House Rules

House Rules Committee to order, uh, chair sees a quorum, uh, without objection, we're going to take uh bill out of order. Uh, we're going to hear HR 1034 1st, by Speaker Evans. Speaker Evans, if you'll identify yourself for the record, you're recognized to present HR 1034. Thank you, members. Thank you, Mr. Chairman, uh, State Representative Brian Evans from District 68. Members, uh, this is the next to last step. Thank you, uh, that you've supported this so far. This is the next to last step that we need to put in place in order to get the Joint Committee on Military and Veterans Affairs kicked off. This is what this resolution does is it simply takes the name military affairs and House rules out of the title of the. Children and Youth Committee, and then that will establish it into the joint committee. It's all the bill does. We appreciate a good vote. Representative Wardlaw, where did he go? Hang on. My You recognize. Thank you, Mr. Chair. It's not that hard to figure out you push a button. Mr. Speaker, How long do you think it would take to have the rulebook out to the members once we approve the final step of this on the floor. The final draft of the rulebook is complete. We've got it bound and ready to send just as soon as we get this done tomorrow, we can ship that out and as normal, we'll have those books back prior to spring break. We won't even have rule books out for the members until after spring break. No, they'll be back for the parliamentarian, they'll be back before spring break. Which, according to the parliamentarian, has been pretty standard. Uh, that it's usually deep into February before those books are here. He kind of gave me a different excuse yesterday, but I won't say it on the mic. Certainly, but there's a number of members that are confused on certain rules. So I think it's important we get those books in our hands as soon as I would agree. Absolutely. Thank you. Yep. see no other questions, what's the will of the committee? Have a motion due pass. Is there any discussion on the motion? Seeing none, all in favor say aye. Oppose nay, congratulations, Speaker Evans. You have adopted HR. 34. Thank you, Mr. Chairman. Thank you. Representative Moore, are you ready to present SB 97, uh. Identify yourself for the record and you're recognized to present the bill. Members, you have an impact. fiscal impact on your desk if you want to take a look at that. Thank you, Mr. Chair, members of the committee. It is my pleasure to present to you SB 97 this afternoon. This is a pretty straightforward bill. Uh, what this does, it is, it ensures and opens up free and fair marketplace for these retail permits for liquor stores. Uh, in short, this bill does not create any new permits for liquor stores, uh, that number will remain unchanged due to this legislation or regardless of this legislation, what this does is that currently under the status quo an individual or entity can only own one retail permit. this does is says it will add 2 additional possible permits that they could own but they have to be in separate counties and that those counties have to have a population of 200,000 people or more, um. Pretty straightforward again, this is not create any new, uh, licenses they will have to purchase those licenses from existing retailers, uh, what this does is promote competition. Thank you. Any questions? Seeing no questions, what's the will of the committee? Motion pass. We have a motion to pass. Is there any discussion on the motion? Seeing none, all in favor, say I opposed. Congratulations, uh. Representative Mo pass your bill. Oh, I'm sorry. Yeah motion to, I need a motion to expunge. I skipped over, uh, uh, sorry about that, members. We have a motion to Expand all in favor, say I. Any opposed? OK, we've exposed the boat. Sorry about that, folks. All right, the first people we have to speak against the bill is Michelle Brewer. And a Mr. Cripps. If you please identify yourself and who you're with, you're recognized to begin OK. Hello. This is Michelle Brewer. I'm with Legacy Wine and Spirits you get closer to your mic, please. And introduce yourself. Brewer with Legacy Wine and Spirits. Um, and I do understand it's not adding any licenses, but I have a huge list of reasons why we should not do this. So. I am an independent liquor store, um, owner in the West Little Rock community, and, um, first off, I appreciate y'all listening and I am in strong opposition to this SB 97. And here is a list of all my things. So let's be clear, this bill is not improving consumer access or fostering competition. It is designed to benefit Walmart. Specifically by allowing liquor stores inside Sam's. clubs, locations. So right there. OK, my heart is just right here with cry, theft, alcoholism, and families. Um, there's a reason these rules are in place, and I stand behind him. 10% of Americans, um, are alcohol dependent. And here we are, Sam's Club. They're coming in for their groceries, big families, trying to bulk up on things. And, um, I, I mean, here we are. Suddenly there's going to be a door. What if they buy booze instead of buying food for their families. And now here goes like another list, but that's like my main, main reason for me coming up here. People with alcoholism, they are able to choose not to go to liquor stores. Here at Sam's, it's gonna be right there in front of their face. Um, I'm an independent retailer. I have one liquor license and I'm happy with that because then I'm able to focus carefully curated selection of wine and spirits, knowledgeable staff. Here I have James Cripps with me. He's a wine expert. I don't think you're gonna find that in other big box retailer stores. Um I mean, this bill threatens my ability, the ability of other small business owners to compete and continue serving our communities. I support Rock Town. Here, I'm right across from Costco. I mean, they used to carry Rocktown like regular vodka as soon as it competed with their Kirkland, they were like goodbye Rock town. I support Rock Town and 50 other small distilleries around Arkansas. This is gonna open. Specs. I mean, you know, Texas is like, what? I can have more liquor license. Let's go for Arkansas. It's gonna bring money out. That's not the competition we want here. Let's see, so my other points, I'll try to be fast, sorry. Um, this location to push for a liquor store in Sam's Club. It's on Bowman. A quick Google search, you'll see there's already 25 liquor stores within a few miles of that location. The same is true for Bentonville, where they're trying to go. The bill is proposing to fix a problem that simply, it doesn't exist. Um, customers already have plenty of options for purchasing purchasing alcohol. And then the other thing is, unlike independent liquor stores, Walmart and Sam's Club can sell groceries, household goods, and a full range of retail products under one roof. Meanwhile, Arkansas law strictly prohibits liquor stores from selling anything beyond alcohol and a handful of complimentary items. Um, I mean, that means I can't sell products in the same way that they can. Um, they're, and again, there's a reason why they're separated. I'm a liquor store. That's what I focus on. There's no reason to try to mix and mingle. Um, that leads to, I have also deep concerns about the purchasing power of big box stores and their ability to deeply discount liquor. Um, they often use it as a loss leader, meaning say like Tito's vodka. We all love some Tito's. They're going to price it right where they price it, like what they bought it at cost, and they're going to use it. They don't care. They can lose money on that. They're going to bring more people in. It just leaves a whole thing of unfair where I don't have that ability to do. Um, small businesses like mine, we just won't be able to survive. We won't. Have the ability to undercut, absorb losses and push independent retailers out of the market. Um, uh, another example, uh, I am the closest liquor store to Costco. So I am always, you know, in competition and fighting, uh, this past Christmas and New Year's are big buyer is Vulio. It's an easy sale. It's a champagne that everyone wants. I put in a buy over at Glazier, and they were like, oh, we're out. I was like, what? Oh man, OK, supply and demand. Well, shoot, I guess I just missed out on a lot. I went across to Costco, they had a huge palette of it, selling for my cost. I was like, dang. I mean, I want to buy at Costco. Shoot, that's a great deal. Um Again, I just feel this is opening the door to more unfair pricing, competitiveness, all the above, um, I think there was like a lawsuit with Southern glaciers or some sort. Let's see. Sorry. Um, Southern routinely charges small independent retailers as much as 12% to 67% more than the same bottles of certain wine and spirits. The national and regional chains and exact same geographic area. I mean, right there, it just shows how unfair it can be out there and what we, you know, try to fight each and every day. But ultimately, at Legacy, Wine and Spirits, I employ a dedicated team of professionals who provide expert recommendations and a thoughtfully curated inventory tailored to our customers. If this bill passes, it will further erode consumer choice by allowing a massive national chain to dictate how liquor is sold in Arkansas. Is that really what you guys want. Arkansas has such a wonderful hidden gem. I want to keep it natural and lovely. So, over time, it will push out independent stores reducing variety, limiting competition, and leaving consumers with fewer options. So please, I do urge you to protect Arkansas and small businesses and vote no to SB 97. Thank you, everyone, and James, did you have anything to add? I will certainly keep it short. I would, uh, iterate most of what you just said. Um, and I won't go over that again, but I will say, um, I've been 40 years in the liquor business in Arkansas. I'm a University of Arkansas graduate lifelong, uh, Arkansas boy and, uh, I just, having worked, I've also worked for all of the major liquor distributors. I like to tell people, uh, not fired several times, but hired several times. And in doing so, I've worked around the state with uh liquor stores in every wet county. And I do know this, like us, they are very much tied into their communities. All of these stores, we're constantly hit up for donations to every kind of charity that you can imagine in our community stores of which there are close to 400 independent liquor stores in the state are doing this from one end of the state to the other. Do we really expect Sam's Club to step up when someone, some mother. comes in and asks for a donation for her school, for her, whatever it may be that benefits the community, we constantly do what we can. We're part of the community. And, uh, I just hate to see that, I mean, I think you all know if this goes into Walmart, even though there are no new permits that will become large stores. They're going to put us out of business. They're going to put stores out of business from one end of the state to the other. So I just ask you because I know that you, a lot of you have constituents in wet counties don't put them under. We're part of the community. We're part of Arkansas. Um, and the last thing I'll say is, I'm a, a wine and spirits educator. I'm certified. Um, we do all that we can do to educate on how to sell and serve alcohol safely and how it can be enjoyed safely. I just don't think you're gonna get that same kind of service or education out of Sam's Club or Costco. And other than that, I just want to plead with you to consider your own constituents and not just Walmart. And I thank you for having us today. Thanks for letting me speak. members. Anybody have a question? If not, I do, uh. Have you ever read the management book Who Moved My Cheese? I'm aware of it, but I can't say that I, I've read it. OK, well, the, the The premise of the book is that Things change. And those people that are flexible, they survive and those that are not flexible, they can make changes in their businesses. They go by the wayside. You know, when Walmart came to my town, there were some, there were some small businesses that went by the wayside because they could not compete, but I believe ultimately the community. Benefited from that. Would you agree? Uh, not necessarily, I think on some counts they probably do benefit. I don't think in the alcohol business, they do. This is a controlled type substance, not literally a controlled substance by legal terms, but we're trained to keep it out of the, the hands of miners and out of the hands of drunks and anyone we constantly on a weekly basis turn people down from selling alcohol to them because they don't fit the criteria that the laws of Arkansas require. I go to Costco, since they're across the street, constantly just to look not only to purchase food and other goods, but to go in and see what we're having to compete against and trust me, they are not checking every ID at the door. Every idea at the cash register. You can just I mean, it's even around the country, it shows that grocery stores and big box stores, uh, the, the data shows that they are far more concerned with selling than they are keeping it in the hands of the legal buyer. We're not, we have one permit. If we lose it, we're sunk. So we do everything we can to protect that, and by doing so protect the Arkansas citizenry. So yeah, I can see where if Walmart comes in and, you know, it, it looks like you get everything cheaper. That that would be fine, but I also know a lot of Main Street towns, uh, around the state that are drying up and blowing away thanks to Walmart going in on the edge town. You know that. I don't know how we're all served by that. So I'm sorry to, to, to disagree, but I do have to disagree on that, uh, I have one other comment as someone that has been sober for 43 years, I find your concern for alcoholism a little disingenuous, frankly, uh, the The experience I had was I was a minor and I was able to go to a liquor store and By alcohol. I mean, if we have, if ABC is doing their job, they should be treating the liquor stores and the big box or whoever is selling alcohol the same way. And if they are not, then I would expect them to take the appropriate appropriate action. Thank you. Well, I'll say this that when you and I were miners, things were different. And we've had successive administrations that have upped the game when it comes to enforcement, but they don't seem to be working in the bed box stores. If you look at the record on how many grocery stores, Get popped for selling beer, uh, to minors, it's way more than what happens in our independent liquor stores. It's just the truth of the matter is we're independent operators that can't afford to break the law. Um, Walmart, Sam's, they can afford to break the law. And I have kids and grandkids too. I, I don't want them buying alcohol from someone who's not a professional and who is going to sell it to them when they're not legally of age. I think you would find that in most of the stores that are in our association and most of the stores that are in the state. Permits are expensive. And these are our livelihoods. It put my kids through the University of Arkansas. I had a liquor store. Um, we're, we're all about community when I just don't see the big box stores being that. I don't know why you would take this away from Us and, and give it to them unless it's just money. I mean, I don't, I don't get it otherwise. Because, like I said, you're looking at over 300 independent operators, independent families sending their kids to our colleges. And trying to keep the money in the state. This just flies in the face of all of that. Any other questions, members? Sing Nan, thank you for your testimony. Thank you. Thank you. We have no one signed up to speak for the next is Mr. Kelly, to speak against, sir, if you'll come to the table and identify yourself you recognized. To begin OK, I, thank you. Um Thank you for your attention. Thank you for your consideration. My name is John Kelly. I've written many of you emails about this subject, so I'm not going to go through reminding all the points that I hope that you already have heard from me. Um, I