Why did the Arkansas AG reject Alex Gray's proposed four-county casino amendment ballot title in April 2018?
Apply this to your situation
This page answers the general question as of 2018. Ask about yours and see what current Arkansas law means for your facts, with citations you can check.
Plain-English summary
Alex T. Gray asked Attorney General Leslie Rutledge to certify a popular name and ballot title for a proposed amendment authorizing four Arkansas casinos. The proposal included licenses for Southland Racing Corporation and Oaklawn Jockey Club and addressed casinos in Crittenden, Garland, Pope, and Jefferson counties. In her April 16, 2018 opinion, the AG rejected the submission because the measure itself left several points unclear. She said she could not fairly summarize its effect or substitute a corrected title while those ambiguities remained.
First, the proposed name and title implied that casinos would operate at or near Southland's and Oaklawn's existing facilities. The measure clearly awarded each a license, but it was unclear whether either casino would actually be built. Second, provisions about licensing appeared to distinguish a license for a casino facility from a license to operate one, without clearly stating whether the same one-license limit applied to both.
Third, the measure required the racing franchise holders to continue horse or greyhound racing and added a vague instruction for the Racing Commission to impose “penalties” for violations. The AG said this addition still did not explain the obligation's purpose, effect, or enforcement. She expressly referred to an earlier submission and her Opinion 2018-029 on this point. Fourth, a provision saying licensees “may receive compensation” left unclear who controlled compensation, what goods or services it covered, how operations would be handled, and who would pay.
Currency note
This opinion was issued in 2018. Verify the current law and the text of any current ballot proposal before applying its analysis.
Common questions
Was this the first version Gray submitted?
No. The AG said the penalty language was “added since your previous submission” and referred to her earlier Opinion 2018-029. April 16, 2018 is the date of this opinion.
Did the proposal guarantee casinos at Southland and Oaklawn? The AG said the popular name and ballot title strongly implied that outcome, but the measure clearly guaranteed licenses, not necessarily constructed casinos. She said the intended effect of naming those sites had to be clarified and accurately described.
What was unclear about the casino licenses?
The measure seemed to distinguish a license for a casino facility from a license to operate a casino. The AG questioned whether the one-license limit for operators also applied to facility licenses.
Why did the racing penalty clause matter?
The proposal required franchise holders to keep conducting racing while authorized under Arkansas law, with unspecified Commission penalties for violations. The AG said the clause did not explain the obligation's purpose, effect, or enforcement well enough for a fair ballot title.
What did the AG decide about the proposal's merits?
Nothing. She said her certification duty did not include judging a proposal's merits, philosophy, or ideology. She rejected the title because unresolved text ambiguities prevented an accurate summary for voters.
Background and statutory framework
Ark. Code Ann. § 7-9-107 governs the AG's review of a proposed popular name and ballot title. The AG can certify a submission, substitute and certify language when practicable, or reject it. Here she said the underlying ambiguities made substitution impracticable and instructed the sponsor to redesign the measure and title.
Citations
- Ark. Code Ann. § 7-9-107 (Supp. 2017)
- Op. Att'y Gen. 2018-029 (earlier review expressly cited in footnote 25)
- Roberts v. Priest, 341 Ark. 813 (2000) (ambiguities in a proposed measure)
Source
Original opinion text
STATE OF ARKANSAS
ATTORNEY GE N ERAL
LESLIE RUTLE DGE
Opinion No. 2018-035
April 16,2018
Alex T. Gray, Esq.
Steel, Wright, Gray & Hutchinson
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.
Arkansas Code Annotated 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 2 set forth the purpose of the proposed amendment or act. In this way, voters will have a fair understanding of the issues presented by referenced to the ballot title 3 alone.
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 CEN T El1. STREET . SUI TE 200 · L IT TLE RO C K. AR KANSAS 7220 1 TE LEPH O N E (5 0 1) 682 -200 7 ·FAX (501 ) 682-8084 ARKANSASAG.GO V
Alex T. Gray, Esq.
Opinion No. 2018-035
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 Arkansas Racing Commission ("Commission"); 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
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. 2018-035 Page 3
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 Commission 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 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 Commission shall require all applicants for a casino license in Pope County or Jefferson County 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 the Commission shall regulate all casino licenses; providing that Southland and Oaklawn 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, and the Commission shall impose penalties on Southland or Oaklawn if either violates this provision; defining "net casino gaming receipts" as casino gaming receipts 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 Alex T. Gray, Esq.
