Scholars discuss Arkansas’ gambling rules and roles

An Ole Miss law professor came Friday (April 26) to Fayetteville to analyze Arkansas' long legal history of gambling. Ronald Rychlak noted the Arkansas Scholarship Lottery is the last success in terms of legalization, and election defeats of referenda allowing casinos the latest failure.

Countering his analysis at the forum was adjunct economics instructor Jason Arentz of the Sam M. Walton College of Business of the University of Arkansas. Arendtz took a libertarian point of view while Rychlak generally stayed on neutral historical footing.

Rychlak, the Mississippi Defense Lawyers Association Professor of Law at the University of Mississippi School of Law, was sponsored by the UA School of Law student chapter of the Federalist Society, a conservative and libertarian group.

A longtime analyst of gambling and the law, Rychlak noted that Hot Springs made Arkansas gaming history unique. He cited the town's pre-World War II presence of gangsters Al Capone, Owney Madden and Charles "Lucky" Luciano alongside the permissive politics of the era's Mayor Leo P. McLaughlin.

Rychlak showed a slide of President Harry S Truman playing poker in Hot Springs, explaining that "buck" as in the former president's motto of "the buck stops here," was a gambling term for a marker indicating the dealer of a particular hand.

Noting legal horse racing in Hot Springs and dog racing in West Memphis, he explained that Arkansas law accounts for two of the three points that define gambling – consideration (items of value) and reward (playing to win) but not chance (luck or randomness). While other states separate games of chance from games of skill, Arkansas thus does not.

State-managed lotteries are nothing new, Rychlak noted. In the 17th and 18th centuries, Britain partially financed public works projects in the Colonies – including the creation of most Ivy League universities including Harvard, Yale and Princeton – with government-managed lotteries.

Arkansas legalized charity bingo in 2007, then voters amended the state constitution in 2008 – which originally prohibited lotteries but not all gambling – to allow the Arkansas Scholarship Lottery.

State-run lotteries generally earmark some of the proceeds to educational purposes, Rychlak said. In general that's about 35% of the revenue – with averages of 50% going to prizes, administration 8%, and retailers who sell the tickets get the remaining 7%. Arkansas gives only 20%-21% to the lottery scholarships, he said.

"Poor people buy the most lottery tickets," Rychlak said, "but in general it's middle class kids getting the scholarships."

The state lottery's main problem has been not corruption but theft of tickets, he said.

"I see no difference between any action you take and gambling," countered Arentz, the UA economics instructor.

Almost everything in life has "an element of skill, an element of risk. You buy a house? You take a risk. Buy an insurance policy? There's risk" that you won't need to file claim that recoup the premiums you paid in.

Arentz grabbed the audience's attention by using prostitution as a contrast.

"It's important to separate the things you don't like about something from that thing itself," he said.

Forbidding slavery and reducing disease are the real issues in prostitution, he maintained, while some forms of prostitution may be criticized but not banned, such as a marriage to someone solely because of his or her wealth.

"In policies about gambling, I encourage you not to be a prostitute," Arentz said.

Rychlak said he generally agreed with Arentz but that "my primary objection is the state being the 'house,'” using the term for management of a gambling operation

"You can go back to antiquity, and you can find examples of where gambling destroys people, destroys families," and now states that operate games of chance bear responsibility for that. "State lottery is the worst kind of gambling."

"I share all his concerns about the state not being the house,” Arentz said of Rychlak.

Otherwise, Arentz barely touched government-managed gambling other than to restate the principal of individual responsibility. Society does not want a dad to gamble the family's savings away, but neither would it want him to risk his life with a hobby of skydiving.

"Do we want to legislate all those other choices?" and Arentz answered himself saying Americans generally do not. Society asks of its members, "Please live a good life."