do want to comment, uh, Sorry about your, your, your point about whooping my cheese. It sat on my desk for What, 30 year whenever it came out. I'm uh also a financial advisor by By profession. So, uh, one of my colleagues gave it to me and believe me, in that business and to survive in the financial services business, you better be ready to move your cheese. I think the fact that what, what might be missing in all this is The position that people like me sit in. Meaning since the time I got, I've owned my store looking back, I own a liquor store in Benton, Arkansas on Highway 5 called Long Hills Wine and Spirits. I've owned it for 8 years. Um Since I've gotten in that business. I have been completely confused about where the rules are. What's being enforced, what's not being enforced. It's astonishing and frankly. I have been unwilling to move my cheese, to expand my store. Because of the dynamics of legislation that keeps coming. That keeps coming that seems all kind of innocuous. Oh, it's not a big deal. Well, I, I, I would just say those are factors why people like myself, and I'm sure that many other stores have not moved their cheese because they don't know where the rules are. They don't know what the dynamics are. Um, just. I want to address that and appreciate you considering that. Um, You know, I, I, I think I, I may have said to some of y'all, I've written so many emails to so many legislatures. I'm not sure if I, if I brought this up to you guys. But one of the things that uh uh something I heard while I've been in the middle of all this for the last 2 weeks. Someone made the statement that, uh, in, in, in law students are taught something about whether a case is ripe and, and the terminology I thought was very profound and really I thought interesting and, and so some of you may have gotten this, but the statement is that we are having a scholarly exercise in hypotheticals. Scholarly exercise and hypotheticals, and I don't know about y'all, but my personal experience in dealing with all this, that is exactly what we are doing. We're not talking about statute that has then been vetted through the court system, and we have legal cases. We don't have that yet. And you're creating more statues. So how else would we address what's going to happen with these statues, statutes besides being hypothetical. Does that make sense? So let's talk about the validity of hypotheticals and, you know, with all respect, This bill makes a bunch of hypotheticals. Who wants this bill? Walmart What's the, what's, what's, what's the, what's backing that? What is the supporting Folks saying about what this is gonna do. What are they saying? It's gonna promote competition. There was a statement about, well, you know, now we have entrepreneurs that can expand their business. So keep that in mind as, as we, as we go a little bit further with that. So, one of the things that many of you may be aware of. I'm, I'm not quite sure again, I've sent so many emails out and stuff, I'm not sure what which when and what bodies have gotten all the, the emails, but I spoke in front of the uh City County Local hearing in the Senate. And I brought up this my, I brought up. Um, a Federal Trade Commission case against Glazers. Now his lateness what many of you may not know who Glaziers is. Well, in my store, and I would suspect the bulk of the, the retail stores throughout the state. Glazers is their biggest supplier. Now, framed in the reference of, if I want Crown Royal, I've got to go to glaziers to buy it. They don't have competition. I have to buy it for whatever price they give me. So the Federal Trade Commission, just at the end of 2024. Filed a complaint against Glaziers. That complained basically said, and, and there was some new, new verbiage that came out about that complaint, some details. Some redacted details of the, of the case. But And, and I would be glad if you're curious about it, I can pull those, some of that summary up to describe it to you, but effectively what they're saying is, is it glazers was unfairly treating mom and pop stores. Well, if you own one store and it's not 8000 square feet. We're a mom, it's a mom and pop store. So Does, is this bill going to promote competition? Well, let's go a little bit further with that. Is it gonna promote with an entrepreneur. Someone like myself or someone else go into and expand their business in the throes of the idea that they're going to compete. In a, in an environment where there is abuse of federal trade laws. I don't think so. I don't want to expand my store because I realize That that's what I'm up against. So, you know, uh, I don't think that it's there that the hypothetical that it's gonna it's gonna give entrepreneurs choices. The other part of it is, is that, you know, I don't think it's a hypothetical. That the people that I support in Saline County. I just had a conversation with him the other day, a nonprofit women's-based organization. And they said John, when we had these events, we can't get money out of the big box stores. It comes from local businesses. So to imply that, that somehow or another this bill doesn't, isn't going to adversely affect your communities? I, I'm, I'm not, I'm not seeing it. Um, let me, let me frame a little bit just to understand what, you know, the, the ABC is gonna go is in charge of it and the 21st Amendment gives the state's authority to enforce liquor laws. So it is indeed on the ABC to enforce the liquor laws. Now, if they don't have in direction direction or resources. It's not, I'm not making any statement about whether they're good at what they do. But I think there's some, I think there's some uh further in due diligence on your part before you vote on this bill that needs to be done to address this. But imagine for a minute, First of all, this, this bill is putting different people in, in the business and it's allowing for 3 stores. So let's talk about that just a minute. If we've got 3 stores that could be owned. And let's say there's 15 stores that decide to own 3 stores. OK, so think about the, the dynamics. Let me go through the dynamics of the investigation and the extent with which it would have to be in the depth that would have to go in order to make sure. That there's not federal trade commission. Violations Type violation you have. The fact is, if Walmart opened, has a store in Little Rock in Benton County in Washington County. The law says they, they can't group by. They can't group by. They can't, and the director can correct me if I'm wrong, but I'm pretty sure that the reality of it is, is that whatever Walmart in West Little Rock sells. Is what the deal sheets ought to reflect. Mean if, if Glazier says you buy 500 cases of this product, and you get it for this price. And Walmart gets it for the 1500 case price. Then That's unfair trade practices. So when, when people like me come up here and say, It's not a fair playing field. So, so what the, what an investigation would include is not just knowing what whether they're getting the 1500, 500 on one invoice. It would take multiple invoices. It would take a period of time of reviewing their invoices because if they know that the ABC is coming, they may, they may stop doing that. Well, do they start it back up? And as, as I have, as I have spoken in front of the, the, the City County Local Committee. I explained this that the way enforcement starts on the liquor side is for me to go to. The enforcement director was some kind of evidence or something to get the ball rolling. Well I don't have access to glaziers. Deal sheets I'd have to actually and again we talked about the complexity I'd have to look at their deal sheets over time for the same product. I mean, we're adding some complexity to the ABC's task we're doing in an environment where I don't think due diligence about how there is being enforced now is. Is even been looked at. Uh, I could go on, but I'm gonna move past that. You know, I think you'll understand the point. The investigating this, it took the Federal Trade Commission 2 years to figure it out, to get this going. And I'm not speaking in hypotheticals. There is a legal action from the Federal Trade Commission against glaziers. Glaziers is a big player in this state. Glaziers is, in my opinion, effectively circumventing your power. Y'all have the right the power to pick winners and losers and in this bill you're picking Walmart to be the winner and the losers are people just like me, just like these great people sitting in the audience just like the wonderful people out there in your communities that, that safely disperse alcohol. Um, so I say they're circumventing, they're picking winners and losers in the liquor business. Glaziers is if they're allowed to do this, and again, I'm not, it's not a hypothetical. Um, I, I. I listened to the last time I I spoke to this group. And it was on, uh, HB 1173. And I just want to make a point. And I, again, I'm, uh, uh, I'm not trying to pick on anybody. I'm trying to make a point of agreement. Representative McKenzie. Um, I asked. Uh, Representative Brown, the sponsor of the 1173, about, um, McKenzie had, had asked a question about the unification of code on ABB. No, no, we're here when that, that occurred. And When Representative Brown, Spoke He talked about what He believed in his thoughts were regarding. Now, let me just paraphrase it. After he dug into the ABC regulations. He said, he said laws are very complicated. Spaghetti noodle. Like Laws are very complicated spaghetti do not, it's not the ABC's fault, I agree. Another point of agreement. Because our statutes that the ABC relies upon are a complete mess. Sir, with all due respect, I've given you a lot of leeway on this, but we're speaking to, uh, SB 97, we're not. Speaking with regard to What the condition of the laws regarding ABC are other than how we we're changing this specific statute or creating this statue. I understand and I would just say it's all about supporting the idea of the importance of enforcement in the current condition of enforcement. Um We're creating, we're creating more, more complexity, um. You know, I, I, I go let me address some of this idea of free and fair trade practices, free and fair markets. This is not to be, should not be treated as if this is a normal free market business. We are regulated those regulations should be followed. Um You know, The, the idea of that providing someone like Walmart or similar people. What they want. It's taking away the power of people like me and it's taking away other people's power. It's spreading that power and concentrating it. Um You know we're in an avalanche of the, of corporations deploying vertical integration. When they get when monopolies get control of the situations they can then begin to raise the prices. Continue to reduce, uh, new product development. And all of that effectively runs small businesses out of business. I'm familiar I'm familiar. I can give you circumstances after circumstances where I suspect I can almost predict what's gonna happen, who's gonna run the next business out and how they're gonna do it because I think the dynamics of this and the fact that there's an agreement between Walmart and the County line stores that you're all aware of, that's not in this bill. It's a factor whether it's in the bill or not. Um, so I, I, I think maybe I've shared, um, What I'd like to share and I appreciate your, um, listening and, and I would be happy to try to explain my position a little bit more, seeing no questions from the committee. I appreciate your testimony. Seeing no one else signed up to speak for or against the bill. Representative Moore, would you like to close for your bill? Thank you, Mr. Chair, members of the committee, I'll make this brief. First of all, this is not about glaziers or the Federal Trade Commission. This is about entrepreneurship. Uh, as you can read in the bill that there are no entities specifically mentioned in this bill, um, in fact, some good friends of mine just bought a store in my hometown of Clarendon, um. Currently they are. Their hands are tied on expanding their operations and pursuing the spirit of entrepreneurship. Uh, this would allow them to pursue good business and open up stores and counties over 200,000 of 3 permits, um. Also, all retailers. They are beholden to the same rules, uh, the first rule that I read and these rules are very easily accessible, I myself just found them online. Uh, it says no liquor store or no liquor manufacturer or supplier shall take or fail to take any action that would cause any type of fixing of wholesale or retail prices. Price fixing is illegal. It's against the rules. Another rule that says. No off-premises retail liquor permit shall be operated as part of the profit making business of any billiard hall, pool room, drug, grocery, sporting goods, dry goods, hardware, general mercantile store, or any other business unrelated to such permits. Um This is about opening up a free marketplace and expanding, uh, the spirit of entrepreneurship. This does not. Allow the state to offer any new retailer licenses, you're gonna have to go out and find them yourself, um. is about encouraging competition. With that, I'm closed for my bill would appreciate a good vote and a motion to pass. All right, we have a motion to pass on SB 97. Is there any discussion on the motion? Representative Tasha recognized for discussion on the motion. Thank you, Mr. Chair. I just want to make a brief comment that uh I'm not, I'm not gonna speak, I'm not going to weigh in on this turf war between one entity versus another, but I tell you what I am going to speak on, and I'm going to speak up for, you know, last year here in the state of Arkansas. We had approximately between 5 and 600 people killed in traffic fatality accidents. And You know, everybody seems to have a voice, but I'm gonna be the voice for those 50 to 600 people that were killed in traffic-related accidents where over 50% of those were alcohol related. So, we need to keep those folks in mind and you know, when we refer to them between 5 and 600. They're not just numbers, those were individuals. Individuals there were moms. They were dads They were somebody's child. They were a brother or sister, so we need to think about them as we make these decisions about extending liquor permits or whatever it is, so I'll be a no and that no is for those people that are unable to be here to speak for themselves. Thank you. Is there any other discussion on the motion? Seeing none All in favor, say I oppose nay. Motion carries congratulations Representative Moore, you've passed the bill. All right, members, we're moving on to House Bill 1044, uh, Representative Hawk. If you'll identify yourself, you recognize to present the bill, members, we have a fiscal impact on, on your desk that you can. Review. Thank you, Mr. Chair. Representative RJ Hawk, District 81. Mr. Chair, at this time, I'd ask that, uh, I'd be joined uh by the legal counsel for the University of Arkansas, Matt McCoy, as well as the Attorney General Tim Griffin. Certainly. Gentlemen, if you'll identify yourself for the record. Tim Griffin, Attorney General, we'll say thank you for working me in early. I have an annual doctor's appointment, trying to stay as healthy as I can, so I appreciate you doing this. I know I'm probably going out of order. So thank you also just want to mention the last time I was here right behind me. was my brain, uh, my. Chief Deputy Bob Brooks, and I appreciate all the House and Senate members recognizing him yesterday with your memorial resolutions, uh, his family thanks you and uh his impact is, uh, still felt in our office. Thank you. Thank you, Mr. Chair, uh, members of the committee, my name is Matthew McCoy. I'm the senior associate general counsel for the University of Arkansas system, uh, although I'm officed in the Burs complex in Fayetteville. I also advise, uh, the other athletic departments throughout the UA system. Thank you, Mr. Speaker or Mr. Chair. Uh, today I bring you House Bill 1044. It creates the Arkansas Sports Raffle A. Uh, this bill would allow for Arkansas universities to be able to hold raffles to help fundraise for NIL purposes, scholarships, um, general support