Opinion No. 2018-035
Page 4
thereof; subjecting each casino to the same income, property, sales, gross receipts, use, employments and other taxation as any for-profit business located in the county and city or town in which the casino is located, except that no state or local sales or gross receipts tax shall 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 Commission for deposit into the Arkansas Racing Commission Purse and A wards Fund to be used only for purses for live horse racing and greyhound racing by Oaklawn and Southland, as the case may be, 2.5% to the Commission, 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 to the State Highway and Transportation Department Fund, or its successor fund.
Alex T. Gray, Esq.
Opinion No. 2018-035
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 disapproved the use of terms that are "technical and not readily understood by voters." 12 Without a definition of such terms in the ballot title, the title may be deemed insufficient. 13
Additionally, if information omitted from the ballot title is an "essential fact which
6
Pafford v. 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 infra note 18. 8 Mayv. 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. 2018-035
Page 6
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 19 and impartial, 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 statutory duty to the satisfaction of the Arkansas Supreme Court without ( 1)
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.WJd 376, 382 (2000).
22 Id.
Alex T. Gray, Esq.
Opinion No. 2018-035
Page 7
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
It is my opinion, based on the above guidelines established by the Court, that some additions or changes to your ballot title (and possibly your popular name) are necessary so that the ballot title more fully and correctly summarizes 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 and ballot title without the resolution of some ambiguities in the text of the measure itself. I cannot determine precisely what changes to the ballot title (or popular name) are necessary to fully and correctly summarize your proposal. It is therefore not practicable 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 ambiguities in the text of your proposal.
-
When read together, your proposed popular name and ballot title indicate or
very strongly imply that if this constitutional amendment is approved, there
will be a casino at or adjacent to the existing facilities of Southland Racing
Corporation ("Southland") and Oaklawn Jockey Club., Inc. ("Oaklawn").
The popular name states that it is an amendment to "authorize four
casinos," including one "to Southland" and "one to Oaklawn." And the
ballot title, in one of the opening clauses, states that Southland and
Oaklawn will be awarded "casino licenses ... for casino[ s] to be located at
or adjacent to" their respective tracks and gaming facilities. This language
basically mirrors the measure's text. The designation of these entities and
these specific locations gives the impression that there will be casinos at
these locations if the amendment is approved. However, these statements
or impressions may be misleading. It is clear under the measure that each
franchise holder would automatically be awarded a license to operate a
casino. But the purpose and effect of designating each casino's location is
less clear. It is possible, though not entirely clear, that the designation is
intended to simply control or limit where the franchise holders' casinos will
be located, if they are built. If that is the intent, then the franchise holders
are essentially afforded only the opportunity to have a casino at the
designated locations. If there is no assurance that there will be casinos at
Alex T. Gray, Esq.
Opinion No. 2018-035
Page 8the Southland and Oaklawn locations, this must be clarified and accurately summarized in the popular name and ballot title.-
Subsections 4(a) and 4(b) of the proposed amendment state that "[c]asinos
shall be licensed by the Arkansas Racing Commission" ("Commission")
and that the Commission "shall administer and regulate the licensing of
casinos, including the issuance of casino licenses." (Emphasis added).
Read together, these subsections suggest that the Commission will issue
separate licenses-one for a "casino," i.e., the "facility where casino
gaming is conducted ... [,]" 23 and one for operating a casino. 24 The apparent
distinction between a license for a casino (as a facility) and for operating a
casino may be significant. It is clear, under subsection 4(t), that "[n]o
individual, corporation, partnership, association, trust, or other entity may
hold more than one casino license [a license to operate] in Arkansas."
(Emphasis added). However, there is no similar limitation with respect to a
license for a "casino," i.e., a facility. This would seem to suggest that
someone holding a license to operate a casino is not prevented from
obtaining more than one license for a casino facility. If that is not the
intent, clarification will be necessary to avoid any misleading tendencies in
the ballot title. -
Subsection 4(1) 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, and the Arkansas Racing
Commission shall impose penalties on Franchise holders in violation of this
this provision." (Emphasis added). The emphasized language has been
added since your previous submission. In my most previous opinion to you
regarding this proposed measure, I noted several problems with the
requirement that franchisees "continue to conduct" racing "for so long as
authorized." I noted that 1) it appears to constitutionally mandate that these
private companies continue to operate (irrespective of any negative changes
in the market or the overall business climate); 2) it was unclear how the
requirement-which was not previously included in the ballot title-would
be enforced; and 3) it implied franchise holders would have a license in
-
23
See subsection 2(a) of the proposed amendment (defining "casino" as "a facility where casino gaming is conducted as authorized by this Amendment."). 24 See id. at (e) (defining "casino license" as "a license ... to operate a facility where casino gaming is conducted ... [i.e., a casino].") (emphasis added). Alex T. Gray, Esq. Opinion No. 2018-035 Page 9
perpetuity. 25 In my view, the purpose and effect of the requirement (which has now been restated in the ballot title essentially word-for-word) remain unclear. The vague reference to "penalties" for violations does not sufficiently clarify the requirement's purpose or effect, or offer sufficient insight into its enforcement. Because this feature would likely give a reasonable voter serious ground for reflection, I believe it must be clarified for proper summation in the ballot title.
