Arkansas regulator moves to issue draft mobile sports betting rules, launch 30-day feedback period

Arkansas is moving closer to approving mobile sports betting. The Arkansas Racing Commission authorized on Thursday its staff to publish the proposed rule changes that would open the market, for the purpose of seeking public comment. These will be widely available “soon.”

A 30-day public comment period is set to launch, which will enable comments to be submitted through the racing commission website or in-person at the next meeting, which is taking place on December 30, in Little Rock.

The proposed rule change would open the door to mobile sports betting through the state’s casinos, which are currently only allowed to offer wagering on-premises. Should commissioners approve the rules at the December meeting, a state legislative committee would still have to give it final approval before online wagering becomes legal in Arkansas.

Three casinos currently operate in Arkansas -Saracen Casino Resort in Pine Bluff, Southland Casino Racing in West Memphis, and Oaklawn Racing Casino Resort in Hot Springs- while a fourth venue, Legends Resort and Casino in Pope County, has been approved earlier this month.

The proposal would allow each casino licensee to provide no more than two individually branded online sports platforms and accompanying mobile applications, under the approval of the Racing Commission. 

The proposed changes also include a slightly different proposal, which was presented on Thursday to the commission by Saracen officials, reports Northwest Arkansas Democrat-Gazette. This change would allow each licensee to provide one individually branded online sports platform and accompanying mobile application with the approval of the commission. A second platform and accompanying application may also be approved upon the request of a licensee, as long as there is a good cause and a majority vote of the commission is secured.

Any individually branded online sports pool platform or mobile application provided by an operator intermediary must bear the name of the casino license with which it is affiliated on its website. 

Online sports pools are defined as operations in which wagers on sporting events are made over the Internet on websites or mobile applications through devices through a gaming system approved by the Racing Commission. In order to operate an online sports pool, a casino licensee must first operate a pool from the casino’s premises.

"Further, 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 proposal reads, according to the previously cited news source.

Sports betting operators have warned that, should the commission approve the proposed rule to require a majority of revenue from the pool to be paid to casinos, it would make it hard for them to enter the market.

"Our issue with that, simply put, is that we don't believe that it is the state's role to dictate business-to-business arrangements on a revenue share agreement, " said lobbyist John Burris, who represents operators DraftKings, FanDuel, BetMGM, Fanatics and Bally’s. "We think that's something that should be negotiated between the parties, with your approval on the back end.”

Byron Freeland, an attorney for the commission, said there is a legal argument that Amendment 100 allows only casino franchise holders with a license to conduct casino gambling, which includes sports betting. If third parties receive more than 50% of sports betting revenue, there is a legal argument that this would allow an unlicensed entity to operate as a casino entity. A possible lawsuit challenge could happen over that.

Since the first in-person sports bet was placed in Arkansas, in July 2019, bettors in the state have wagered $95.7 million in sporting events. This has resulted in $83.2 million in payouts and about $1.74 million in state revenue, according to official data.