Arkansas Legislative Subcommittee Approves Statewide Online Sports Betting

• An Arkansas legislative subcommittee approved an online sports betting rule Thursday morning
• An Arkansas Joint Budget Committee will likely cast the final vote on online sports betting next week
• The state will require casinos to keep at least 51% of profits if partnered with an online sportsbook

A legislative subcommittee Thursday voted to approve Arkansas online sports betting after nearly two days of discussion. Online sports betting will need to be approved by a full committee vote before it’s legalized.

The Joint Budget Administrative Rule Review Subcommittee today approved Arkansas online sports betting after a  two-day discussion debating the legality of a controversial 51% profit sharing rule included in the plan. Arkansas casinos will be required to keep at least 51% of all online sports betting profits, a rule that several national online sportsbook operators vigorously opposed during the two-day meeting.

Online sports betting next goes to the Arkansas Joint Budget Committee for approval. The earliest the committee can take up a vote is Tuesday, Feb. 22.

If approved, each brick-and-mortar Arkansas casino will be able to offer online sports betting. Arkansas has a total of three casinos:

• Oaklawn Racing Casino Resort
• Saracen Casino Resort
• Southland Casino and Racing

A fourth casino has been approved in Pope County but has not yet begun construction.

Arkansas Online Sports Betting 51% Profit Rule

Each casino, if they choose, can partner with up to two online sportsbooks to use their technology and their operating platforms, called “skins.” However, Arkansas online sports betting includes a controversial clause that requires state casinos to keep at least 51% of online sports betting profits. National online sportsbooks usually keep between 85% to 95% of profits when partnered with a casino.

The clause was a point of contention for online sportsbooks after it was included in the initial online sports betting plans approved the Arkansas Racing Commission in late December. Representatives for several online sportsbook companies, including DraftKings and FanDuel, spoke during yesterday’s subcommittee hearing and claimed the 51% rule violated the federal Commerce Clause by discriminating against out-of-state vendors.

Despite the protestations, Arkansas Attorney General Chief of Staff Brian Bowen today said the attorney general’s office believes the 51% profit rule can be defended if challenged in a court of law.

The business model for national online sportsbook vendors depends on receiving 85% to 95% of sports betting profits to be successful, said Carlton Saffa, Chief Marketing Officer of Saracen Casino in Pine Bluff. The claim that the rule violates the federal Commerce Clause is a “Hail Mary” attempt to block Arkansas online sports betting online sportsbook operators in its proposed form.

If approved by the Arkansas Legislative Committee, its the hope of state lawmakers that online sports betting could be operational by the NCAA men’s basketball tournament in March.