Arkansas Regulates Sports Betting Under Gambling Laws

Arkansas has undergone a significant transformation in its approach to gambling, evolving from a state with limited options to one that embraces regulated sports betting. This shift reflects a broader national trend following the 2018 Supreme Court decision to overturn the Professional and Amateur Sports Protection Act (PASPA). For residents and visitors in The Natural State, understanding the framework of Arkansas’s gambling laws is essential for participating in legal sports wagering. The state has carefully integrated sports betting into its existing gaming infrastructure, creating a unique market managed by established casino operators.

The journey to legal sports betting in Arkansas was methodical, culminating in a constitutional amendment that authorized comprehensive casino gaming, including wagering on sporting events. The regulatory body, the Arkansas Racing Commission, has been tasked with overseeing this expansion, ensuring that all operations adhere to state laws designed to protect consumers and maintain market integrity. This regulatory oversight covers everything from licensing operators to setting the rules for online and retail sportsbooks. As a result, the landscape for both casual and serious bettors is now clearly defined, offering a secure environment for wagering on a wide variety of sports.

History of Gambling in Arkansas

The history of gambling in Arkansas is a story of gradual evolution, marked by long periods of prohibition punctuated by key legislative changes. For much of its history, the state held a conservative stance on most forms of gambling. The primary exceptions were pari-mutuel wagering on horse racing and greyhound racing, which have been fixtures in the state for decades.

Early Forms of Legal Wagering

Pari-mutuel betting was first legalized in the 1930s, leading to the establishment of two iconic venues: Oaklawn Racing Casino Resort in Hot Springs for thoroughbred horse racing and Southland Casino Racing in West Memphis for greyhound racing. For many years, these two tracks represented the entirety of the legal gambling landscape in Arkansas, offering a controlled environment for wagering enthusiasts. These establishments became cornerstones of their local economies and cultivated a long-standing tradition of racing in the state.

The Introduction of the State Lottery

A significant shift occurred in 2008 when Arkansas voters approved a constitutional amendment to create a state-run lottery. The Arkansas Scholarship Lottery launched in 2009 with the primary mission of raising funds for college scholarships. The introduction of the lottery marked a major expansion of state-sanctioned gambling, making it accessible to a much wider audience. While distinct from casino gaming or sports betting, it signaled a growing public acceptance of regulated gambling activities.

The Path to Casino Gaming and Sports Betting

The most transformative change came in November 2018 with the passage of the Arkansas Casino Gaming Amendment, also known as Issue 4 or Amendment 100. This constitutional amendment authorized the state’s two existing racetracks, Oaklawn and Southland, to become full-fledged casinos offering a wide array of games, including slot machines and table games. Crucially, the amendment also included provisions for legal sports betting. Furthermore, it permitted the issuance of two additional casino licenses in Pope and Jefferson counties, paving the way for a more robust and competitive gaming market in Arkansas.

Current Gambling Laws in Arkansas

The legal framework for gambling in Arkansas is primarily defined by Amendment 100 to the Arkansas Constitution. This amendment serves as the foundation for all casino gaming and sports betting activities within the state. The Arkansas Racing Commission (ARC) is the state agency responsible for implementing and enforcing the rules and regulations derived from this amendment.

Regulatory Oversight and Licensing

Under current gambling laws, the ARC oversees the licensing of the four authorized casinos in the state. These casinos are the exclusive providers of legal sports betting, both at their physical locations (retail sportsbooks) and through online platforms. In February 2022, the ARC approved rules that allowed each casino to partner with up to two online sportsbook brands, or skins, to offer mobile sports betting statewide. This decision was a pivotal moment, as it made legal sports betting accessible to anyone of legal age located within Arkansas borders, not just those physically present at a casino.

Key Regulations for Sports Betting

The regulations established by the ARC govern all aspects of sports betting operations. Some of the key rules include:

• Legal Age: Participants must be 21 years of age or older to place a sports wager.
• Geographic Location: All online bets must be placed from within the physical boundaries of Arkansas. Geolocation technology is used by all licensed apps to verify a user’s location.
• Authorized Events: Wagering is permitted on professional sports, collegiate sports (including in-state teams), and certain international sporting events as approved by the ARC.
• Revenue Sharing: The rules stipulate a unique revenue-sharing model where casinos must retain at least 51% of the revenue from their online sports betting partnerships, a figure higher than in many other states.

