Why did the Arkansas AG reject the very first March 2018 draft of the four-county casino constitutional amendment?
Apply this to your situation
This page answers the general question as of 2018. Ezel answers yours: what it means for your facts, under current Arkansas law, with citations.
Plain-English summary
Alex T. Gray submitted the very first draft (March 29, 2018) of an Arkansas constitutional amendment to authorize four casinos in Crittenden, Garland, Pope, and Jefferson counties, with two of the licenses going automatically to the Southland (greyhound) and Oaklawn (horse racing) franchise holders. AG Leslie Rutledge rejected it for ambiguities in the text of the measure. The same problems would resurface in revised drafts (Op. 2018-035 in April, Op. 2018-052 in May), each time with the AG flagging the unclear interaction between racing operations and casino license retention.
A revised version of this measure (sponsored by the same coalition) eventually qualified for the November 2018 Arkansas ballot as Issue 4 and became Amendment 100 to the Arkansas Constitution after voter approval.
Currency note
This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
A successor version of this amendment was approved by Arkansas voters in November 2018 and is now Amendment 100 to the Arkansas Constitution.
Common questions
How many drafts did the casino amendment go through before voters saw it?
At least four AG reviews (Ops. 2018-029, 2018-032 (companion Bynum draft), 2018-035, and 2018-052) and earlier informal rounds. Each rejection forced the sponsors to revise. The version that became Amendment 100 was substantially cleaner than this first draft.
Why does the AG keep flagging the same issues?
Because the underlying drafting choices kept the same ambiguities. The franchise-holder structure (giving Southland and Oaklawn licenses automatically while requiring them to keep racing) is a complicated arrangement, and the sponsors needed several rounds to get the language right enough that voters could understand it from the ballot title alone.
Did the policy ultimately succeed?
Yes. After multiple rounds of AG rejections and redrafting, the version that reached voters in November 2018 was approved as Issue 4 and became Amendment 100 to the Arkansas Constitution. Casinos at the four locations followed (Crittenden, Garland, and Jefferson opened relatively quickly; Pope County went through extended litigation before its casino opened).
Is there a substantive difference between this draft and the May 2018 version (Op. 2018-052)?
The structure was the same (four counties, two franchise holders, two open licenses) but the specific drafting evolved. Each AG rejection identified different ambiguities. The May 9 version added some provisions (like the explicit "permitted to conduct gaming but not required to" language) that the AG still found insufficient. The eventual ballot version dropped or clarified the most problematic provisions.
What does "rejected for ambiguities in the text" actually mean?
It means the AG could not draft a fair ballot title because the underlying measure's meaning was unclear. Under Ark. Code Ann. § 7-9-107, when the measure itself is ambiguous, no honest title can summarize it, and the AG cannot lawfully substitute a clearer title.
Background and statutory framework
The legal framework is the same that runs through the entire 2018 casino-amendment cluster:
- Ark. Code Ann. § 7-9-107: AG's certification authority.
- Becker v. Riviere: ballot title must give voters a fair understanding.
- Bailey v. McCuen: essential facts cannot be omitted.
- Roberts v. Priest: ambiguities in the measure prevent any honest title.
Citations
- Ark. Code Ann. § 7-9-107 (Supp. 2017)
- Becker v. Riviere, 270 Ark. 219, 604 S.W.2d 555 (1980)
- Bailey v. McCuen, 318 Ark. 277, 884 S.W.2d 938 (1994)
- Roberts v. Priest, 341 Ark. 813, 20 S.W.3d 376 (2000)
- Op. Att'y Gen. 2018-035 (subsequent rejection of this proposal in April)
- Op. Att'y Gen. 2018-052 (subsequent rejection in May)
Source
Original opinion text
STATE OF ARKANSAS
ATTORN EY GENERAL
LES LI E RUTLEDGE
Opinion No. 2018-029
March 29, 2018
Alex T. Gray, Esq.
Steel, Wright, Gray & Hutchinson, PLLC
400 West Capitol Avenue, Suite 2910
Little Rock, AR 72201
Dear Mr. Gray:
I am writing in response to your request for certification, pursuant to Ark. Code
Ann. § 7-9-107 (Supp. 2017), of the popular name and ballot title for a proposed
initiated measure.
At the outset, I wish to make clear to you that the decision to certify or reject
a popular name and ballot title is in no way a reflection of my view of the
merits of a particular proposal. I am not authorized to, and do not, consider
the merits of the measure when making a decision to certify or reject.
Section 7-9-107 authorizes my office to 1) certify the popular name and ballot title
of a proposed measure, 2) substitute and certify the popular name and ballot title,
if practicable, or 3) reject the entire submission if "the ballot title, or the nature of
the issue, is presented in such manner that the ballot title would be misleading" to
voters.1 The purpose of my review under section 7-9-107 is to ensure that the
popular name and ballot title honestly, intelligibly, and fairly set forth the purpose
of the proposed amendment or act.2 In this way, voters will have a fair
understanding of the issues presented by referenced to the ballot title alone. 3
1 Ark. Code Ann.§ 7-9-107(c) (Supp. 2017).
2 See Arkansas Women's Political Caucus v. Riviere, 283 Ark. 463, 466, 677 S.W.2d 846, 848
(1948).
3 Becker v. Riviere, 270 Ark. 219, 226, 604 S.W.2d 555, 558 (1980) (internal citations omitted).
323 CENTER STREET. SU ITE 200 · LITTLE ROCK, ARKANSAS 7220 1
TELE PH ONE (501) 682-2007 · FAX (501) 682-8084
ARKANSASAG.GOV Alex T. Gray, Esq.
