- A bill to prohibit sweepstakes gaming, legalize iGaming introduced in Arkansas
- The bill will allow casinos to offer iGaming, prohibit dual-currency sweepstakes games
- Arkansas has three licensed casinos
Arkansas lawmakers are hoping to prohibit sweepstakes gaming and legalize iGaming in the Natural State in one fell swoop.
An Arkansas bill introduced in the House seeks to prohibit dual-currency sweepstakes games and legalize iGaming in Arkansas for the state’s three casinos. Saracen Casino Resort in Pine Bluff, Oaklawn Racing Casino Resort in Hot Springs, and Southland Casino Hotel in West Memphis all currently offer online sports betting.
If legalized, casinos may partner with up to one iGaming operator for their services.
Dual Purpose Bills a First
Sen. Dave Wallace (R-19) also introduced SB 524, while Rep. Matt Duffield (R-53) introduced companion bill HB 1861 on Wednesday, March 19.
However, Wallace withdrew his Senate bill this morning from the Senate Insurance and Commerce Committee. Duffield’s bill still resides in the House Judiciary Committee.
The House legislation seeks to prohibit sweepstakes gaming that utilizes a “dual-currency system of payment that allows the player to exchange the currency for a prize, aware, cash, or cash equivalent, or a chance to win any prize, award, cash, or cash equivalent.”
It also prohibits casino style gaming, including slots, video poker, or table games such as blackjack, roulette, craps or poker. It also prohibits sweepstakes games that simulate lotter and sports wagering as well.
Sweepstakes that do not award cash or a cash equivalent will not be prohibited under the legislation.
The bill also serves a dual purpose, as it seeks to legalize iGaming for the state’s three licensed casinos.
iGaming Details in Legislation
While the bill seeks to prohibit unlicensed gaming from the state, it hopes to expand another gaming market for its casinos.
If legalized, each of the state’s three licensed casinos will be able to partner with up to one iGaming partner. However, the law is the same for online sports betting and none of the licensed casinos have partnered with existing sports betting operators. Each of the state’s three casinos utilize their own designed platforms for online sports betting.
The legislation does not set a proposed iGaming tax rate or license fee. However, it could mirror the state’s interesting online sports betting tax structure, implementing a 13% sports betting tax rate on the first $150 million, which increases to 20% after the initial $150 million.
Additionally, casinos can only partner with an outside online sports betting operator if the casinos keep 51% or more of the net gaming revenue in the partnership. This is designed to keep sports betting tax revenues in the state and does not provide a beneficial financial arrangement for outside operators.
If approved, the Arkansas Racing Commission will regulate iGaming and award licenses.
In a move that has sparked controversy and debate, Arkansas recently passed a new bill that effectively bans sweepstakes gaming while legalizing iGaming within the state. The bill, known as HB 1942, was signed into law by Governor Asa Hutchinson on March 31st, 2021, and is set to go into effect on July 1st of the same year.
Sweepstakes gaming, also known as internet cafes or cyber cafes, has long been a contentious issue in Arkansas. These establishments typically offer customers the chance to play online games of chance in exchange for the purchase of a product or service. Critics argue that these businesses operate as de facto casinos, exploiting legal loopholes to offer gambling-like experiences without proper regulation.
Under the new bill, sweepstakes gaming will be explicitly prohibited in Arkansas, with penalties for violations ranging from fines to potential criminal charges. Proponents of the ban argue that it will help curb illegal gambling activities and protect consumers from potential harm associated with unregulated gaming.
On the other hand, the legalization of iGaming represents a significant shift in Arkansas’ approach to online gambling. iGaming refers to the practice of playing casino games, poker, or other forms of betting over the internet. The new law allows for licensed operators to offer iGaming services to residents of Arkansas, subject to strict regulations and oversight by the state’s gambling commission.
Supporters of iGaming legalization point to the potential economic benefits for the state, including increased tax revenue and job creation in the gaming industry. They also argue that regulating iGaming can help protect consumers by ensuring fair play and responsible gambling practices.
However, critics of the bill have raised concerns about the potential social costs of expanded gambling in Arkansas. They worry that legalizing iGaming could lead to an increase in problem gambling and addiction, particularly among vulnerable populations. Some also question whether the state has the resources and infrastructure in place to effectively regulate and monitor online gambling activities.
Overall, the passage of HB 1942 represents a significant development in Arkansas’ gaming landscape. As the state prepares to implement these new regulations, it will be important for policymakers, industry stakeholders, and advocacy groups to work together to address any potential challenges and ensure that gaming activities are conducted in a safe and responsible manner.