What is the legal definition of gambling?

In Arkansas, the legal definition of gambling is outlined in the state’s criminal code. According to Arkansas Code § 5-66-103, gambling is defined as betting something of value on the outcome of a future event which is determined by an element of chance, or upon a game of chance. The law specifies that a person engages in gambling if they bet anything of value at any game of chance or skill, or at any gambling device, or if they operate a gambling house.

However, the state’s constitution and subsequent amendments have carved out specific exceptions to this general prohibition. Activities explicitly authorized by law, such as the state lottery, pari-mutuel wagering on horse and dog races, charitable bingo and raffles, and casino gaming (including sports betting) at the four licensed facilities, are considered legal and are not subject to the general anti-gambling statutes.

Is advertising of gambling permitted in Arkansas?

Yes, the advertising of legal gambling activities is permitted in Arkansas, but it is subject to regulations set forth by the Arkansas Racing Commission. Licensed casinos and their authorized sports betting partners can market their services to the public through various channels, including television, radio, print, and digital media. These advertisements must be truthful and not misleading. Furthermore, all marketing materials are required to include responsible gaming messages and provide resources for individuals who may need help with problem gambling. The goal of these regulations is to allow businesses to promote their legal products while also ensuring the public is informed about the potential risks associated with gambling.

Gambling Winnings and Losses Taxes

Gambling winnings are considered taxable income by both the federal government and the state of Arkansas. Bettors are legally required to report all winnings on their tax returns. The tax implications can vary based on the amount won and the type of gambling activity.

Federal Tax Requirements

The Internal Revenue Service (IRS) requires that you report all gambling winnings. If your winnings are substantial, the payer (such as a casino or sportsbook) may be required to provide you with a Form W-2G, Certain Gambling Winnings. A Form W-2G is generally issued if you win:

• $600 or more from a betting pool, sweepstakes, or lottery, if the payout is at least 300 times the wager amount.
• $1,200 or more from bingo or slot machines.
• $1,500 or more (minus the wager) from keno.
• $5,000 or more (minus the wager) from a poker tournament.

Even if you do not receive a Form W-2G, you are still obligated to report the income. The standard federal withholding rate for large gambling winnings is 24%.

Arkansas State Tax Requirements

In addition to federal taxes, gambling winnings are also subject to Arkansas state income tax. Arkansas taxes income at a progressive rate, and winnings are added to your total income for the year, which can potentially place you in a higher tax bracket. The state of Arkansas also requires payers to withhold state taxes on certain winnings. It is crucial for bettors to keep accurate records of their wagers, winnings, and losses throughout the year to ensure accurate tax filing.

Deducting Gambling Losses

Bettors who itemize their deductions on their federal tax return can deduct gambling losses. However, the amount of losses you can deduct cannot exceed the amount of your reported winnings for the same year. For example, if you won $3,000 but lost $4,000, you can only deduct up to $3,000 in losses. You cannot deduct the net loss of $1,000. To claim these deductions, you must maintain detailed records, such as receipts, tickets, and statements.

Key Milestones in Gambling Laws

Arkansas’s path to its current gambling landscape was paved by several key legislative and voter-approved milestones. These events fundamentally reshaped the state’s relationship with the gaming industry.

• 1935: The state legalizes pari-mutuel betting on horse racing, leading to the establishment of Oaklawn Park.
• 1957: Southland Greyhound Park (now Southland Casino Racing) opens after pari-mutuel wagering on greyhound racing is legalized.
• 2005: Oaklawn and Southland are authorized to install electronic games of skill, an early precursor to full casino gaming. This significantly expanded their offerings beyond live racing.
• 2008: Arkansas voters approve the Arkansas Scholarship Lottery Amendment, creating a state-run lottery to fund educational scholarships.
• 2018: The Arkansas Casino Gaming Amendment (Amendment 100) is passed by voters. This landmark decision authorizes four full-scale casinos and legalizes sports betting under their licenses.
• 2019: The first legal retail sports bets are placed in Arkansas at Oaklawn Racing Casino Resort in July.
• 2022: The Arkansas Racing Commission finalizes rules to allow for statewide mobile and online sports betting, with the first apps launching in March of that year.

What Types of Gambling Are Legal?

The gambling laws in Arkansas permit several forms of regulated wagering. For beginners, it’s important to know which activities are sanctioned by the state to ensure they are participating legally and safely.