within the athletic program or even construction of facilities or maintenance at the respective university. These raffles will work just like your local church or your civic organization that are currently being held right now. We're not reinventing the wheel. We are just Allowing for our universities to have a tool to help with their fundraising efforts. Currently there are more than 50 colleges and universities in the United States that hold raffles. Some of those schools include the University of Missouri, Texas, Oklahoma, Tennessee, Mississippi, Ohio State, Arizona, Florida, Kentucky, and Georgia. Arkansas would just be adding to that list to stay competitive in an athletic field. Now this bill's been labeled in the media as the fifty-fifty raffle bill. Well, it does do that. It also does so much more. It allows for the local car dealership that's in one of these towns. Say it's Southern Arkansas and Magnolia, uh, to be able to give a car to the university and say, you know what, why don't you raffle this off to help raise money. It's not just about the, the 50/50 that's gotten all the attention across the country. This bill was brought to me by the universities themselves. They asked me for this. In fact, they collectively helped me write the bill with the assistance, assistance of Mr. McCoy and others, minus the part on page 4 line 31B that says the casino license or an agent or a casino license shall not act as a third party operator or otherwise administer a raffle on behalf of the qualifying agent. Organization. The reason was that because of that stipulation, myself and my Senate sponsor, Senator Dima felt like because this was a fundraising bill, not a gambling bill. We want to leave the casinos out. The other part was, um, Upon doing research across the country, as I talked about just a moment ago, there's over 50 universities that do this. Not one university is run by a casino. They do it in-house or with a promotional company that the university hires to help them run these, these raffles. It's been noted on social media from people that, that do not like this bill that these universities don't have the tools to be able to run a raffle. Well, clearly there's over 50 universities in the country that are doing it. And these promotion companies, that's what they specialize in, they're coming in and helping with that to raise money, not just for NIL. I know that's been talked about a lot. That's a piece once again. But for all aspects of the university athletic budget. I've spoken directly with the governor's office on this, uh, they are supportive of the bill. The one thing she wanted though before she gave her support. She wanted safeguards in place. So if you look in the bill, you'll see a $250 transaction fee on credit card receipts. That was done she didn't want just to be able to have an open credit card to be able to go in and and buy as many raffle tickets that you wanted. Um, so we added that. That was amended after the fact. We filed this bill in November and if we've worked with people to be able to to do amendments and, and get public comment ahead of time. That's why we filed it early. At the end of the day this bill's giving Arkansas universities is another tool in their toolbox. I mean, we've talked about the landscape of college athletics all the time. We've had NIL bills we, we, we've got some higher ed bills that are gonna be coming up this session. This is helping the smallest of the small universities in our in our state, all the way up to the University of Arkansas, who's in the SEC. It helps everybody. The people at the smallest of universities that don't have a lot of donors that are trying just to figure out how to get to the next sporting event. This bill helps them. It allows for them to hold raffles, to be able to help them with their general budget each and every year. So with that, I've, I've got the attorney General who also helped me with this bill, and I'll take any questions. See no questions for, well, Representative Darby, you recognize her a question. Thank you. Thank you, Mr. Chair. Uh, Representative Haw, I've, I've read your bill many times, uh. And I have a couple of questions if I have a couple ride in a row, is that OK, Mr. Chair, thank you. Um. First of all, I've read the physical impact statement, and it appears that it's referring to the physical impact for licensings that the alcohol. Beverage Control board might have to issue and that's what that physical impact statement is limited to, so my question when I read that, here's, here's my question because I've read your bill and there's startup cost, whether it's computer programming. It's the first I've heard of these promotional companies, so you have the startup costs, what's the physical impact to the taxpayers of Arkansas because these are publicly funded universities. We're not talking. about the foundations now because your bill allows either or to conduct these, what is the physical impact to the taxpayers of Arkansas to start up this because there's no money to start it, so that means my tax dollars that I'm paying is going to start, start this and we don't have a physical impact statement on that. So I'm, I'm going to defer to Matt McCoy, who's they've, they've talked to these, these companies, um, about. what that cost may look like, um, well, I would like and let me go ahead and ask you several questions and then maybe everybody can, uh, I would like a physical impact statement in that regard because I think that's important to know with the taxpayers are going to be charged. That's my money, that's Representative Vox's money, representing Clowney's money, you know, what's that going to cost the taxpayers. I think that's a legitimate question. I don't see the this physical impact statement addresses that. So that's. one question, and I'll just give you several, and then everybody can weigh in that may be the quickest way to do it. Uh, I've also read your bill many times trying to figure it out, want to do the right thing and, and, uh, and for full disclosure, I'm a season ticket holder to the Razorback football games. I have tickets to the basketball game, though I'm not sure I'll be able to get in the, the arena next year because of redoing it. So I, I'm a graduate of the University of Arkansas. I'm not, I'm not poking at them. I just wanna make sure we get this right. So when you look at the bill. Page one Section 1 C1 says the provisions of this chapter are not intended and shall not be construed to allow the play of games of bingo or raffles through any electronic device or machine, OK? Then when you go down. I'm having to read off my phone, so if you'll hang on so I can find the exact Statement, you go on down. In the bill and the bill then tells us. That You can play off of your phone. And so to me that's inconsistent. In the language and should we not have that language of the bill fixed to have a proper bill. I mean, so that it reads right. So those are really kind of my two questions and I'll just roll it up and let somebody please answer that for me. I'm going to let the attorney General address first the, the question about the electronic devices, um, and why it states where it states. Thank you. The way I put it, uh, uh, a chairman, um, is this bill, so the prohibition on electronic. On electronic, uh, electronic raffle tickets is statutory. So this is purely statutory. All the other stuff has been talked about involves constitutional issues. Yeah, and I did go back and look at the Constitution and I've looked at those case law so so the bill does two things. First, broadens it says we have a prohibition in statute. On using electronic devices. So we're gonna get rid of that and we're gonna now say you can do that. But then it immediately narrows. It says you can do that only if. You are, you meet the following educational institution or foundation, athletic, uh, purpose, etc. So if you are one of the. Entities Currently prohibited from selling electronically. Then These changes and you're not an in a higher education institution, doing this for athletic purposes. Nothing changes for you. This is changing it for this narrow purpose. So it broadens to the electronic, but then it immediately says that that broadening only applies for this particular purpose if you meet these. There's no issue there. Is that fair? Is that a fair reading? That's correct. Those are two separate chapters. Um The Attorney general is talking about the charitable bingo and raffle enabling act. Nothing would change in that. And that What's being introduced here on the latter pages is the new act, the Arkansas Sports Raffle Act, so I, I, I think I'll go on to address the question about um the expenses, so, um, if you look on page 4, it, it talks about, you know, the money that is raised off these things can go to, to purchase the software and to your point, um, this is a startup, right? So you don't have that money up front, uh, the universities could essentially use the money out of their budget to for a software company it's not like the universities are gonna go out and and hook up a bunch of computers and run these raffles themselves. Most of them that I've talked to, I've talked to a lot of them in our state are going to hire a promotional company that's already got the software in place and it's essentially a subscription every month that you're gonna pay for them to run this and and and to your point, and I appreciate that Representative Hawk, but to your point, I want to know how much that is, and we don't have that information in front of us and we've not been given a physical impact. As to how it's going to impact the taxpayers of Arkansas, for whether it's the University of Arkansas or SAU or ASU or whoever, we don't have that in our hand or, or even a one of our little famous green sheets that we all get up here that tells us, well they can't determine it or or whatever and I think, I think I have to be able to answer to the folks in my district that that their taxes that are going. To these institutions, how much is going to this because you know I may have a lot of people in my district who are not for, you know, their taxpayers' money going to, to a raffle. I mean, that's just my point. I just want to know what it's gonna cost and I think that that's something that would be very helpful to this committee, and I was hopeful when I read the physical impact statement that was on our desk that it would have addressed that, but it does not. And so I'm requesting. that we have one that we reach to that I believe Matt McCoy may have something for you. I, I can speak to something that I'm hoping that at least this context may be a little more helpful. Um The bill doesn't limit how those particular raffles are conducted, so when you compare the University of Arkansas to let's say the track program at Northwest Arkansas Community College. There's nothing that prevents a university from printing paper tickets and using those with the raffle, so what the bill would allow the institutions to do is operate within their legislative discretion to determine what amounts they can spend that are not going to result in. And uh, In in excess expenditures. So if they don't already have the money to begin a raffle. Uh, then you would think they would operate more within their budget that's been uh appropriated for them. So it's, I would imagine that would be difficult for most of these higher ed institutions to know whether or not they're going to be uh producing printed tickets at a at a small attended track event or whether or not they're gonna be more in line with our larger universities who it's already within their funding, for example, the University of Arkansas is a self-funded institution. It takes no appropriated dollars and no student fees, so those would have zero impact uh on. The uh tax appropriations. Any other questions from the committee? Representative Eaves, you're recognized her a question. Thank you. Um, Representative Hawk or Mr. McCoy, either one of you over here, you're right. Can you just walk me through how you envisioned the raffle actually working like give me some examples of how the University of Arkansas might use it or uh private university or anything like that. What, so I'll give you a little background on, on how I was involved in in this particular project and I can tell you that the request for Raffles did not come overnight. It did not just, although public awareness is fairly recent, uh. This request for me to consult with this started about 6 years ago. So there's been an enormous amount of research into um A plan that would be able to accommodate every single higher ed institution within the state of Arkansas, and I can tell you that was not an easy project and I, I, I commend the Attorney General and Representative Hawk for being able to come up with something that actually does that, um. I will tell you we have not, uh, the higher ed institutions that I worked with were not in a position to run this because they did not have that particular solution to create a bill that uniquely was a, a uh multi fit for every institution. So back to your question. Uh, an institution like the University of Arkansas would in all likelihood contract with what they call a GLI 31. Uh, entity, um, that works with nonprofits around the country. Those entities, uh, those, uh, vendors have been. Uh, producing raffles for sports venues for more than 15 years. They actually created the industry for it. So Within, uh. College athletics, it's relatively new, but there are already 35 schools that hold raffles. There are 4 within the SEC conference footprint. Uh, I would, I would imagine larger universities would elect to Uh, work with a vendor to be able to do that. The unique thing about the software that's available is they allow them to do it in venue, which uh based on the research that we've had about 70% of all raffle sales come in venue. Only 30% are typically sold online. So For this bill, again, we're trying to find something that could accommodate both those universities that may only do in venue sales, um, I represent UA Monticello, I represent UA Pine Bluff, UA Fort Smith, in all likelihood, they may not be contracting with something as large as one of these GIL 30, uh, vendors. But that revenue is still important to them, so. They very well could have those tickets printed themselves or they could have somebody working with them to be able to print those types of tickets. Um For our larger universities. On those uh selected game events. You would have your social media would be able to. communicate with the fans, for example, the University of Arkansas has 30,050,000 downloaded app users. They would be able to communicate that information with them and would have a working software app. On the University of Arkansas's app, if other universities elected to do that, they would be able to do the same thing. It would not be tied. To Any other uh gaming or vendor website, it would be a. A software that is solely controlled by the institution. Which is one of the reasons it. That, um, That we offered our support behind this bill because it was important that each one of our higher ed institutions had autonomy with how they elected to run their particular raffles. Um So it would it would be uh communicated either through their social media on those game days. They would be able to purchase tickets using software in venue as well. Uh, not only on the app but in venue. And then what would be anticipated for the larger events is that they wouldn't award that until after the event, which was another uh. Uh, really important part of how it was run for our athletic directors. This isn't just about generating revenue, it's also about creating a experience, uh, and in venue experience and incentive to attend games and not only attend games but be there. Winning in basketball the final shots taken to keep people in their seats to be able to support those individuals, so I will tell you it's not an easy challenge, and there were I've reviewed. Uh, 78 different proposals for higher ed, uh, collegiate raffles. This is the only one that I've sat at this table, um. To uh to provide support for. Um, but I hope that