UPDATE: A portion of this post was rewritten after its original publication to more accurately describe how casino revenue affects state highway funding.Odds are you’ve seen or heard an advertisement in recent weeks about Issue 2, which goes by the rather unwieldy short title of “Countywide Voter Approval for New Casino Licenses and Repeal Casino Licenses in Pope County Initiative.” It’s one of three ballot measure that Arkansas voters will vote on in the November election. Honestly, you might have tuned out those ads, considering how often casino-related fights have been on the ballot in the last dozen years or more. Even if you have paid attention to them, you might still be unclear as to what Issue 2 does and what voting for (or against) it means as a practical matter, considering their confusing language and misleading descriptions.
To that end, let’s take a look at exactly what Issue 2 will accomplish if it is successful in November, what a vote either way on Issue 2 says, and some other information that might help you reach a decision before you head to the ballot box.What Issue 2 would doIssue 2 does three related things. First, it would repeal some provisions of Amendment 100 to the Arkansas Constitution, the 2018 voter-approved constitutional amendment that mandated the state to authorize a license to operate a casino in Pope County.
It would amend the provision of Amendment 100 that guarantees four operating casinos in the state and would reduce the maximum number of casino licenses in Arkansas to three.Finally, going forward, it would require approval by a countywide vote before a casino license could be granted in any county other than Crittenden, Garland or Jefferson Counties (where the three existing casinos in Arkansas are located).Voting on Issue 2Here is where things get a little confusing, thanks in large part to misleading ads from supporters of Issue 2. For reference, here’s one 30-second TV spot by supporters of Issue 2.
On the other hand, here’s one example of an ad from opponents of Issue 2:
That’s the spin. But in reality, a “yes” vote on Issue 2 means the following: You do not want a casino to open in Russellville/Pope County
You want to reduce the number of available casino licenses in the state from four to three, and
You don’t want the state to be able to issue any future casino licenses unless the county where the new casino would be located votes in favor of a casino.Recent television advertisements by Issue 2 supporters frame this as “putting casinos only in communities that want them.” But, importantly, the part of Issue 2 that reduces the number of available casino licenses to three means it would take a statewide effort to pass another constitutional amendment, increasing the total number of licenses allowed by law, before a new casino could be put anywhere, even if a community signaled overwhelmingly that they wanted one.A “no” vote on Issue 2, on the other hand, means:You want a casino in Russellville
You don’t want the number of available casino licenses reduced, and
You do not want future casino placements to require a countywide vote before a license can be issued. Because the current number of licenses is fixed at four, a “no” vote would not open the door for the state to award additional licenses. That would first require another constitutional amendment to increase the number of licenses. This is contrary to the suggestions of Issue 2 supporters, who act as if voting against Issue 2 means the state can and will put casinos all over the state, regardless of whether counties want them.If Issue 2 passes, would it get rid of any existing casinos?Not really. Voters passed Amendment 100 in 2018 by a 54-46 margin. That amendment set the number of casino licenses at four and required that one be awarded in each of Garland, Crittenden, Jefferson and Pope Counties. The Garland and Crittenden County licenses went to Oaklawn and Southland, respectively. Quapaw Nation of Oklahoma received the Jefferson County license and opened the gambling annex part of Saracen Casino Resort in October 2019.The Pope County license, however, has been the subject of multiple lawsuits, appeals, decisions by the Arkansas Racing Commission, reversals of those decision and assorted procedural miasma. Following nearly six years of fighting from various interested groups, the racing commission awarded the Pope County license to a subsidiary of the Cherokee Nation in June of this year, but the group has not yet broken ground on a casino.So while the passage of Issue 2 would revoke Cherokee Nation’s license and stop their ability to build a casino, it would not affect the three existing casinos in Arkansas.If Issue 2 passes, will it impact highway funding in Arkansas?Sort of. It wouldn’t necessarily impact the amount of money currently going to highways, but it would likely limit future increases in that amount.Under Amendment 100, casinos are taxed 13% on the first $150 million of net revenues (income minus payouts to gambling winners), then 20% on all money above $150 million. That tax money breaks down like this:55% to state general revenue,
