Can an Arkansas casino licensee outsource its online sports betting to a vendor who keeps most of the revenue?
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This page answers the general question as of 2021. Ezel answers yours: what it means for your facts, under current Arkansas law, with citations.
Plain-English summary
Senator Jonathan Dismang asked whether a casino licensee in Arkansas would violate Constitutional Amendment 100 by contracting with a third-party vendor (typically a sports-betting platform operator) to run a function of the licensee's casino gaming, where the vendor keeps a majority of the revenue. Attorney General Leslie Rutledge concluded the amendment does not address such contracts at all.
The opinion drew on a baseline principle: the Arkansas Constitution is a limiting document, not a grant of enumerated powers. Where Amendment 100 says nothing about a particular contractual arrangement, it neither blesses nor prohibits it. The amendment defines casino gaming and casino licensees but does not regulate the licensee's commercial relationships with vendors or the revenue split.
The AG also confirmed that the Arkansas Racing Commission's casino gaming rules do not address third-party revenue sharing, and the General Assembly had not passed any legislation on the topic. So the practical answer was: under Amendment 100, the contract is permissible. Whether it complies with future Racing Commission rule changes or future legislation is a separate question.
Currency note
This opinion was issued in late 2021. Arkansas's casino-gaming and sports-betting regulatory landscape has been actively shifting, with subsequent Racing Commission rulemaking on online sports betting and ongoing legislative interest in revenue-share parameters. Verify the current Racing Commission rules and any new statutes before relying on this opinion to structure a vendor agreement.
What this means for you
If you operate an Arkansas casino
Based on this opinion, Amendment 100 by itself did not prohibit revenue-share agreements with third-party platform providers, even where the vendor retained the majority of revenue from a specific gaming function. The constitutional risk is low under the amendment's text. The regulatory risk sits at the Racing Commission level, where rule changes could later impose minimums on what the licensee retains, or other structural requirements. Track Racing Commission rulemaking and confirm any deal complies with the current rules.
If you are a sports-betting platform operator
Arkansas's three casino licensees have been the operative permitted parties for sports betting under Amendment 100. This opinion left the door open for vendor partnerships. Industry standard structures (white-label, revenue share, market access) are not facially prohibited. Negotiated terms still need to fit the licensee's compliance, taxation, and integrity requirements.
If you are a state legislator considering legislation
The AG explicitly noted that Amendment 100, § 3(c) authorizes the General Assembly to enact implementing legislation. Any structural change to vendor revenue sharing (caps, floors, mandatory licensee retention percentages) would need to come through statute or rule, not constitutional reinterpretation.
If you advise gaming clients
Frame Amendment 100 questions around what it does say: the definitions of casino gaming and licensee, and the locations where casino gaming is permitted. Commercial structure, including revenue allocation between licensee and vendor, sits in the regulatory and legislative space.
Common questions
Q: What does Amendment 100 actually do?
A: Amendment 100 to the Arkansas Constitution authorizes casino gaming at four specified locations and defines casino gaming and casino licensee. It also includes "accepting wagers on sporting events" within the definition of casino gaming, which became the constitutional basis for sports betting in Arkansas.
Q: Does Amendment 100 specify who can run sports betting in Arkansas?
A: Amendment 100 limits casino gaming to casino licensees holding a license issued by the Arkansas Racing Commission. The amendment is silent on whether a licensee can outsource execution to a third-party vendor.
Q: Why does silence in the constitution mean a contract is allowed?
A: Per the opinion, the Arkansas Constitution is a limiting document, not a source of permission. If a constitutional provision does not prohibit conduct, the conduct is allowed unless other law (statute, regulation, common law) prohibits it. The opinion relied on Jones v. Mears, 256 Ark. 825, 510 S.W.2d 857 (1974), for that principle.
Q: Could the Racing Commission change the rules to prohibit majority-revenue-keeping by vendors?
A: Possibly. The opinion explicitly noted that the Racing Commission's existing casino gaming rules at the time did not address third-party revenue arrangements, and that the General Assembly had authority to enact legislation under § 3(c). Both regulatory and statutory changes are on the table going forward.
