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State of the Union: US Sports Betting Update – Up Up and Arkansas

Arkansas will become one of the next states to legalise sports wagering after the state’s voters agreed to a constitutional amendment that will permit it. A decisive 453,275 Arkansas residents voted in favour of invoking Issue 4 of the amendment, which allows four casinos in the Natural State to offer sports betting to their patrons. Three operators – Quapaw Tribe, Cherokee Nation and Delaware North – have spent a combined $9 million lobbying the state’s legislators to approve sports wagering. Their dream is now on the brink of becoming a reality after they won the backing of more than 54% of voters in Arkansas.

Arkansas State Flag

The decision requires the state to roll out a regulated sports betting industry by June 2019 and it could become a lucrative market for operators. There are more than 3 million people living in Arkansas, making it the 32nd most populous state in the US, and it has a similar GDP per capita to West Virginia, which is already up and running with legal sportsbooks. The state plans to tax sportsbook revenue at a rate of 13% on the first $150 million and 20% thereafter. That is slightly high compared to some states, but it pales in comparison to the rates of 36% being charged by Pennsylvania.

Politicians Have Their Say

Governor Asa Hutchison is less than thrilled about the news, but there is little he can do to prevent sports betting from being introduced. “I did not support this initiative, and I continue to have great concern over the immediate and negative impact on the state’s budget,” he said. “But the people have spoken, and I respect their will. Time will tell as to what this means for our state, and it remains to be seen as to whether the communities affected will consent to the gambling initiative.”

His comments are interesting, as most state governors have welcomed the advent of sports wagering and the financial boost it will give them. Yet Hutchison thinks it will have a negative impact on Arkansas’ finances. However, Alex Gray, counsel for the Driving Arkansas Forward committee, which lobbied passionately for sports wagering to be introduced in the state, argued that voters approved the constitutional amendment because they wanted to keep tax dollars in the state and to create jobs and foster economic development. Neighbouring Mississippi is already running a regulated sports betting industry and the sports bettors in Arkansas currently have to go across the border if they want to wager on football, basketball and so on in a safe, regulated environment.

Little Rock

Gray added that one operator, Southland, now plans to make a $200 million investment in a new sports betting facility as a result of the ballot measure. The operator is based on the border of Tennessee and it could soon offer sports wagering to 1.3 million people living in the Memphis metropolitan area. Another operator, Oaklawn, is based in Hot Springs and two casinos in the vicinity of Little Rock can now also apply for a license to offer sports betting.

Introducing HB0001

News of a sportsbook opening up on the edge of Tennessee has seemingly spurred the Volunteer State into action. Knox County-area Rep. Rick Staples has introduced bill HB0001, which seeks to authorise sports betting in Tennessee and impose a 10% tax on revenue. It hopes to devote 40% of the tax it raises to bolstering general public funds, 30% to local colleges and the remaining 30% to education and infrastructure at a local level. That 10% tax seems realistic, and it would keep the state in line with the likes of Mississippi, New Jersey and Delaware, rather than taking the hard-line approach of Pennsylvania.

HB001 seeks to permit sports wagering in bricks and mortar sportsbooks and allow state residents to wager on mobile devices on the go and from the comfort of their own homes. A group of state legislators will now debate the 6,000-word bill and decide whether or not to endorse it. However, it is likely to face several hurdles due to the conservative nature of the state’s government. Staples is a Democrat, but the Republicans control the Senate in Tennessee. Governor Bill Lee has a similar stance on sports betting to that of Hutchison in Arkansas: he spoke out against gambling while on the campaign trail this year, and he is likely to oppose it vehemently. However, the bill has attracted bipartisan support and the economic argument may outweigh conservative prejudices if Tennessee residents keep heading into Arkansas and Mississippi to bet, boosting neighbouring economies to the detriment of their own.

Kentucky Keen

Further north, plans are afoot to introduce sports wagering in Kentucky, and anyone seeking to prevent it becoming a nationwide phenomenon looks to be fighting a losing battle. Delaware, New Jersey, Mississippi, West Virginia and New Mexico have already joined Nevada in offering sports betting. Pennsylvania will roll out regulated sportsbooks soon and Rhode Island will launch sports wagering this month at Twin River Casino in Lincoln. Huge states like New York and Illinois seem certain to follow in their footsteps in 2019, while Connecticut, Kentucky, Michigan, Indiana, Massachusetts, Maryland, Missouri, Kansas, Iowa, Louisiana, Oklahoma, South Carolina, California, Oregon, Montana, Ohio, the District of Colombia and of course Arkansas all have bills on the table, so they are moving towards legislation.

Kentucky

When a neighbouring state starts running regulated sportsbooks, it becomes all but impossible to ignore it and many legislators are tempted by the prospect of raising extra money through taxes, which can be reinvested in public services. Deeply conservative states like Utah might well hold out, but it seems as though sports betting will be rolled out across the vast majority of the country over the next year or two. It will create thousands of jobs, the sports leagues will enjoy a tremendous revenue boost and the industry is tipped to contribute $22.4 billion to the country’s GDP. As a comparison, that is greater than the entire GDP of Iceland. Sports data can be monetised, TV advertising will shoot up and indirect labour income will rise by $7 billion; sports betting now stands out as one of the most exciting economies in the US and the sky is the limit.


Author: Kristian

Kristian heads up the content and SEO team at Digital Fuel having worked in digital marketing for ten years. He’s as passionate about creative content as he is about Brighton & Hove Albion FC and when he’s not following football he’s writing about Brighton’s bustling pub scene

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