Arkansas Racing Commission greenlights mobile sports betting via local casinos

The Arkansas Racing Commission has now greenlighted mobile sports betting through the state's casinos. Unanimous approval to changes to the state’s gambling rules was given in a meeting last Thursday, and must now be also approved by the state’s Legislative Council, to meet on Jan. 28.

The rules changes allow mobile sports betting to be conducted through local casinos, which would be granted 51% of the proceeds when partnering with online bookmakers. This is far above the average 5-15% share with local casinos most states have in place.

The commission meeting featured a public hearing and lasted more than two hours, with representatives of casinos and sportsbooks speaking to the regulator. Commissioners also received input from the public in the form of about 800 letters.

"Whether this item makes the January agenda is yet to be determined," Racing Commission spokesman Scott Hardin said after the meeting, according to Northwest Arkansas Democrat Gazette. "If the Arkansas Legislative Council approves, the rule changes allowing mobile sports betting would be effective immediately."

The approval was celebrated by parties seeking to launch operations in the state. John Burris with the Capitol Advisors group, who represents operators DraftKings, FanDuel, BetMGM, Fanatics and Bally’s, said the companies were “excited” about the new development.

"We think it's a great opportunity. I think if I had one point, it would be that it's not us versus them. Us being sports betting and them being the three in-state casinos," Burris said, according to the previously cited source. "We view it as an opportunity to bring to a marketplace through the casinos revenue and a player who is generally being unregulated and utilized now."

Casinos in Arkansas, including Saracen Casino Resort in Pine Bluff, Southland Casino Racing in West Memphis, Oaklawn Racing Casino Resort in Hot Springs, and Legends Resort and Casino in Pope County, were first greenlighted to conduct on-premises sports betting in 2019.

New rules would allow mobile betting anywhere within Arkansas, as long as it occurs physically within state lines, and in partnership with a current gambling license holder. Wagers on sporting events made over the internet must be carried through a gambling system approved by the Racing Commission.

When defining the new set of rules, commissioners heard petitions from parties involved to amend some of the proposed regulations. Online sportsbooks asked commissioners to amend a rule to allow for the sports betting companies to negotiate the revenue split directly with the casinos, with venues having the control to accept or reject said offer.

This contrasts with the position taken by casinos, which asked for a fixed, higher split. In a December 21 letter to the Racing Commission, Wayne Smith, Oaklawn Racing and Casino Resort General Manager said out-of-state wagering vendors generally require to receive 85% to 95% of net revenue, which leaves only 5% to 15% of net revenue to local casinos. According to him, this is not “consistent” with the intent of limiting casino gaming and sports wagering to the four licensed casinos.

"If the third-party subcontractor-vendor retains 85% to 95% of the net revenues themselves, who is really conducting the sports wagering?,” Smith asked in the letter, as retrieved by Democrat Gazette.

The commission did not budge on the 51% split, despite online sportsbooks such as FanDuel claiming this would hamper the ability to bring “first-class offerings” to gamblers in the state.

The regulator did not budge either on a second rule protested by vendors, which limits each casino licensee to provide no more than two individually-branded sports platforms or “skins” and accompanying mobile applications with the approval of the commission.