Arkansas has taken a rather unique approach to online gambling by allowing casino operators to offer online sports betting and casino games, but only to patrons physically present at a brick-and-mortar casino. This means Arkansas residents cannot access online gambling from the comfort of their homes or mobile devices, unlike in other states like Michigan that have legalized online gambling.

Djordje Todorovic from ReadWrite states that there is a desire for casinos that can be accessed online in Arkansas currently being filled by offshore options. However, it’s unlikely that gambling laws in Arkansas will be changed in the near future. The Arkansas Racing Commission regulates online gambling in the state. To date, only four licensed casinos have been granted permission to provide online gambling to patrons. The legal gambling options in Arkansas are limited to sports betting, horse racing, the state lottery, daily sports betting, and casino gambling like slots and blackjack at licensed casino locations. However, online casino gambling remains illegal in the state.

Six states have legalized online gambling including Michigan, New Jersey, and Pennsylvania. Michigan’s online gambling market has been extremely successful since launching in 2021. This decision has paid off tremendously, with the state now leading the nation in online gambling revenue and experiencing massive growth in this new market.

While Michigan has embraced online casino gambling with great success, Arkansas has taken a much more limited approach. Arkansas’s approach to online gambling aims to drive traffic to its physical casinos rather than by cannibalizing that business.

The concern Arkansas has is that legalizing online gambling could lead to a decline in revenue, jobs, and visitation at physical casinos, which are a key part of Arkansas’s gambling industry and economy. Governor Kay Ivey has been somewhat reluctant to approve any new gambling expansions, stating she would not be signing “just any bill.” This suggests there may be political resistance to legalizing online casinos in the state.

Rather than cannibalizing the existing casino market, Michigan has demonstrated that online casino gaming can thrive alongside land-based casinos. By legalizing and regulating online casinos, poker, and sports betting, the Great Lake State has been able to grow the overall gambling market and generate substantial tax revenue, while physical casinos have continued to maintain a strong customer base.

Online gambling revenue in Michigan grew 22.9% from 2022 to 2023, showing strong growth and popularity. Michigan’s physical casinos only saw a 2.7% decline in revenue in 2023, which was far less than other states like Indiana and Maryland. So, the impact on brick-and-mortar casinos has been relatively modest.

Arkansas could learn from Michigan’s approach to online gambling in so many ways without risking cannibalizing its existing land-based casino revenue. Michigan’s online casinos feature a wider variety of online gambling options from many top developers to ensure a high-quality selection. Arkansas could work to integrate more game providers and titles to attract new players to their physical casinos, before expanding the same options to existing players online. Michigan’s online casinos are known for their large sign-up bonuses and ongoing rewards for players. Arkansas could provide competitive bonus offers to draw new online players, but require them to be new to the casino’s customer base to qualify.

Looking ahead, Arkansas could study how Michigan’s online gambling market has attracted new players versus drawing from the existing casino customer base. Using these insights to design policies and restrictions, allows Arkansas to expand online offerings while minimizing cannibalization of its physical casinos. The current gambling laws in Arkansas do not explicitly address online gambling, but rather refer to it as “casino gaming.” Legalizing online casinos would require the state to develop a new regulatory framework and licensing system. Michigan’s successful model can help Arkansas identify ways to expand and generate additional tax revenue to benefit the state.