Sports Betting Lobbyist Looks to Overturn Arkansas’ 51% Rule

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Sports Betting Lobbyist Looks to Overturn Arkansas’ 51% Rule
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A lobbyist for national online bookmakers says he expects to ask Arkansas lawmakers to overturn a state rule requiring his clients to give local casinos most of the profits in mobile sports betting partnerships.

John Burris, a former Arkansas legislator representing national online bookmakers such as DraftKings and FanDuel, said he will seek legislation to abolish the rule giving local casinos 51% of mobile wagering profits. These bookmakers typically share 5-15% with casino partners.

“The rule is going to need to be changed,” Burris said.

Carlton Saffa, chief market officer at Saracen Casino Resort in Pine Bluff, said the rule aligns with a state constitutional mandate requiring casinos to control wagering.

“Of course, the constitutionally authorized casinos should be required to maintain a majority profit position in bets booked under their license,” he told Gambling.com.

A legislative effort to change the 51% rule will have to wait until next year.

The Legislature is in a fiscal session in Little Rock until March 15 to address the state’s budgetary needs. A regular legislative session, open to matters beyond fiscal issues, is scheduled to begin in January 2023.

Lawsuit Unlikely to Overturn 51% provision

The coalition is not likely to file a lawsuit to eliminate the 51% provision, but instead will focus on getting that done when the Legislature meets again next year, Burris told Gambling.com.

In addition to DraftKings and FanDuel, the coalition includes BallyBet, BetMGM Sportsbook and Fanatics Sportsbook.

Testifying this month before a legislative subcommittee, Burris said the 51% provision violates the U.S. Constitution’s commerce clause preventing discrimination against out-of-state businesses.

Saffa said the Racing Commission’s sports betting rule does not restrict any national online bookmaker from operating in Arkansas.

“There is no discrimination,” he said. “There is no mention of geography in this rule.”

Racing Commission Sets 51% Rule

On. Dec. 30, the Arkansas Racing Commission voted unanimously to approve a rule change to legalize mobile sports betting in Arkansas. The commission regulates all gaming in the state.

The proposed rule includes language granting Arkansas casinos 51% of profits if they use a national online bookmaker’s app.

The national bookmakers objected to the 51% provision, saying profit-sharing negotiations should occur between themselves and their casino partners, not set by the government. No other state has a rule establishing these profit-sharing arrangements.

Arkansas’ three casinos said most profits should remain in-state, where casinos employ thousands of workers and contribute millions in local and state taxes. In addition to Saracen, Arkansas is home to one casino in West Memphis and another in Hot Springs.

On Feb. 22, a legislative committee gave final approval to the Racing Commission rule allowing mobile sports betting in Arkansas. The 51% provision remains in the rule.

After a 10-day mandatory filing period at the secretary of state’s office, mobile sports wagering can begin in Arkansas. The earliest date for legal mobile wagering is March 4. The actual launch date depends on when the casinos can have their apps available for bettors to download.

‘Consumers Want Choice’

The national bookmakers are required to partner with Arkansas casinos in making their apps available to bettors who want to wager on sports. This means operators such as DraftKings and FanDuel can’t come into the state and begin operating independently.

Under the new state rule, casinos are given two online sports betting platforms, called “skins.” The casinos can use a skin to create an app under their brand name, or partner with a national bookmaker. The casinos can choose not to use an out-of-state online bookmaker.

In the immediate future, Burris said that the national bookmakers are unlikely to partner with an Arkansas casino, meaning apps like DraftKings and FanDuel won’t be available in the state.

He said the casinos have made it clear they don’t want such a partnership.

However, Burris said consumer pressure could bring about change. When mobile wagering is operational, people wanting to place a sports bet in Arkansas will learn they can’t download apps they are familiar with, like DraftKings.

“Consumers are going to want choice,” he told Gambling.com.

Saffa said that while he has no immediate plans to partner with a national brand, “you should never say never.”

“The Arkansas Racing Commission got this right with their rule and the unanimous vote approving it,” he said.

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Larry Henry

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