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Arkansas Legislative Panels Approves Mobile Sports Betting
By Jeff Osienya Feb 20, 2022 LegalityMobile sports betting rules have received approval from the Arkansas legislative sub-committee ahead of a vote by the Joint Budget Committee. The controversial 51% revenue-sharing model between land-based casinos and third-party sportsbooks still stands.November 2018 heralded a new dawn for the residents of The Land of Opportunity. They were allowed to legally place sports bets for the first time in their history. The only problem was that they had to do it physically in one of the 3 established land-based casinos across the state. Arkansas residents will look back at that date as a vital one. It laid the foundation for the current push for the legalization of mobile sports betting.
Arkansas edged closer to launching regulated mobile sports betting on Thursday morning after clearing a major legislative hurdle. The Administrative Rule Review (ARC) sub-committee of the state legislature’s Joint Budget Committee (JBC) okayed proposed sports wagering regulations. This endorsement comes hot on the heels of the approval by the Arkansas Gaming Commission, and as significant as it is, there are still a couple of crucial few steps to go.
From the ARC sub-committee, the proposed sports betting regulations require a thumbs up from the JBC. Should they be accepted, they’ll be passed over to the office of the Secretary of State. Arkansas residents will then be free to place mobile sports bets from anywhere in the state, 10 days after the mobile sports betting measure wins approval in the Secretary of State’s office.
The most exciting part about the progress is that should things go as planned, the mobile sports betting market will be live just in time for March madness. As such, Arkansas populaces would be free to place bets on their very own University of Arkansas Razorbacks team.
Bone of Contention
There have been varying opinions regarding several key clauses to be implemented once mobile sports betting becomes legal. The key of them all is the 51% rule which would give Arkansas brick and mortar casinos hosting the mobile bookies more than half of the proceeds that mobile sportsbooks generate. To no one’s surprise, the land-based casinos (Oaklawn Racing Casino Resort in Hot Springs, Saracen Casino Resort in Pine Bluff, and Southland Casino Racing in West Memphis) supported this decision.
On the other side of the ring, the online bookmakers comprised of giants like BetMGM, Bally’s, FanDuel Inc, Fanatics, and DraftKings Inc are largely opposed to the idea. This issue has been a serious thorn in the flesh to mobile sports betting proponents who would have liked to see the process take a faster pace.
Lobbyist John Burris, a representative of the five bookmarkers mentioned above, informed legislators on Wednesday that the proposed sports betting regulation violates the federal commerce clause. According to Burris, with the 51% rule, the state is discriminatory against out-of-state companies for the advantage of in-state companies. John Burris and the national bookmakers he represents have been so contentious that many anticipate a legal challenge of its validity in the future.
However, officials of Arkansas’ three brick-and-mortar casinos insist that the proposed mobile sports betting measure abides by both state and federal law and isn’t discriminatory in any way. Moreover, they affirmed that it doesn’t discriminate against companies based on their location in Arkansas or the rest of the United States. The chief deputy of the Attorney Generals’ office, Brian Bowen, further expressed confidence that the 51% rule could be defended when he spoke to the Arkansas Times. He said on Thursday that:
Quote“There was several comments yesterday made on the legality of the rule and opinions as to whether or not it violated the dormant commerce clause; our position is if challenged, we can defend this rule. I must apologize because, in anticipation of litigation, I don’t want to lay a road map out for any defense that our office might have. After our review of the rule, we do feel like we can defend the rule if challenged.”
All in all, even though such a clause is not common amongst mobile sports betting states, it is not entirely unheard of with New York taking a similar approach. In most other states, however, the online sportsbook operators are used to sharing between 5% and 15% of their revenue. So, for now, it remains to be seen whether the issue will still come up during the next budget committee hearing or whether the bookmakers will cave into this regulation.
All Eyes on March Madness Despite Potential Consequences of The 51% Rule
It’s increasingly likely that the 51% rule is here to stay for Arkansas and its mobile sports betting endeavor. And in that case, there might be some consequences that will come with the controversial measure in place. From what some experts are saying, online sportsbook operators, are likely to steer clear of Arkansas, at least for the time being.
However, should that happen, there still won’t be a vacuum left if we go by what Mr. Carlton Saffa said in a recent interview. Mr. Saffa is the Chief Marketing Officer at Saracen Casino Resort, one of the land-based casinos in Arkansas. He is on record saying that the Bet Saracean app will be ready to launch as soon as the mobile sports betting measure checks all legislative boxes. He said, “…we will be live for March Madness if not sooner,” in a text message correspondence with the Northwest Arkansas Democrat-Gazette.
For the most part, the time scales align for Arkansas, and there is a collective push to have things ready before March madness is here after the initial pre-Super Bowl drive failed. With the sports betting world targeting the final four March madness tournament, Arkansas residents will not be left behind unless something unexpected happens. We are looking forward to how things turn out as we keep an eye out for the March proceedings for the Arkansas mobile sports betting measure.
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