Opinion No. 2018-029
Page 2
Section 7-9-107 neither requires nor authorizes this office to make legal
determinations concerning the merits of the proposed act or amendment, or
concerning the likelihood that it will accomplish its stated objective. In addition,
consistent with Arkansas Supreme Court precedent, unless the measure is "clearly
contrary to law,"4 this office will not require that a measure's proponents
acknowledge in the ballot title any possible constitutional infirmities.5
Consequently, this review has been limited primarily to a determination, pursuant
to the guidelines that have been set forth by the Arkansas Supreme Court,
discussed below, of whether the popular name and ballot title you have submitted
accurately and impartially summarize the provisions of your proposal.
REQUEST
You have requested certification, pursuant to Ark. Code Ann. § 7-9-107, of
the following popular name and ballot title for a proposed constitutional
amendment:
Popular Name
An Amendment to Authorize Four Casinos, One Each in Crittenden
(to Southland Racing Corporation), Garland (to Oaklawn Jockey Club, Inc.),
Pope, and Jefferson Counties
Ballot Title
An amendment to the Arkansas Constitution authorizing four
casinos in Arkansas, being subject to laws enacted by the General
Assembly in accord with this amendment and regulations
promulgated by the Office of Casino Gaming or the Arkansas
Racing Commission, as the case may be; creating the Office of
Casino Gaming within the Department of Finance and
Administration; defining "casino gaming" as dealing, operating,
carrying on, conducting, maintaining, or exposing for play any game
4 See Kurrus v. Priest, 342 Ark. 434, 445, 29 S.W.3d 669, 675 (2000); Donovan v. Priest, 326
Ark. 353, 359, 931S.W.2d119, 121 (1996); Plugge v. McCuen, 310 Ark. 654, 841S.W.2d139
(1992).
5 As part of my review, however, I may address constitutional concerns for consideration by the
measure's proponents. Alex T. Gray, Esq.
Opinion No. 2018-029
Page 3
played with cards, dice, equipment, or any mechanical,
electromechanical, or electronic device or machine for money,
property, checks, credit, or any representative value, as well as
accepting wagers on sporting events if and when no longer
prohibited by federal law; providing that individuals under 21 are
prohibited from engaging in casino gaming; providing that the
Office of Casino Gaming shall award four casino licenses, one to
Southland Racing Corporation ("Southland") for a casino to be
located at or adjacent to Southland's greyhound track and gaming
facility in Crittenden County, one to Oaklawn Jockey Club, Inc.
("Oaklawn") for a casino to be located at or adjacent to Oaklawn's
horse track and gaming facility in Garland County, one to an
applicant for a casino to be located in Pope County within two miles
of Russellville, and one to an applicant for a casino to be located in
Jefferson County within two miles of Pine Bluff; providing that the
Office of Casino Gaming shall require all applicants for casino
licenses pay an application fee, demonstrate operational experience
in providing casino gaming, provide either a letter of support from
the county judge or a Resolution from the county quorum court in
the county where the casino would be located and, if the proposed
casino is to be located within a city, a letter of support from the
mayor of that city, demonstrate a minimum investment of at least
$100,000,000 for the development of each casino facility with credit
given for the market value of existing real estate, facilities,
equipment, and other improvements, and provide general
information relating to the applicant's name, location, and
ownership; providing that Southland and Oaklawn are not applicants
and are not required to submit applications for casino licenses in
order to be issued a casino license; providing that the Arkansas
Racing Commission shall regulate Oaklawn and Southland and the
Office of Casino Gaming shall regulate the other casino licensees;
defining "net casino gaming receipts" as gross receipts from casino
gaming less amounts paid out or reserved as winnings to casino
patrons; providing that for each fiscal year, a casino licensee's net
casino gaming receipts are subject to a net casino gaming receipts
tax of 12% on the first $100,000,000 of net casino gaming receipts
or any part thereof, 15% on net casino gaming receipts between
$100,000,001 and $150,000,000 or any part thereof, 17% on net
casino gaming receipts between $150,000,001 and $200,000,000 or
any part thereof, and 22.5% on net casino gaming receipts exceeding Alex T. Gray, Esq.
Opinion No. 2018-029
Page 4
$200,000,001 or any part thereof; subjecting each casino to the same
income, property, sales, use, employment, and other taxation as any
for-profit business located in the county and city or town in which
the casino is located, except that the Arkansas Gross Receipts Act of
1941 and local gross receipts taxes shall not apply to casino gaming
receipts or net casino gaming receipts; providing that the net casino
gaming receipts tax shall be distributed 52.5% to the State Highway
and Transportation Department Fund or its successor fund, 17 .5% to
the Arkansas Racing Commission for deposit into the Arkansas
Racing Commission Purse and Awards Fund to be used only for
purses for live horse racing and greyhound racing by Oaklawn and
Southland, as the case may be, 1.5% to the Arkansas Racing
Commission, 1 % to the Office of Casino Gaming, 8% to the county
in which the casino is located, and 19.5% to the city in which the
casino is located, provided that if the casino is not located within a
city, then the county in which the casino is located shall receive the
19.5%; allowing a casino to operate on any day for any portion or all
of any day; permitting casinos to sell liquor or provide
complimentary servings of liquor during all hours in which the
casino operates for on-premises consumption only and to that extent
not subjecting casinos to Arkansas law prohibiting the sale of liquor
on Christmas Day and requires the residents of a dry county or city
to vote to approve the sale of liquor; providing that licensed casinos
shall purchase liquor from a licensed Arkansas wholesaler and shall
be subject to all other applicable Arkansas laws involving the
distribution and sale of liquor that do not conflict with this
Amendment; permitting shipments of gambling devices that are duly
registered, recorded, and labeled in accordance with federal law into
any county in which casino gaming is authorized; declaring
inapplicable all constitutional provisions, statutes, and common law
of the state to the extent they conflict with this amendment, but not
otherwise amending, repealing, or otherwise affecting Amendment
84 (bingo or raffles) or Amendment 87 (state lottery) to the Arkansas
Constitution, or Arkansas Act 1151 of 2005 (Electronic Games of
Skill); providing that this Amendment does not impliedly repeal
existing Arkansas laws criminalizing gambling for purposes not
specified in this Amendment; permitting the General Assembly by
two-thirds vote to amend certain sections of the amendment relating
to distribution of tax revenue. Alex T. Gray, Esq.
