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Betting on Arkansas 

Gambling is in the news.

A November vote is scheduled on a state lottery, if a lawsuit doesn't remove it from the ballot.

Meanwhile, the legislature was treated to a whinefest last week. Bingo hall operators complained that a modest state tax — about 5.6 percent on gross revenues — was cutting into the charitable work of the alleged nonprofits that are operating the games, chiefly veterans and fraternal organizations.

The legislators should have devoted some attention to how much of the profit from these bingo games goes to “internal” charity — that is, the nonprofit itself — and how much goes to “external” charity. Overall, the bingo halls are putting about 6 percent of their take into charity of any sort. In Arkansas, where bingo is allegedly operated only by volunteer labor, this return is suspiciously paltry.

The lottery amendment could provide a solution to the bingo operators' problems over time, even as it brings an end to the constitutional obstacle to  full-blown casinos at Oaklawn and Southland Park or anywhere else.

I'll explain. But first, there's the Family Council's lawsuit to remove the lottery amendment from the ballot. The lottery amendment repeals the Arkansas Constitution's general prohibition on lotteries. Neither the proposal's popular name nor ballot title takes note of that material fact. The Supreme Court generally takes a dim view of ballot titles that don't adequately disclose major provisions.

The repeal of the lottery prohibition is meaningful. That prohibition has limited the spread of gambling in Arkansas. Though some dispute the view, court precedent and practice generally have held that games of chance are banned by the Constitution's lottery prohibition.

Out of that belief grew the fiction of “electronic games of skill.” This type of gambling (video poker and blackjack mainly) joined pari-mutuel wagering as a legal activity at Oaklawn and Southland Parks, now racinos more than racetracks.

If the lottery prohibition in the Constitution is removed, you could argue that voters will have removed the last bar to legislative control of all gambling.

Backers of the lottery amendment have a curious defense to this alarmist notion. They say the state will run only traditional lotteries under their amendment, not other games of chance. Besides, they argue, gambling is not barred by the Constitution now, rather by legislation. If this pro-lottery legal argument prevails, it will insure that gambling becomes a legislative rather than voter prerogative in the future.

This possibility might explain the silence of the racinos on the lottery, which otherwise will produce new gambling competition.

Should the lottery supporters prevail, you can bet that racino lobbyists will be at the Capitol soon after. If gambling regulation is up to the legislature, they'll argue that there's little fundamental difference in allowing blackjack and poker with cards as well as by video terminals. And they'll argue that, to compete against Mississippi and raise a few more dollars for noble Arkansas horse and dog breeders, a few (thousand) slot machines, plus roulette wheels and craps tables, wouldn't hurt.

The VFW and American Legion will march in, too, to plead for a lower tax, more gambling options and a loosening of restrictions on their games. Otherwise, they'll cry, how can they compete?

Before it's over, we'll look like most other states, awash in opportunities for the poor to plunk down sucker bets in return for some wishful dreaming. Lobbyist-fed legislators will be in high cotton.

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