Why did the Arkansas AG reject Alex Gray's 2018 ballot title for a four-county casino constitutional amendment?

Plain-English summary

Alex T. Gray, on behalf of the casino-industry sponsors, submitted a 2018 constitutional amendment that would have created exactly four Arkansas casino licenses: one for Southland Racing Corporation in Crittenden County (the existing greyhound track), one for Oaklawn Jockey Club in Garland County (the existing horse track), and two more in Pope and Jefferson Counties for applicants meeting a $100 million minimum-investment threshold. The proposal also distributed casino tax revenue to the State Highway Fund, the Racing Commission, and host counties and cities, and exempted casinos from the Christmas-Day liquor ban and dry-county restrictions.

AG Leslie Rutledge rejected the popular name and ballot title. Her reasons were specific:

1. The proposal said it would "authorize four casino licenses," but the structure actually required the Racing Commission to issue two of those licenses to Southland and Oaklawn automatically. Calling that an "authorization" was misleading.
2. The proposal said casino licensees "are permitted to conduct casino gaming but are not required to do so." Combined with the language that the licenses go to specific designated locations, this left voters unclear whether the franchise holders would actually have to operate casinos, and whether the licenses could be perpetual and exclusive with no operating obligation.
3. The relationship between holding a casino license and continuing to conduct horse or greyhound racing was unclear. The proposal said awarding the casino license was not contingent on racing, but also said franchise holders "shall continue" to conduct racing for so long as they retained their racing franchises. Voters could not tell what would happen to a casino license if a track stopped racing.

A revised version of this measure (sponsored by the same coalition) eventually qualified for the November 2018 Arkansas ballot as Issue 4 and was approved by Arkansas voters, becoming Amendment 100 to the Arkansas Constitution.

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 and is now Amendment 100 to the Arkansas Constitution. Casino regulation in Arkansas is governed by Amendment 100, the implementing statutes, and Racing Commission rules; the 2018 rejection does not control any current regulatory question.

Common questions

What did Issue 4 / Amendment 100 actually do?

The version of this proposal that voters approved in November 2018 became Amendment 100 to the Arkansas Constitution. It authorized casino gaming at the four locations (Crittenden, Garland, Pope, Jefferson Counties), with two licenses going to the existing race tracks and two going to applicants in Pope and Jefferson Counties. Pope County in particular went through years of contested licensing litigation before a casino there opened. For current law on casino licensing in Arkansas, look at Amendment 100 and the Racing Commission rules, not this 2018 rejection.

Why does the AG focus on whether something is "authorized" or "required"?

In ballot-title work, a single word like "authorize" can change what the voter thinks they are voting for. "Authorize" suggests permission with discretion. The AG read the proposal as effectively granting two specific entities a constitutional right to a casino license, regardless of whether they ever wanted to operate one. That is closer to a property right than an authorization, and the title did not say so.

Could a track lose its casino license by stopping racing?

That was exactly the AG's question, and the proposal did not clearly answer it. The first sentence of the relevant subsection said awarding or renewing the casino license was not contingent on racing. The second sentence said the franchise holders "shall continue" to race for as long as they had their racing franchises. The interaction was ambiguous. Resolution would have come either through redrafting before re-submission, or through Racing Commission rulemaking and litigation under any version that did pass.

Why does the proposal exempt casinos from the Christmas-Day liquor ban?

Ark. Code Ann. § 3-3-211 has historically prohibited the sale of liquor on Christmas Day. The amendment as drafted carved casinos out of that ban. It also overrode the Arkansas dry-county/dry-city rules that require local approval for liquor sales. Both carve-outs are policy choices specific to casino operations and were spelled out in the ballot title.

How is this different from the Bynum proposal in Opinion 2018-049?

Opinion 2018-049 (Bynum) targeted Benton, Boone, Miller, and Pulaski counties without designating specific operators. This one (Gray) targeted Crittenden, Garland, Pope, and Jefferson counties and tied two licenses to Southland and Oaklawn by name. Both were rejected on the same day. The Crittenden/Garland/Pope/Jefferson framework is the one that ultimately reached voters and passed.

