What are the odds?

by Paul Holmes (paulh@talkbusiness.net) 134 views 

Let the games begin on April 1 at the state’s two race tracks, decreed the Arkansas Racing Commission last month.

The two, as anybody who’s been around here even a short period of time knows, are Southland Gaming and Racing in West Memphis and Oaklawn Racing Casino Resort — the facility formerly known as Oaklawn Racing and Gaming — in Hot Springs. The Oaklawn name change came with the April 1 rollout of table games complete with live dealers.

The state Racing Commission was charged with overseeing casinos following Arkansas voters’ approval in November of Constitutional Amendment 100 allowing the establishment of four casinos — two at the tracks and one each in Pope and Jefferson counties.

The two racetracks already offered to their patrons what are called electronic games of skill in addition to greyhound racing at West Memphis and thoroughbred racing at Hot Springs. Electronic games of skill can be defined as those that involve making choices as opposed to say, simply pulling the lever on a slot machine. For example, video poker where the player must use his skill to decide which cards to keep and which to discard is considered an electronic game of skill.

I agree that poker, electronic or manual, is indeed a game of skill — just sitting around the table with some buddies playing a few friendly hands requires at least a rudimentary degree of skill in deciding which cards to keep and which ones to toss if one wants to stay in the game for very long. I’ve spent more time spectating than participating in those friendly games, proving time after time my late mother-in-law’s adage that “scared money never wins.”

The games of skill law came about in 2005, following by several years the casino boom in Tunica County, Miss., that began in 1992. Just a few dozen miles from West Memphis, Tunica landing, located in one of the poorest places in the United States, was traditionally a hot spot for crappie fishing when the Mississippi River gauge read about 15 feet at Memphis.
If memory serves, the development of Tunica’s riverside gaming industry started with a single casino — more correctly a dockside barge. Tunica County soon became a mecca not for crappie fishermen but for craps shooters and other gamblers, ranking third after Las Vegas and Atlantic City.

A recent article in the Los Angeles Times however, indicates that Tunica’s gambling boom has turned bust in terms of shrinking employment and tax revenue. The LA Times attributes that reversal of fortunes in Tunica largely to a proliferation of casinos in major cities from Chicago to New Orleans, causing a glut in the casino market.

Both Oaklawn and Southland say they are planning significant expansions — a $100 million project at Oaklawn and a $250 million expansion at Southland, both of which would include hotels.

Perhaps we won’t see a glut in the casino market in Arkansas like that from which Tunica County is said to be suffering. One would think that the folks who are in the casino business wouldn’t just risk hundreds of millions of dollars on a roll of the dice, but instead, must be convinced that they can operate profitably in Arkansas.

At their March meeting, members of the Racing Commission approved a license application form for prospective casino operators and decided to begin taking applications May 1 for licenses to put casinos in Jefferson and Pope counties.

At Pine Bluff, the Quapaw Tribe of Oklahoma proposes to build the $240 million Saracen Casino Resort, across the road from The Pines Mall. The proposed project has the endorsement of current elected officials. The tribe said it plans to break ground as soon as the commission approves its application, and open the facility on Valentine’s Day 2020.

In Pope County, however, the casino game seems a bit more complicated. Pope County residents in November voted against the casino amendment and approved an ordinance requiring that any local official endorsements would require the backing of the voters.

Before they left office in December, officials from the city of Russellville and Pope County sent in letters of support for the casino, without voter approval. The Racing Commission said in February that it will accept letters of support only from current officeholders.

However, published reports say the four-page application form approved by the Racing Commission doesn’t say endorsement letters must come from current officials but commission rules do have that requirement.

Gulfside Casino Partnership, which operates a casino in Gulfport, Miss., has proposed a three-phase, $250 million casino and resort in Pope County. If the commission decides to reject Gulfside’s application because endorsements came from previous officeholders, or awards a license to another applicant, it seems a pretty safe bet that Gulfside will sue the commission.

However, if the commission decides to accept Gulfside’s application and gives the company permission to build its proposed casino, it seems equally likely that a resident of Pope County who voted against Amendment 100 would sue the commission. Perhaps a citizen from outside Pope County who is opposed to the idea of casinos existing anywhere in Arkansas might attempt a legal challenge also, based on a lack of endorsement from current Pope County officials.

One more little wrinkle: As part of his $95 million highway funding package that the Arkansas Legislature passed, Gov. Asa Hutchinson counts on a significant amount of casino tax revenue. If the Racing Commission doesn’t permit anyone to build a casino in Pope County, would someone sue over lost revenue?

The smart money may be on the lawyers.

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Editor’s note: Paul Holmes is editor-at-large for the Northeast Arkansas Talk Business & Politics. He can be reached at paulh@talkbusiness.net. The opinions expressed are those of the author.

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