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December 14, 2017

Casino v. Casino: The fight on Issue 5



Though the Arkansas Supreme Court may yet make the issue moot, the battle over Issue 5, to allow three more casinos in Arkansas, is raging.

The group pushing to be given constitutional protection for three casinos in Boone, Miller and Washington counties is advertising heavily with a message of the jobs and tax revenues new casinos would bring, while returning Arkansas gamblers’ money from other states.

An opposition group, relying on funding from the state’s two existing casinos, at Oaklawn Park and Southland Gaming and Racing, is attacking the casino proposal. It is the work (so far as we know) of two investors from Missouri, with significant aid from the would-be operator of a Washington County casino, the Cherokee Nation.

The opposition group hits heavily on a point that has bothered me from the start — the maybe unprecedented grant of an exclusive business franchise in a state constitution. 

Not good. But, as the casino group fairly points out, the Arkansas Constitution already grants a horse racing monopoly in Hot Springs that is held by the Oaklawn Jockey Club. And that monopoly, in turn, entitles Oaklawn to the duopoly privilege, with Southland, thanks to its dog racing, to have “electronic games of skill.” These are otherwise known as casino gambling — blackjack, poker and slot machines of the sort identical to those you find in Las Vegas. Blackjack is no longer electronic, in fact, but played with real cards

Yesterday, the group opposing three new casinos illustrated the somewhat slippery ground on which they stand in attacking the Missouri interlopers.

They disclosed the $100,000 Oaklawn and Southland have put in the campaign so far (the pro-casino group, they say, has spent $3 million, but that includes a significant sum spent on an unsuccessful effort by related people in 2012). They say that they are not doing this because they believe the new casinos would harm their casinos. Rather:

It is a terrible and dishonest amendment that will be bad for our State. Arkansas will have no say over who gets the licenses, who operates the licenses or even what kind of gambling they can offer, since the type of gaming is defined by other States in the amendment. This is an open invitation to corruption and unimaginable forms of gambling. Worse, the people who live in communities where casinos will be located are being denied the right to vote on what they want in their own communities. It is not surprising that no state has ever voted for something like this.”

I’ve asked, but so far received no response, to my question about what power the state has to regulate decisions by the owners of Oaklawn or Southland to sell to other investors. I’d guess Arkansas would have a hard time standing in the way of such a business decision. Speaking of the vagaries of ownership, it would be unkind to detail the past racketeering charges and reports of mob ties in the corporate family tree of the greyhound track ownership.

However shadowy and bad the idea might be of writing Missouri-controlled LLC’s into the state Constitution ( if the Arkansas legislature hadn’t passed an abominable law shielding LLC ownership we’d know a lot more), the political issue is a lot simpler.

I think polling will show that the great contest is between the traditional resistance to casino gambling in Arkansas, driven by religious influence, against the growing prevalence of gambling in the United States.

The debate about constitutional construction is a worthy and interesting one, but I don’t think it’s much of a voter mover. And please. Out of state owners? The boss of Southland, Jeremy Jacobs, has homes in New York and Florida.  The Cella family that has controlled Oaklawn  for generations makes their primary homes in the St. Louis area. The homes of the would-be new casino honchos — Jim Thompson of Blue Eye, Mo., and Bob Womack of Branson —  lie closer to the Arkansas border.

I’ve thought from the first that this amendment was a terrible idea. If there’s to be gambling, Mississippi is a better model, far closer to a free market.  But sometimes when a spade card  is played you have to call it a spade.


Though the Arkansas Supreme Court may yet make the issue moot, the battle over Issue 5, to allow three more casinos in Arkansas, is raging.

The group pushing to be given constitutional protection for three casinos in Boone, Miller and Washington counties is advertising heavily with a message of the jobs and tax revenues new casinos would bring, while returning Arkansas gamblers’ money from other states.

An opposition group, relying on funding from the state’s two existing casinos, at Oaklawn Park and Southland Gaming and Racing, is attacking the casino proposal. It is the work (so far as we know) of two investors from Missouri, with significant aid from the would-be operator of a Washington County casino, the Cherokee Nation.

The opposition group hits heavily on a point that has bothered me from the start — the maybe unprecedented grant of an exclusive business franchise in a state constitution. 

Not good. But, as the casino group fairly points out, the Arkansas Constitution already grants a horse racing monopoly in Hot Springs that is held by the Oaklawn Jockey Club. And that monopoly, in turn, entitles Oaklawn to the duopoly privilege, with Southland, thanks to its dog racing, to have “electronic games of skill.” These are otherwise known as casino gambling — blackjack, poker and slot machines of the sort identical to those you find in Las Vegas. Blackjack is no longer electronic, in fact, but played with real cards

Yesterday, the group opposing three new casinos illustrated the somewhat slippery ground on which they stand in attacking the Missouri interlopers.

They disclosed the $100,000 Oaklawn and Southland have put in the campaign so far (the pro-casino group, they say, has spent $3 million, but that includes a significant sum spent on an unsuccessful effort by related people in 2012). They say that they are not doing this because they believe the new casinos would harm their casinos. Rather:

It is a terrible and dishonest amendment that will be bad for our State. Arkansas will have no say over who gets the licenses, who operates the licenses or even what kind of gambling they can offer, since the type of gaming is defined by other States in the amendment. This is an open invitation to corruption and unimaginable forms of gambling. Worse, the people who live in communities where casinos will be located are being denied the right to vote on what they want in their own communities. It is not surprising that no state has ever voted for something like this.”

I’ve asked, but so far received no response, to my question about what power the state has to regulate decisions by the owners of Oaklawn or Southland to sell to other investors. I’d guess Arkansas would have a hard time standing in the way of such a business decision. Speaking of the vagaries of ownership, it would be unkind to detail the past racketeering charges and reports of mob ties in the corporate family tree of the greyhound track ownership.

However shadowy and bad the idea might be of writing Missouri-controlled LLC’s into the state Constitution ( if the Arkansas legislature hadn’t passed an abominable law shielding LLC ownership we’d know a lot more), the political issue is a lot simpler.

I think polling will show that the great contest is between the traditional resistance to casino gambling in Arkansas, driven by religious influence, against the growing prevalence of gambling in the United States.

The debate about constitutional construction is a worthy and interesting one, but I don’t think it’s much of a voter mover. And please. Out of state owners? The boss of Southland, Jeremy Jacobs, has homes in New York and Florida.  The Cella family that has controlled Oaklawn  for generations makes their primary homes in the St. Louis area. The homes of the would-be new casino honchos — Jim Thompson of Blue Eye, Mo., and Bob Womack of Branson —  lie closer to the Arkansas border.

I’ve thought from the first that this amendment was a terrible idea. If there’s to be gambling, Mississippi is a better model, far closer to a free market.  But sometimes when a spade card  is played you have to call it a spade.

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