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Arkansas Regulators Pull Back Mobile Sports Betting Rules
By Jeff Osienya Jan 29, 2022 IndustryArkansas mobile sports betting launch faces delay after the Racing Commission withdrew the proposed measure from the state’s lawmaking agenda. Locals will now have to wait until March Madness to enjoy wagering on their favorite sporting events.Excitement was rife in the state of Arkansas following news of the forthcoming debut of mobile sports betting in the state. The Arkansas voting commission voted on December 30th, 2021, to adopt rules and regulations that would have paved the way for mobile betting.
Having gone through this all, anticipation was at its peak that Arkansas residents would now be able to take part in mobile betting just in time for the Super Bowl and the Winter Olympics. Well, there seems to be a spanner thrown in the works. The focus has now shifted from the much-anticipated Super Bowl debut to a prospective target of March Madness.
In light of the new developments, Carlton Saffa, the Chief Marketing Officer at Saracen Casino Resort, one of the retail casinos in Pine Bluff, said in a written statement:
Quote“The Saracen team was prepared to speak in favor of the rule allowing mobile sports wagering; we had hoped to have this authorization before the Super Bowl. We planned to have subject matter experts as well as vendors representing state-of-the-art technology on hand to address any questions members may have had. We look forward to addressing the issue next month and are optimistic that, just as the Racing Commission passed the mobile wagering rules 7-0 [on December 30th], the Legislative Council will be supportive. Mobile wagering has broad support and is something Arkansans ask us for daily.”
So, what exactly went on? Let’s fill you in;
Last-Second One-Word Edit in Emergency Meeting
The Arkansas Racing Commission unanimously voted in an emergency meeting to change one word. The meeting was scheduled to take place on Wednesday. Had the rule been approved by the legislative council on Friday, Arkansas would have officially legalized mobile betting. However, on Tuesday morning, the Arkansas Racing Commission (ARC) attorney Byron Freeland put a momentary nail to the coffin of mobile betting in Arkansas. He withdrew the state’s proposed mobile betting rules from the state legislative council’s administrative rules sub-committee agenda.
The ARC attorney proposed to change the net gaming “revenue” to “receipts” in a section of the mobile sports betting rules. The full paragraph where the word revenue was replaced read as follows:
Quote“Operation of an online sports pool shall be prohibited in circumstances in which a majority of the net gaming revenue, as defined in amendment 100, from the online sports pool is paid to a third-party vendor assisting in the operation of the sports pool”.
The change was occasioned by public concerns over what exactly was meant by net gaming revenue. Freeland clarified a legal argument to the commission that before the one-word edit, the measure implied that a third-party vendor would have violated Amendment 100 of the state’s constitution.
While this may seem such an easy change to implement without any fuss, it did raise some eyebrows among legislators. How do you explain how an amendment was proposed barely 24 hours before the final vote? The mobile betting legislation process is a delicate matter hence even the addition of one word could raise serious implications.
Either way, if you take a closer look at the picture, it’s just not about making a fuss. The concerns are indeed valid. The ARC attorney explained the need to ensure transparency and inclusivity of the public’s ideas throughout the entire regulatory process. And thanks to his commentary, the changes were okayed by the ARC.
It, however, has led to an unprecedented delay in the mobile betting implementation in Arkansas as the legislative council will deliberate on it during its next sitting.
Arkansas governor Asa Hutchinson also released a written statement following the news of the delay saying in part:
Quote“There have been concerns expressed by numerous legislators about the late change in the language of the rules for mobile sports betting. The change does not appear to be significant, but in fairness, it made sense to consider the rules in regular order at the next meeting.”
Avenue for the 51% Concerns to Come Back?
A delay in passing mobile betting in Arkansas might open a pandora’s box back to the 51% issue that haunted the legislative process last year. Sigh, here we go again.
The 51% revenue clause required host Casinos in Arkansas (Saracen Resort Casino, Oaklawn Racing and Gaming, and Southland Park Gaming and Racing facilities) to retain that percentage of any net sports betting revenues. This split the entities involved into two. On the first faction were the retail casinos that supported this rule. On the other hand, were national bookmakers (DraftKings, MGM resorts, and FanDuel).
At that time, a BetMGM representative had informed the commission that:
Quote“In addition to the unprecedented nature of the proposed regulation, imposing such an artificial cap on vendors’ revenue share, in this case, not more than 50%, is not based on any market considerations and would only serve to impede competition. In short, the cap would make it impossible for sports betting platform providers to enter the Arkansas market and serve the state’s residents.”
The national bookmakers have been used to sharing between 5 to 15% with their local partners. The justification for this percentage has been that these bookmakers do most of the marketing for the local casinos. Well, the bad news for the bookmakers is that they have accepted similar terms in New York.
Though New York is bigger in population, this is not an argument that the Arkansas Racing Commission was willing to listen to. While the bookmakers may have accepted these demands in the first round of negotiations, there are concerns that they may bring up the issue again this time around. The bookmakers argue that this business model is flawed and does not make much economic sense to them.
What Next for Mobile Betting in Arkansas?
Even though most Arkansas residents may be disappointed right now, all the key stakeholders are still optimistic about when mobile sports betting will go live. The March date is a promising date barring another fundamental shift or should the bookmakers come back with different demands. Here’s to hoping that everything goes smoothly and that Arkansas residents will definitely get to enjoy mobile betting this time. See you at March Madness!
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