What About Issue 2?

So much back-and-forth on Pope County casinos!

There’s been a lot of back-and-forth in the news over the last few years about Pope County casinos. Now (maybe) November’s ballot will include Issue 2, a constitutional amendment about a planned Pope County casino as well as future casino licensing. Are you as confused about it as we are?

Counting the votes for Issue 2 is up in the air now after several years of lawsuits have placed that final decision in the hands of the Arkansas Supreme Court. Because the question has dragged on so close to November our state ballots have already been printed with Issue 2 included; if the court rules against allowing Issue 2, those votes will not be counted.

What Is Issue 2?

According to the Cooperative Extension Service (University of Arkansas Research & Extension) fact sheet, Issue 2 "Repealing Pope County Casino License and Requiring Local Elections" would:

1. Remove every reference to Pope County from Amendment 100, which originally authorized the casino location.

2. Revoke any casino gaming license issued for Pope County prior to this amendment taking effect.

3. *Require the quorum court where any future casino license is proposed to call for a countywide vote in a special election.

4. *Establish ballot issue language to be used for any future countywide votes on casino licenses.

5. *Require voter approval at the county level before the Arkansas Racing Commission could issue a casino license in the future.

*Sections 3-5 would only apply if voters in a future statewide election amend the state constitution to add additional licenses and counties where a casino could be authorized.

Background

The Extension Service voter guide further explains that

Arkansas voters approved a constitutional amendment, which is now Amendment 100, in 2018, by a statewide vote of 470,954 in favor (54.1%) to 399,530 against (45.9%).

Amendment 100 authorized four casino locations: one in West Memphis to Southland Racing, one in Hot Springs to Oaklawn Jockey Club, one in Jefferson County and one in Pope County.

Voters in three of those four counties approved Amendment 100 to the State Constitution (of course it passed state-wide). However, Pope County voters stood 61% against it and they sponsored unsuccessful ballot question committees in both 2020 and 2022 to remove the Pope County casino gaming license from the Arkansas Constitution.

Who Opposes? Who Supports?

Opponents of Issue 2 -- Cherokee Nation Entertainment -- currently hold the Pope County gaming license (after much legal wrangling), with plans to build a $300 million casino, hotel and resort in Russellville in line with their economic agreement blessed by both Republican County Judge Ben Cross and a majority of the Pope County Quorum Court. If Issue 2 passes and Cherokee Nation loses their casino license, Pope County's economic development agreement with Cherokee Nation is voided and the County incurs a $39 million penalty.

LegendsArkansas.com

Speaking for Cherokee Nation Entertainment, Natalie Ghidotti says “The only thing that Issue 2 does is repeal Pope County from the places that can have a casino in Arkansas. And it voids the license that the Cherokee Nation holds right now.” Cherokee Nation has funded the opposition to the tune of about $2.8 million.

Supporters of Issue 2 -- Choctaw Nation of Oklahoma -- have poured $5.3 million into the campaign, with only $100 coming to the campaign from Arkansas. Ghidotti says Choctaw Nation wants only to protect their casino in Pocola, Oklahoma (across the state line from Ft. Smith). Hans Stiritz, the campaign spokesman for the ballot question group Local Voters in Charge, says

“In record numbers, the people of Arkansas have supported our campaign to give local voters the final say on whether a casino should be built in their town or not. Some communities might want casinos, others might not, but nearly everyone agrees that it should be up to local voters to determine the character of the communities in which they live."

Casino Tax Dollars for Highways

The Arkansas Times (standing clearly against Issue 2) writes:

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.

Bottom Line?

It's true that, if passed, Issue 2 would require county voters to approve any new gaming licenses -- but only if/when a future Constitutional amendment is passed that allows more casino licenses in the state. That’s because Issue 2 limits casino licenses to three and so any future licenses must first be approved as a Constitutional amendment.

Voting "YES" means you want to change the Constitution to remove the Pope County casino gaming license approved in Amendment 100. Voting "YES" means you want a special election to allow county voters to approve future casino licenses, if a future Constitutional amendment implements them.

Voting "NO" means you want to keep the Pope County gaming license in the Constitution (along with the other three current licenses). Voting "NO" means you do not want county voters to weigh in if/when future casino licenses are in play. Voting “NO” does not affect the current three casino licenses.

We fundamentally oppose constitutional amendments that seem to pop up for every contentious issue. We should reserve our Constitution for basic foundational issues and leave the everyday stuff to state law. Putting non-foundational issues into our state Constitution just ham-strings the public and limits voters. That’s because changing the Constitution is so difficult and so expensive that only politicians and lobbyists have any good chances at being successful. Just look — over $8 million of out-of-state lobbying money has been spent on Issue 2 so far!

In this case, voting "YES" on Issue 2 means that future casino licenses must first be approved as a Constitutional amendment -- so this Constitutional amendment/Issue 2 actually requires another, new Constitutional amendment before the promised county-wide voter approval can be fully implemented.

But with all that said, we will always vote for any measure that allows the PEOPLE to have the final word. We’d prefer this issue to not be on the ballot. However, if the Supreme Court allows the votes to be counted, we vote “YES” on Issue 2.