Opinion No. 2018-029
Page 5
GUIDELINES
Popular Name
The popular name is primarily a useful legislative device. 6 It need not contain
detailed information or include exceptions that might be required of a ballot title,
but it must not be misleading or give partisan coloring to the merit of the
proposal. 7 The popular name is to be considered together with the ballot title in
determining the ballot title's sufficiency.8
Ballot Title
The ballot title must include an impartial summary of the proposed amendment or
act that will give the voter a fair understanding of the issues presented. 9
According to the Court, a ballot title will not be legally sufficient unless it
"adequately inform[ s ]" the voters of the contents of a proposed amendment or act
so that they can make a "reasoned decision in the voting booth."10 A ballot title's
failure to "honestly and accurately reflect what is contained in the proposed [act
or] Amendment" may lead the Court to conclude that the "omission is
significant." 11 The Court has also disagproved the use of terms that are "technical
and not readily understood by voters." 2 Without a definition of such terms in the
ballot title, the title may be deemed insufficient.13
6 Paffordv. Hall, 217 Ark. 734, 739, 233 S.W.2d 72, 75 (1950).
7 See, e.g., Chaney v. Bryant, 259 Ark. 294, 297, 532 S.W.2d 741, 743 (1976); Moore v. Hall, 229
Ark. 411, 316 S. W .2d 207 ( 1958). For a better understanding of the term "partisan coloring," see
note 18 infra.
8 May v. Daniels, 359 Ark. 100, 105, 194 S.W.3d 771, 776 (2004).
9 Becker v. Riviere, 270 Ark. 219, 226, 604 S.W.2d 555, 558 (1980) (internal citations omitted).
10 Lange v. Martin, 2016 Ark. 337, 500 S.W.3d 154, at n. 2.
11 Id. at 9, 500 S.W.3d at 159.
12 Wilson v. Martin, 2016 Ark. 334, 9, 500 S.W.3d 160, 167.
13 Id., 500 S.W.3d at 167. Alex T. Gray, Esq.
Opinion No. 2018-029
Page 6
Additionally, if information omitted from the ballot title is an "essential fact which
would give the voter serious ground for reflection, it must be disclosed."14 At the
same time, however, a ballot title must be brief and concise; 15 otherwise voters
could run afoul of Ark. Code Ann. § 7-5-309's five-minute limit in voting booths
when other voters are waiting in line.16 The ballot title is not required to be
perfect, nor is it reasonable to expect the title to cover or anticipate every possible
legal argument the proposed measure might evoke.17 The title, however, must be
"free of any misleading tendency whether by amplification, omission, or fallacy,
and it must not be tinged with partisan coloring."1 The ballot title must be honest
and impartial, 19 and it must convey an intelligible idea of the scope and
significance of a proposed change in the law.20
Furthermore, the Court has confirmed that a ballot title cannot be approved if the
text of the proposed measure itself contributes to confusion and disconnect
between the language in the popular name and the ballot title and the language in
the measure.21 The Court concluded that "internal inconsistencies would
inevitably lead to confusion in drafting a popular name and ballot title and to
confusion in the ballot title itself."22 Where the effects of a proposed measure on
current law are unclear or ambiguous, it is impossible for me to perform my
14 Bailey v. McCuen, 318 Ark. 277, 285, 884 S.W.2d 938, 942 (1994).
15 See Ark. Code Ann.§ 7-9-107(b).
16 Bailey, 318 Ark. at 284, 884 S. W.2d at 944.
17 Id. at 293, 884 S.W.2d at 946-47.
18 Id. at 284, 884 S. W.2d at 942. Language "tinged with partisan coloring" has been identified by
the Arkansas Supreme Court as language that "creates a fatally misleading tendency" (Crochet v.
Priest, 326 Ark. 338, 347, 931 S.W.2d 128, 133 (1996)) or that "gives the voter only the
impression that the proponents of the proposed amendment wish to convey of the activity
represented by the words." Christian Civic Action Committee v. McCuen, 318 Ark. 241, 249, 884
S.W.2d 605, 610 (1994).
19 Becker v. McCuen, 303 Ark. 482, 489, 798 S.W.2d 71, 74 (1990).
2° Christian Civic Action Committee, note 18 supra, 318 Ark. at 245, 884 S.W.2d at 607 (internal
quotations omitted).
21 Roberts v. Priest, 341 Ark. 813, 825, 20 S.W.3d 376, 382 (2000).
22 Id. Alex T. Gray, Esq.
Opinion No. 2018-029
Page 7
statutory duty to the satisfaction of the Arkansas Supreme Court without (I)
clarification or removal of the ambiguities in the proposal itself, and (2)
conformance of the popular name and ballot title to the newly worded proposal.
RESPONSE
My statutory duty is to certify, substitute and certify, or reject the entire proposal
as submitted. Your submission has shortcomings that require me to reject the
ballot title as drafted. It is my opinion, based on the above guidelines established
by the Court, that a number of additions or changes to your popular name and
ballot title are necessary in order to more fully and correctly summarize your
proposal. I cannot, however, at this time, fairly or completely summarize the effect
of your proposed measure to the electorate in a popular name or ballot title without
the resolution of some ambiguities in the text of the measure itself. And thus I
cannot determine precisely what changes to the popular name and ballot title are
necessary to fully and correctly summarize your proposal. It is therefore not
appropriate, in my opinion, for me to try to substitute and certify a more suitable
and correct popular name and ballot title pursuant to Ark. Code Ann.§ 7-9-107(b).
