Casino ini­tia­tive cre­ates un­cer­tain rev­enue fore­cast

The Sentinel-Record - - FRONT PAGE - DAVID SHOW­ERS

The city of Hot Springs said it has not pro­jected how the casino gam­ing amend­ment vot­ers ap­proved Tues­day night will af­fect gen­eral fund rev­enues.

Oak­lawn Rac­ing and Gam­ing will be granted one of four casino gam­ing li­censes un­der the amend­ment to the state Con­sti­tu­tion. The city and Gar­land County will re­ceive a per­cent­age of the tax ap­plied to net casino gam­ing re­ceipts, ac­cord­ing to the bal­lot ti­tle vot­ers ap­proved. They cur­rently re­ceive a per­cent­age of net wa­ger­ing rev­enues, which are de­fined as wa­gers less win­nings.

The Arkansas Depart­ment of Fi­nance and Ad­min­is­tra­tion said un­der Oak­lawn’s cur­rent games-of-skill li­cense, the city and county re­ceive 1.5 and 0.5 per­cent, re­spec­tively, of net wa­ger­ing rev­enues. The state re­ceives

18 per­cent, a cut DFA said gen­er­ated

$64.3 mil­lion dur­ing the fis­cal year that ended June 30.

The city fi­nance depart­ment said Wed­nes­day the gen­eral fund has re­ceived $1,652,921 from the games-of­skill tax since the first of the year. The

5-per­cent in­crease the fi­nance depart­ment projects for next year raises the city’s ex­pected share to $2,264,500. The city said it has not for­mally pro­jected rev­enues for the tax and dis­tri­bu­tion for­mula stip­u­lated in the amend­ment.

Gar­land County’s 2018 bud­get pro­jected $525,000 in rev­enue from the county’s per­cent­age of Oak­lawn’s net gam­ing re­ceipts.

Ac­cord­ing to the bal­lot ti­tle ap­proved Tues­day night, the city and county will re­ceive a per­cent­age of the tax levied on Oak­lawn’s net casino gam­ing re­ceipts. The amend­ment ap­plies a 13-per­cent tax to the first $150 mil­lion of net gam­ing re­ceipts dur­ing the fis­cal year, with the city re­ceiv­ing 19.5 per­cent of the tax and the county get­ting 8 per­cent. The levy in­creases to 20 per­cent on re­ceipts of more than $150 mil­lion.

The state gen­eral fund will get 55 per­cent of the tax, and the Arkansas

Rac­ing Com­mis­sion Purse and Awards Fund will get 17.5 per­cent of the tax re­ceipts gen­er­ated by all four casino li­censees. The Rac­ing Com­mis­sion will li­cense Oak­lawn and South­land Rac­ing Corp. in West Mem­phis au­to­mat­i­cally. Ap­pli­ca­tions will have to be sub­mit­ted for li­censes the amend­ment re­serves for Pope and Jef­fer­son coun­ties.

The Driv­ing Arkansas For­ward bal­lot ques­tion com­mit­tee that or­ga­nized the casino ini­tia­tive was sup­ported by the Down­stream Devel­op­ment Au­thor­ity of the Qua­paw Tribe and Chero­kee Na­tion Busi­nesses LLC, ac­cord­ing to fi­nan­cial re­ports the com­mit­tee filed with the Arkansas Ethics Com­mis­sion.

The Qua­paw Tribe of Ok­la­homa owns and op­er­ates the Down­stream Casino Re­sort in Qua­paw, Okla., and Chero­kee Na­tion Busi­nesses own Hard Rock Ho­tel and Casino Tulsa. Fi­nan­cial re­ports show they con­trib­uted al­most $5.9 mil­lion of the $6.9 mil­lion spent on the casino ad­vo­cacy cam­paign through Oct. 27.

City vot­ers nar­rowly ap­proved games of skill at Oak­lawn in a 2005 spe­cial elec­tion en­abled by the Leg­is­la­ture’s pas­sage of a lo­cal bal­lot op­tion for games of skill at horse rac­ing and grey­hound rac­ing parks. The li­cense, ac­cord­ing to the 2005 statute that au­tho­rized the lo­cal elec­tion, al­lows Oak­lawn to of­fer games “played through any elec­tronic de­vice or ma­chine that af­ford an op­por­tu­nity for the ex­er­cise of skill or judg­ment where the out­come is not com­pletely con­trolled by chance alone.”

The amend­ment de­fines casino gam­ing more broadly than the games of skill lan­guage.

DFA said it ex­pects Oak­lawn and South­land to be li­censed by July 1. The tax and dis­tri­bu­tion for­mula stip­u­lated in the amend­ment will take ef­fect at that time, DFA said.

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