19.5% to the city the casino is located in, or, if not in city limits, to the county where the casino is located,
17.5% to the Arkansas Racing Commission, and
8% to the county the casino is located.In 2019, the Arkansas Legislature passed a new law that requires the state to send any tax revenue collected from casinos that exceeds $31,200,000 to the state Department of Transportation on the last day of each fiscal year.Last year, Arkansas casinos reported $686.6 million in gaming revenue. That works out to $19.5 million in taxes on the first $150 million and $107.3 million in taxes on the remainder, for a total of $126.8 million. The state’s share of this would be 55%, or $69.7 million.After the first $31.2 million is exempted, that would leave $38.5 million to transfer to the highway department for maintenance of Arkansas highways, streets and roads.Now, $38.5 million is nothing to sneeze at. But the highway department’s total budget for fiscal year 2024 is $953 million, so we’re talking a little over 4% of the department’s budget.It’s worth noting, though, that the $686.6 million in casino revenues last year was generated by the three existing casinos. Issue 2 does not impact those casinos, so passing it would not reduce the money already going to highways. A fourth casino in the state would likely drive the total gambling revenue higher each year, however, and passing Issue 2 would prevent that fourth casino from opening. Who is supporting Issue 2?The sponsor of Issue 2 is Local Voters in Charge, a ballot committee formed by a number of people who have been involved in multiple prior attempts to stop casinos in the state. They have raised $5,600,100 to support Issue 2, all but $100 of which has come from Choctaw Nation of Oklahoma.Why would Choctaw Nation of Oklahoma pump $5.6 million into an amendment push in Arkansas? Pure, greedy self-interest. Choctaw Nation owns Choctaw Casino & Resort in Pocola, just outside of Fort Smith, which is barely an hour and a half away from Russellville. It’s a safe bet that a large portion of their revenue comes from people in western Arkansas driving to Pocola to gamble, and a casino in Russellville would likely siphon away some number of people who would have otherwise gone to Oklahoma.In a bit of selfish irony, Choctaw Nation was also one of the groups who applied for the Pope County casino license. In June, the Arkansas Racing Commission awarded the Pope County license to Cherokee Nation Entertainment, a direct competitor of Choctaw Nation in Oklahoma. Who is opposing it?The opposition to Issue 2 is nominally led by Investing in Arkansas, a ballot committee formed by Jennifer McGill, Community Relations Specialist for Cherokee Nation, and two Little Rock-based lobbyists. Investing in Arkansas has brought in $2.8 million to fight Issue 2, every dime of which has been provided by Cherokee Nation Businesses.So, wait … this is entirely a fight between a group who didn’t get the license to build a casino in Pope County and the group who did?Yep.Then why is this being presented as some life-or-death struggle over local rights and crumbling highways and other Big Scary Things?Because it’s a lot easier to get people to care about these fake, non-issue issues than to get them to pick a side when two very wealthy out-of-state groups are in a pissing match over who will get to rake in millions in additional gambling losses from Arkansans. Isn’t there a lawsuit pending over Issue 2?There is. Cherokee Nation Entertainment sued Local Voters in Charge on the heels of Secretary of State John Thurston’s undemocratic-yet-successful efforts to strike the Arkansas Abortion Amendment from the ballot. Cherokee Nation adopted Thurston’s arguments from the abortion case to argue that Local Voters in Charge violated Arkansas law in how they trained and used paid canvassers.While Thurston initially argued Local Voters in Charge’s signatures should be treated differently than those submitted by the abortion rights groups, he has since changed his ever-changing tune and said many of the Issue 2 signatures should also not be counted.Ultimately, the Arkansas Supreme Court will decide in the coming days whether Issue 2 will even be on the ballot in November. With how far the high court has been willing to bend the law to reach a desired outcome, especially in recent months, however, it’s anyone’s guess as to how this case will turn out.
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