DISCUSSION
I highlight below the more concerning aspects of the popular name, ballot title,
and text of your proposal.
- According to subsections 4(a) and (b) of your proposed amendment, the
Office of Casino Gaming will "administer and regulate" casino licensing,
including the issuance of licenses; and it will license casinos. But subsection 4(n)
states that licenses to franchise holders will be issued upon the adoption of rules
by the Arkansas Racing Commission. This suggests that both bodies have some
regulatory authority with respect to the licensing of franchise holders. But their
precise, respective authority is unclear. The uncertainty is compounded by the
directive in section 4 that the Office of Casino "shall administer and enforce the
provisions of this Amendment relating to casino licensees that are not Franchise
holders" and the Arkansas Racing Commission "shall administer and enforce the
provisions of this Amendment relating to casino licensees that are Franchise
holders, including the renewal thereof" (Emphasis added). It is unclear what
"provisions of this Amendment" this refers to. Further confusing matters,
subsection 4( e) states that "the Office of Casino Gaming and the Arkansas Racing
Commission, as the case may be, shall adopt rules necessary to carry out the
purposes of this Amendment .... " Their respective rulemaking authority is unclear, Alex T. Gray, Esq.
Opinion No. 2018-029
Page 8
in my view. This must be clarified for proper inclusion in the ballot title so that
voters will have a clear understanding of the licensing processes, both as to
franchise holders and non-franchise holders. - Related to the foregoing, I believe the proposed ballot title is wholly
deficient in its summary of the measure's provisions regarding the licensing and
regulation of the four casinos. The ballot title states that "the Arkansas Racing
Commission shall regulate Oaklawn and Southland and the Office of Casino
Gaming shall regulate the other casino licensees[.]" This statement may be
misleading, given the above observations regarding Section 4 of the measure. The
location of this statement in the ballot title is also problematic, in my view. The
opening clause of the ballot title states that the four casinos are subject to "laws
enacted by the General Assembly ... and regulations promulgated by the Office of
Casino Gaming or the Arkansas Racing Commission, as the case may be[.]"
(Emphasis added). The phrase "as the case may be" is vague and insufficient to
apprise the voters of each body's respective regulatory authority. And
importantly, it is followed by a summary of other provisions of the measure
concerning the "award" of licenses and application requirements that voters might
reasonably on first impression assume also apply to franchise holders. The
statement that "Southland and Oaklawn are not applicants and are not required to
submit applications" is located further down in the ballot title. In my view, voters
may be misled by both the ballot title's ordering of information regarding the
licensing of the four casinos and the insufficient information regarding the precise
authority of the Office of Casino Gaming and the Arkansas Racing Commission.
Additionally, in my opinion, the statement in the proposed ballot title that
"Southland and Oaklawn are not applicants and are not required to submit
applications" does not sufficiently alert voters to the process for awarding casino
licenses to the franchise holders, or the ways in which that process differs from the
process for "applicants." - Subsection 4(n) of the measure states that franchise holders "shall
continue to conduct horse racing or greyhound racing, as the case may be, from
their facilities for so long as authorized under Arkansas law." This provision, on
its face, appears to compel a franchise holder to conduct racing unless and until
prevented under Arkansas law. It is problematic in several respects. First, it is
unclear how such a provision would be enforced. Additionally, while this may not
be the intent, it impliedly gives franchise holders a license in perpetuity. This
provision is not included in the proposed ballot title. Without clarification, Alex T. Gray, Esq.
Opinion No. 2018-029
Page 9
however, I believe it would need to be included due to its far-reaching
consequences. - Subsection 5(b) of the measure states in part that "[ e ]ach casino licensee
shall be subject to the same ... sales, use, ... and other taxation as any for-profit
business located in the county and city or town in which the casino is located,
except that the Arkansas Gross Receipts Act of 1941 and local gross receipts taxes
shall not apply to casino gaming receipts or net casino gaming receipts." It is
difficult to reconcile the two clauses of this provision, which is basically restated
in the proposed ballot title. Under the first clause, "sales" and "other taxation" will
apply to licensees; but under the second clause, state and local sales taxes cannot
apply to net gaming receipts. This confusing provision could suggest to voters
that the tax authorized under the Arkansas Gross Receipts Act of 1941 is somehow
a different tax than sales taxes as they are commonly understood. - The proposed ballot title says the measure permits the General Assembly
to amend, by two-thirds vote, "certain sections of the amendment relating to
distribution of tax revenue." This is insufficient, in my view, given the
significance of the provisions subject to amendment. The General Assembly
could amend the amount of the net gaming receipts tax distributed to the Highway
and Transportation Fund, and the apportionment of that amount between the
Transportation Fund, the County Aid Fund, and the Municipal Aid Fund. This
amendment authority would likely give a voter serious ground for reflection, and
must therefore be disclosed to comply with the Court's guidelines.
CONCLUSION
The ambiguities noted above are not necessarily all the ambiguities contained in
your proposal, but they (together with the other stated problems) are sufficiently
serious to require me to reject your popular name and ballot title. I am unable to
substitute language in a popular name or ballot title for your measure due to these
ambiguities. Further, additional ambiguities may come to light on review of any
revisions of your proposal. My office, in the certification of ballot titles and
popular names, does not address the merits, philosophy, or ideology of proposed
measures. I have no constitutional role in the shaping or drafting of such measures.
My statutory mandate is embodied only in Ark. Code Ann. § 7-9-107, and my
duty is to the electorate. Alex T. Gray, Esq.
