Rules that allow mobile Arkansas sports betting were approved Tuesday, paving the way for operators to launch before March Madness.
The Administrative Rule Review Subcommittee approved the last rule necessary for sports betting in Arkansas to expand online last week with plenty of debate. Full committee approval came much easier Tuesday with the subcommittee’s report approved in under a minute. That starts a 10-day waiting period before operators can launch.
That rule that held up the process states Arkansas casinos must retain 51% of revenue at the minimum from any contract with a third-party vendor:
“Further, operation of an online sports pool shall be prohibited in circumstances in which a majority of the net casino gaming receipts, 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.”
Mobile Arkansas sports betting for March Madness?
At least one mobile sportsbook should be live in time for March Madness betting, according to Saracen CMO Carlton Saffa.
“We are largely ready,” Saffa told LSR of the casino’s Bet Saracen app. “Barring any catastrophe, we’re ready and I fully anticipate being ready for March Madness.”
Saffa did not disclose which vendors are working with Saracen on the app. He also said while he never says “never” in business, the focus for now is on building up Bet Saracen and not on finding a partner for a second skin.
Saracen fine with revenue share
Saffa and two lawyers from Oaklawn and Southland casinos spoke in favor of the revenue share rule’s approval. The three did not necessarily agree on all the details – Saracen did not want two skins per casino, for instance – but all supported approval of the rule. Neither Oaklawn nor Southland’s representatives commented on when they might offer mobile apps.
The only potential delay to Arkansas launching mobile would be if national brands arguing against the rule decided to challenge the rule in court.
Lobbyist argued legality of rule, but failed
The process to bring Arkansas sportsbooks online looked a little different than in other states.
The approval to bring the sportsbooks online happened in late January at an Arkansas Racing Commission meeting. Multiple hours of testimony from both sides preceded the commission unanimously approving the rule change.
That left a two-step process for the legislature. The Rule Review subcommittee must decide whether rules comply with state and federal laws. Then, the full committee must give final approval. In other words, the rule can only be thrown out at this point if it is somehow illegal.
John Burris of Capitol Advisors Group lobbied on behalf of national sports betting brands including DraftKings and FanDuel. He argued the rule that requires 51% of revenue to stay with casino operators goes against the Dormant Commerce Clause. Essentially, the Dormant Commerce Clause prevents states from creating laws that discriminates against out-of-state companies.
AG office provided confidence in Arkansas rules
The AG office’s Chief of Staff Brian Bowen offered an opinion that the rules could be defended, but noted he had to speak carefully “in anticipation of potential litigation” when addressing the subcommittee.
“We have discussed with legal council for the Racing Commission, I have discussed with the attorneys in our office including our Solicitor General, and after review of the rule we feel that the rule can be defended if challenged.
“There were several comments yesterday made on the legality of the rule and opinions on whether it would violate the Dormant Commerce Clause. Our opinion is if challenged we can defend this rule.”
Saffa said he does not hold the “Hail Mary” attempt to fight the rule against anyone.
“I don’t blame the lobbyists for the national vendors for trying this tactic,” Saffa told LSR. “They have no other tactic to try. You have to play the cards you have. … It wasn’t a particularly good argument but a bad argument is better than no argument.”
Neither DraftKings nor FanDuel responded to requests for comment.
Background on sports betting in Arkansas
Arkansas is not a state that immediately jumps to mind when considering the US sports betting market, but was a relatively early mover in the space.
Oaklawn took the state’s first bet in July 2019. That was followed by Saracen in October 2019 and Southland in January 2020.
That said, handle has never eclipsed $10 million in a month with AR sports betting only available at the three retail casinos, which has led to some low totals since launch through January 2022:
- $120.3 million in handle
- $15.3 million in operator revenue
- $2.1 million in tax revenue