Funny. Shortly after raising questions earlier today about spending by a group seeking to expand machine gambling in Arkansas comes the announcement of the formation of a group to oppose that initiative.

Arcade Arkansas has been circulating petitions since last fall (and spent $358,000 through Feb. 14) to place an amendment on the ballot to permit some 15,000 “coin-operated amusement machines” in businesses around Arkansas. These are gambling machines, sometimes with varying degrees of “skill” involved, and would be legalized to pay off in-store merchandise or lottery tickets. A portion of net proceeds would be donated to lottery scholarships.

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Efforts are underway nationwide to expand gambling through such amusement machines. An interesting rundown can be found here.

Today comes a news release from the McLarty Consulting Group announcing the formation of a committee to oppose the measure.

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Protect Arkansas Communities (PAC) has launched a ballot question committee to challenge Arcade Arkansas and its efforts to amend the Arkansas Constitution to allow 15,000 coin-operated amusement machines throughout communities across the state.

 

The event will take place at the Arkansas State Capitol on Friday, February 21st , at 10 a.m. in the Old Supreme Court Room.

 

The event will include speakers that will address concerns regarding Arcade Arkansas and layout how this Constitutional Amendment is a bad deal for Arkansas communities.
The event is open to the press and the public.

 

Committee to Protect Arkansas Communities is a coalition with like-minded organizations, former law enforcement officials, elected leaders, business organizations, associations, veteran
advocates, religious leaders, that will raise awareness and educate Arkansans to oppose Arcade Arkansas’ drive to put 15,000 coin-operated amusement machines all across Arkansas.

In response to my question, a spokesman for the group said a regulatory filing will provide details on financial support in the days ahead.

I can guess one potential source of financial support for opposition: The three legal casinos in Arkansas (Southland, Oaklawn and Saracen), whose total slot machines would be dwarfed by this new competition.

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This is a business ripe with political angles. The machines are already in use in many places in Arkansas, including veterans clubs. Prosecutorial efforts to stop them are mixed. They also enjoy some significant support from senators in areas where private clubs make money off the machines. Disgraced Sen. Jeremy Hutchinson attempted to legislate broader protection for the supposed “skill” machines.

There’d be a 20 percent tax on net proceeds, equivalent to the top state take on casino gambling, but without a provision for the support of cities and counties as provided by Amendment 100 that expanded casino gambling. There’s dense language in the amendment on how the licenses would be doled out, though opponents suspect it’s written in such a way as to favor the backers of the proposal.

It’s doubtful the Arkansas Lottery would view this as complementary to its mission, even if some proceeds went to scholarships. UPDATE: Indeed, lottery director Bishop Woosley appeared at the new group’s news conference at the Capitol this morning to say the proposal would hurt the lottery and the scholarship program.

Local political consultant Jason Cline is leading the Arcade campaign. He as yet has not responded to my questions about what appears to be a lack of detail about how the money is being spent. Of about $78,000 reported in expenditures in the last monthly report, for example, more than $70,000 went to Spur Line Strategies, Cline’s consulting firm. Was that wholly his compensation? Or did he, in turn, spend some of that money on other goods and services, such as, say, legal fees?

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I’ve been down this road before, raising questions about Little Rock Regional Chamber of Commerce payments to a consulting group to back a city sales tax increase. No explicit spending was recorded. I complained that this violated the ethics law. The Ethics Commission finally decided that, through a legal loophole, this spending was exempt from disclosure, but it moved to get the law changed so that consultants couldn’t spend money in secret, they must itemize.

So there’s that. But it’s a minor issue compared with the larger questions about an exponential expansion of machine gambling, its impact on other businesses and the lottery and what sorts of privileges we might be writing into the Arkansas Constitution for the promoters.

The major financial backers are not well-known figures in Arkansas. They are led by Nourin Charania of Stockbridge, Ga. Other major contributors are Bahaburali Hamid, Anwarali Charania and Zoheb Charania, who list Little Rock apartment addresses.

UPDATE: Cline responded to my question about breakdown of expenditures with this note:

I am happy to break out the differences in consulting and signature services. I’m getting reports together that are amended to reflect that breakdown.

He promises a release shortly in response to the opposition group.

The casino industry is organizing nationwide against what they call “unregulated” amusement machines.

For your information, here’s a news release about the gaming industry’s opposition.

And also, here’s a fact sheet in which casino industry details the differences between their machines and the amusement machines.

 

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