Opinion No. 2018-029
Page 10
Based on what has been submitted, my statutory duty is to reject your proposed
popular name and ballot title for the foregoing reasons and instruct you to redesign
the proposed measure, popular name, and ballot title. 23
Sincerely,
- :==>£a_
~SLIE RUTLE~d~
Attorney General
Enclosure
23 Ark. Code Ann.§ 7-9-107(c). Popular Name
AN AMENDMENT TO AUTHORIZE FOUR CASINOS,
ONE EACH IN CRITTENDEN (TO SOUTHLAND RACING CORPORATION),
GARLAND (TO OAKLA WN JOCKEY CLUB, INC.), POPE, AND JEFFERSON COUNTIES
Ballot Title
An amendment to the Arkansas Constitution authorizing four casinos in Arkansas, being subject
to laws enacted by the General Assembly in accord with this amendment and regulations
promulgated by the Office of Casino Gaming or the Arkansas Racing Commission, as the case
may be; creating the Office of Casino Gaming within the Department of Finance and
Administration; defining "casino gaming" as dealing, operating, carrying on, conducting,
maintaining, or exposing for play any game played with cards, dice, equipment, or any
mechanical, electromechanical, or electronic device or machine for money, property, checks,
credit, or any representative value, as well as accepting wagers on sporting events if and when no
longer prohibited by federal law; providing that individuals under 21 are prohibited from
engaging in casino gaming; providing that the Office of Casino Gaming shall award four casino
licenses, one to Southland Racing Corporation ("Southland") for a casino to be located at or
adjacent to Southland's greyhound track and gaming facility in Crittenden County, one to
Oaldawn Jockey Club, Inc. ("Oaklawn") for a casino to be located at or adjacent to Oaklawn's
horse track and gaming facility in Garland County, one to an applicant for a casino to be located
in Pope County within two miles of Russellville, and one to an applicant for a casino to be
located in Jefferson County within two miles of Pine Bluff; providing that the Office of Casino
Gaming shall require all applicants for casino licenses pay an application fee, demonstrate
operational experience in providing casino gaming, provide either a letter of support from the
county judge or a Resolution from the county quorum court in the county where the casino
would be located and, if the proposed casino is to be located within a city, a letter of support
from the mayor of that city, demonstrate a minimum investment of at least $100,000,000 for the
development of each casino facility with credit given for the market value of existing real estate,
facilities, equipment, and other improvements, and provide general information relating to the
applicant's name, location, and ownership; providing that Southland and Oaklawn are not
applicants and are not required to submit applications for casino licenses in order to be issued a
casino license; providing that the Arkansas Racing Commission shall regulate Oaklawn and
Southland and the Office of Casino Gaming shall regulate the other casino licensees; defining
"net casino gaming receipts" as gross receipts from casino gaming less amounts paid out or
reserved as winnings to casino patrons; providing that for each fiscal year, a casino licensee's net
casino gaming receipts are subject to a net casino gaming receipts tax of 12% on the first
$100,000,000 of net casino gaming receipts or any part thereof, 15% on net casino gaming
receipts between $100,000,001 and $150,000,000 or any part thereof, 17% on net casino gaming
receipts between $150,000,001 and $200,000,000 or any part thereof, and 22.5% on net casino
gaming receipts exceeding $200,000,001 or any part thereof; subjecting each casino to the same
income, property, sales, use, employment, and other taxation as any for-profit business located in
the county and city or town in which the casino is located, except that the Arkansas Gross
Receipts Act of 1941 and local gross receipts taxes shall not apply to casino gaming receipts or
net casino gaming receipts; providing that the net casino gaming receipts tax shall be distributed 52.5% to the State Highway and Transportation Department Fund or its successor fund, 17.5% to
the Arkansas Racing Commission for deposit into the Arkansas Racing Commission Purse and
Awards Fund to be used only for purses for live horse racing and greyhound racing by Oaklawn
and Southland, as the case may be, 1.5% to the Arkansas Racing Commission, 1 % to the Office
of Casino Gaming, 8% to the county in which the casino is located, and 19.5% to the city in
which the casino is located, provided that if the casino is not located within a city, then the
county in which the casino is located shall receive the 19.5%; allowing a casino to operate on
any day for any portion or all of any day; permitting casinos to sell liquor or provide
complimentary servings of liquor during all hours in which the casino operates for on-premises
consumption only and to that extent not subjecting casinos to Arkansas law prohibiting the sale
of liquor on Christmas Day and requires the residents of a dry county or city to vote to approve
the sale of liquor; providing that licensed casinos shall purchase liquor from a licensed Arkansas
wholesaler and shall be subject to all other applicable Arkansas laws involving the distribution
and sale of liquor that do not conflict with this Amendment; permitting shipments of gambling
devices that are duly registered, recorded, and labeled in accordance with federal law into any
county in which casino gaming is authorized; declaring inapplicable all constitutional provisions,
statutes, and common law of the state to the extent they conflict with this amendment, but not
otherwise amending, repealing, or otherwise affecting Amendment 84 (bingo or raffles) or
Amendment 87 (state lottery) to the Arkansas Constitution, or Arkansas Act 1151 of 2005
(Electronic Games of Skill); providing that this Amendment does not impliedly repeal existing
Arkansas laws criminalizing gambling for purposes not specified in this Amendment; permitting
the General Assembly by two-thirds vote to amend certain sections of the amendment relating to
distribution of tax revenue. SECTION 1. The following is added as an amendment to the Arkansas Constitution:
§ 1. Short title.
This Amendment shall be known and cited as "The Arkansas Casino Gaming
Amendment of 2018."
§ 2. Definitions. For purposes of this Amendment, the below terms are defined as
follows:
(a) "Net casino gaming receipts" is defined as gross receipts from casino gaming less
amounts paid out or reserved as winnings to casino patrons.
(b) "Net casino gaming receipts tax" is defined as a tax on net casino gaming receipts.
(c) "Casino" is defined as a facility where casino gaming is conducted as authorized by
this Amendment.
(d) "Casino applicant" is defined as any individual, corporation, partnership, association,
trust, or other entity applying for a license to operate a facility where casino gaming is conducted
as authorized by this Amendment.