answered your question. Right Thanks. Sorry about that. Yeah, I think you did and um Representative Haw, I guess based on the Senate sponsor, I'm assuming private universities can participate in this as well. Absolutely. So, uh, um, I just heard from last week, uh, Harding University said they would, they would totally do something like this because they don't have a foundation at Harding, right? They don't have somebody that's out there fundraising for them like that and so something like this would help them and whether it be facilities, uniforms, whatever. Thank you. Appreciate it. Thank you. Represent Tasha recognized for a question. Thank you, Mr. Chair. While I've got a couple of constitutional scholars there at the table. I guarantee you I'm not talking about you. They know who I'm talking about. I had, uh, I just want to be sure about something, and I've kind of discussed this, uh, with a few folks, and, uh, probably about 3 or 4 sessions ago. I attempted to draft a bill to run legislation. To do raffle tickets and, and to actually be able, uh, it was for Saint Jude Hospital, uh, out of Memphis and the plan was to draft legislation to help them to be able here in Arkansas, which they do in other states to be built dream houses, and then that money go back to help those kids. I was told at that time that I was. I couldn't do that because uh it would exceed a limit of like the best I remember around $50,000 so I'm trying to understand a few sessions ago, I was told that was unconstitutional and it was against the rules. I don't know DNA whatever. So has something changed since then. I'm just trying to make sure that I understand what I couldn't do then is it something I could do now or something that something changed? Could you answer? it. He says he's a constitutional scholar, but I'm gonna take this one, I have no idea who told you what, and I can't speak to what someone else said before I got in office, uh. If you're, I love Saint Jude. My daughter has pediatric, uh, lupus and low platelets, and I took her over there. Uh, because I wanted the best. I saw your name and face over there. Uh, miracles are performed there every day. We get past this and I get past my heart checkup in about 20 minutes while we sit down and figure out a way to help children's hospital or whatever else, I'm happy to work with you on that. I don't know who told you what. I'm not gonna say that they were right. OK, that's, that's fair enough. Thank you. Representative Bo, you recognize for a question. Thank you, Mr. Chair. So on average, I think you said there's 30. Uh, schools or universities that already do this. Can you tell me over 50? OK, sorry. Can you tell me on average about how much they bring in per game. Well, I, so I, it's funny you say that, so it varies by sport, right? and however many people, so, um, I looked at the University of Florida, they were one of the first ones that got this going right? and uh I looked at their their football games because this is where really the biggest ones are gonna be and on average the jackpot on a fifty-fifty raffle was around $55,000 per game. Now they did have one game that got up to $90,000. That's when. I had the great American Cocktail party and with Georgia testimony here in a little bit that Kentucky the other night for the Arkansas game when we raised $5000. It's also about how you promote this thing, right? Like it goes into your marketing department, getting the word out, things of that nature. And as Mr. McCoy has already talked about, they've got a 300,000 people that have downloaded the app, that they're able to to send the message to and let them know this thing's going on. Can I have one follow up? You recognize. You brought it up. I think there's like a games, basketball games, soccer games, whatever it might be and help each individual one with that, would that not bring in about the same amount of money. As far as adding money to the ticket, uh, to raise money for this. Well, uh, when that when that was not proposed to me this uh so the university brought this to me to do, um, and plus I mean if you think about it, we as a committee sat here and heard a bill just last week about the rise in ticket sales, the rise in in seat sales and I think that if you go and add more dollars onto those tickets, and I don't want to speak for the universities. I'm just, this is RJ's opinion. But if you go and add those dollars to those tickets, it's gonna start So there's you. Thank you, Mr. Chair. Members, uh, before So, uh, sir, if you have any other comments. I do have one. I'm just gonna make sure it's good. You've all got my I appreciate you doing that, uh, so that I don't get in trouble, but, uh, I support it. Governor supports that our higher education ought to be excellent academically intellectually. But athletics is important. The people I meet with the most People from other states. I want them to come here and spend all their money. They, they won't do that if we're never winning. They'll do it if we have a chance and are competitive. And you know what, you may not like the current landscape of how these games and I and all this, but you know what? This is a landscape we've got, we've got a. You read the book about who moved my cheese, we gotta adapt, and this is a way to adapt. It's common sense, it's reasonable, and it's a mere statutory change. Thank you, Chairman. Thank you, sir. I Representative Ferguson, you're recognized for a question. Thank you, Mr. Chairman. I want to follow up. Representative Hall. Representative Eve's question in terms of walking us through how this rapper works and and the question uh It's about your small colleges, UAPB. Manoella, but I've got a 2-year college. That's a basketball team. In my district. So with these vendors, With these vendors. Assist these small colleges, these small institutions, and getting whatever product or whatever service or whatever item to raffle. To get those donated because some of these schools are small. They don't have a robust foundation or booster club. Uh, since we can't use taxpayers' money. To say buy a car to raffle off. How do they get these uh uh items or services or uh that the vendor go out and do this for them? As I understand it, it's just a a a software. Uh, and equipment service that's provided by the vendors, but what that allows them to do is to sell those in venues so that the pot will generate during the game or even before the game depending on how long you wanna make those tickets available. So even our institutions that don't have a dime to contribute to it. Would the pot would be built by the raffle tickets that are purchased, so they they're in the industry they call them fifty-fifty raffles. So if they were able to generate $5000 they would be able to give away $2500 at the end of the game. Even without committing any. Uh, money to the actual prize. So even if, even if there aren't cars or or uh boats or anything like that to con contribute, there would always be uh prize money that would be available and the flexibility of this would also allow you to, let's take for example uh. A a baseball series 3 games you could award it at the end of the 3 if the institution wanted the pot to build up and to create interest and have more of their fans attending. Um Or you could build it over several weeks to a really big game that you wanted um. To be more highly attended. And you could also put requirements on it that they have to be there when it's awarded, so it, it can build over time so that that was one of the things that our institutions had expressed that they really like the flexibility of the way this bill was structured and, and I, I will say to answer your question, so I've talked to um. UCA is my school, right? That's where I went to school, um, they don't have the donors at the UFA has, right? But they've got sponsors. Um, crane crane Automotive, for example, is a sponsor at UCA that if Crane wanted to come to UCA and say, hey, we wanna, we wanna be able to give you a vehicle. Give it to you, you raffle off, raise the money. This bill would then allow for UCA to do something like that, um, I, I think with fundraising, right, you're gonna have to have some lead that goes out and gets the gets the prizes if you're gonna do prizes rather than a fifty-fifty raffle, you're gonna have to have somebody in your athletic department that is in charge of, OK, well, we want to raffle off a boat or a car or what we've got to go out there and procure that, um, if you're gonna go that route. And I guess, uh, Mr. Chair, can I just ask one follow up if you're be clear. OK, I'll be quick. So, the vendor doesn't go out and get the sponsor. The institution has to get the sponsor. And if the institution doesn't have sponsors or if they can't get the sponsors, then actually it doesn't benefit them, but they better go get the sponsors. And, but most athletic, I mean, you go to any athletic, I mean even high school games, they're sponsors involved, right? And so I would say that this, I, I, look, I called games for, for Henderson State University, and we had more sponsors than, than, you know, most major colleges, they wrapped the stadium with them most small even Juke. those schools, um, they've got sponsors that cover this, but you to your, to your, to answer your question, yes, the school has to get the sponsors. OK. Thank you. Thank you, Mr. Chair, if I may, Mr. Chair, even without a a sponsor to to donate, you would still be able to get tickets or experiences or those other types of things that may be of value to the fans. Members, we are at 120 and uh we have a couple of people in the audience that have a, under a time crunch, and, uh, I'd like to hear from them if I could, uh, I suspect we're going to be coming back after session to I'm not gonna take that motion right now. I want to hear from The, the gentlemen in the audience. So, uh, We will hear from them and then we are going to recess till after session. So with, uh, Mr. Yzek and Whitting would, and if anybody else is out there that If you could come to the table. I mean, after session. Gentlemen, if you'll identify yourself and who you're with, you're recognized. Your hunter your check vice-chancellor and director of athletics at the University of Arkansas Fayetteville. Mr. Chair, Matt Whiting, director of athletics at the University of Central Arkansas. Good afternoon, Frank Cuervo, director of athletics at UA Little Rock. Jeff Burinton, Arkansas State University Vice Chancellor for Intercollegiate Athletics. And, Mr. Chairman, not to speak for the group, but I'll start and uh I think you said it very eloquently when you talked about who moved my cheese and, uh, we're trying to adapt in college athletics as athletic directors to an ever changing environment where we're being asked now to share revenue with, uh, student athletes uh on our campuses and to generate more revenue and, uh, this is just another tool for. each of us to be able to generate uh revenue that will go back to support our student athletes go back to support the success of our of our departments now to speak solely for the university of Arkansas, Fayetteville, uh, Mr. McCoy mentioned, we are self-sustaining athletic program. We don't get any money from the state or taxpayers. We don't get any money from the university. We don't receive any money from our students, uh, we will fund this, uh, through the revenue that is generated. We've talked to an external company and to answer. Question, I know that's been asked is, uh, they take 10% of the gross to pay for the application of this product and at the University of Arkansas Fayetteville, we envisioned launching this, um, if it is passed sometime, uh, late this spring in conjunction with their baseball season and then having a full launch, uh, next fall. We have over 100 events between our 19 sports and we believe that we can generate north of 7 figures as this 50/50 raffle. uh on our campus matures, uh, through the course of time. Uh, we will designate one person within a razorback Athletic Foundation that will be charged with running this, charged with having volunteers at games to help, um, expedite the process and generate and maximize revenue potential for us. Mr. Chair, I would just say from the University of Central Arkansas standpoint and to Attorney General Griffin's statement earlier about this state of college athletics that we're in. It's, it's a unique time and, and we're in that though, we have to adapt and we have to adjust. And I think that we're in the business, we're in the entertainment business, and we're in the in the business of generating revenue. I think that this gives us an opportunity to extend upon those avenues within our current athletic department to create better experiences for our fans and also generate additional revenue to support our, our departments. Not to belabor the point, but I, I think many of the comments that that Hunter and Matt just made uh hold true, uh, all of us just got an email actually while, while the, the committee was in session, uh, soliciting whether or not we were opting into the the house settlement that is a paradigm changing uh case in in college athletics, um, being able to drive incremental revenue to support our athletics program through means such as as this raffle, um, impacts our ability to to compete at the highest level to bring pride and. to, to Arkansas and to our local communities, uh, and to compete at the highest level in college athletics, so this is uh uh something that most certainly would be a beneficial benefit to all of us, uh, regardless of, uh, the level at which we compete. Thank you. Thank you, Mr. Chair, speaking for Arkansas State University. Uh, we've had a very successful, um, year in terms of athletics who played on national TV and won a bowl game. Our basketball team is having, uh, great success so far. National TV exposure, I think all that is great for our state. Um, and we're trying to find every creative avenue we can, uh, to generate revenue. This would be a key component for us. In addition to potential revenue share and where this house settlement ends up, there's also an opportunity to add scholarships, uh, so some of the money could be used for that as well, so, you know, whether it's um, medical care, uh, tutors, academics, I think that's another key part to this and I appreciate your time and don't want to delay your lunch. Oh, we're not going to lunch. Uh, Mr. Yurze, you You said something that caught my attention. I was wondering if you could repeat it. You were talking about the funds don't come from student fees or, uh, And this is just the University of Arkansas Fayetteville, we are a self-sustaining athletic program, an auxiliary of the University of Arkansas, so we don't receive a dollar from the state of Arkansas taxpayers. We do not receive a dollar from the university and we do not have a student athletic fee, so every dollar that we spend on our student athletes on our athletic program is generated through ticket sales, sponsorship sales, potentially, uh, the raffle SEC television revenue, etc. for the other gentleman there with that piece. Would that be a similar case, or you, would it? Possibly be, uh, public funds that might, uh, you might have to use to for startup costs. I think the, the three of us are, are in a similar situation and that we do receive ENG dollars uh from the university, uh, as well as student fees, however, in terms of the model in which we would execute uh this type of raffle it, it would be very similar to to what our friends in in Fayetteville would do in terms of um having a percentage off the top of the revenue generated incrementally, um, go to the provider, uh, to uh, to pay tho those fees, so in, in fact they're there would be little. To no startup costs other than the time, uh, necessary to work with the strategic partner. OK, thank you. Representative Wardlaw, you recognize her question. Thank you, Mr. Chair. Mr. Arch, you made a comment when you opened your statement about a third party running this in the 10% they would hold back if I recollect correctly. The older I get, the less my memory works, but Um Who, who, who are these third parties you're talking to and why would we exclude third party vendors we have within the state. I'm, I'm not aware of any third party vendors in the state that are not tied to a casino if there was one, we would use one, but the third parties that are nationally known that do NFL, NBA, Major League Baseball, and other colleges are a national companies is one, it's called bump, um, that's one we've had some very informal conversations about how their model works and really what they designed for you and tailor it, uh, to your program is the application or the app that you would tie into what we already have our existing. Arkansas Razorback online app and that's what they have is, so we're not reinventing the wheel, they already have the app that's working at, at multiple sports venues. I understand. So looking at. I believe Representative earlier asked for impact statement. What, what kind of monies do does bump, I guess the name of, what kind of monies do they raise on a per game basis? I mean, do you have an idea of what the projected money they could raise off of 3000 fans or 10,000 fans or what that would look like. Uh, they, they estimated $1 a fan. And so if you take the University of Arkansas Fayetteville, 6 home football games, uh, 70,000 fans, 18 home basketball games. 