KASU

West Memphis could get $200 million hotel and convention center if casino measure passes

If the casino ballot initiative passes in Arkansas on Tuesday (Nov. 6) Delaware North, the parent company of Southland Gaming and Racing will attempt to build a hotel and convention center in West Memphis, Delaware North Senior Vice President of Governmental Affairs Jack McNeill told Talk Business & Politics. It would cost at least $200 million to build and would likely be located on the Southland property, he said.

An estimate of how long it would take to build was not available. Some of the current facilities might have to be modified to accommodate a project of this size, he said. Soil samples could be tested and renderings of the proposed facility could be drafted in the weeks after the election if it passes, he added.

“It would be a priority of the company to get it up and get it going,” McNeill said.

One rumor that has been floated – that Southland will eliminate dog racing if the casino initiative passes – isn’t true, he said. There have been no internal discussions about ending racing for any reason, and it’s not under consideration, he said.

Issue 4 is a constitutional amendment that would permit casinos in four Arkansas counties – Garland, Crittenden, Pope, and Jefferson – with two of the casino licenses being granted to Oaklawn and Southland. Tax revenues generated by the casinos would be distributed to the state’s general revenue fund, to cities and counties where the casinos are located, and to the Arkansas Racing Commission for purses for horse and dog races.

A recent Talk Business & Politics-Hendrix College Poll indicated that 49% of Arkansas voters approve of Issue 4 while 43% oppose the measure. McNeill said he thinks Arkansas voters will weigh the benefits of expanded gaming when they cast their ballots.

“I’m confident people will give this a fair shot. It will be close,” he said.

Southland has been a dog racing venue for more than 60 years and has over 2,000 electronic games of skill, including video poker and blackjack. features an event center that hosts private and community banquets and events, and it is a popular destination for dining, including the World Market Buffet, Bourbon St. Steakhouse and Sammy Hagar’s Red Rocker Bar & Grill, DN Director of Corporate Communications Glen White told Talk Business & Politics.

Since 2006, Delaware North has invested more than $100 million to transform the racing-only facility to add gaming, restaurants and other amenities, White said. Southland currently has about 765 employees and would add about 250 jobs with an expansion, bringing the workforce to over 1,000, he added.

Supporters of Issue 4 tout additional economic benefits to the state. In addition to stemming the flow of Arkansas gamblers going to Mississippi, Louisiana or Oklahoma, advocates floated an economic impact study that found the state could add more than 6,000 new jobs if Issue 4 passes. About 3,000 would be directly created in the gaming industry and another 3,000 would be created in sectors tied to the industry. It could mean $5.8 billion in GDP growth during the next 10 years, the study concluded. The study was conducted by the University of Arkansas at Little Rock’s Arkansas Economic Development Institute.

OPPOSITION COMES FROM SEVERAL SIDES
While Southland has outlined its potential for expansion if Issue 4 passes, Oaklawn has stayed neutral in the debate. Like Southland, it stands to benefit from the upgrade to full-fledged casino status and a lower tax rate.

That’s one reason State Rep. Vivian Flowers, D-Pine Bluff, advocates in her opposition to Issue 4. Jefferson County, and presumably economically challenged Pine Bluff, would stand to benefit from one of the remaining two possible casinos that the amendment would allow.

“You’re writing this as a self-interested bill, or amendment to our Constitution and then you’re setting up a super low tax rate on yourself compared to other states and other areas across the country,” she said.

The tax rate on Oaklawn and Southland gaming receipts is currently 20%. Under Issue 4’s provisions, it would fall to 13% for the first $150 million in gaming receipts, then increase to 20% on receipts above $150 million. Supporters point out that new tax receipts will be bestowed on local government entities with the passage of the amendment.

State finance officials unveiled an economic impact study earlier this year that focused on the tax reduction. Department of Finance and Administration officials said the state would lose $86 million over the next three years due to the lower tax rates on Oaklawn and Southland.

Flowers contends that the Arkansas legislature is unlikely to consider adding any additional taxes to the casinos due to lobbying forces, and she thinks the strength of having the measure written into the state Constitution will be a deterrent to changes.

“This is not an initiated act where if we don’t get it right we can go back and tweak it and make a change in the legislation. It’s a constitutional amendment. If we get it wrong, the likelihood of us, the legislature, or the people ever going back to make a change — given the millions of dollars that we’re seeing pouring into the state to make this change — is highly unlikely. I would even dare say impossible,” Flowers said.

Rep. Flowers also thinks not enough money is dedicated to helping those with gambling addictions, although supporters say that $200,000 is being dedicated to an addiction hotline, an amount equal to funding that the legislature cut in 2017.

In Pope County, opposition has arisen from local residents against their county being a consideration for a casino. Citizens for a Better Pope County has been attempting to influence local public opinion, but it’s been countered by Jobs for Pope County, a group that received $70,000 from Gulfside Casino in Gulfport, Miss., and Warner Gaming of Las Vegas.

Local residents in Pope County will be voting on an ordinance this November 6 that will make a local option vote a requirement if Issue 4 passes.

Statewide, opposition has come from the Family Council Action Committee, which has spent very little, roughly $1,600, and used most of its muscle to influence its statewide religious, conservative supporters. Ensuring Arkansas’ Future has worked with Family Council on legal challenges to Issue 4, but the group has only spent a few thousand dollars on court costs and in-kind reimbursements.

A late entrant to the game – Vote No on Issue 4 – organized in late October, and on Oct. 31 it reported a $150,000 contribution from Caesar’s Entertainment of Las Vegas. It hasn’t expensed the money, according to its latest report, and with less than a week to influence some sort of messaging, it’s likely to get drowned out by the millions spent by two groups advocating for Issue 4.

Those two ballot question committees, Driving Arkansas Forward and It’s Our Turn, have raised and spent $7 million and $1.9 million respectively, as of the end of October. The Cherokee Nation, Quapaw Tribe, and Delaware North have been the primary funders of Driving Arkansas Forward, and Delaware North has solely funded It’s Our Turn’s efforts.

Editor’s note: Talk Business & Politics Roby Brock contributed to this story.

Talk Business and Politics is a content partner of KASU.  Their show airs on KASU 91.9 FM on Mondays and Fridays during NPR’s Morning Edition at 6:51 am.  It also airs during NPR’s All Things Considered on Wednesdays at 5:20 pm.  You can follow more of their coverage on their website TalkBusiness.net where you can also catch the latest Northeast Arkansas news.