Background and statutory framework
Arkansas voters approved Amendment 100 in November 2018, authorizing casino gaming at four sites: Oaklawn (Hot Springs), Southland (West Memphis), and two new licensees in Pope and Jefferson Counties. The amendment defines "casino gaming" expansively to include card and dice games, electronic gaming devices, and "accepting wagers on sporting events" (§ 2(c)). A "casino licensee" is the entity holding the Arkansas Racing Commission license to conduct casino gaming at the specified casino location (§ 2(f)).
The amendment delegates implementation details to the Racing Commission and grants the General Assembly authority to enact legislation under § 3(c). When the AG opinion issued in late 2021, the Racing Commission's casino rules covered licensure, integrity, and operational matters, but not third-party vendor revenue allocation.
In commercial gaming, vendor revenue sharing is the norm: the casino licensee provides the regulatory home (license, location, customer onboarding) and the vendor provides the technology, platform, marketing, and risk management. A typical revenue-share split has the vendor retaining the majority of net gaming revenue, with the licensee receiving a smaller fixed or percentage cut plus other consideration. The opinion's holding that Amendment 100 does not prohibit such structures cleared the constitutional path; the regulatory and legislative path remained open for refinement.
Citations and references
Constitutional provisions:
- Ark. Const. amend. 100, § 2(c) (definition of casino gaming)
- Ark. Const. amend. 100, § 2(f) (definition of casino licensee)
- Ark. Const. amend. 100, § 3(c) (legislative authority to implement)
Cases:
- Jones v. Mears, 256 Ark. 825, 510 S.W.2d 857 (1974) (Arkansas Constitution as limiting document, not grant of enumerated powers)
Regulatory references:
- Rules of the Arkansas Racing Commission, Casino Gaming (then-current version, hosted at dfa.arkansas.gov)
Source
Original opinion text
Opinion No. 2021-096
December 30, 2021
The Honorable Jonathan Dismang
State Senator
P. O. Box 475
Beebe, AR 72012
Dear Senator Dismang:
This is in response to your request for my opinion regarding Amendment 100 to the Arkansas Constitution. Your request states that Amendment 100 defines 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. Casino gaming shall also be defined to include accepting wagers on sporting events." Amendment 100, § 2(c).
Your request further sets out the amendment's definition of a casino licensee 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." Amendment 100, § 2(f).
In light of the foregoing, you have asked the following questions:
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Is it a violation of Amendment 100 for a casino licensee to contract with a third-party vendor to assist in the operation of a certain function of casino gaming, such as an online sports pool, wherein the third-party vendor retains a majority of the revenue generated from assisting in the operation of casino gaming?
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Would a revenue share agreement wherein a third-party vendor retained a majority of the revenue generated from assisting in a certain function of casino gaming violate the terms of a licensee's casino gaming license to conduct casino gaming in the state?
RESPONSE
With respect to your first question, the answer is "no." Amendment 100 is completely silent regarding such contractual arrangements. As to your second question, neither Amendment 100 nor the rules promulgated by the Arkansas Racing Commission on casino gaming address the scenario you have outlined in the question.
DISCUSSION
Question 1: Is it a violation of Amendment 100 for a casino licensee to contract with a third-party vendor to assist in the operation of a certain function of casino gaming, such as an online sports pool, wherein the third-party vendor retains a majority of the revenue generated from assisting in the operation of casino gaming?
No, Amendment 100 is silent about such contracts or contractual arrangements. It is well-established that the Arkansas Constitution is not a grant of enumerated powers or an enabling act, but instead is a limiting, restraining document. Because Amendment 100 does not speak about, much less prohibit, the kinds of contracts or contractual terms you have described, I cannot say that they would violate Amendment 100.
Question 2: Would a revenue share agreement wherein a third-party vendor retained a majority of the revenue generated from assisting in a certain function of casino gaming violate the terms of a licensee's casino gaming license to conduct casino gaming in the state?
Again, Amendment 100 is silent about such agreements. Moreover, the General Assembly has not enacted any legislation on the topic, as it clearly may do. Nor do the rules promulgated by the Arkansas Racing Commission speak to this issue.
Sincerely,
LESLIE RUTLEDGE
Attorney General
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