Petitioners urge casino caution

They ask state panel to slow down process of setting rules

A Little Rock attorney and two faith-based leaders petitioned the state Racing Commission in a joint effort Friday to slow down the process of adopting rules governing casino operations in the state.

They also cautioned that sports betting should be thoroughly researched before moving forward.

Scott Trotter — a Little Rock attorney who represented the group Ensuring Arkansas’ Future, which campaigned against allowing casinos in the state — as well as Jerry Cox, president of the faith-based Family Council, and the Rev. Stephen Copley of North Little Rock presented the commission with a report from Keith C. Miller, a law professor and gambling expert at Drake University in Des Moines, Iowa.

Trotter said he began looking into the issue after Amendment 100 was approved by voters in November to legalize casino gambling in the state.

“I was interested in how the Racing Commission was going to go about trying to handle the enforcement and administration of the casinos. It is no question that they are woefully understaffed in order to ultimately do the job once the casinos are operating,” Trotter said. “They are really are going to be hardpressed in a short period of time to come up with regulations both to govern applications and licensing as well as the extensive regulation of the casino operations.”

Scott Hardin, spokesman for the state Department of Finance and Administration, which oversees the Racing Commission, said it is in the process of reviewing the information and disseminating it to commission members.

“It would be premature to comment as we’ve not had time to review it in full,” Hardin said.

The report was filed a day after the Johnson County Quorum Court passed a resolution in a 7-4 vote to support amending Arkansas Amendment 100 to allow a casino license to be issued to Johnson County. About 56 percent of Johnson County voters supported Amendment 100 at the polls.

The amendment names Jefferson and Pope counties as the specific places where the state could license two new casinos. It also allows Oaklawn Racing and Gaming in Hot Springs and Southland Gaming and Racing in West Memphis to expand into full-

fledged casinos.

But voters in Pope County soundly rejected the amendment and also approved an ordinance requiring voter approval before local officials support a casino. Local officials who left office in December said they supported a casino proposed by Gulfside Partnership for Russellville, even though it was too early to apply for a license.

Under Miller’s study, which cost Trotter and the others about $7,625, the professor takes exception with seven key areas from the more than 340 pages of proposed rules.

“I focus on issues that affect consumers and players and that balance the state’s desire to establish a regulatory system that creates casino tax revenue while minimizing the harm that can sometimes be produced by gambling,” Miller wrote in the executive summary.

Miller, who teaches gambling law and has published extensively on gambling, cautioned the commission against casinos extending credit to players and locating automatic teller machines near gambling areas.

“Credit provides an opportunity for gamblers to lose more than they can truly afford,” Miller wrote.

Later in the document, Miller advised the commission to go “slow initially” before deciding whether to grant credit lines.

“This provides regulators an opportunity to observe how the regulated casino markets are operating and whether credit is appropriate or necessary, and to study and evaluate the impact on gamblers if they take on debt to gamble,” Miller said.

Gambling disorders, Miller said, are often characterized by players maxing out bank accounts and credit cards.

“For a person determined to achieve this, it may be that little can be done to prevent it,” Miller said. “However, if ATMs and credit card cash advance machines are located on the gaming floors of casi- nos, this makes it far too easy for gamblers to tap into their accounts.”

The commission should also work with the Legislature to create an administrative resolution process for disagreements between a casino and a player “who believes the casino has wrongly withheld money that is owed to him from gambling activity,” Miller said.

“Having an administrative process in place that provides an opportunity to resolve the dispute would draw on the expertise of the Commission, and would save the courts from being a tribunal of first resort,” Miller said.

Also, Miller said, the proposed rules give “far too little attention” to gambling disorders, highlighting a 2015 law that stripped the Arkansas Scholarship Lottery’s $200,000-a-year contribution to compulsive-gambling treatment and education programs in favor of increasing the amount of money available for scholarships.

The cut eliminated the Arkansas gambling hotline that was established after the Arkansas lottery was adopted in 2009.

“The gambling disorder issue has special significance with the prospect that sports betting will be offered in the state,” Miller said. “Sports betting is a popular form of gambling with young people, with one source reporting that 67% of college students bet on sports. With the spread of legal sports betting, this number will likely increase.

Unfortunately, youth is a significant risk factor for developing gambling disorders.”

Input should be sought from universities in the state about allowing betting involving their teams and a dedicated study should be performed before promulgating sports betting regulations for the state, Miller said.

Miller also recommended that the commission use “self-exclusions,” in which a gambler submits a form requesting that he be placed on a list of people who are not permitted to gamble at licensed casinos.

The proposed rules offer self-exclusion for “interactive gaming” such as that done over the Internet or telephone, but does not provide barring gamblers from casino properties themselves.

Miller also suggested that casinos not be exempted from the Arkansas Clean Indoor Air Act, which allows smoking at existing racetracks.

The Racing Commission’s draft of proposed rules is being publicly vetted through the end of the day Monday, and anyone offering input can appear in person at a public hearing Thursday in the commission’s office at 1515 W. Seventh St. in Little Rock.

At that time, the commission can vote to adopt, modify or reject the proposed rules, which will then be sent to a legislative committee for approval.

No casino applications can be submitted until the rules are adopted and in place.