arkansas.
If such a proposal does seem to have a serious path to the ballot, I’d expect casino operators to resist the potential competition.
UPDATE: Bishop Woosley, director of the Arkansas Lottery, responds (prompted by my use of the lottery logo as an art element given that the proposal lists it as a beneficiary) that this is NOT an initiative of the Arkansas Scholarship Lottery. As I figured.
UPDATE II: Jason Cline, a political consultant who’ll be spokesman for Arcade Arkansas, promises a fuller statement on the proposal later this morning. When I asked if it would be backed primarily be machine makers, he said the measure would have a “broad coalition” of supporters. Beams, according to an Internet search, is a state leader of the VFW. Lodge halls have been popular spots for efforts to expand gambling opportunities in the past. Neither Beams nor Johnson was reachable this morning.
UPDATE III: Here are the materials filed Thursday to support a petition drive for a constitutional amendment.
It would legalize playing coin-operated games with an element of “skill” that paid off in points redeemable for merchandise worth up to $5 and also in lottery tickets, but not cash. The measure would provide for 50 licenses to operate such machines, up to 300 for each licensee. The Arkansas Lottery would regulate the business. There’d be a 20 percent tax on machine receipts, all payable to the lottery fund. The machines also would be covered by other standard taxes. The measure prohibits local government regulation or prohibition of the machines. It specifies it doesn’t alter other laws related to gambling, charity bingo, the lottery and the casino amendment.
UPDATE IV: Here’s the news release from Cline’s group.
The citizens’ group Arcade Arkansas today announced the formation of a ballot question committee and filing with the Secretary of State of a proposed constitutional amendment authorizing coin operated amusement machines to fund the Arkansas Scholarship Lottery.
The amendment imposes a new 20% tax on coin operated amusement machine and allocates 100% of the tax revenue to fund the Arkansas Scholarship Lottery. The Arkansas Scholarship Lottery would issue licenses through a merit-based selection method and the number of amusement machines at any one location is limited.
“The amendment authorizes amusement machines currently legal under Arkansas law to be taxed at an elevated 20% with all proceeds benefitting the Arkansas Scholarship Lottery. In a time where college tuition and student loan debt are spiraling out of control, it is imperative that solutions be offered to fund college for all Arkansans. Under this amendment, these amusement machines would be licensed and regulated by the Arkansas Scholarship Lottery and redeemable prizes do not include cash but are limited to merchandise valued at less than $5 and lottery tickets,” said Jason Cline, spokesperson for Arcade Arkansas.
Proponents of the measure also see the benefits for veterans’ organizations across the State. Places like Veterans of Foreign Wars (VFW) Halls and American Legion Posts will be able to offer these machines as entertainment and generate revenue to provide events for the State’s veterans.
“Every day, veterans across the State congregate at veterans’ organizations, and this will provide the funding for these organizations to continue to offer entertainment and events for those that have honorably served our great country. This proposed amendment would be an added benefit to help reach veterans in Arkansas,” said Cline.
For the proposed amendment to be placed on the ballot at the November 3, 2020 general election, Arcade Arkansas must obtain approximately 90,000 signatures of registered voters by July 3, 2020.