0000 fans, 30 home baseball games with 10,000 fans, you start to do that math and it quickly compounds itself for us. Thank you. That, that answers my questions. Thank you, Mr. Chair. Represented more you recognized for her question. Thank you, Mr. Chair. Um, Mr. Uze, gentlemen, I Received a letter signed by many of you, uh, yesterday, uh, in support of a raffle to support your NIL programs. Is that letter specific to this piece of legislation? Yes, it is. All right, gentlemen, I know some of you have to leave, but, uh, I, I have some um some members that have, uh, some questions for the University of Arkansas specifically after we come back, is there gonna be someone from the universities that would be able to answer questions. I can stay until 3:30 at the men's basketball game. I have to get back to and I, I drove down today and didn't fly. Happy to stay as needed. Yes, sir. Same here, double header basketball game tonight. Representative Darby. Did, did you wanna I have If you wanted to go ahead, I'll recognize you right now. You recognize. Thank you, Mr. Chair. I move that we specifically, I'm asking the committee to on this motion to specifically ask for a, uh, Physical impact statement that would address those issues I raised earlier. I, uh, in regard to. What's going to be the startup cost and I understand the University of Arkansas, Mr. Yzek just testified that there are separate entity don't get taxpayer funds, though the university does, but not the athletic department, but the other athletic departments are not so, um, Positioned within the state of Arkansas and do receive taxpayer funds, it is still an issue to me that we as a committee would need to know if it can be determined with the physical impact statement with the physical impact statement with these startup cost would because I can't imagine anybody's gonna just say we're gonna give it to you free and hope we make some money on it. What's it gonna cost the state? Via our taxes to have uh this startup if they're gonna print paper tickets if they're going to develop an app, they're gonna go online and do it that way. I feel like for us to make an informed decision and the right one and understand, I support athletics, and I understand what NIL is doing to the landscape and full disclosure, my husband's a University of Texas graduates, so I'm well aware of how much money they have down there. And I want us to be on a level playing field, but as representatives, I believe in this committee we need to know those kinds of things to make a good informed decision, and that would be my motion. All right. It's my understanding after consulting with the parliamentarian that we have a fiscal impact on the table, and the rules do not require an additional impact unless uh a member makes a motion and the committee adopts that motion. So, uh, Representative Darby has made a motion that we ask for another fiscal impact. Is there any discussion on the motion? Representative McKenzie, you recognize I'd actually like to make a substitute motion if possible for us to continue with the motion for fiscal impact after we have the opportunity to hear some debate. The need for fiscal impact, I agree, um, we've just, we've got a lot of stakeholders in the room. This has been a long embattled and belabored conversation. Uh, people have made a good amount of sacrifice to be down here to testify on this. So my substitute motion would be that we do make, we do request a fiscal impact or a fiscal impact is is requested, Halloween, uh, question and answer and public testimony. All right, members, we, we have a uh substitute motion that we, uh, delay taking up this motion until after we've heard the, uh, testimony. But that's what my my understanding is that we're going to continue to have the physical impact statement despite what the testimony is, and that, that we need that physical is that my understanding of your substitute motion? the fiscal impact. Hang on. I hit your button again. My substitute motion is that we request a fiscal impact following question and answered by the bill's sponsor and public testimony. Can you repeat that, so yeah, because I'm not, yeah, I'd like to, uh, I mean, I want the physical impact statement, but I don't want the testimony to derail the fact that I still believe we'll need an physical impact segment. Are you OK if we're saying the same thing typically when a fiscal impact statement is requested, the rules dictate that every member has the privilege that ends the the progression of the debate in committee. So I want to ensure that we do not end the progression of debate and. testimony in committee. Yeah. I understand what he's saying now, I understand. OK, so it's my understanding that the substitute motion is that we request the fiscal impact, but we can Continue with the testimony. You know, you know, Rep Representative McKenzie, am I repeating in my stating your substitute correctly. OK, I'll adopt that substitute motion because I do understand that we're not giving up that right to ask for it and that I and that Representative McKenzie and I are asking the committee to. Adopt our motion at the conclusion of testimony because I do understand people have come from a a ways away and want to testify, and I'm willing to hear that, but I'm also wanting to have that physical impact statement correct? Is that accurate? Thank you. OK, members, so the substitute motion, I think you've all heard that and understand it, uh, uh. Representatives recognized for discussion on the substitute motion. OK. Thank you, Mr. Chairman. I'm, I'm a little concerned at how DFNA is going to come up with a fiscal impact statement because it's gonna depend on how each institution sets up their raffle program. This bill also includes private universities, uh, uh, who clearly don't take state money. So I don't, I think maybe we're asking DFNA to do something that they're not going to be able to do accurately. All right, members, we have a, uh, a substitute motion that we are going to still request a, uh, fiscal impact, but we're going to continue with testimony today. Is there any other discussion? All right, all in favor of the substitute motion, say I. Oppose say nay. I roll the nas. So we are going to, uh, At this point, not require or request an additional fiscal impact, and we are going to recess until after session, uh, but my question still stands for anyone that's here, are, are you gonna have somebody here that can answer questions for your universities. Because I can't guarantee I will be back by 3:30. What we'll stay as long as we need to. The same, yes, sir. Yes, same, same for me as well. OK. Mr. Yuck, do you have anybody else that's from the university that would be able to answer questions. Uh, Mr. McCoy would be here as well. OK. At least I'm going to speak for him. Yes, he said he would be. All right, members, we are, uh, we're gonna go ahead and recess at this point and come back 15 minutes upon adjournment. Thank you. Representative, uh, Ferguson, your uh recognized for a question. Who is your question for? I guess for the I havethletic directors who were here. Uh All right, gentlemen or and uh Mr. McCoy, could you all come back up to the table, the ones that are here. Or the representative. From the university. Please identify yourselves again for the record. And who are you with? Matthew McCoy, senior associate general counsel for the University of Arkansas system. S Mr. Chairman Matt Whiting, director of Athletics, University of Central Arkansas. Frank Cuervo, director of athletics, UA Little Rock. Shane Broadway ASU system filling in for Vice Chancellor of Athletics, Jeff Purington. Represent Ferguson, you recognize her question. Thank you, Mr. Speaker. I think I heard, uh, the Ali director for the University of Arkansas, uh, system state that there was a letter presented from most of the athletic directors from the system. From the University of Arkansas State, UALR, I think, was it UCA or was it? Yeah, and that based on that letter, That the you of a system in the other. Uh, colleges was in support of this legislation. Did I hear that correctly? Yeah, I think we would have to ask or read the statement. I don't, I don't know that I could, I could say exactly what exactly they were the question they were answering or. I would have to hear the statement. OK. And, and I, I would make a correction. I'm, I'm general counsel, I'm in the office of general counsel for the system. Um, Hunter Yuriczek is the athletic director for the University of Arkansas at Fayetteville. And so I believe that particular statement was signed by the athletic directors that there was not a UA system signature on the. That's correct. It's the the division one athletics directors, um, including the you know the athletics director at UA Pine Bluff. I can read the statement if you want me to read the, OK. As in intercollegiate athletics continues to evolve. It's more imperative than ever. The universities and colleges competing with Arkansas have the resources necessary to compete and win within their conferences in Ashley. We must continue to identify innovative ways to generate support for the college athletic programs at all levels within our state. While remaining aligned with educational missions. The ability to conduct responsible collegiate sports raffles would allow Arkansan, Arkansans and others to voluntary participate in an effort. It supports athletics across our state does not conflict with vital support for other educational programs, where it's Razorbacks, Red Bulls, Golden lines, Trojans or bears rallying together as a state to support our athletic programs as a collective win for Arkansas and the teams that we cheer, so it's not it's specific to the topic of Raffles. It's not specific to the topic of Raffles. It is specific to the topic of raffles or any other legal means, I would say, Representative Ferguson, uh, by which we can raise funds specific. Raffles, but is it Pacific to this bill? It is the statement is not specifically state this bill. I think it would pertain to any piece of legislation that would allow, uh, this is the bill, only bill currently filed. So, it would pertain to this bill or any other bill that pertains. To this topic that possibly could be filed. Uh, that would allow us different and new opportunities to raise money for student athletics, but currently the only bill filed is the one we're discussing today. Does that help? Yeah, it, it helps a little bit. Thank you. Uh, thank you, Mr. Chairman. If I Representative Darby, you recognize her question. Thank you, Mr. Chairman. I keep circling back to this because no one's ever answered my question, and it's been asked several times by other people. I want to know from which each of these entities, how much is it going to cost to start up. Is it $5000 10,000 dollars, $100,000. There's a cost to starting this up before anybody ever sells a raffle ticket. I want to know what is your research shown as how much it's going to cost to start this up. That's a simple question, but nobody seems to want to answer. Shane. I see you. I Uh, representative only frame of reference I have is as the sponsor of the uh bingo and Raffles amendment back in 2000 and whatever year that was. Uh, that allowed all of this to occur. For many years, A State Athletics has done raffles, but we have done that with existing personnel going around and selling raffle tickets. Y'all probably have done that, uh, to 2, so there was no cost because they were already employees or they were volunteers for athletics. What the cost for obtaining a digital app or, or something like that. I don't know that we've had the opportunity to research that yet that I'm aware of. But we can find out and get an answer back to you. If I could just to to add to that, um, with the strategic partners, the companies that that we've spoken with, uh, the way they would set it up is that the, the startup, they would fund or provide, so whether it's the development of an app, uh, uh, development of a website, whatever the platform is and then off of the proceeds that are generated, they would maintain a share, so if $10,000 were generated in the first period, the company, the partner, would retain. 00 $0 of it, the university would then receive the remaining 90%. So in effect, other than the, the time of staff to coordinate and interface with the partner. There's no, there's no outlay of capital to to start a project like this with, with some providers. Yeah, I would echo what Mr. Cuervo mentioned there as far as my research on these companies, the majority of, of what you see is related to a fee, a percentage of the sales, uh, associated with, with what they make as the company. I would also just say that at the University of Central Arkansas, um, Whatever fee, if there is a fee, we would not pay that from state dollars. We would look to pay that from private funding, um, if, if that was necessary. Their their answers were consistent with with the research, uh, at least that I've seen personally is that there is no outlay, there is no fee that's paid up front, but this particular bill does allow for foundations to do those raffles as well and from an NIL standpoint, it would probably be. More beneficial under the House settlement for the foundations to run these anyway, which would not have any cost to the athletic departments. Just one quick follow up, if I may, Mr. Chair. For each of, each of the individuals at the table, could you also tell me, are you discussing, uh, these promoters for lack of better word, I think somebody used that earlier promoter. Are they, uh, located within the United States or located outside the United States because the one that was mentioned earlier when I Googled them, they're not even in the United States, so I'm just curious, are we sending our money outside of the country? And if so, what countries? Thank you. Ma'am, to the best of my knowledge, for with the companies that, that we've researched and had any conversations with, they're all US based. That would be my same answer as well, representative. I would, I would have to ask Jeff had any conversations with anybody, so my best to answer, Madam Chair, is I don't know. To my knowledge, there have been uh. No conversations to move where they're going to have an actual contract, uh, with any particular company. I mean, that would, that would have come across my desk if they have all of the companies that I personally talked to are all based in the United States and that's been over a course of 7 years. Representative Moore, you recognized for a question. Thank you, Mr. Chair. I wanted to circle back to what Representative Ferguson was asking because when I asked, uh, athletic director Ezek, did he support that that letter that y'all. Your institution signed, was that specific to this bill? and he said yes. And then I believe Representative Ferguson just asked, was that letter? Specific to this bill, and you said no. Could you provide