Arkansas Casino Tax Revenue Rebounding After COVID-19 Falloff

Posted on: September 17, 2020, 12:29h. 

Last updated on: September 17, 2020, 02:16h.

Larry Henry Read More
Expertise: Commercial Gaming, Gaming Business, Legislation, Politics, Regulation.

With fewer people gambling in the spring, tax collections from Arkansas casinos fell sharply. But the numbers have been on the upswing in recent months.

Oaklawn in Hot Springs
Oaklawn Racing Casino Resort and two other gaming sites in Arkansas have reopened since May. Tax revenue from these properties declined in the spring but has gone up during the summer months. (Image: Texarkana Gazette)

Since coronavirus infection rates began to spike in mid-March, wagering at the state’s three casinos declined by a combined $1.4 billion. The casinos are Southland Casino Racing in West Memphis, Oaklawn Racing Casino Resort in Hot Springs, and Saracen Casino Resort in Pine Bluff.

Gov. Asa Hutchinson (R) directed casinos to close at the pandemic’s onset in March but allowed them to reopen in May.

Under the state Department of Health directives, casinos in the Natural State are operating at 66 percent capacity.

Tax revenue from casinos was down more than $7.7 million from May 2019 to May 2020, according to the latest figures from the state Department of Finance and Administration. However, with casinos reopening in May following the COVID-19 lockdown, tax revenue has gone up more than $2.3 million from the three casinos combined.

Casinos in Arkansas pay 13 percent on revenue under $150 million and $20 percent on revenue over $150 million.

The property in Pine Bluff is operating with 300 video machines as it prepares to open a full casino in late October, according to Scott Hardin, spokesman for the state Department of Finance and Administration.

Casino Licensing Fight

In November 2018, Arkansas voters approved casino gambling at four locations in the state.

The locations included the greyhound track at West Memphis and horse track at Hot Springs. For years, these two sites offered “electronic games of skill,” but now are in business as fully licensed casinos, Hardin said in an email to Casino.org.

While three of the four casinos are in operation, the fourth casino in Russellville is tied up over a licensing dispute and has not opened. Russellville is in Pope County, northwest of the capital city of Little Rock.

“We anticipate litigation will be filed in relation to the Russellville license, as it was an extremely competitive licensing process,” Hardin told Casino.org.

Notorious Hot Springs

Oaklawn in Hot Springs has an important legacy in US horse racing, dating back to the track’s origins in the early 1900s. In the horse racing world, the annual Arkansas Derby is seen as a significant event leading up to the high-profile Triple Crown races.

Hot Springs also has a storied history in casino gambling. For decades, illegal casinos operated openly in Hot Springs until being shut down in the 1960s. Oaklawn now is the only place in the city of about 35,000 residents where casino gambling is allowed.

Hot Springs is in Central Arkansas, about an hour southwest of Little Rock.

Among the notorious mobsters who vacationed there in the city’s illegal-gambling heyday were Al Capone, Charles “Lucky” Luciano, and Benjamin “Bugsy” Siegel.