(e) "Casino gaming" is defined as dealing, operating, carrying on, conducting,
maintaining, or exposing for play any game played with cards, dice, equipment, or any
mechanical, electromechanical, or electronic device or machine for money, property, checks,
credit, or any representative value. If and when not prohibited by federal law, casino gaming
shall also be defined to include accepting wagers on sporting events.
(f) "Casino gaming receipts" is defined as gross receipts from casino gaming.
(g) "Casino license" is defined as a license issued by the Office of Casino Gaming to
operate a facility where casino gaming is conducted as authorized by this Amendment. (h) "Casino licensee" is defined as any individual, corporation, partnership, association,
trust, or other entity holding a license issued by the Office of Casino Gaming to operate a facility
where casino gaming is conducted as authorized by this Amendment.
(i) "Franchise holder" is defined as any individual, corporation, partnership, association,
trust, or other entity holding a franchise to conduct horse racing under the Arkansas Horse
Racing Law, Ark. Code Ann. § 23-110-101 et seq., or greyhound racing under the Arkansas
Greyhound Racing Law, Ark. Code Ann. § 23-111-101 et seq. as of December 31, 2017.
G) "Intoxicating liquor" is defined as any beverage containing more than one-half of one
percent of alcohol by weight.
(k) "Wholesaler" means any person who holds a permit under any alcoholic beverage
control law of the State of Arkansas to purchase controlled beverages from a manufacturer,
importer, or domestic wine or brandy producer only and to sell such controlled beverages to
retailers only.
§ 3. Authorizing Casinos and Casino Gaming.
(a) Casinos and casino gaming are hereby authorized in the State of Arkansas as
provided in this Amendment.
(b) Only casino licensees may accept wagers on sporting events if and when not
prohibited by federal law. Franchise holders may continue to accept wagers on horse and
greyhound racing as now or hereafter provided under the Arkansas Horse Racing Law, Ark.
Code Ann.§ 23-110-101 et seq., and the Arkansas Greyhound Racing Law, Ark. Code Ann.§
23-111-101 et seq., as the case may be.
(c) There is created within the Management Services Division of the Department of
Finance and Administration the Office of Casino Gaming ("Office of Casino Gaming"). (d) To fulfill the purposes of this Amendment, the Arkansas General Assembly shall
from time to time enact laws, and appropriate monies to or for the use of the Office of Casino
Gaming. Initial laws and appropriations enacted by the General Assembly pursuant hereto shall
be in full force and effect no later than June 30, 2019.
(e) Individuals under the age of21 are prohibited from engaging in casino gaming.
§ 4. Licensing of Casinos and Casino Gaming.
(a) Casinos shall be licensed by the Office of Casino Gaming.
(b) The Office of Casino Gaming shall administer and regulate the licensing of casinos,
including the issuance of a casino license, and shall administer and enforce the provisions of this
Amendment relating to the casino licensees that are not Franchise holders.
( c) The Arkansas Racing Commission shall administer and enforce the provisions of this
Amendment relating to the casino licensees that are Franchise holders, including the renewal
thereof.
(d) Casino gaming under this Amendment shall not be regulated under or be subject to
the provisions of the Local Option Horse Racing and Greyhound Racing Electronic Games of
Skill Act, Ark. Code Ann. § 23-113-101 et seq.
(e) The Office of Casino Gaming and the Arkansas Racing Commission, as the case may
be, shall adopt rules necessary to carry out the purposes of this Amendment; and perform their
duties under this Amendment.
(f) Rules adopted under this section are rules as defined in the Arkansas Administrative
Procedures Act, Ark. Code Ann.§ 25-15-201 et seq. (g) Not later than 120 days after the effective date of this Amendment, the Office of
Casino Gaming and the Arkansas Racing Commission, as the case may be, shall adopt rules
governing:
( 1) The renewal of casino licenses;
(2) The tenn of the casino licenses;
(3) The fonn and content of renewal for casino licenses;
(4) Oversight requirements for casinos and casino gaming;
(5) Recordkeeping requirements for casinos;
(6) Personnel requirements for casinos and casino gaming;
(7) Procedures for suspending or terminating casino licenses held by casino
licensees that violate the provisions of this Amendment or the rules adopted under this
Amendment;
(8) A schedule of penalties and procedures for appealing penalties;
(9) Procedures for inspection and investigations of casinos and casino gaming;
and
(10) Any other matters necessary for the fair, impartial, stringent, and
comprehensive administration of its duties under this Amendment.
(h) Not later than 120 days after the effective date of this Amendment, the Office of
Casino Gaming shall adopt rules governing:
(I) The establishment of a casino license application fee which shall not exceed
$250,000;
(2) The manner in which the Office of Casino Gaming considers applications for
issuance of casino licenses. (i) Not later than June I, 2019, the Office of Casino Gaming shall begin accepting
applications for casino licenses.
(j) The application for casino licenses shall include without limitation the following:
( l) The application fee;
(2) The legal name of the casino;
(3) The physical address of the casino;
(4) The name, address, and date of birth of each officer and owner of the casino
applicant; and
(5) If the city, town, or county in which the casino would be located has enacted
zoning restrictions, a sworn statement certifying that the casino will operate in compliance with
the restrictions;
(k) Prior to the submission of an application for a casino license, the owners,
shareholders, board members, or officers of the casino applicant:
(I) If an individual, shall not have been convicted of a disqualifying felony
offense as defined by the Office of Casino Gaming;
(2) Shall not have previously had a casino license in any state revoked;
(3) If an individual, shall not be under twenty-one years of age; and
(4) If an individual, shall not be a county judge or mayor that provides a letter of
support, or a quorum court member that votes in favor of a letter of support as identified in this
Amendment.
(I) The Office of Casino Gaming shall award four casino licenses.
