Legal mobile sports betting cleared another legislative hurdle in Arkansas on Thursday morning, as the joint budget committee’s administrative rule review subcommittee approved proposed wagering rules. The move wasn’t without debate, however, as a lengthy Wednesday discussion about a revenue-sharing provision spilled over into Thursday before the subcommittee approved the rule.
It’s expected that the full joint budget committee is expected to review the rule in the near future, perhaps even next week at its Tuesday meeting. If the joint budget committee approves the rule, it would mean mobile sports wagering could launch in Arkansas before March Madness, where the University of Arkansas Razorbacks are expected to compete for the national title.
A legislative subcommittee in Arkansas approves proposed mobile sports betting rules, which include a 51% revenue-sharing model between casinos and third-party operators. The move clears a potential path for an early March launch.
— Bennett Conlin (@BennettConlin) February 17, 2022
51% revenue share remains
Arkansas’ mobile sports betting laws require third-party operators to partner with one of the state’s three brick-and-mortar casinos. While some other states include tethering in their sports wagering laws, Arkansas’ revenue-sharing model is unusual.
In the partnership, the retail casino is required to receive 51% of the revenue from a mobile sports betting partnership with a third-party operator. National sportsbooks like BetMGM, DraftKings, and FanDuel were strongly opposed to this provision during the rule-making process.
“In addition to the unprecedented nature of the proposed regulation, imposing such an artificial cap on vendors’ revenue share, in this case not more than 50%, is not based on any market considerations and would only serve to impede competition,” BetMGM wrote in a letter to the Arkansas Racing Commission before it unanimously passed the rule. “In short, the cap would make it impossible for sports betting platform providers to enter the Arkansas market and serve the state’s residents.”
With the rule being approved, it’s likely that national operators like BetMGM, DraftKings, and FanDuel will opt to stay out of the Arkansas market for the time being. For Arkansas bettors, that means they might be using apps and platforms that differ from the majority of the country.
It’s important to note that discussion during the rule review subcommittee meetings on Wednesday and Thursday was about whether or not the revenue-sharing rule violated federal or state law. The subcommittee’s job was not to evaluate the rule’s merit as public policy, something that some of the subcommittee members still questioned, but rather the potential legal repercussions of approving the rule.
John Burris, a partner at Capitol Advisors Group, spoke to the subcommittee Wednesday on behalf of several national operators. Burris argued that the rule violated the dormant commerce clause, excessively burdening interstate commerce by essentially prohibiting out-of-state operators from entering the market.
Thursday morning, Brian Bowen spoke to the subcommittee about the rule. Bowen serves as the chief of staff for Arkansas’ attorney general, and while his comments were a bit reserved, he shared that he believed there was an argument to be made that the rule did not violate the dormant commerce clause.
That turned out to be enough information for several subcommittee members, who approved the rule shortly after Bowen’s comments.
Who could launch in March?
Carlton Saffa, chief marketing officer at Saracen Casino Resort in Pine Bluff, has said for weeks that the Bet Saracen app is prepared to launch at any time. Once Saracen Casino receives the go-ahead from legislative bodies, it will be ready to launch its mobile sports betting platform.
As far as timing, once the joint budget committee approves the mobile sports betting rules, there’s a 10-day period before mobile sports betting platforms can launch. If the joint budget committee approves the rules Tuesday, that sets up a potential launch in the first few days of March.
Mood ⬇️🤞 pic.twitter.com/jjq9EXLYb5
— Bet Saracen (@BetSaracen) February 17, 2022
Oaklawn Racing Casino Resort isn’t expecting its mobile sports wagering platform to launch until the third quarter of 2022. Meanwhile, the timeline for Southland Casino’s mobile sports betting launch is unclear, although it seems likely that all three retail casinos will launch mobile offerings in 2022. A Southland representative told Sports Handle this week that it will make an official announcement regarding its mobile betting platform “at the appropriate time.”
Given the timing of the expected mobile launches, Bet Saracen has a chance to quickly gain market share and customer loyalty within the state, as it will likely be the first mobile sports betting app available in Arkansas.