2020 Regional Gaming Highlights
In late 2019, the Birmingham Race Course placed 301 historical horse racing machines at its facility. The machines, known as historical pari-mutuel betting, allow users to place wagers on horse races that have already taken place. The machines use historical information from previously run races, allowing bettors to pick the favorites or handicap for themselves. While issues pertaining to COVID-19 impacted and temporarily shut down operations at the facility after reopening, the Birmingham Race Course placed another 300 machines at the facility over the summer and has plans for even more. The Office of the Alabama Attorney General issued opinions in 2001 and 2008 that address the legality of pari-mutuel wagering in the context of computerized machines that replay historical horse races. Both opinions note that the Supreme Court of Alabama in 1971 determined pari-mutuel wagering is an activity involving skill, and that local laws in Mobile County and Birmingham permit pari-mutuel wagering, including televised horse racing events occurring elsewhere. The Attorney General’s Office has not, however, issued any formal opinions regarding the machines currently in use at the Birmingham Race Course and the technology employed by those machines or addressed how the evolution of Alabama’s law since 2008 may have impacted its prior opinions.
After the expansion of casino gaming and sports betting in 2019, Arkansas opened its third casino (out of a possible four), the Saracen Casino Resort, in Pine Bluff in October. Saracen features more than 2,000 slot machines and 30+ table games. The fourth casino license authorized by statute, in Pope County, has been awarded to Gulfside Casino Partnership. However, the second bidder on the license, the Cherokee Nation of Oklahoma, is currently pursuing litigation regarding the license, even as construction is ongoing. Organizers were collecting signatures for a constitutional referendum, the same mechanism used to expand sports betting in 2019, to expand the number of available casino licenses to 16, but withdrew the petition after a challenge by state election officials.
After a federal judge found designated player games violated a compact between the Seminole tribe and the state, in which the tribe agreed to pay approximately $350 million a year in exchange for the “exclusive” rights to operate banked card games, the Seminole tribe indicated it would stop the exclusivity payments to the state of Florida. While negotiations were ongoing through the legislative session and numerous parties close to the process indicated hope it would be resolved, the Legislature adjourned without any agreement in place. The tribe is continuing to withhold payments, and the current COVID-19-related budget crisis is increasing pressure on the state and legislators to find a resolution. As a possible benchmark for future discussions, sources involved in the negotiations held earlier in the year indicated the tribe may be granted exclusivity over gaming in exchange for potentially doubled annual payments.
Georgia lawmakers brought a number of bills to the state Legislature, as well as the possibility of ballot referendums, on gaming topics such as casino gaming, sports betting, pari-mutuel betting, and horse racing. A procedural question remains as to whether Georgia voters would have to approve any casino or wagering proposal or if such a proposal could be approved solely by a two-thirds majority vote in the state Legislature, and bills were brought to the Legislature contemplating both avenues. While gaming expansion has bipartisan support, Governor Brian Kemp has indicated he does not support gaming in the state and has indicated he would consider using a veto on any bills on the subject sent to his desk.
After years of legislative debate, sports wagering was recently legalized in certain Louisiana parishes. In November 2020, voters in 55 of Louisiana’s 64 parishes voted to authorize sports wagering in their respective parishes. Although sports wagering has been legalized in the majority of the parishes across the state, it will be some time before sports wagering can actually take place in Louisiana. Indeed, the Louisiana Legislature and the Louisiana Gaming Control Board first need to implement licensing and tax-related rules before sports wagering can be offered. The Louisiana Legislature and Louisiana Gaming Control Board also need to determine how sports wagering may be conducted in the parishes that voted to legalize the activity, such as whether sports wagering may be offered remotely over the internet via electronic devices. The alternative would be to follow Mississippi’s approach and allow sports wagering only in brick-and-mortar casinos. Several commentators have predicted that allowing sports wagering to take place remotely — and not exclusively in Louisiana’s land-based and riverboat casinos — could result in hundreds of millions of dollars in additional tax revenue for the state. Only time will tell whether the Louisiana Legislature and the Louisiana Gaming Control Board decide to authorize sports wagering outside of brick-and-mortar casinos.
In May 2019, Tennessee passed a sports betting bill which authorized online/mobile sports betting with no brick-and-mortar component, making Tennessee the first state in the country with an online-only sports betting law. The Tennessee Education Lottery serves as the sports betting regulator and has appointed a commission that governs sports betting. The Lottery issued its first licenses in the fall of 2020, and sports wagering commenced on November 1, 2020. Tennessee imposed a 20% tax rate on adjusted sports betting gross revenue and was the first state in the nation to mandate the use of official league data, if available, at commercially reasonable rates. The regulations also impose a 10% hold requirement on sports wagering operators. At this time, there is no plan to expand casino gaming or authorize any brick-and-mortar gaming.