clarity on that? I said no I won't. I presume to speak for that. Well, I'm, I'm not in a position to contradict any of his testimony if if that's what he said and that's what the record reflects then. Mr. Uriche is. I, uh, certainly able to be able to. To, to answer his position. Representative Wardlaw, you recognize her question. Pass. Representative Bo, you recognize her question. Thank you, Mr. Chair. Mr. McCoy, I think you said that y'all do have an app already up and running, uh, where you can buy tickets and I thought, I want to say maybe you said 300,000 people had this app, I can't remember for sure. Do you already have a sponsor for that app that you have right now? Um I don't, I don't operate with the marketing and external on a day to day. I'm sure they do have. Uh, sponsors for all those, it's 300 and I think. A little more than 350,000. OK, thank you, sir. To let me add, I got a message back from Our athletic director, he has not spoken to anybody, Representative Dalby, uh, specifically about being able to do the raffles for us. We do have a company we use currently all of our athletic programs do auctions for fundraisers through the foundation. And so that's probably. Depending on how this shakes out at the end would be who we would, we would work with. Representative McKenzie, recognized for the question. Thank you, Mr. Chair. Uh, a lot of questions about the ephemeral, uh, this isn't legal yet, so you guys really haven't gotten far with contracting. Uh, I do, and I would like to know, especially since we got a general counsel here. What other inhibitors, what other barriers are going to exist for speed market, um. Obviously there's a lot of supervenient if allowed, not allowed, uh, going on here, but I'd love to know, you know, if this were to pass, uh, how quickly could you guys start to facilitate? I know that uh uh Mr. Yuriczek mentioned the anticipated for Fayetteville would be uh around baseball season, but that's not necessarily when the product will ship. So I would love to know if you guys have an estimation, again, if you've started to engage with some of these companies, how quickly can you guys start to facilitate? Well, from my chair, I, I can say part of the reason some of this is difficult is because what we're talking about changing is currently illegal. It's unlawful to your point. So, Most of these athletic departments and universities have not gone down those roads until they have authorization from this body to to do so. Um On the the the time to market. Um, that varies that one they have to select a a a partner to be able to do this, um. The way that that they've represented that they would like to see that in venue, so there will be a process for them to be able to do that. Uh, my involvement comes when they then present uh a working document that we can um move back and forth my position, there are a number of things by state law that we just can't accept changes in venue and, and jurisdiction, so they have to be able to. To operate within the state of Arkansas. In addition to that, we do have some other laws that do make it difficult. Uh, and how it's set up, so it has to be determined whether it's gonna be on the university side or the foundation side. If the foundation elects to do that, that's not, that's not something that the university. Uh, at that point would be, be regulating. Um The, the other issue is if payment is going to be paid to student athletes. There is currently a settlement that has been proposed. And, and been presented and will be heard by the Northern District of California and NCAA versus House as part of that settlement, they are permitting institutional payments to be made up to, and I think the number is approximately $21 million. That the institutions can make the student athletes, and I, and I, I hate to go into the details, but it's important for for answering your question. If they are not institutional payments, and they are made by some other third party entity that raises the money to pay for a student athlete. The student athlete has to do it for goods and services, and it has to be for market value and there's going to be a company, I believe they've identified Deloitte is the company that will be reviewing that. So If There were a third party. To run this outside of this bill. Um, I don't know that payments could be received by the student athletes without there being a new process created at the university to be able to do market valuations for each one of our 400 plus student athletes. And there's also uh. Prohibitions on what a student athlete can work goods and services for that currently exists in state law that would also have to be addressed. So that would have to be amended. So for me, there are a lot of legal issues if this is not uh. Or, or something similar to what has been presented that this particular format is not approved, Chairman, just uh follow up a little latitude if possible. Thank you. I would love to hear from the other institutions, but I think just to that point, I want to make sure we hammer home on this. Um, the, the landscape of NIL is extremely complicated. Again, it's all still being litigated. Everyone's trying to get their pound of flesh. Everyone, and obviously the, the gray market of it all is something we all have to deal with as well. Um, you invoke a big consultancy like Deloitte, you know, they're also gonna want a cut of the big. Wouldn't you agree? That's the code word we use for I'm trying to get you to, to either affirmatively say yes or or say no. Uh, wouldn't you agree that because of the place that you're, you are in, or the foundation is in, again, that determination needs to be made, and the same could be probably copy and pasted for the other institutions. You, as the institution, you as the, probably the wrong use of the in loco parentes of these students within your NIL bracket, you're having to navigate those waters for them because of that market evaluation. Wouldn't it make sense for you to be the arbiters or the, the, the entity that's controlling. The potential raffle that we're debating here today. Wouldn't it make best sense or wouldn't you agree that because you are um going to be the ultimate one to, to administer the raffle and that you're ultimately the one that's responsible for, uh, creating the market valuation and then administering the money to your athletes, that you're in the right position to be doing that. As a the university yourself. My advice from my chair would be absolutely critical. And I, I, I don't know how you would be able to. Protect your institution from the risk of liability or your student athletes who are recruited on a particular evaluation and come here and only to be told. That exceeds goods and services, and that exceeds the amount and they can't come here. They go to they go to Kentucky, they go to some other school, because we didn't have the ability to control how those payments were made, so that's. Yes sir OK. If you, if you could say, if you want to say ibi or ditto, I'm fine with that too, but I'd love to know how you guys wanna approach my previous question as well. Yeah, Representative McKenzie, please correct me if I'm wrong, but I believe that the initial question was asked, uh, time to bring this to market. For us at UCA it is, it's too premature to say at this point, um, and, and without, you know, if this were to pass, uh, similar to a lot of the responses that he said initially, Matt said initially, uh, it would take proper checks and balances, but it's, it's too premature for us to even, even speculate on that at this point. OK, thank you. I'd largely agree with what uh what uh. Matt and Matt have shared, um, I think the, the issue that would take the most time, um, to, to go to market is, is just the vetting of the companies because there there are many and and it's a popular space, so there are a number that are getting into it day by day. And so you'd want to make sure that you're with a, you know, a reputable outfit that would, would represent the, the institution's interest, um, in a first class way. However, once, once those uh those initial vettings are are completed. It's all built to scale, so the, the website that's employed at, at the University of Arkansas or at Little Rock, you know, would very likely be the a similar website that's, that's implemented elsewhere, the social media handles, etc. So the, the ability once that decision's made to go to market could be weeks. Um, so I think that would be the main determinant. Thank you. I would, I would echo all of what's already been said, I think to Matt's point, uh. On your second questionson McKenzie, I mean the, the house settlement is the great unknown here, uh, in terms of what that's gonna look like, is it gonna be settled? Uh, is Congress going to step in and take some kind of action in some way. A lot of things at play, uh, right now, I think that will dictate. How all this is going to shake out over the next several months or year. But you're right, it's, uh, it's something every day. Any other questions for these individuals? Seeing none. Thank you, gentlemen. Thank you. Thank you. All right, we have one individual signed up to speak against the bill. Uh, Carlton Safa. If you'll come up and identify yourself and who you're with. You'll be uh recognized to proceed. Thank you, Mr. Chairman. Um, I believe I signed in as Carlton Safa on behalf of Saracen Casino Resort and a hog fan. And while I graduated from the University of Arkansas, um, if we could let the record reflect that I signed in today only on behalf of Saracen Casino Resort, and I'll explain why. You recognize. I'm grateful that we had an opportunity to recess. I know Sometimes we want to handle business, we rush, we try to get through. But I was utterly shocked. At the testimony that I heard from my friend, athletic director. I won't use names. I'll be polite. The athletic director at the University of Arkansas. Directly contradicted. What was an agreement between athletic directors. And I think Representative Moore's question. With regard to Representative Ferguson's question, spoke directly. To the fact that there's a lot of misleading going on. I met with the speaker yesterday specifically used the word misled because I've heard that a lot from a lot of people. I'm going to do my best to not be emotional. But when I worked in this building for a former governor for 5 years. This was the only committee that I came to. And this committee does big things. Big things are assigned to you all, hard things, strange things. In many ways, this is the junk drawer committee for things that are unassorted, that don't fit in easily. But they're always complicated. There's rarely a best practice. And you all are here because you're the most trusted and senior members on behalf of the speaker. You know all that. But the thing about this committee, From 5 years of watching it. Is that people came in here. And they said what was real. And we had to believe them to say what was real because there was no best practice. This isn't the Energy Committee, where you can look at FERC findings or charts and have PSC come. You listen to people and their hearts. And what I heard today, Directly contradicted what I had been told was going to occur. A friend of mine in Pine Bluff was put in a very bad spot because of false testimony today. He signed a letter that was not specific to legislation. was specific to the concept of raffles in general. He would not have signed that letter. If it's specifically cut out our organization. Now I have some remarks prepared and I'll be as brief as I can. But I needed to share my heart with you. I took very seriously the years I was in this room with many of you all. And heard almost entirely honest truth. But just a moment ago, we heard an attorney from the University of Arkansas who off the cuff knew exactly how many users used his app. Tell you he didn't know who sponsored it. Do you know who sponsors that app? So you might have to Razorback app on their phone? Saracen You know how many users you have on the app and you don't know whose name is all over it. That's not the rules committee I remember. My heart hurts for our state and this body. That this is what we are. I've been gone 5 years. I'm a nobody. No one would let me dog catcher. But in 5 years, we have devolved to a place where the athletic director of the University of Arkansas makes a misstatement to the most important committee of the House and then his lawyer follows up behind him and says he doesn't know who sponsors an app that he conveniently knows exactly how many users they have. Thank you all for letting me get that out. But I'm in shock. Now when the people were sitting here a second ago. Our organization has relationships with 3 of the 4. We are proud to do. Multimillion dollar work with the University of Arkansas, where I graduated from, where my wife graduated from and where my children will likely go to school. We have a relationship with you, a Little Rock, we're proud to work with him in basketball. We have a relationship with Arkansas State University and Shane Broadway is one of my favorite people on the planet. If he told me today was Sunday, I would have thought I should have been in church this morning. There are men of honor and integrity who have been here today, but you all have been misled, and that's the word I use with Speaker Evans yesterday. My remarks. And again, thank you for John Vines is looking at me. He says he's probably never seen me emotional before, but this is I'm not used to this in this committee. Let's speak to the specifics of the bill. There are a number of what I consider showstopper fatal flaws with the bill and its construction. Outside of any misstatements that have been provided to you today in testimony, there are a number of absolute show stoppers. And what I can offer, It's not me, but our organization to assist with this. Number one Nowhere in the bill. Is anything other than a requirement that you have to be 18 to use it. There is no rule promulgation process for minimum standards, nor any minimum standards specified. No certainty. That you have to be 18 to use it. Now we heard something about no more than $250 on a credit card. That's fine, I guess. But how do we know that when someone signs up, On an app that they're who they say they are. We happen to know a little bit about that at Saracen. We have over 100,000 users in all 75 counties. The way that identity verification works, and this is true of every sports book in the United States, at least the regulated ones, is that you work with a third party vendor. We happen to work with a company that does a lot of work in the government space. And it's kind of like when you sign your taxes or when you apply for a car loan, they ask you about the last 4 of your social, which these streets did you never live on? What color was your car? If you're like me, you scratch your head and you don't remember what color the car you owned 15 years was. But we do these things. We require the front and the back of your driver's license. We require a selfie, and if there are even further questions, we require even further due diligence. We've had customers in our space again separate from this drawing, who have gone through additional levels of scrutiny. for identity verification when we believe something strange might be going on or when pings are occurring in multiple places. This is what you need when you are going to gamble online and make no bones about it if you are risking money to win money. You are gambling online, whether it's for a charity or to make money for a casino or the lottery or anything else you were gambling online. Nowhere in this bill do we have anything. That indicates Besides the fact that it just has got to be 18. That we're gonna control who's doing it. Geolocation In sports betting in particular, we must keep the transactions intrastate. And if you had 10 lawyers here, they'd give you 10 different answers about how geolocation applies outside of sports betting. Well, sports betting, it is specific to a federal law called the Wire Act, but there is conflicting legal opinion as to the applicability of the wire Act with regard