Southland Gaming and Racing supports a proposed constitutional amendment that would authorize the state to issue casino licenses to Southland Racing Corp. in West Memphis and Oaklawn Jockey Club and an applicant apiece in Jefferson and Pope counties, a spokesman said Friday.
Southland and Oaklawn are allowed to operate electronic games of skill under existing state law, so the proposed amendment, called Issue 4, would allow them to expand their gambling operations, including allowing sports betting. Issue 4 is on the Nov. 6 general election ballot.
Glen White, corporate communications director for Buffalo, N.Y.-based Delaware North, parent company of Southland, said, “We recently made an initial investment [of $50,000] to assist the It’s Our Turn Committee,” a supporter of Issue 4.
White said the results of a recent study conducted by the University of Arkansas at Little Rock’s Arkansas Economic Development Institute “have prompted us to begin discussions on ways to further support the effort.” The study was commissioned by the Driving Arkansas Forward committee that is promoting the proposed ballot measure.
He said that Southland Gaming and Racing “is very pleased to see that the Arkansas Economic Development Institute’s study shows that the proposed expansion of casino gaming will be a major boost to the state’s economy,” and that “expanding our gaming offerings will allow us to create more good jobs to benefit our state economy, especially in West Memphis and Crittenden County.”
But Oaklawn in Hot Springs continues to have no position on Issue 4, said Oaklawn spokesman Jennifer Hoyt. Last month, opponents of Issue 4 filed two lawsuits in which they’ve asked the state Supreme Court to strike the proposal from the ballot and order the secretary of state not to certify the votes cast on it.
Issue 4 would allow the Arkansas Racing Commission to issue casino licenses to: an applicant in Jefferson County within 2 miles of Pine Bluff; an applicant in Pope County within 2 miles of Russellville; a franchise holder, which is now Southland Racing Corp., at or adjacent to Southland Gaming and Racing; and a franchise holder in Garland County, which is now Oaklawn Jockey Club, at or adjacent to Oaklawn Racing and Gaming.
Under the proposal, a licensee in Jefferson or Pope counties would be required to pay an application fee, demonstrate experience in casino gambling and submit a letter of support from the county judge or a resolution from a quorum court. If the proposed casino would be placed in a city, the licensee also would need a letter of support from that city’s mayor.
The Arkansas Economic Development Institute projected that if the voters approve the ballot proposal and “the construction upgrades and attendance meet expectations,” the economic impact on the state “could result” in 6,000 more jobs, including 3,000 for the amusement, gambling and recreational industries, and a $5.8 billion increase in gross domestic product over 10 years. The institute also projected $39 million a year more in state and local government revenue.
“What this study represents is a thorough investigation of the likely impact of Issue 4 on the state’s economy,” Michael Pakko, the institute’s chief economist, said in a news release issued through the Driving Arkansas Forward committee.
“We applied a dynamic regional economic model to projections of casino revenues, growth and construction activity to investigate both the direct and indirect effects of expanding the gaming sector in Arkansas. Not surprisingly, when you have an economic activity that is prohibited within the state but is available in nearby states, bringing that activity home has the effect of raising total income, spending and employment within Arkansas,” Pakko said.
The institute contracted with the Driving Arkansas Forward committee to carry out the economic-impact study at a cost of $12,500, said Judy Williams, a spokesman for the University of Arkansas at Little Rock.
Luke McCoy, a spokesman for the Family Council Action Committee that opposes Issue 4, said, “It should be no shock that a study commissioned by a pro-gambling group would propose economic benefits from casino gambling.
“It would be like some tobacco company commissioning a medical journal to highlight the benefits of smoking,” he said.
“Even if casinos did create jobs, it simply wouldn’t justify the harm gambling does to families” and perils, including bankruptcy, divorce domestic violence and suicide, McCoy said.
The institute’s report provides graphic representations of the projected changes in total employment as well as in gross domestic product, and state and local government revenue under two scenarios. Figures for each year of the institute’s projections regarding revenue weren’t available through Pakko late Friday afternoon.
In mid-August, the state Department of Finance and Administration projected that state government would receive $36 million less in tax revenue in each of the next two fiscal years if voters approved Issue 4. In the third fiscal year after approval, revenue would be $14 million less, according to the finance department. The department attributed the projected revenue to two factors: Oaklawn and Southland would be taxed at a lower rate and it assumed that the new casinos around Pine Bluff and Russellville wouldn’t open until fiscal 2022.
At that time, Alex Gray, an attorney for Arkansas Driving Forward committee, said the state’s projections are flawed because they don’t factor in growth of Oaklawn and Southland as full-fledged casinos and wrongly assume that it would take two years rather than one year to open the other casinos.
So far, the Cherokee Nation and Quapaw tribe have largely financed the Driving Arkansas Forward committee with $2.45 million in contributions through the end of August, based on its reports on file with the Arkansas Ethics Commission. The Quapaw tribe has expressed interest in applying for a casino license in Jefferson County, while the Cherokee Nation has indicated its interest in a casino in Pope County.
In a recent interview, Democratic gubernatorial candidate Jared Henderson cited the Department of Finance and Administration’s projections for declaring his opposition to Issue 4.
“Generally, my position on ideas like this is I accept what local folks want,” Henderson said.
“That being said, I am against this amendment because I have studied it more and from what I understand … I think this would actually cost the state $36 million each of the next two years and up to $14 [million] or $15 million the third year,” Henderson said, referring to the finance department projections. “I just don’t see how we can afford that and then in … years four and five and beyond the revenues are still uncertain and so I for that reason alone I don’t think this makes sense for the state.”
Last month, Republican Gov. Asa Hutchinson and Libertarian gubernatorial candidate Mark West signaled their opposition to Issue 4.