Gambling accelerates at racinos | Arkansas Blog

Friday, February 11, 2011

Gambling accelerates at racinos

Posted By on Fri, Feb 11, 2011 at 2:52 PM

I've commented a couple of times on Rep. Anne Clemmer's proposed constitutional amendment to require that 35 percent of lottery sales be spent on college scholarships. In its first year, lottery sales were about $477 million, with $105 million, or 22 percent, going to scholarships. The majority of the take, more than 60 percent, was paid back to gamblers in winnings. A little more than 10 percent went to overhead and retail commissions. A 35 percent minimum would depress winnings and thus discourage play and ultimately strangle profits for scholarships — which is the Family Council's idea if they can't get a majority of Arkansans to change their mind and repeal the lottery. Which they can't.

The subject pops to mind again today with the monthly release of wagering on the electronic gambling at Oaklawn and Southland parks. It continues to grow exponentially.

In January, gamblers plugged $71.5 million into Southland's gambling slots, and got back $67.5 million in winnings. The $4 million margin (meaning a 94.4 percent pay return) has to cover taxes and overhead, but leaves a pretty good profit, though nowhere near 35 percent of gross. In 12 months, Southland has pulled in more than $700 million in wagering on its electronic games (not counting dog racing and other wagering). Oaklawn gamblers wagered $44.1 million in January and won back $41.4 million of it, for a 93.9 percent return. The Hot Springs track has registered more than $386 million in machine wagering, on top of its simulcast and on-track betting, in the last 12 months. The big news is the jump in wagering, from $33 million last January at Oaklawn to $44 million this year and from $41 million to $71 million at Southland. And they say times are tough.

Think about it: Two operations, in Hot Springs and West Memphis, are doing double the gambling business of a statewide lottery on a few thousand gambling machines.

Imagine the howls if a legislator proposed a constitutional amendment to require the tracks to pay 35 percent of their gross wagering in either taxes or college scholarships. Imagine what would happen to wagering if the payback dropped from 94 percent to around 60 percent.

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