Casinos in Arkansas Are Now Required to Get Licensed and Bonded
Since February 2019, casinos in Arkansas have new policies to comply with, and new rules to follow in order to operate legally in the state. By having legislators create and enforce a better framework for the functioning of the casinos, the interests of the general public will now be better protected than ever.
The Arkansas Racing Commission will now require a licensing procedure for casinos. Any entity that wants to run a casino will have to obtain a state license that guarantees it is suitable to conduct such activities. In some cases, the newly set surety bond requirement will provide an additional safety net against potentially unlawful actions or financial default of the licensees.
Below you can find out the essentials about the new licensing and bonding rules for all Arkansas casinos.
The licensing process for Arkansas casinos
The Arkansas Racing Commission will now demand all casinos to undergo a licensing procedure before they can open doors in the state.
The Commission can issue four licenses:
- Franchise holder in Crittenden County
- Franchise holder in Garland County
- Casino in Pope County within two miles of the city limits of the county seat
- Casino in Jefferson County within two miles of the city limits of the county seat
There is a special procedure for non-franchise casino gaming applications. All applications entail providing personal and business documentation, zoning compliance forms, background checks, and payment of licensing fees of up to $250,000. You can find further details in the Arkansas Casino Gaming Rules.
One of the requirements that casino owners may have to meet is to provide financial security. This can be done in the form of surety bonds, but the exact criteria depend on the specifics of your gaming activities.
Casinos that make periodic payments for prizes are required to have an approved funding source with an independent financial institution. This entails keeping a reserve, which can be done via a surety bond or an irrevocable letter of credit. The way to calculate the amount of the reserve is set in the legislation and is based on the prize amounts owed to customers. In case the casino fails to make the scheduled periodic payment, the reserve can provide the due payment.
As for casinos with wagering accounts for customers, the reserve can be in the form of a surety bond or another type of security, such as cash, cash equivalents, or an irrevocable letter of credit. It should be at least $25,000, or the whole amount of customer funds maintained in wagering accounts if that is greater.
If you want to hold progressive keno games at your Arkansas casino, the Commission may require you to also keep a reserve in the form of a surety bond, cash, or both. The exact amount is set by the Commission on a case-by-case basis.
Obtaining a surety bond
You may have to provide a form of financial security as a part of your casino licensing in Arkansas, as described in the previous section. One of the typical ways to fulfill this requirement is to post a surety bond. It ensures you will comply with all applicable state regulations in your operations as a casino gaming provider.
For casinos in Arkansas, the bonding amounts are set by the Commission depending on the specific circumstances and amounts of prizes and customer funds held. Whatever the amount that you have to obtain, you only need to pay a small percentage of it in order to get bonded. Typically, it is between 1% and 5% if your finances are in good shape. The factors that determine the bond cost include your personal credit score, business financials, and any fixed or liquid assets.
Do you have any further questions about the new licensing and bonding requirements for Arkansas casinos? You can reach us at 877.514.5146 to speak to our bonding experts.
Latest posts by Victor J. Lance, President/Owner (see all)
- New Mexico Changes License and Bond Rules for Insurance Adjusters - July 15, 2019
- How to Register Your California Credit Services Organization - June 28, 2019
- Changes in the Minnesota Requirements for School Bonds - June 21, 2019