(m) The Office of Casino Gaming shall award no more than one casino license per
county. (n) The Office of Casino Gaming shall award casino licenses to a Franchise holder
located in Crittenden County, there being only one, for a casino to be located at or adjacent to the
Franchise holder's greyhound racing track and gaming facility as of December 31, 2017 in
Crittenden County and to a Franchise holder located in Garland County, there being only one, for
a casino to be located at or adjacent to the Franchise holder's horse racing track and gaming
facility as of December 31, 2017 in Garland County. The Franchise holders shall continue to
conduct horse racing or greyhound racing, as the case may be, from their facilities for so long as
authorized under Arkansas law. Casino licenses to be issued to Franchise holders shall be issued
upon:
(1) Adoption by the Arkansas Racing Commission of rules necessary to carry out
the purposes of this Amendment; and
(2) Initial laws and appropriations required by this Amendment being in full
force and effect.
(o) The Office of Casino Gaming shall award a casino license to an applicant for a
casino to be located in Pope County within two miles of the city limits of the county seat.
(p) The Office of Casino Gaming shall award a casino license to an applicant for a
casino to be located in Jefferson County within two miles of the city limits of the county seat.
(q) The Office of Casino Gaming shall require all applicants to demonstrate current
operational experience, by the applicant or an affiliate of the applicant, in providing casino
gaming.
(r) The Office of Casino Gaming shall require all applicants to demonstrate a minimum
investment of at least $100,000,000 for the development of each proposed casino facility, with credit given for the market value of existing real estate, facilities, equipment, and other
improvements where the casino will be located.
(s) The Office of Casino Gaming shall require all applications to include either a letter of
support from the county judge or a resolution from the quorum court in the county where the
proposed casino is to be located and, if the proposed casino is to be located within a city or town,
shall also require applications to include a Jetter of support from the mayor in the city or town
where the applicant is proposing the casino to be located.
(t) The Office of Casino Gaming may conduct a criminal background check of the
owners, shareholders, board members, or officers of the casino applicant in order to carry out this
section.
(u) Franchise holders are not applicants and are not required to submit applications for
casino licenses in order to be issued a casino license.
(v) No individual, corporation, partnership, association, trust, or other entity may hold
more than one casino license in Arkansas.
(w) The casino licensee may receive compensation for providing the goods and services
allowed by this Amendment.
(x) The Office of Casino Gaming and the Arkansas Racing Commission, as the case may
be, shall issue a renewal casino license within ten days to any licensed casino that complies with
the requirements contained in this Amendment, including without limitation the payment of the
casino license renewal fee, which shall not exceed $10,000. Casino licenses shall be renewed
every ten years. (y) ( 1) The Office of Casino Gaming shall provide an annual amount of at least $200,000
for compulsive gambling disorder treatment and compulsive gambling disorder educational
programs.
(2) The Office of Casino Gaming shall work together with the Department of Human
Services to implement the compulsive gambling disorder treatment programs and the compulsive
gambling disorder educational programs under this section.
(3) The Office of Casino Gaming may contract with the Department of Human Services
for providing all services related to and administration of the compulsive gambling disorder
treatment programs and the compulsive gambling disorder educational programs.
(4) The Department of Human Services may promulgate rules to administer the
compulsive gambling disorder treatment programs and the compulsive gambling disorder
educational programs.
§ 5. Graduated taxation and distribution of proceeds.
(a) For each fiscal year, a casino licensee's net casino gaming receipts are subject to a
net casino gaming receipts tax as follows:
( 1) 12% on the first $100,000,000 of net casino gaming receipts or any part
thereof;
(2) 15% on net casino gaming receipts between $100,000,001 and $150,000,000
or any part thereof;
(3) 17% on net casino gaming receipts between $150,000,001 and $200,000,000
or any part thereof; and
(4) 22.5% on net casino gaming receipts exceeding $200,000,001 or any part
thereof. (b) Each casino licensee shall be subject to the same income, property, sales, use,
employment, and other taxation as any for-profit business located in the county and city or town
in which the casino is located, except that the Arkansas Gross Receipts Act of 1941 and local
gross receipts taxes shall not apply to casino gaming receipts or net casino gaming receipts.
(c) The net casino gaming receipts tax shall be distributed as follows:
(1) 52.5% to the State Highway and Transportation Department Fund as
identified in Ark. Code Ann. § 19-6-405 or its successor fund and then to be apportioned as set
forth in section (d),
(2) 17.5% to the to the Arkansas Racing Commission for deposit into the
Arkansas Racing Commission Purse and Awards Fund to be used only for purses for live horse
racing and greyhound racing by the Franchise holders, as the case may be, and then to be
apportioned as set forth in section ( e ),
(3) 1.5% to the Arkansas Racing Commission,
( 4) 1 % to the Office of Casino Gaming,
(5) 8% to the county in which the casino is located, and
(6) 19.5% to the city or town in which the casino is located, provided that the
casino is not located within a city or town, then the 19.5% dedicated to the city or town shall go
to the county in which the casino is located.
(d) On the last day of each month, the Treasurer of State shall transfer the 52.5% of
revenues derived by the taxes levied under this Amendment referenced in section (c)(l) to the
State Highway and Transportation Department Fund, the County Aid Fund and the Municipal
Aid Fund in the percentages provided in the Arkansas Highway Revenue Distribution Law, Ark.
Code Ann.§§ 27-70-201 and 27-70-206. ( e) On the last day of each month, the Treasurer shall transfer the 17. 5% of revenues
derived by the taxes levied under this Amendment referenced in section (c)(2) to the Arkansas
Racing Commission to be distributed to the Franchise holders as follows: for the period prior to
January 1, 2024, 60% shall be distributed to the Franchise holder operating a franchise to
conduct horse racing, and 40% shall be distributed to the Franchise holder operating a franchise
to conduct greyhound racing; and for each calendar year thereafter, pro rata to the Franchise
holders based upon the total respective amounts of each Franchise holder's pari-mutuel wagering
handle during each respective immediately preceding calendar year from wagers placed on and
off-track on the Franchise holder's live races (horse or greyhound, as the case may be) conducted
at the Franchise holder's licensed premises.