4. Subsection 4(u) states that "[t]he casino licensee may receive compensation for providing the goods and services allowed by this Amendment." The statement that a casino licensee "may receive compensation" is ambiguous.
The use of the word "may" makes it unclear whether a licensee has the discretion to decide whether to receive any such compensation, or whether the Commission will have the authority to approve the compensation in the course of administering the amendment, or something else entirely.
Additionally, in light of the definition of a "casino licensee," 26 the "services" referenced in subsection 4(u) presumably are services provided in connection with casino gaming. However, this is far from clear. The measure is also unclear as to what "goods" a casino licensee would provide (except, perhaps, winnings to patrons).
Several other questions arise under this subsection. A "casino licensee" holds a license to operate a casino. Thus, on its face, subsection 4(u) authorizes such licensee to receive compensation for a casino operation.
But the measure does not address any matters pertaining to the operation of a casino. It does not say whether the licensee must itself operate the facility, whether the casino license is transferable, or whether a licensee's operational responsibilities are assignable. These matters are likely relevant when considering this "compensation" provision. Also relevant is the payment source of any such compensation. While it may not be the intent, without clarification, a voter might presume it is paid out of gross receipts. I recognize that the Commission is authorized to administer and enforce the amendment. But allowing compensation for a licensee is significant, and I believe voters are entitled to be fully apprised of the meaning and effect of this provision, which is not summarized in your proposed ballot title.
25
See Op. Att'y Gen. 2018-029 at 8.
26
Supra note 24.
Alex T. Gray, Esq.
Opinion No. 2018-035
Page 10
CONCLUSION
The ambiguities noted above are not necessarily all the ambiguities contained in your proposal, but they are sufficiently serious to require me to reject your popular name and ballot title. I am unable to substitute language in a 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. Based on what has been submitted, my statutory duty is to reject your proposed ballot title for the fore~oing reasons and instruct you to redesign the proposed measure and ballot title. 7
Sincerely,
~~~;::>_ L. //~~
LESLIE RUTLEDGE
Attorney General
Enclosure
27
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 Arkansas Racing Commission ("Commission"); 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
Commission 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 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 Commission shall require all applicants for a casino license in Pope County or
Jefferson County 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 the Commission shall regulate all casino licensees; providing that Southland and Oaklawn
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, and the Commission shall impose
penalties on Southland or Oaklawn if either violates this provision; defining "net casino gaming
receipts" as casino gaming receipts 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,
gross receipts, 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 no state or local sales or gross
receipts tax shall 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 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, 2.5% to the
Commission, 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 to the State Highway and Transportation Department Fund, or its successor fund.
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 of2018."
§ 2. Definitions. For purposes of this Amendment, the below terms are defined as
follows:
(a) "Casino" is defined as a facility where casino gaming is conducted as authorized by
this Amendment.
(b) "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.
(c) "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 Jaw, casino gaming
shall also be defined to include accepting wagers on sporting events.
(d) "Casino gaming receipts" is defined as gross receipts from casino gaming.
(e) "Casino license" is defined as a license issued by the Arkansas Racing Commission
to operate a facility where casino gaming is conducted as authorized by this Amendment.
(f) "Casino licensee" is defined as any individual, corporation, partnership, association,
trust, or other entity holding a license issued by the Arkansas Racing Commission to operate a
facility where casino gaming is conducted as authorized by this Amendment.
(g) "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.
(h) "Intoxicating liquor" is defined as any beverage containing more than one-half of one
percent of alcohol by weight.
(i) "Net casino gaming receipts" is defined as gross receipts from casino gaming less
amounts paid out or reserved as winnings to casino patrons.