1. Sports Betting: Both retail (in-person) and online/mobile sports betting are legal. Wagers can be placed on a wide range of professional and collegiate sporting events through operators licensed by the state.
2. Casino Games: The four licensed casinos in Arkansas are permitted to offer a full suite of traditional casino games, including slot machines, blackjack, craps, roulette, and poker.
3. Pari-Mutuel Wagering: Betting on live and simulcast horse racing and greyhound racing remains legal at the state’s licensed racetracks.
4. State Lottery: The Arkansas Scholarship Lottery offers various games, including scratch-off tickets and draw games like Powerball and Mega Millions.
5. Charitable Gaming: Certain non-profit and charitable organizations are permitted to conduct games of chance, such as bingo and raffles, for fundraising purposes, subject to state regulations.

Are any types of gambling products prohibited?

Yes, despite the expansion of legal gambling, certain activities remain prohibited under Arkansas law. The state’s gambling laws are specific about what is allowed, and anything not explicitly legalized is considered illegal. Prohibited forms of gambling include:

• Unregulated Online Casinos: While online sports betting is legal through state-licensed operators, playing on unregulated offshore online casino sites that offer slots or table games is illegal.
• Private and Unlicensed Gambling Operations: Operating or participating in unauthorized poker games, sports betting rings, or any other gambling enterprise not licensed by the state is a criminal offense.
• Video Lottery Terminals (VLTs): The operation of VLTs or other similar gambling devices in establishments outside of the four licensed casinos is not permitted.

Quick Facts About Gambling in Arkansas

Popular Sports to Bet on in Arkansas

The passion for sports runs deep in Arkansas, and this enthusiasm translates directly into sports betting. While professional teams from neighboring states garner significant interest, college sports, particularly the Arkansas Razorbacks, are at the heart of the state’s sports culture.

College Sports

The Arkansas Razorbacks are, without a doubt, the most popular team for sports betting in the state. Bettors actively wager on Razorbacks football games in the highly competitive SEC, as well as on their perennially strong basketball program. Betting markets include point spreads, moneylines, totals, and player props for individual games.

Professional Football

The National Football League (NFL) is a major driver of sports betting action. Due to its geographic location, Arkansas has a diverse fan base with allegiances to teams like the Dallas Cowboys, Kansas City Chiefs, and Tennessee Titans. Wagering on the NFL is popular throughout the regular season, playoffs, and the Super Bowl.

Professional Basketball and Baseball

The NBA and MLB also attract considerable betting interest. Teams like the Memphis Grizzlies (NBA) and the St. Louis Cardinals (MLB) have strong followings in Arkansas. Bettors engage with a daily slate of games, offering numerous opportunities for wagering.

Top Sportsbooks in Arkansas

The Arkansas online sports betting market is unique because it is controlled by the state’s casinos. Each casino can launch its own branded app or partner with established national brands. Here are the primary licensed sportsbooks available to bettors in Arkansas.

Conclusion

Arkansas has successfully navigated the complexities of legalizing and regulating sports betting, integrating it into the state’s established gambling laws. By empowering the Arkansas Racing Commission to oversee operations and tying licenses directly to its four land-based casinos, the state has created a controlled and secure market. For both beginner and amateur bettors, this structure provides a safe environment to engage in sports wagering, backed by clear rules on legal age, location verification, and responsible gaming.

The current legal landscape offers a variety of options, from retail sportsbooks at world-class casino resorts to the convenience of statewide mobile apps. With a clear definition of legal gambling, established tax guidelines, and a growing number of licensed operators, Arkansas has solidified its position in the national sports betting arena. As the market continues to mature, residents can expect a competitive and well-regulated environment for placing wagers on their favorite teams.

References

Arkansas General Assembly. (n.d.). Arkansas Code. Retrieved from https://www.arkleg.state.ar.us/

Arkansas Racing Commission. (n.d.). Rules and Regulations. Arkansas Department of Finance and Administration. Retrieved from https://www.dfa.arkansas.gov/racing-commission/rules-and-regulations

Internal Revenue Service. (n.d.). Topic No. 419, Gambling Income and Losses. Retrieved from https://www.irs.gov/taxtopics/tc419

National Council on Problem Gambling. (n.d.). Arkansas Council on Problem Gambling. Retrieved from https://www.ncpgambling.org/state/arkansas/