Whew!
That was my reaction last Thursday morning when I heard the ballot proposal to create casino gambling in Arkansas had been removed from the ballot by the Arkansas Supreme Court.
Issue No. 5 was an awful amendment to the Arkansas Constitution. By constitutional authority, it would have granted a casino monopoly to three limited liability companies, as proposed by two businessmen from Missouri. It was tossed because the Supreme Court ruled the ballot language, previously approved by Attorney General Leslie Rutledge, was insufficient to inform voters. Particularly, it failed to notify voters that the measure would authorize sports gambling, in violation of federal law.
It had many other shortcomings, but one that bothered me was its ability to force casinos into communities whether those communities wanted them or not. The measure would have authorized casinos in Miller, Boone and Washington counties.
Arkansans will be asked again one day to authorize some kind of casino gaming, but even the staunchest supporter of casinos in Arkansas could see Issue No. 5 was a horrible concoction. When a new measure is brought forward, I've got a couple of suggestions.
First, any county where a casino might be operated should have full authority, indeed a requirement, to call a local election to determine whether that's what local residents want. It's simple: No community should be forced to take on casinos unless its residents want them.
Secondly, local governments should get far more than the tax revenue Issue No. 5 promised. That proposal pledged 18 percent of net annual gaming revenue to the state, 0.5 percent to the county and 1.5 percent for any city in which a casino was built. That is not enough.
Why should state government be the recipient of the windfall? Issue No. 5 wouldn't have even legalized a casino in the state's capital city. Yet a massive amount of the tax benefit for casinos would have been shipped to Little Rock for state's government's use. Sure, state government devotes its resources all around Arkansas, but wouldn't it make sense to directly funnel more of the tax revenue to the communities most affected by establishment of casinos? It doesn't need to be funneled through the state, where state lawmakers will gleefully spread the money around.
Casinos will be a major change in the fabric of any community in Arkansas. It must be viewed as a great privilege for someone to be able to operate a casino anywhere in this state, and with that privilege should come a responsibility to pay serious dividends to the communities affected by a casino's presence. It's the local communities that will carry the burdens, so why does it make sense for the state to get a huge share of the tax revenue while the local governments get a relatively small piece of the action?
Casinos are still a bad bet for Arkansas and I would oppose them, but if Arkansans are going to say yes, let's make sure it means something for local coffers.
Who knows how much a casino would make in Arkansas? But they're lucrative ventures for the people who run them and they should be lucrative ventures for the communities that take the risk of allowing them in their back yards.
The two casino-style operations in Arkansas now are at Oaklawn Jockey Club in Hot Springs and Southland Park Gaming and Racing in West Memphis. The state allows their so-called "electronic games of skill" under the ruse that they're not casinos. It's a joke, but that's an old battle not worth re-fighting here.
In fiscal 2016, Oaklawn's 18 percent tax to the state for its electronic gaming totaled $20.8 million. For Southland, the total was $34.9 million. Taking an average of the two, every 1 percent of tax might be expected to generate a little more than $1.5 million. Using such assumptions, a casino in Washington County under Issue No. 5 would have paid about $750,000 a year to county government. Operating within a city would have cost the casino another 1.5 percent, or $2.25 million, making it more than likely they would find a spot to operate outside city limits.
It's not enough, at least for the host communities. If a community is going to be expected to embrace a 24-hour-a-day gambling operation with alcohol sales, let's put a premium on that imposition. Why not 5 percent for the county and 5 percent for the city, for a cool $7.5 million each annually? Let's not pretend casinos have no impact on the communities in which they operate. Casino operators should have to treat local governments as the partners they necessarily will be forced to become.
What about the state? Well, at 8 percent per casino, it would amount to $12 million. Assuming a future proposal would authorize three to five casinos -- a wild guess, I'll grant you -- that would still be $36 million to $60 million a year for the state's role in all this, which shouldn't need more than some administrative work and a few gaming agents.
Some might say high local taxation might discourage casino operators from risking their investment. Maybe, but what do they want, a sure bet?
I'm pretty certain there is no such thing. Those who want to operate casinos in Arkansas, as a matter of fact, are counting on it to make them millions of dollars.
Commentary on 10/17/2016