Background and statutory framework

The proposal would have layered a new constitutional gambling regime on top of three existing Arkansas frameworks:

• The Arkansas Horse Racing Law, Ark. Code Ann. § 23-110-101 et seq. (Oaklawn's franchise authority).
• The Arkansas Greyhound Racing Law, Ark. Code Ann. § 23-111-101 et seq. (Southland's franchise authority).
• Existing constitutional gambling provisions, including Amendment 84 (bingo and raffles), Amendment 87 (state lottery), and the Local Option Horse Racing and Greyhound Racing Electronic Games of Skill Act, Ark. Code Ann. § 23-113-101 et seq.

The AG's certification standard came from Ark. Code Ann. § 7-9-107 and Arkansas Supreme Court precedent. Key principles:

• A ballot title cannot be tinged with partisan coloring or amplification (Becker v. Riviere, 270 Ark. 219, 604 S.W.2d 555 (1980)).
• Where the measure is internally inconsistent, no ballot title can save it (Roberts v. Priest, 341 Ark. 813, 20 S.W.3d 376 (2000)).

Citations

• Ark. Code Ann. § 7-9-107 (Supp. 2017)
• Ark. Code Ann. § 23-110-101 et seq. (Arkansas Horse Racing Law)
• Ark. Code Ann. § 23-111-101 et seq. (Arkansas Greyhound Racing Law)
• Ark. Code Ann. § 23-113-101 et seq. (Local Option Horse and Greyhound Electronic Games of Skill)
• Ark. Code Ann. § 3-3-211 (Christmas-Day liquor ban)
• Ark. Code Ann. § 7-5-309 (statutory five-minute voting booth limit)
• Ark. Const., amend. 84 (bingo and raffles)
• Ark. Const., amend. 87 (state lottery)
• Becker v. Riviere, 270 Ark. 219, 604 S.W.2d 555 (1980)
• Bailey v. McCuen, 318 Ark. 277, 884 S.W.2d 938 (1994)
• Wilson v. Martin, 2016 Ark. 334, 500 S.W.3d 160
• Roberts v. Priest, 341 Ark. 813, 20 S.W.3d 376 (2000)
• Op. Att'y Gen. 2018-035 (the earlier AG review of the same measure, referenced at footnote 24)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS
ATTORNEY GENERAL
LES LI E RUT LEDGE
Opinion No. 2018-052
May 9, 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 I 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 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 reference 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 (I 980) (internal citations omitted). 323 CENTER STREET. SU ITE 200 · LITTLE ROCK. ARKANSAS 72201 TELEPHONE (501) 682-2007 ·FAX (501) 682-8084 ARKANSASAG.GOV Alex T. Gray, Esq. Opinion No. 2018-052 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. My office treats each proposed measure, and any successive proposal from the same sponsor, as a discrete submission that must be evaluated on its own terms according to the standards established for popular names and ballot titles by the Arkansas Supreme Court. Because the Court's scrutiny of voter-initiated acts and amendments is exacting, my office places great importance on the rigorous analysis of every submission. Each response to a request for certification will, if appropriate, identify ambiguities that militate against certifying the proposed ballot title. However, the ambiguities discussed in a given response will not necessarily be all of the ambiguities contained in the proposal. If additional ambiguities become apparent with successive submissions, I consider it my duty under section 7-9-107 to identify those ambiguities regardless of whether previous responses have included them. 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 Licenses to Permit Casino Gaming at Casinos, One Each in Crittenden (to Southland Racing Corporation), Garland 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. 