A proposed constitutional amendment to authorize up to three casinos in southwestern and Northwest Arkansas -- and controlled by two Missouri businessmen's companies -- will be on the Nov. 8 ballot, the secretary of state's office said Thursday.
Republican Secretary of State Mark Martin certified the proposed amendment for the general election ballot after he determined that its supporters turned in 100,977 valid signatures of registered voters in Arkansas, said the office's director of elections, Leslie Bellamy. A proposed amendment requires 84,859 valid signatures to qualify for the 2016 ballot.
The proposed amendment will be Issue 5 on the ballot, Bellamy wrote in a letter to attorney Cal McCastlain of Dover, Dixon, Horne PLLC, which represents Arkansas Wins in 2016 and the Arkansas Winning Initiative Inc., the groups that are promoting the amendment.
The proposed amendment would authorize one casino each in Boone, Miller and Washington counties.
"We're grateful to the 100,977 registered Arkansas voters that joined with our campaign to get this pro-growth, pro-jobs issue on the ballot this November," Robert Coon, a spokesman for the amendment groups, said in a written statement. "This amendment will create thousands of good paying jobs, generate tens of millions of dollars in new tax revenue, increase tourism, and stimulate our state and local economies."
"We are opposing this amendment because it is a bad deal for Arkansas," Chuck Lange, chairman of Protect Arkansas' Values -- Stop Casinos Now and former president of the Arkansas Sheriffs' Association, said in a written statement. "No state has ever allowed something this outrageous."
Republican Gov. Asa Hutchinson said he opposes the proposed amendment because he has opposed similar proposals in the past.
"I don't think that is what we need to expand tourism in the Natural State," he told reporters. "I think we have some great venues for electronic games of skill in Arkansas now, horse racing. That's our tradition. That's our history.
"Even if you were going to have casino gambling in Arkansas, this is not the means to accomplish it, whereby you have a ballot initiative that designates ... three locations, that gives basically a monopoly to an out-of-state company to designate who is going have those operations," Hutchinson said.
The casinos would be operated in Boone County by Arkansas Gaming and Resorts LLC, in Miller County by Miller County Gaming LLC, and in Washington County by Washington County Gaming LLC, their respective successors or whomever they assign their licenses to, under the proposed amendment.
The owners of the three limited liability companies -- which currently exist-- are Jim Thompson of Blue Eye, Mo., and Bob Womack of Branson, according to Coon.
Cherokee Nation Entertainment -- the Cherokee Nation's wholly owned corporate entity that manages the tribe's gambling, hospitality, entertainment and retail ventures -- will be involved in the proposed casino, hotel and entertainment complex in Washington County if voters approve the amendment.
Asked why voters should approve an amendment creating a monopoly for these three casinos rather than seeking bids for each casino license to raise money for the state, Coon said, "Our amendment, Issue 5, is the only option currently available to voters that would authorize casinos to operate in Arkansas.
"If voters want to see casino gaming in Arkansas, and want jobs, tourism and tax revenues to return to Arkansas from our surrounding states, then, they should vote for Issue 5. Our amendment would bring competition to an already restrictive gaming industry, giving Arkansans more gaming and entertainment choices," he said.
The proposed amendment would define casino gambling as including any game, device or type of wagering permitted at a casino operated within Louisiana, Mississippi, Missouri, Nevada, Oklahoma, Tennessee or Texas as of Nov. 8 or "as subsequently permitted hereafter."
While state law doesn't allow for stand-alone casinos, it permits electronic "games of skill" at two racetracks, Oaklawn Racing and Gaming in Hot Springs and Southland Park Gaming and Racing in West Memphis. Gambling at those facilities is subject to regulation by the Arkansas Racing Commission.
Jerry Cox, president of the Arkansas Family Council Action Committee, said at this point that the council isn't planning any legal challenge or to be part of a legal challenge to knock the amendment off the ballot or stop votes from being counted.
He said he wouldn't be surprised if the existing gambling operations in Arkansas pursue a legal challenge. Oaklawn General Manager Eric Jackson and Southland General Manager Troy Keep could not be reached Thursday for comment by telephone.
The state also runs a lottery. Amendment 87 to the Arkansas Constitution -- enacted by voters in 2008 -- authorized the Legislature to create a lottery to raise net proceeds for college scholarships. The lottery started selling tickets on Sept. 28, 2009, and has helped fund more than 30,000 Arkansas Academic Challenge Scholarships each of the past six fiscal years. Its revenue and net proceeds for college scholarships rebounded to $85.9 million last fiscal year, after dipping each of the previous three fiscal years.
Hutchinson said he hasn't analyzed the potential impact of the proposed amendment on the Arkansas Scholarship Lottery.
"There is clearly a maximum point that a state can saturate itself in gaming activities, whether it is lottery or whether it is casinos or otherwise, so there is a tipping point," Hutchinson said. "There [are] only so many dollars that go around."
Each casino authorized by the amendment would pay an annual net gaming receipts tax of 18 percent to the state, according to Coon. Net receipts include gross receipts for a 12-month period from gaming, minus amounts paid out or reserved as winnings to patrons.
Each casino also would pay an annual net gaming receipts tax of 0.5 percent to the county in which the casino is located and of 1.5 percent to the city or town in which the casino is located.
Coon said it's difficult to project total revenue for the three casinos, "but we are in the process of determining an economic impact.
"State gaming taxes paid by Oaklawn and Southland have averaged around $40 million per year at an 18 percent rate," he said in a written statement. "We believe the tax revenue generated by these new facilities would be comparable, if not more. The tax rates included in our amendment are the same tax rates that existing gaming facilities pay to the state and their respective cities and counties."
The state collected $58.3 million in general revenue taxes from electronic games of skill and horse and dog racing at Oaklawn and Southland in fiscal 2016, which ended June 30. Those collections are up from $42.4 million in fiscal 2014 and $49.9 million in fiscal 2015 , according to the Department of Finance and Administration's records.
The records show that of the fiscal 2016 total, $34.9 million came from electronic games of skill at Southland; $20.8 million from electronic games at Oaklawn; about $1.6 million from horse racing at Oaklawn; and about $850,000 from dog racing at Southland.
Cox said voter approval of this proposed amendment is unlikely after Arkansans understand that the amendment writes out-of-state businessmen into the Arkansas Constitution, doesn't allow for the General Assembly to control the casinos and clears the way for any future casino gambling authorized in Nevada to also come to Arkansas.
"They are going to say, 'Whoa, that's enough. We aren't going to support this,' " he said.
But Coon said, "We believe that when voters consider Issue 5, they will see the value that it brings to the state of Arkansas and local communities in terms of job creation, tourism, and increased tax revenue.
"The idea that the casinos won't be properly regulated is not only a scare tactic, it is completely false," he said. "The amendment clearly establishes a new regulatory body appointed by the governor, the Arkansas Gaming Commission, that will have the authority to adopt regulations to regulate casinos and casino gaming in accord with laws enacted by the General Assembly. This oversight structure will provide ongoing accountability and protection for the public should the amendment pass."
A Section on 09/02/2016
Print Headline: Proposal for three state casinos makes ballot