to other forms of RMG. RMG is known as real money gambling, which is risking money to win money on the internet. Safe harbor best practice is always in the space of real money gaming to keep your transactions intrastate only. Because when you go interstate, you create federal nexus and you risk not only going crossways with the federal government, but Outside of your jurisdiction, attorneys general and other enforcement agencies in other states who may view your activity differently than you do. Our position at Saracen has always been because of the wire Act or intrastate and Should we ever be in an opportunity to run a fifty-fifty for free, which we'll get to in a moment. We would restrict it intrastate because it is a best practice. Nowhere in this bill is there any reference to geolocation. And that is a danger because this can get us afoul of other states in the federal government. But how about at least a mention? GLI 19 is the global standard right now for how this works. It would be just as easy to make reference to something. But we don't even have rule promulgation authority in this bill for a whole new code section on a whole new type of raffle in a whole new division in a basement part of DFNA called Excise Tax Bingo. There's no real reference to overall compliance in general. And believe it or not, we know a little bit about compliance. We have a department of about 10 for our small casino. Most of them we hired away from banks. And from publicly traded companies. So I've got, uh, Got a couple of OCK folks. We stole one from Simmons and a bunch of folks from Caesars. And I will tell you, if there are bankers in this room, I know what your business looks like because it looks like the back half of my business, our business. Whether it's suspicious activity reports. KYC concerns, know your customer, Title 31 provisions. These are all realities about the heavily regulated space of gambling, and I refuse to believe that risking money to win money is not gambling. It is gambling. It's, by the way, why it's in rules. It's gambling. No reference whatsoever to compliance. Who will be paying the W2G who'll be paying out first of all, I assume the vendor, and who will be issuing the W-2Gs. So the W-2G is like the 1099 or the W2 that you get from your job. And a gambling environment, there are different thresholds at which place a W2G kicks in. In some instances, it's 1200, in some instances, a multiplier of the wager that was placed. It depends on the game. The rules are as complicated as, uh, probably a ream of paper. I assume the vendor, but we've heard no references to tax withholding and how that will work, and it's important. Perhaps the most important thing to me as a casino guy. is the lack of any discussion about the random number generator that will be selecting the winner. What is a random number generator? It's the thing that picks the number, right? So we built in anticipation of being able to hopefully do this for free. A random number generator that I don't exactly know what this word means. The tech guys call it smoke testing. I think it means final phases of being done. A random number generator tested to GLI-19. Which will be proprietary to us, but I will tell you today, and I have not checked with the owners of the casino, but I will make this offer live here today. Should we be able to offer this, I will give to the other casinos in Arkansas for free. So that they can offer this feature to support our colleges as well. We're about a million too invested in a proprietary random number generator, one that's lottery grade. And we'll give it away. There is no reference to what the random number generator will look like in this. We don't know where the companies are coming from. We don't know who the vendors will be and we certainly don't know the security measures that will be in place to select their number. I do want to quabble with something we talked about an app earlier. I, I think it's debatable whether or not you could ever actually get a university run raffle. On the app. If memory serves, and I've talked to the guys in Florida, Florida Victorious fifty-fifty. If memory serves, FV 5050 is not on an app. I can tell you, having had personal experience with the creation of a real money gambling online app. The hardest part of it, well, there's really two hard parts. I'll get to the next one in a second. Probably the hardest part besides payments. It's getting through Apple and Google Play's compliance departments. And we expended hundreds of thousands of dollars in opinion letters. Because they don't, they don't take y'all's word for it. We send a, a rule that's promulgated by an agency that's approved by ALC that 10 days later goes in the Secretary of State's books. That's still not enough for a company like Apple. It's still not enough for Google. It's still not enough for Facebook. They want opinion letters, and they want opinion letters from their preferred vendors, their preferred lawyers. It's fine. It's the cost of doing business, but we expended hundreds of thousands of dollars in specific opinion letters just to clear visa. Venmo PayPal. Then stagger Apple Pay, Google Pay, and the like. That's payments, but all of that times 10 to get onto the app stores. So, to get something engaged in real money gaming on an app store. And I realize I'm granular here, but I want you all to understand that not only have we had misleading testimony. We've completely left out the elephant in the room, which are all of the major technical problems associated. In order to clear the threshold for compliance with the app stores. They basically try to break your app. So, I actually remember I was in Fayetteville at a baseball game. I got word that our app had not cleared the App Store's clearance for Apple, and the reason was, was that it was some kind of buggy feature if you were using like an 8 year old version of the iPad. It didn't work. And don't quote me on that, but it was, it was some old tech on an old operating system that isn't even supported by Apple anymore, but our app didn't run on a stable version on that and therefore could not make it to the app store. It's actually probably one of the biggest hurdles in my life. is dealing with Apple. I say that to say this. We have a casino gaming license and we offer something that is clear as a bell. Authorized and we still struggle even to this day, when we issue an update, making sure that it clears the scrutiny of Apple and Google. So yes, the Saracen Casino resort does spend a lot of money, and yes, I didn't know we had 350,000 users. I did know that we had our name on the front of it and as a static on the top, but no, I can't say comfortably that I believe these raffles will ever make it there. I hope I'm wrong, but I've lived it. And it's one of the hardest parts of this business is getting through those stores. Finally, payment processing, I mentioned that earlier. It's the hardest part of this. Um, It's why many instances, um, you're, you're able to do ACH only, um, I, I will, I will say my friends in, in, uh, in, in Garland County initially launched their sports book product without credit cards because it took a long time. I was glad when they got credit cards. We need a robust competitive marketplace. But, It took months for credit cards to even be available for Okon's product. And that's neither good or bad and and I'm not here to talk about Oaklawn, but that's a real life example of how difficult it is with the legitimate large business with almost unlimited resources behind you to be able to access the credit card companies. We saw that with them. One last thing, we do know that NIL is changing. I, I know it well. I, I have family in the athletics business in other states, um, I This is not a showstopper, but it's one that I drew a circle around, and it is this business that it must be a 5 year, 501c3 in order to benefit. I can tell you that our company, especially with Coach Cal and the scrimmage game held at UAPB we're able to raise quite a bit of money through, uh, that for NIL. But that money didn't go to a 501c3. It didn't go to the foundation. It went to NIL. When we've been able to help, we've helped with NIL, not with the foundation. And the foundation is the C3, I know because we've helped them too. But, um, I know all of this may change in June when it comes in-house, but the references to the emergency, and I do agree with the sponsor that this is a dire emergency. In conjunction with tying this to a 501c3. I, I don't exactly understand how that works. If we're going to get the money to Arkansas Edge, but Arkansas Edge is in a C3. are we gonna run it through another C3 through another C3 to finally get it to the edge, which I suspect is probably the answer. That's more of a question than a showstopper, but I would say everything I've said previous to this is an absolute showstopper. I agree with one of the representative's comments that there may be a contradiction within The section, the first section that was discussed earlier, I think that that needs to be vetted. And finally, as I wrap up. I want to give you what I would consider editorial comments. And again, at the beginning, I, I had only intended to speak to technical and editorial concerns, but after what I saw, that sort of blind side that didn't used to happen in this building. I had to open in the way I did. Our little business is the 13th largest sports book in America. We were processing 400 wagers a minute during the Super Bowl. We process $35 million or so in a given month in transactions. We're good at what we do. Doesn't have anything to do with me. I work with incredibly smart people. We know how to do this. And we're offering to do this, and we're offering to do this for free. Why would you do it for free? Why do we put our name on the Razorback app. Why is our name on the jumbotron? Why is our name on the infield pads. It's good for our company and it's also good to support these institutions. We have the ability to do it now for free. You don't need a physical impact statement. We heard earlier about bump 50/50. Bump 50/50 rolls up into a Canadian national company. Don't take my word for it, Google it. This company has a number of tentacles. One of which touts itself as one of the premier vendors and casino gaming. Now think about that for a minute. We were told that the casinos couldn't participate, and there was only one vendor thrown out. As an option. I'm sure there's a million. I don't know if this is a procurement deal or not. I have no idea how they'll do it. But they named one vendor. But And it's a damn casino company. In the same bill in which you specifically preclude casinos from participating. And in which you say you're going to run it on an app sponsored by a casino. What are we doing? You have an in-state company willing to help. And there being told no, I don't understand what has changed in this building. And my heart hurts for our state, and God bless you all, many of you in this room I have known for years. And I am sad to be here today to speak with this tone and this tenor about my alma mater and people that I woke up this morning respecting. This is the equivalent. Not allowing Saracen, Oaklawn, or Bentley to participate. of saying we're going to offer NIL merchandise. Commemorative merchandise at retail. But we will not allow Walmart to sell it. So we're going to take an incredible retail vendor that is homegrown. The best in the country, in the world, at retail. And we are going to prevent them. For no real reason. From selling it for us. It makes no sense. Finally I'm not sure why I'm so upset, except that, frankly, I'm just shocked. Do you know how much they raised last night at Kentucky with the model this bill prescribes. Kentucky played Tennessee. They raised $900. And I find it hard to believe. That somehow the University of Arkansas Has some massive marketing machine. The Kentucky basketball doesn't. They raised $900. That's what we're talking about. Someone said that's just a basketball game. They ran one of these at a football game. Louisville. In state rivalry. They raised even less than that. Sure, they can raise 30,000 in Florida. How many times bigger than our state is Florida. And how much more money is in Florida than here. Kentucky's a little bigger than we are. They did 900 bucks last night, guys. Somebody asked me, how much do you think you can raise? We have projections. I've looked at Alberta, Canada, and looked at the way this has worked with well-run, well-marked hockey games. But I can confidently tell you we can raise more than $900. Do not check your phones because I know some of you in this room use our product, but right about the time rules kicked off, you got a push notification about baseball season. 75% of our customers opt in to push notifications. And I look forward to being able to send a push notification that says. The NIL 50/50 for today's game has started. Buy your tickets here. That's how you don't do a $900 drawing. That's what we have ready to go. They say it's being smoke tested, so When will it be done? I think probably by the end of the week. It's ready now. We just measure twice and cut once, the old carpenter rule. I'm sure there are a million questions out there, and I apologize for being a little bit emotional. But I've been reflective the last hour and, and I'm sad And God bless you all for what you do, especially in an environment like this today. You ready to take questions? Yes, sir. Representative McKenzie, you recognize her question. Thank you, Mr. Chair. Um. So I'll, I'll just lead off by saying I came into this conflicted. Um, I have said to the bill sponsor, and I've worked with him closely on this. This is the fastest hurdle. This is the least desirable bad option that makes it through in my mind. Uh, you've raised some very good points today, and I, I would like to see them addressed in the final version or a final version of the bill. You didn't get me with rules promulgation, but you got me with some of the, the, the points about age verification, geolocation, W2G because I know we have people that get hung up on that as they come back from Bacola. Or as they come back from uh Nevada. Um What I really want to get to the heart to, and the question I think a lot of us are, 11 answered, and it's the quiet part out loud. I would love for an in-state vendor to do this work. Absolutely love it. I think you have the tech, I think that you guys have, um, the clientele and the know-how to do this effectively. It, the proposal comes at the tailwind of your rule 5 proposition. And I think there's a lot of people I'm not going to indicate anybody in this committee, but in this legislature that have Aida with the fact that all of this benevolence comes at a price tag, and it comes at the price tag of pocket gambling, and it comes at the price tag of having access to slots and blackjack, and other games of skill and chance that our state's not ready for. So, to the same token that you're willing to do this, would you be willing to, to make the, the, the sacrifice to do this as a vendor to the university, and or hold off on any additional Rule 5 promulgation for pocket gambling, because if, if that promise or that assurity could be made, I don't know anybody in here that wouldn't agree with that. But what we worry about is future generations, and easy and ready access to gaming that um that we don't think necessarily people are ready for. Um, I, I've not been to your establishment. I've been to Oak Lawn, um, I like, I, I, I'm actually a proponent of free market gaming. I think that we should have more options. Um. The, the citizens of Arkansas bought a ticket with Amendment 100, and it's time for us to ride the ride. I want you to have to drive to a place, park my car, walk past a billboard that says, gotta gamb got a gambling problem, call 1-800 gambler. But what I don't want is to say, hey, um, We're willing to do this 50/50 for NIL. We're willing to go out there and make the investment. The cost is having a slot machine in your pocket for all 3.1 million Arkansans. Is that something that Saracen or you'd be willing to commit to as we work through the process of making this bill