2018-052 Page 3 (to Oaklawn Jockey Club, Inc.), Pope, and Jefferson Counties Ballot Title An amendment to the Arkansas Constitution authorizing four licenses to permit casino gaming at 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") to permit casino gaming at 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") to permit casino gaming at a casino to be located at or adjacent to Oaklawn's horse track and gaming facility in Garland County, one to an applicant to permit casino gaming at a casino to be located in Pope County within two miles of Russellville, and one to an applicant to permit casino gaming at a casino to be located in Jefferson County within two miles of Pine Bluff; providing that casino licensees are permitted to conduct casino gaming but are not required to do so; 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 and Jefferson County pay an application fee, demonstrate experience in conducting casino gaming, submit 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 Alex T. Gray, Esq. Opinion No. 2018-052 Page 4 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 the awarding or renewal of casino licenses to Oaklawn and Southland shall not be contingent upon them conducting horse racing or greyhound racing, as the case may be, but Oaklawn and Southland shall continue to conduct horse racing or greyhound racing from their facilities for so long as they retain a franchise under Arkansas law; 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%; permitting casino licensees to conduct casino gaming on any day for any portion or all of any day; permitting casino licensees to sell liquor or provide complimentary servings of liquor during all hours in which the casino licensees conduct casino gaming only for on- premises consumption at the casinos and to that extent not subjecting casino licensees to Arkansas law prohibiting the sale of liquor on Christmas Day and requiring the residents of a dry county or city to vote to approve the sale of liquor; providing that casino licensees Alex T. Gray, Esq. Opinion No. 2018-052 Page 5 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. GUIDELINES 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 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 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 19. 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). Alex T. Gray, Esq. Opinion No. 2018-052 Page 6 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 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 the statutory five-minute limit in voting booths16 when other voters are waiting in line. 17 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.18 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."19 The ballot title must be honest and '0 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 (stating that "voters [should not] be placed in a position of either having to be an expert in the subject or having to guess as to the effect his or her vote would have."). 13 Id., 500 S.W.3d at 167. 14 Baileyv. McCuen, 318 Ark. 277, 285, 884 S.W.2d 938, 942 (1994). 15 See Ark. Code Ann. § 7-9-107(b). 16 Ark. Code Ann. § 7-5-309 (Supp. 2017). 17 Bailey, 318 Ark. at 284, 884 S.W.2d at 944. 18 Id at 293, 884 S.W.2d at 946-47. 19 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). Alex T. Gray, Esq. Opinion No. 2018-052 Page 7 impartial, 20 and it must conve~ an intelligible idea of the scope and significance of a proposed change in the law. 1 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.22 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."23 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) 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 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 ballot title are necessary to fully and correctly summarize your proposal. It is therefore not practicable, 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 ambiguities in the text of your proposal.