(f) On the last day of each month, the Treasurer of State shall transfer the other
percentage allocations made in section (c) to the designated entities.
§ 6. Contribution to purses and promotion of Arkansas thoroughbred and
greyhound breeding activities.
(a) For so long as a Franchise holder is operating a franchise to conduct horse racing, an
amount equal to 14% of the net casino gaming receipts shall be set aside by the Franchise holder
in a separate account and used only for purses for live horse racing by the Franchise holder.
(b) For so long as a Franchise holder is operating a franchise to conduct greyhound
racing, an amount equal to 14% of the net casino gaming receipts shall be set aside by the
Franchise holder in a separate account and used only for purses for live greyhound racing and for
capital improvements to the Franchise holder's facility by the Franchise holder. The amount of
net casino gaming receipts set aside in this paragraph shall be apportioned as follows:
(1) 80% for purses for live greyhound racing by the Franchise holder; and (2) 20% for capital improvements to the Franchise holder's facility so long as any
amount so apportioned for capital improvements shall be matched by the Franchise holder and
used only for capital improvements to the Franchise holder's facility.
(c) With respect to a Franchise holder operating a franchise to conduct horse racing, an
amount equal to I% of the net casino gaming receipts by the horse racing Franchise holder shall
be paid by the Franchise holder to the Arkansas Racing Commission for deposit into the
Arkansas Racing Commission Purse and Awards Fund to be used for purse supplements,
breeders' awards, owners' awards, and stallion awards as provided in Ark. Code Ann. § 23-110-
409 in order to promote and encourage thoroughbred horse breeding activities in Arkansas.
(d) With respect to a Franchise holder operating a franchise to conduct greyhound
racing, an amount equal to 1 % of the net casino gaming receipts by the greyhound racing
Franchise holder shall be paid by the Franchise holder to the Arkansas Racing Commission to be
used for breeders' awards as provided in the Arkansas Racing Commission's rules and
regulations governing greyhound racing in Arkansas in order to promote and encourage
greyhound breeding activities in Arkansas.
(e) (1) The dedication of net casino gaming receipts to purses and breeding activities as
set forth in this section shall not be subject to any contract or agreement between the Franchise
holder and any organization representing horsemen or greyhound owners or trainers, to the end
that any such contractual obligations for the use of moneys for purses shall not apply to the funds
dedicated to purses and breeding activities as set forth in this section.
(2) The moneys dedicated to purses and breeding activities as set forth in this section are
intended to be in addition to any such contractual purse obligations affecting moneys other than
the amounts dedicated to purses and breeding activities as set forth in this section, as well as in addition to amounts required to be used for purses and breeding activities .under applicable
provisions of the Arkansas Horse Racing Law, Ark. Code Ann.§ 23-110-101 et seq., and the
Arkansas Greyhound Racing Law, Ark. Code Ann.§ 23-111-101 et seq., as the case may be.
(f) The Arkansas Racing Commission shall have jurisdiction to check and verify
compliance by the Franchise holders with the provisions of this section and shall make periodic
determinations as to compliance under rules and regulations adopted by the Arkansas Racing
Commission.
§ 7. Other operational provisions.
(a) Casinos may operate on any day for any portion or all of any day.
(b) Casinos shall be permitted to sell intoxicating liquor or provide complimentary
servings of intoxicating liquor, for on-premises consumption only, during all hours in which the
casinos operate. To that extent, casinos shall not be subject to Ark. Code Ann. § 3-3-211, which
prohibits the sale of intoxicating liquor on Christmas Day, and Ark. Code Ann. § 3-9-201, et seq.
and other applicable Arkansas law requiring the residents of a dry county or city to vote to
approve the sale of intoxicating liquor. Casino licensees shall purchase all intoxicating liquor
from a Wholesaler. Casinos shall be subject to all other applicable Arkansas laws involving the
distribution and sale of intoxicating liquor that do not conflict with any provision of this
Amendment.
§ 8. Legal shipment of gambling devices into State.
All shipments of gambling devices, including slot machines, that are duly registered,
recorded, and labeled by the manufacturer and/or dealer thereof in accordance with applicable
federal law into any county of this State in which casino gaming is authorized in accordance with
this Amendment shall be deemed legal shipments. § 9. Effect on existing law.
(a) By adoption of this Amendment, there is no implied repeal of the existing Arkansas
laws criminalizing gambling for purposes not specified in this Amendment.
(b) This Amendment does not amend, repeal, or otherwise affect Amendment 84
(authorizing bingo and raffles), Amendment 87 (creating the state scholarship lottery), or Act
1151 of 2005 (authorizing electronic games of skill), to the extent those Amendments and statute
do not conflict with this Amendment.
§ 10. Inconsistent provisions inapplicable.
All provisions of the Constitution, statutes, and common law of this State, including
without limitation laws forbidding the judicial enforcement of gambling debts and statutes
declaring gambling to be a crime, to the extent inconsistent or in conflict with any provision of
this Amendment are expressly declared null and void as to, and do not apply to, any activities
allowed under this Amendment.
§ 11. Severability.
If any provision or section of this Amendment or the application thereof to any person or
circumstance is held invalid, such invalidity shall not affect any other provisions or application
of the Amendment that can be given effect without the invalid provisions or applications, and to
this end the provisions of this Amendment are declared to be severable.
§ 12. Amendment by General Assembly.
The General Assembly, in the same manner as required for amendment of laws initiated
by the people, may amend sections 5(c)(l), and 5(d) of this Amendment. SECTION 2. EFFECTIVE DATE. This Amendment shall be effective on and after November
14,2018.
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