The Arkansas Racing Commission today approved rules that will allow Arkansas casinos to offer online sports betting, rather than only on-site. The vote was unanimous.
The rulemaking hearing was dominated by efforts of national bookmaking companies to alter the rules to give them a shot at a bigger share of profits if they strike deals to provide Internet platforms for the casinos. They failed.
Scant attention was given to objections to expansion of gambling to cell phones, which critics said could encourage problem gamblers.
The rules now go to the Legislative Council for review, where lobbying efforts will continue. In this case, some of the largest Arkansas lobbies, including the state chamber of commerce and hospitality lobby, supported the rules as presented. That meeting could occur in late January.
Most of the discussion was about resistance from national bookmaking companies, such as DraftKings and MGM, to a rule specifying that 51 percent of net house win be retained by Arkansas casinos. The national bookmakers normally retain 85 to 95 percent of the net wagering revenue. They contend they deserve it because their marketing ability increases gambling and profit for the casinos.
The Commission noted the majority of individual comments on the rules came in messages opposed to gambling expansion in a campaign organized by a religious lobby. John Burris, a lobbyist for a national bookmaker (DraftKings, FanDuel and BetMGM are among the operators hoping for a piece of the market), said equal weight should be given to those who signed a form letter generated by a consultant working for the national bookmakers.
Commissioners in comments and questions seemed receptive to arguments from Oaklawn Park that giving a majority of sports betting profits to out-of-state operators effectively conceded control to the out-of-state interest, where the state casino amendment specifies that gambling must be operated by Arkansas entities.
Carlton Saffa, representing the Saracen Casino in Pine Bluff, said the national companies had implicitly criticized the expertise of local operators by describing their betting platforms as “first-class,” as if platforms developed by the casinos themselves (which some plan) might not be.
Lobbyists for the national bookmakers argued there were legal questions about a state rule on profit-sharing and said that no other state sets a limit on profits. But Saffa noted that there are fee specifications in many laws and that casinos already have profit-sharing arrangements on slot machines that generally give 80 percent of the profit to the casino. And he said the bookmakers fighting the Arkansas rule, who said they couldn’t operate in Arkansas if casinos kept 51 percent of the revenue, have been willing to accept a 51 percent payment to New York to operate there.