1. Your proposed popular name and ballot title refer to the authorization of
   four casino licenses. But under the measure itself, the Commission is 20 Becker v. McCuen, 303 Ark. 482, 489, 798 S.W.2d 71, 74 (1990). 21 Christian Civic Action Committee, 318 Ark. at 245, 884 S.W.2d at 607 (internal quotations omitted). 22 Roberts v. Priest, 341 Ark. 813, 825, 20 S.W.3d 376, 382 (2000). 23 Id. Alex T. Gray, Esq. Opinion No. 2018-052 Page 8 required to issue four licenses; and the two franchise holders are automatically each awarded a license. Characterizing the proposed constitutional amendment as one "to authorize" the casino licenses is therefore misleading, in my opinion.
2. In my most recent opinion to you regarding this proposal, 24 I stated that the
   popular name and ballot title gave the impression there will be casinos at the franchise holders' designated locations if the measure is approved. And I expressed my uncertainty regarding the purpose and effect of designating these casinos' locations. You have revised some of the language to make it clear that a casino license permits the licensee to conduct casino gaming at a casino. Subsection 4(1) now states that "[ c ]asino licensees are permitted to conduct casino gaming but are not required to do so." This indicates there is no assurance casino gaming will be conducted at the designated locations. But in my view, this does not clarify the purpose or effect of awarding licenses to franchise holders "to conduct casino gaming at a casino to be located at or adjacent to" their respective tracks and gaming facilities. See subsection 4U) (emphasis added). I believe the impression remains that there will be casinos at the specified sites. And "casino" is defined, under subsection 2(a) of the measure, as "a facility where casino gaming is conducted." (Emphasis added). If, contrary to this impression, there is no assurance under your measure that casino gaming will ever be conducted by the franchise holders-or anyone else-at these locations, I believe this must be clearly conveyed to the voters. While it is not entirely clear, it seems that the franchise holders might retain their constitutionally granted casino licenses indefinitely, with no corresponding obligation to conduct casino gaming. Or at least, that appears to be the case, given the absence of any apparent consequence of not conducting casino gaming. I realize in this regard that you have also added a provision that includes "[t]ransferability of a casino license" among the rules to be adopted by the Arkansas Racing Commission ("Commission"). See subsection 4(e)(12). However, nothing in the measure guides the Commission in promulgating a rule or rules in this respect. Without some clarification, I do not believe voters will realize that the amendment may grant each franchise holder an exclusive, perpetual license in these counties with no corresponding obligation to conduct casino gaming. 24 Op. Att'y Gen. 2018-035. Alex T. Gray, Esq. Opinion No. 2018-052 Page 9
3. In your immediate past submission, there was a requirement that franchise
   holders "continue to conduct [racing] ... from their facilities for so long as authorized under Arkansas law,]" and those in violation were subject to unspecified "penalties." I noted several ambiguities regarding this requirement.25 As revised, the subsection in question, now subsection 4U), states in pertinent part: The awarding or renewal of casino licenses shall not be contingent upon the Franchise holders conducting horse racing or greyhound racing, as the case may be. However, Franchise holders shall continue to conduct horse racing or greyhound racing from their facilities for so long as they retain a franchise pursuant to Ark. Code Ann. § 23-110-101 et seq. or Ark. Code Ann. § 23-111-101 et seq., as the case may be. The meaning and effect of this provision are unclear. While the first sentence plainly provides that conducting racing is not a condition of being awarded a casino license or having a license renewed, it is unclear whether an existing license might nevertheless be forfeited as a consequence of ceasing to conduct racing. This might be suggested by the second sentence, but it by no means clearly follows from the provision as worded. The provision's effect on current law is also unclear. Franchise holders currently appear to be under no clear obligation to conduct racing at their facilities. If your proposed amendment would change current law in this regard, I believe that change must be clearly summarized in the ballot title. 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 25 See id. at p. 8. Alex T. Gray, Esq. Opinion No. 2018-052 Page IO role in the shaping or drafting of such measures. My statutory mandate 1s 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. 6 Sincerely,
   --==--~- t!.' //~k ..C:::::::::-- ,P"
   LESLIE RUTLEDGE
   Attorney General
   Enclosure
   26 Ark. Code Ann.§ 7-9-107(c). Popular Name
   AN AMENDMENT TO AUTHORIZE FOUR LICENSES TO PERMIT CASINO GAMING AT 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 licenses to permit casino gaming at 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") to permit casino gaming at 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") to permit casino gaming at a casino to be located at or adjacent to Oaklawn's horse track and gaming facility in Garland County, one to an applicant to permit casino gaming at a casino to be located in Pope County within two miles of Russellville, and one to an applicant to permit casino gaming at a casino to be located in Jefferson County within two miles of Pine Bluff; providing that casino licensees are permitted to conduct casino gaming but are not required to do so; 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 and Jefferson County pay an application fee, demonstrate experience in conducting casino gaming, submit 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 the awarding or renewal of casino licenses to Oaklawn and Southland shall not be contingent upon them conducting horse racing or greyhound racing, as the case may be, but Oaklawn and Southland shall continue to conduct horse racing or greyhound racing from their facilities for so long as they retain a franchise under Arkansas law; 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%; permitting casino licensees to conduct casino gaming on any day for any portion or all of any day; permitting casino licensees to sell liquor or provide complimentary servings of liquor during all hours in which the casino licensees conduct casino gaming only for on-premises consumption at the casinos and to that extent not subjecting casino licensees to Arkansas law prohibiting the sale of liquor on Christmas Day and requiring the residents of a dry county or city to vote to approve the sale of liquor; providing that casino licensees 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 of 2018."
