The Arkansas Racing Commission on Thursday instructed its attorney to inform a Nevada company that operates a site for people to buy and sell active sportsbook tickets that the commission doesn't regulate the firm under its rules.
But the commission stopped short of heeding PropSwap's request to confirm that there is no objection to the Las Vegas company doing business in Arkansas, after attorneys for Oaklawn Racing Casino Resort and Southland Casino Racing said they recently learned about the company and have numerous questions about the company's operations.
"It is necessarily true that there is no objection," Commissioner Michael Post of Altus told commission attorney Bryon Freeland.
"There might be from Southland and Oaklawn," he said.
The commission also approved racing dates for Oaklawn and Southland for next year, and heard updates on casino expansions at Oaklawn in Hot Springs and Southland in West Memphis and the construction of the Saracen Casino Resort in Pine Bluff.
Amendment 100 to the Arkansas Constitution, approved by voters in November of 2018, authorized the commission to license up to four casinos in Arkansas, including the expansion of Oaklawn and Southland and a casino apiece in Jefferson and Pope counties, and also authorized sports betting. Two applications have been submitted for the casino license in Pope County.
Lloyd Levenson, chief executive officer for the Cooper Levenson law firm in Atlantic City, N.J., said in an email to commission Director John "Smokey" Campbell that he represents PropSwap, and "although I do not believe the company will need any type of approval in Arkansas, I wanted the commission to be aware of what they do in case they hear of PropSwap's product."
PropSwap provides a platform for people who made a legal sports bet from a licensed sportsbook to sell their bet to an interested buyer, he wrote in his email to Campbell.
"PropSwap does not require gaming licenses in any state, because no new bets are produced through PropSwap," Levenson said. "PropSwap is simply a peer-to-peer marketplace for betting tickets."
He said that the company was started in Nevada in September 2015 and is now active in Connecticut, Illinois, Indiana, Kentucky, Massachusetts, Mississippi, Nevada, New York, New Jersey, Ohio, Pennsylvania, and West Virginia.
PropSwap has found that customers on average spend $200 more per weekend on sports bets, so it benefits casinos, and bettors are able to cash in on a smart bet before it expires, Levenson said.
"PropSwap has received ZERO complaints from any gaming regulator in a state where they operate," he wrote in his email to Campbell.
Freeland said he reviewed the Arkansas Racing Commission's rules and he didn't see any prohibition on PropSwap.
"Our rules are patterned after the Nevada rules, and PropSwap is operating in Nevada," he said.
Jennifer Rushin, a tax division manager at the state Department of Finance and Administration, said the racing commission regulates the sale of tickets and cashing of the tickets.
"Now reselling the tickets, basically there is really no way I can regulate that either. I don't know that it happened. Even if it is happening right now, there is no way I know that," she said. "I don't feel like we can regulate it. There is just no way."
Attorneys for Oaklawn and Southland said they want to study PropSwap's operations more.
"Questions that I would have is, can I on this site if I go and buy a ticket or make a sports wager in Las Vegas at a Las Vegas casino, can an Arkansas resident buy that ticket?" asked Skip Ebel, an attorney for Oaklawn. "Can someone make a wager at a Mississippi casino and then me as an Arkansas resident buy that ticket on this site?"
"Be mindful that if Dallas is a 100-to-1 to win the Super Bowl and I make that bet at a Mississippi casino and then Dallas plays great during the season, the odds go down to 10-to-1 ... and I can go to Southland or Oaklawn or Pine Bluff and I can get 10-to-1 on Dallas at that point," he said. "If I go to one of the Arkansas casinos, Arkansas will get the tax revenues from that wager. If I purchase that ticket on this site instead of going and making the wager at one of the Arkansas sports wagering facilities, then Arkansas is not getting any tax revenue from that."
Ebel said Oaklawn has "know your customer" rules when the wager is made in the casino that it operates under federal law, "so do they operate those same parameters of knowing who is really making these large wagers, where that cash is coming from, [and] who has that cash."
Carlton Saffa, Saracen Casino Resort project manager, told the commission that "we would be in a similar mind to our cousins in this business in Hot Springs and in West Memphis," regarding PropSwap.
After the commission's meeting, Levenson could not be reached for comment by telephone or email late Thursday afternoon.
In other business, the commission approved Southland's request to conduct live greyhound racing from Jan. 1-June 30 in its first meet of 2020, with six live racing performances in a normal week, and then from July 1 until Dec. 31 in its second meet of 2020, with six live racing performances in a normal week until October when that would drop to five a week for the remainder of the meet. Southland has agreed to reduce the number of its live races by 20% from 2019 to 2020, by 40% from 2019 to 2021 and by 60% from 2019 to 2022 to phase them out by Dec. 31, 2022.
The commission also approved Oaklawn's proposed 57-day live horse racing calendar that starts on the Jan. 24 opening day through May 2.
Regarding the construction of the Saracen Casino Resort in Pine Bluff, Saffa said that "we keep swinging between being ahead and behind" schedule due to the weather.
"We still are looking at a June open of the casino floor and then the hotel and convention space thereafter," he said. "There have been rampant rumors that we've somehow decided we are going to change the scope of the project, [but] we are still intending to proceed full speed."
Gambling is already taking place in Pine Bluff at the smaller Saracen Q Store and Casino Annex.
Oaklawn General Manager Wayne Smith said that "the casino is still on track to open at the end of January before live season, before the 24th.
"Restaurants and concourse are still on pace for mid-summer and hotel is hopefully by Christmas next year," he said.
Southland Racing Director Shane Bolender told the commission that "like everybody else the weather is going to be the dictator over the next few months on how quick or slow it goes.
"But, as of right now, we are still on the same track we were before," he added.
Metro on 11/22/2019