Mobile Sports Betting OK’d in Arkansas Subcommittee, Final Vote Expected Next Week

Mobile Sports Betting OK’d in Arkansas Subcommittee, Final Vote Expected Next Week
© USA Today

An Arkansas legislative subcommittee on Thursday approved a proposed state rule to legalize mobile sports betting in Arkansas.

The Joint Budget Administrative Rule Review Subcommittee approved the state’s mobile sports-betting rule on a voice vote. The rule goes to the full Joint Budget Committee for final consideration, possibly next week.

Arkansas’ mobile wagering rule includes a provision granting local casinos 51% of profits when partnering with national online bookmakers such as DraftKings and FanDuel. National bookmakers usually share 5-15%.

If the measure receives final approval, Arkansas would be the only state with a mobile sports betting profit-sharing arrangement established by a government rule.

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Sports Betting Rule Up for Final Vote

After hearing testimony on the mobile wagering proposed rule Wednesday, the subcommittee went into recess until Thursday to allow other speakers to testify.

The subcommittee then voted on a “review” of whether the mobile wagering rule violates state or federal laws. The affirmative vote moves the mobile-wagering rule to the full Joint Budget Committee.

The final vote could take place at the full committee’s next meeting on Tuesday. The committee met Thursday, but lawmakers would have been required to suspend legislative rules for a vote to occur then. The committee is not scheduled to meet Friday or Monday.

The 56-member committee and smaller subcommittee contain state Senate and House of Representatives members.

With the full committee’s approval next week, mobile sports betting could be operational in Arkansas by the NCAA March Madness basketball tournaments start in about a month.

Legislators are meeting in Little Rock for a fiscal session that began Monday and ends March 15.

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Secretary of State to File Mobile-Wagering Rule for 10 Days

If the full committee approves the Racing Commission rule, it will be filed for a mandatory 10 days in the secretary of state’s office.

The elected secretary of state does not have the authority under this procedural step to overturn the rule.

51% Mobile Profit-Sharing Moves Forward

In late December, the state Racing Commission unanimously approved a rule change to allow mobile sports betting off casino property. The Racing Commission regulates all legal gaming in Arkansas.

The state is home to three casinos. They are in West Memphis, Hot Springs and Pine Bluff. A fourth casino has been approved in Pope County but has not been built.

A coalition of national online bookmakers, including DraftKings and FanDuel, have objected to wording in the rule requiring them to give local casinos 51% of profits when partnering on a mobile app. In the sports-wagering industry, these mobile apps are called “skins.”

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At Wednesday’s subcommittee hearing, John Burris, a former Arkansas lawmaker representing the national bookmakers, said the 51% mandate violates the U.S. Constitution commerce clause prohibiting discrimination against out-of-state businesses.

The national bookmakers cannot operate in Arkansas unless they partner with a casino. Each casino is allowed two skins. The casinos can use the skins under their brand and partner with an out-of-state bookmaker. Arkansas casinos can also choose to use one skin under their brand and not put the second to use.

Carlton Saffa, the chief market officer at Saracen Casino Resort in Pine Bluff, said the Racing Commission’s sports betting rule does not restrict any national online bookmaker from operating in Arkansas.

“There is no discrimination, there is no mention of geography in this rule,” he said at Wednesday’s hearing.

Arkansas casinos contend a state constitutional amendment requires them to “accept” sports betting within the state. Because of that amendment, it is sound public policy for casinos to maintain 51% of revenue from mobile wagering, according to the three casinos.

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