Arkansas Lawmakers Delay Action on Mobile Sports Betting, Vote Possible Thursday

An Arkansas legislative subcommittee on Wednesday delayed voting on a measure to legalize mobile sports betting in Arkansas.

After a 1 1/2-hour morning meeting, the Joint Budget Administrative Rule Review Subcommittee went into recess for the remainder of the day without voting.

The subcommittee is scheduled to return at 8 a.m. CT on Thursday to take mobile sports betting under consideration and possibly to vote on it.

On Wednesday, the chairman, Rep. Lee Johnson, R-Greenwood, said the subcommittee hearing, which began at 7:30 a.m. CT, was required to end at 9 a.m.

As time was running out, and with more people wanting to be heard, Johnson said he would rather go into recess and return Thursday than rush a vote on Wednesday. This was Johnson’s first time to chair the subcommittee.

Full Committee Vote on Mobile Wagering Required

If the subcommittee on Thursday approves mobile wagering, one more vote remains before Arkansans can use their smartphones or computers to place online sports bets anywhere in the state.

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

That second vote would occur in a full Joint Budget Committee hearing.

With approval in the subcommittee and full committee, mobile sports betting could be operational in Arkansas by the time March Madness starts in about a month.

If the Joint Budget Committee doesn’t take up the issue on Thursday, the next opportunity for a full committee vote won’t occur until Tuesday.

The committee’s calendar indicates there are no meetings scheduled for Friday or Monday.

Legislative rules would have to be suspended for the Joint Budge Committee to vote on Thursday, which means the vote is not likely to happen until next Tuesday.

Approval Would Send Mobile Wagering to Secretary of State

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.

This is a procedural step. The elected secretary of state does not have the authority to overturn the rule.

51% Mobile Profit-Sharing Debated

In late December, the state Racing Commission unanimously approved a rule change to allow mobile sports betting off casino property.

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.

The Racing Commission regulates all legal gaming in Arkansas.

A coalition of national online bookmakers, including DraftKings Sportsbook and FanDuel, object to wording in the rule requiring them to give local casinos 51% of profits when partnering on a mobile app. National online bookmakers typically share 5-15%.

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

No other state mandates a mobile profit-sharing percentage.

The national bookmakers cannot operate in Arkansas unless they partner with a casino. Each casino is allowed two online sports betting platforms, called “skins.” The casinos can use the skins under their own brand and partner with an out-of-state betting site.

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.

He was joined by attorneys from Oaklawn Racing Casino resort in Hot Springs and Southland Casino Racing in West Memphis.

Geofencing Demonstrated at Meeting

Also at Wednesday subcommittee hearing, Rep. Jim Wooten, R-Beebe, questioned whether electronic geofencing works to block people trying to bet from outside the state.

Danny DiRienzo, a former U.S. Secret Service agent working for GeoComply, a geolocation compliance company, showed a video demonstrating in real-time that attempts to wager from outside restricted areas are blocked.