0) "Net casino gaming receipts tax" is defined as a tax on net casino gaming receipts.
(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) 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 Arkansas Racing
Commission. Initial laws and appropriations enacted by the General Assembly pursuant hereto
shall be in full force and effect no later than June 30, 2019.
(d) Individuals under the age of 21 are prohibited from engaging in casino gaming.
§ 4. Licensing of Casinos and Casino Gaming.
(a) Casinos shall be licensed by the Arkansas Racing Commission.
(b) The Arkansas Racing Commission shall administer and regulate the licensing of
casinos, including the issuance of casino licenses, the renewal of casino licenses, and shall
administer and enforce the provisions of this Amendment relating to all casino licensees.
(c) 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.
(d) The Arkansas Racing Commission shall adopt rules necessary to carry out the
purposes of this Amendment; and perform their duties under this Amendment.
(e) Rules adopted under this section are rules as defined in the Arkansas Administrative
Procedures Act, Ark. Code Ann.§ 25-15-201 et seq.
(f) Not later than 120 days after the effective date of this Amendment, the Arkansas
Racing Commission shall adopt rules governing:
( l) The establishment of a casino license application fee which shall not exceed
$250,000;
(2) The manner in which the Arkansas Racing Commission considers applications
for issuance of casino licenses;
(3) The renewal of casino licenses;
(4) The form and content of renewal for casino licenses;
(5) Oversight requirements for casinos and casino gaming;
(6) Recordkeeping requirements for casinos;
(7) Personnel requirements for casinos and casino gaming;
(8) 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;
(9) A schedule of penalties and procedures for appealing penalties;
(10) Procedures for inspection and investigations of casinos and casino gaming;
and
(11) Any other matters necessary for the fair, impartial, stringent, and
comprehensive administration of its duties under this Amendment.
(g) Not later than June 1, 2019, the Arkansas Racing Commission shall begin accepting
applications for casino licenses.
(h) The application for casino licenses shall include without limitation the following:
( 1) 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;
(i) Prior to the submission of an application for a casino license, the owners,
shareholders, board members, or officers of the casino applicant:
( 1) If an individual, shall not have been convicted of a disqualifying felony
offense as defined by the Arkansas Racing Commission;
(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.
U) The Arkansas Racing Commission shall award four casino licenses.
(k) The Arkansas Racing Commission shall award no more than one casino license per
county.
(I) The Arkansas Racing Commission 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, and the Arkansas Racing Commission shall impose penalties on
Franchise holders in violation of this provision. 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.
(m) The Arkansas Racing Commission 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.
(n) The Arkansas Racing Commission 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.
(o) The Arkansas Racing Commission shall require all applicants for a casino license in
Pope County or Jefferson County to demonstrate current operational experience, by the applicant
or an affiliate of the applicant, in providing casino gaming.
(p) The Arkansas Racing Commission shall require all applicants for a casino license in
Pope County or Jefferson County to demonstrate a minimum investment of at least $ l 00,000,000
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.
(q) The Arkansas Racing Commission shall require all applications for a casino license
in Pope County or Jefferson County 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 letter of support from the mayor in the city or town where the applicant is proposing
the casino to be located.
(r) The Arkansas Racing Commission may conduct a criminal background check of the
owners, shareholders, board members, or officers of the casino applicants for a casino license in
Pope County or Jefferson County in order to carry out this section.
(s) Franchise holders are not applicants and are not required to submit applications for
casino licenses in order to be issued a casino license.
(t) No individual, corporation, partnership, association, trust, or other entity may hold
more than one casino license in Arkansas.
(u) The casino licensee may receive compensation for providing the goods and services
allowed by this Amendment.
(v) The Arkansas Racing Commission 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 $I 0,000. Casino licenses shall be renewed every ten years.
(w) (1) The Arkansas Racing Commission shall provide an annual amount of at least
$200,000 for compulsive gambling disorder treatment and compulsive gambling disorder
educational programs.
(2) The Arkansas Racing Commission 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 Arkansas Racing Commission 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:
(I) 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, gross
receipts, 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 no sales or gross receipts tax shall apply
to casino gaming receipts or net casino gaming receipts.
(c) The net casino gaming receipts tax shall be distributed as follows:
(I) 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) 2.5% to the Arkansas Racing Commission,
(4) 8% to the county in which the casino is located, and
(5) 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.§§ 27-70-201and27-70-206.
(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 1% 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 l % 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. § 23-110-10 l 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 oflaws 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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