Arkansas Looking to be Next to Join Sports Betting Party

Arkansas Looking to be Next to Join Sports Betting Party

Sports betting is beginning to become a way of life in the United States. It’s hard to think that the industry was just legalized in 2018 when the Supreme Court eliminated the Professional and Amateur Sports Protection Act.

The southern states have been slightly slower to the gambling party. This is because of foundational religious beliefs amongst these states, but this is no longer the case. The south almost has unanimous legal sports wagering, and Arkansas may be the following jurisdiction to expand its industry.

Retail sports betting began in July of 2019, and the Arkansas Racing Commission voted to expand to online betting on Thursday. This is thanks to the large success of retail betting. Mobile wagering will give bettors in the state more opportunities to place bets and win big.

Mobile Sports Betting

Arkansas casinos have been offering retail sports betting since July of 2019. This was a hit immediately in the state, and it caused many legislators to push for a new set of sports betting rules.

There were hours of discussions with stakeholders on Thursday before the vote occurred. However, the Arkansas Racing Commission passed the new laws with ease. There is still one more step that must occur before online sports wagering goes live in Arkansas.

The rules need to be approved by a subcommittee, which will likely occur in 2022. The hardest part of bringing mobile sports betting to the state was the approval from the Arkansas Racing Commission.

If sports betting is approved in early 2022, the industry will quickly be able to implement mobile wagering. The national sports betting operators fought hard to add to the mobile industry. DraftKings and BetMGM were two stakeholders who requested each casino receive four skins.

The casinos were content with the two-skin rule, and this is partially thanks to the financial agreement that Arkansas operators must follow. There will be little leeway when it comes to the profit share between casinos and operators.

Arkansas made the regulations to keep money in the state, and this is an unprecedented rule amongst the national landscape.

The Rules

The Arkansas Racing Commission made a rule where the casinos must receive 51% of the profit. Sports betting operators like DraftKings and BetMGM are not happy about this regulation.

The two conglomerates argued the decision should be between the two parties. According to the operators, the Arkansas Racing Commission should not dictate how much money goes to each party.

DraftKings and BetMGM said that increased operators would heighten profits, allowing casinos and individual operators to make more money. This would lead to extra tax revenue for the state, but the Arkansas Racing Commission did not buy into this argument.

The profit share between casinos and operators is typically between 5 and 15%, so Arkansas may not be a market with high demand for mobile sportsbooks. The thing that hurt BetMGM and DraftKings’ argument was the latest legislation in New York.

Operators happily accept a 51% profit share in New York, and Carlton Saffa of Saracen Casino argued this. However, sportsbooks were happy taking this rule in New York because it’s one of the last big states remaining that has not legalized betting.

New York has so many people that sportsbooks can afford a 51% profit share, but Arkansas does not provide the same framework for betting success.

Yet, there is still potential in the state. Arkansas voters approved sports betting in November of 2018, and the industry launched in July of 2019. Since this date, there have been more than $104 million in wagers. This gave the state $1.9 million in tax revenue.