A battle over profit-sharing between local casinos and online betting sites is going to be waged in Arkansas. Casinos want to receive most of the sports betting revenue produced by their online sportsbook partners, even though they do less of the work.
The Controversial 51% Rule
Arkansas casino operators seek 51% revenue from online bookmakers when they partner with them. Typically, bookmakers only share between 5-15%.
The Arkansas Racing Commission (ARC) is scheduled to vote on December 30 to introduce statewide mobile sports betting. Included is a rule that says that local casinos would be entitled to 51% of the profits from mobile sports-betting partnerships.
If the rule is approved, it would be sent to the Arkansas Legislative Council for consideration in January. The council is expected to easily sign off on it, since it historically follows the ARC’s lead.
A coalition of online betting operators is trying to convince the ARC to strike off the 51% rules. They argue that profit-sharing agreements should be negotiated among private businesses and not mandated by the government. The alliance includes BetMGM Sportsbook, DraftKings, FanDuel, and others.
Former Arkansas legislator John Burris stated that online bookmakers think it is a bad precedent to allow “a government to dictate the terms and conditions of a private contract.”
According to the coalition, the 51% rule will discourage brand-name mobile platforms that consumers trust and recognize from entering 7BALL Arkansas.
According to Gambling.com, Burris said that the rule would not be adopted in other states as sports bettors prefer to have options. He asserted, “In the end, consumers will demand a change because they want a choice. They want a real marketplace, not something with a lid on it.”
51% Rules Receives Attention from Casino Operators
Carlton Saffa, the chief market officer of Saracen Casino Resort in Pine Bluff, AR, has reportedly received a lot of feedback about the new rule. He tweeted this week that he has been contacted by casino operators across the country wishing they had considered the 51% rule. Saffa added that he is “proud of the national implications.”
According to the Pine Bluff casino executive, the majority of Arkansas’ sports betting revenue should be kept in Arkansas. The state’s three casinos employ a total of 3,000 people and contribute millions to local and state taxes.
The proposed rule would allow each casino to have two sports-betting apps, or skins, to offer their product or partner with an outside operator.
Other than Saracen, Arkansas has the Oaklawn Casino Resort in Hot Springs and the Southland Casino Racing in West Memphis. A fourth casino, to be built in Pope County, will be added in the future. Oaklawn was the first casino to accept sports bets when land-based sports betting was launched in 2019.