   § 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 conduct casino gaming at a casino. ( 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 law, casino gaming shall also be defined to include accepting wagers on sporting events. "Casino gaming" does not include lotteries conducted pursuant to Amendment 87 and/or The Arkansas Scholarship Lottery Act, Ark. Code Ann.§ 23-115-101 et seq. ( 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 conduct casino gaming at a casino. (t) "Casino licensee" is defined as any individual, corporation, partnership, association, trust, or other entity holding a license issued by the Arkansas Racing Commission to conduct casino gaming at a casino. (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. (j) "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) 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) The Arkansas Racing Commission shall administer and regulate casino licenses, including their issuance and renewal, and shall administer and enforce the provisions of this Amendment relating to all casino licensees. Each casino license shall be issued for the purpose of permitting a casino licensee to conduct casino gaming at a casino as provided in this Amendment and by regulation of the Arkansas Racing Commission, and all other applicable law. (b) 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. ( c) The Arkansas Racing Commission shall adopt rules necessary to carry out the purposes of this Amendment and perform its duties under this Amendment. ( d) Rules adopted under this section are rules as defined in the Arkansas Administrative Procedures Act, Ark. Code Ann.§ 25-15-201 et seq. (e) Not later than 120 days after the effective date of this Amendment, the Arkansas Racing Commission shall adopt rules governing: ( 1) 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; (11) Responsibilities of casino licensees related to conducting casino gaming; (12) Transferability of a casino license; and ( 13) Any other matters necessary for the fair, impartial, stringent, and comprehensive administration of its duties under this Amendment. (f) Not later than June 1, 2019, the Arkansas Racing Commission shall begin accepting applications for casino licenses. (g) 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; (h) 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. (i) The Arkansas Racing Commission shall award four casino licenses. U) The Arkansas Racing Commission shall award a casino license, as provided in this Amendment, to a Franchise holder located in Crittenden County, there being only one, to conduct casino gaming at 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. The Arkansas Racing Commission shall also award a casino license, as provided in this Amendment, to a Franchise holder located in Garland County, there being only one, to conduct casino gaming at 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 awarding or renewal of casino licenses shall not be contingent upon the Franchise holders conducting horse racing or greyhound racing, as the case may be. However, Franchise holders shall continue to conduct horse racing or greyhound racing from their facilities for so long as they retain a franchise pursuant to Ark. Code Ann.§ 23-110-101 et seq. or Ark. Code Ann.§ 23-111-101 et seq., as the case may be. 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. (k) The Arkansas Racing Commission shall award a casino license to a casino applicant for a casino to be located in Pope County within two miles of the city limits of the county seat. The Arkansas Racing Commission shall also award a casino license to a casino applicant for a casino to be located in Jefferson County within two miles of the city limits of the county seat. (1) Casino licensees are permitted to conduct casino gaming but are not required to do so. (m) The Arkansas Racing Commission shall require all casino applicants for a casino license in Pope County and Jefferson County to demonstrate experience conducting casino gaming. (n) The Arkansas Racing Commission shall require all casino applicants for a casino license in Pope County and Jefferson County to demonstrate a minimum investment of at least
   $100,000,000 for the development of each proposed casino, with credit given for the market value of existing real estate, facilities, equipment, and other improvements where the casino will be located. ( o) The Arkansas Racing Commission shall require all casino applicants for a casino license in Pope County and Jefferson County to submit 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 all casino applicants to include a letter of support from the mayor in the city or town where the applicant is proposing the casino to be located. (p) Franchise holders are not applicants and are not required to submit applications for casino licenses in order to be issued a casino license. ( q) No individual, corporation, partnership, association, trust, or other entity may hold more than one casino license in Arkansas. (r) 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 $10,000. Casino licenses shall be renewed every ten years. ( s) (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: ( 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 pati 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 A wards 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 )(1) 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 A wards 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 fo1ih 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) Casino licensees are permitted to conduct casino gaming on any day for any portion or all of any day. (b) Casino licensees shall be permitted to sell intoxicating liquor or provide complimentary servings of intoxicating liquor, only for on-premises consumption at the casinos, during all hours in which the casino licensees conduct casino gaming. To that extent, casino licensees 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. Casino licensees 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 of2005 (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 DA TE. This Amendment shall be effective on and after November 14, 2018.