right. So I know you want a yes or no answer, and I'm going to get I don't want a binary answer. Well, I, I, I appreciate that and, and I will tell you of the folks here, I probably know you the least, and I look forward to getting to know you better, sir. Um, and I got to tell you, I smiled when you said Deloitte. I think they're in everything, right? I didn't know they were in the NIL business. I should have ended with this, but I will say it here. My hope today is not that there's some resounding no. I realize I'm here to speak against this. My hope is, is that we can come back here a week from today, because I agree with the sponsor. This is an emergent issue. I've been screaming about this for over a year, well, almost a year, I guess, I guess it was late last summer when Senator Hester first approached me about the potential for NIL 50/50 with our technology, and we've wasted 9 months. We don't need to waste any more time. But to your question We were never able to so much as have a hearing on Rule 5. And I'm particularly fond of the racing commission, not just because they're my regulator and I'm supposed to say that. They're smart. Every one of them is a businessman in their own right who have distinguished themselves in incredible ways. But we could not even have a discussion. It was such a bugaboo we could not even have a discussion. So what's amazing is what most people know about Rule 5. And what we proposed. It's what they heard Third hand. Representative, I can tell you that at least I hope I have a reputation as being a straight shooter. I've tried my whole life to be. I have never in my life tried to be more transparent than I was with a. So we began the rule 5 discussion. Which never became a public discussion. In a way where we were creating records. In a way you wouldn't normally. We're a little bit off the topic of, of the raffle here, Mr. Chairman, but if you'll give me just a moment, I know I can come back in. I began that. First, with a conversation with the member who was in this room. Very conservative friend. And then A letter to the chairman of the commission. Which we copied To half the darn world. So that it would exist as a foible document. I also met with the problem gambling council on the front end. To explain to them the why. Because I did not want anyone to think what we were working on was something we were trying to do quietly, fast or sneaky. It was not some little old Bill does nothing. We were making it abundantly clear this was a big deal and a big conversation needed to be had about it. The origins of my concern. With Rule 5, we're not as much a desire to expand gambling in Arkansas, but rather to get in front of something. That other states are recognizing now as a problem. So about 10 states, give or take. Have various bills of various sorts to address illegal offshore gambling. Um, a friend of mine, a former pro temp of the Senate, said to me last night, you don't have to wonder what Carlton's thinking. He tweets it. Hm It's true. I, I I'm an open book. I'm deeply concerned. And I'm gonna do something. I know we're on camera. I know there's people watching, but I'm going to do something that I've not done with the press. I always say VGW, they're the parent company. You can download a product today called Chomba Casino on your phone. And with Chumba Casino within 60 seconds you can be playing a slot machine or table games for real money. They have no regard for how old you are. The Senate Intelligence Committee has identified them as being involved in human trafficking, money laundering, and organized crime. There is nothing we can do to stop them. Now those of y'all that know me know I don't talk like that, right? Hopelessly. There's nothing we can do to stop them. But there's about 10 states right now who have bills to stop them. Now a friend of yours and mine who used to be the regulatory administrator for DFNA. Wrote a letter To any illegal sports book. Not linked to China. Not based in Malta. They were in Atlanta. And said what you're doing is illegal sports betting, please stop. They're still rolling today. So if we can't stop a sports book in a town, we've got a direct flight to. Not that that matters, but they're pretty darn close. The only way I know to stop the scourge, and it is a scourge of illegal Chinese-linked online gambling is to displace it. I began with rule 5 because it is a defensive mechanism. Not an offensive mechanism and we could be here until the sunset discussing cannibalism and the lack thereof. There's a mountain of data. I visited at length with the problem gambling council. I'm honored that a member of our team at Saracen sits on the board. I speak at their meetings every year. But online gambling has algorithmic features to it that help us identify problem gambling far earlier than we can in person. Mr. Saffa, can we bring this back to the bill? I've given you a lot of leeway here. You have given me and I I knew where this was going, but I didn't want to give the representative a yes or a no. So here is where I can firmly commit. If I could wave a magic wand. We would come back a week from today with a bill that makes sense. And I will commit 24/7 to come to your districts wherever you want. And I want to recruit you all. To either join as co-sponsors on this bill as amended or a new bill. But we're going to have to find a way. In which we can authorize games of chance, which is what a raffle is. To do this Because Our program is not playing Twister, twisting knots about raffle amendments and carve out language, we would be utilizing the broad authority provided to us under Amendment 100 for casino gaming and running an NIL 50/50 for free in our industry term of art would be running a game at 0 hold. So zero cost. I can't commit to you that that can be done. But I also would welcome an opportunity to explain to you that my concerns are not so much about a desire to put slot machines on your phone, it's that they're already there and wouldn't you rather it be being done here with someone who does all of this. than the Chinese. Representative McAloon, you're recognized for a question. Thank you, Chairman. Thanks for being here. Um, I had a question for you. I, I, first of all, I want to say I just, I always appreciate your frankness, um, I appreciate the way you have kind of an eyes wide open approach to the business that you do and so I, I am grateful for that because we've had several conversations. Um, I understand your desire, Saracen's desire to be in the raffle business from a business standpoint, but also because you have the capabilities to kind of make it better for what it is for the universities, but does, my question is, does Amendment 84 prevent you from being able to do that without a constitutional amendment. Like is this conversation kind of moot because we have Amendment 84 out there. Now we're good to go. So Amendment 100. Pretty cool. Oddly enough, I worked against it when I was in another life. Someone can pull up the language, and I used to be able to quote it off the cuff, and I'm gonna do my best to do it as I go, but it says, um, a casino game is defined as anything played for money using cards, dice, mechanical electromechanical, digital. Otherwise, the way I explained it to my wife one day is anything played with stuff for money is gambling. It's basically what Amendment 100 says, um, you use the word raffle, that's not a word we use. Because It doesn't have to be a raffle. We do drawings at the casino every Saturday night, every last Saturday night, um, quick infotainment uh advertisement. We're doing a Porsche Cayenne at the end of this month. We do drawings every month. And this would be a drawing, no different than any other drawing that we've done. So if the word raffle gets people hung up. Raffle doesn't have a technical definition. It, it, it does in Webster and it does in the raffle section, but, and I I hate to interrupt you, I wouldn't do it if we weren't friends, but if you, if you run a game where you have entries and one person wins. Then we're doing raffles now with the car giveaway. And so are the other casinos when they give away things. So as goofy as this sounds, and it's not my style to play word games. But when something is done under the auspices of a casino license that looks and smells like a raffle. I'm not sure it's a raffle, because if it is, those cars we've been given away and the boats, my friends in Hot Springs give away, and I think this was so cool. The guys in West Memphis gave away a semi truck. Those would have been raffles. So, I, I'll tell you we're, we're 6 figures, 7 figures invested into our comfort that we do not conflict with that amendment because of the extraordinary authorities were provided by Amendment 100. OK. Thank you. I hope I'm not a lawyer. Representative Clowney is your, uh, do you have a question for Mr. Saffo. I'd like at some point to get, um, we've heard a lot of legal analysis from Mr. Safa. I'd like to get somebody from the AG's office back to the table just to answer some legal questions I have at some point whenever it's appropriate. OK, I want to see if there's any other questions for, uh, Mr. Saffa, uh. Representative Darby, thank you, Mr. Chair. uh. I think you kind of touched on my question when you uh uh Representative McAlinden did, but uh I kind of wanted to ask this question and you've answered in a way I think that a raffle, a raffle is, is gambling. I wrote that in my notes, just my, my view of it, yes absolutely and it is defined in this bill as meaning. The selling of tickets or chances to win a prize through a random drawing to me that. It's the same as anything else. So my question, and I've been double checking the bill again. So if the section was struck under 23-120-104, Section B 1A and B. Which says you can't that gives it the online part of it. We struck if that was struck and we leave in the section that it has to be done on the premises only or otherwise utilized by a qualifying organization then they would go. Standing at the gate and and selling, you know, those long rolls of red tickets and then they would draw kind of thing which we need to draw, I think, our drum or whatever, but uh that would take away the issues maybe that some people have with their being gambling in the pockets, you know, and then it would be a a straight 50/50 pot like we've seen at high school football games or wherever and they could do it that way and then that would take out your argument. it not, and they could have their fifty-fifty, but they'd have to conduct it there on the premises with physical. things that people would buy a couple of responses to that. Um, one thing I appreciate so much. Is your thoroughness in reading the bills. I love that. That's old school. That's the stuff I used to see and still see, right? Um Should we be able to, I guess this is my altar call, get together. You name the time, you name the place. Come up with a bill for next Wednesday that does this and makes sense. I think it would look dramatically different than this because my recommendation would be that we use again. The casino code sections and not The raffle coat sections. So, we can discuss in detail those lines that you're referencing, but I think we use again the extraordinary authorities that we are privileged to have by nature of our privileged license, one of only 3 which exist in the state. To operate the game under those pretenses, just like we do car giveaways or Oakland does boats and Southland does all kinds of cool stuff. So I, uh, without the language in front of me. And being respectful of y'all's time, Representative Dalby, I'm not sure that we need to go line by line through the raffle language because I think we can use the casino sections, much of which are constitutional, some of which are rule, which is why we actually, we're confident we could do this exclusively by rule. To address this with a new code section in the casino language. And we actually have language in draft form, which I am happy to visit with in a group of willing folks. Again, my altar call, y'all text me if you're in. We'll get to work on it together. I think there's a better way to do it than playing Twister, um, with the, with the raffle code sections. Um, I hope that, I hope that answers your question. 011 more thing, the tickets. I don't think he would mind me saying this, um. I'm going to say it anyway. He's my friend. I hope I have some grace, um, former Speaker Shepard has been a friend for a long time and, and my understanding is that for many years, the university sought to do something like this. But it needed to be cash only and there were concerns when Shepard was speaker about a cash raffle. I can understand why. I mean, look, even today, we have a bill that doesn't have anything about how we're going to draw the integrity of the random number generator, we're just gonna have cash in the back room with a drum. But you've got, and I'm gonna put myself in the shoes of the university here for a moment. You've got an environment in which you can't buy a hot dog and raise your Back stadium for cash. But Raffle would have to be done in cash because you still have the trouble besides online with the digital payment in the Raffle statutes, as I recall, you can't use a credit card or a debit card or anything like that. And so my response to all of this is that, um, a cash system's not gonna work. Um, we might only raise $900 or less if we did in-person tickets. Uh, we, we might, Kentucky might beat us. I don't think it's worth doing if we're going to raise $900 on the Kentucky model. I certainly don't think it's worth doing if um We're gonna do it with paper tickets. I think it's messy. I think it's nasty. Some of you all in this room will recall an instance we had at the state fair a number of years ago, where we had problems with, uh, cash and parking and, uh, that process, if any of y'all were in on that, you know what I'm talking about. You invite a lot of trouble when you have rooms full of cash, um. I think what we do If I could be so bold. Is we find a way to do this under the casino gaming rules. And we rock and roll with an in-state company. And I would hope that my friends in West Memphis, and my friends in Hot Springs would also do this as well. But I, I, I don't, I don't want to get tied up around the axle of Raffle regs because I think, I think we strike all of that and we use casino language instead. There are broad permissions in there. Final note, the raffle regs need to be tight for a reason, because the state issues licenses to people that they, they don't really know, they don't really meet to administer. And so I think it's right that the raffle provisions are as tight as they are, your personnel through DFNA are in our building every day. In fact, y'all met some of them. They're there. And then sometimes leg audit is there following them. And this entire process, if done through a casino would be overseen by the casino gaming section of DFNA and then audited by legislative audit behind that. And, and those are some, I think, features that you get if we can do this to the casino code sections. Represented first and you recognized for a question. Yeah, thank you, Mr. Chair. Uh, I want to ask a quick question. And get a quick answer. I'll do my best. What's the difference I've heard the testimony about the raffle and I'm thinking about CR College. It just started a uh a basketball team. And so what's the difference between A raffle that we would do under this legislation. Uh, where you need probably some sponsors to offer something to Raffa with. Now what's the difference between that And put Saracen is saying that they would do with a fifty-fifty raffle. I learned something, um, And it really figured, I figured out it depended on if somebody was a professional sports fan. People either absolutely knew what a fifty-fifty was or they'd never heard of it. There's nobody in the middle. They they knew every bit what it was or never ever heard of it. And a 50/50 is at its core. The money goes in the pot. So What the model at the bill we're discussing today prescribed is almost identical to what Kentucky used last night. There was $1800 raised total 900 went to NIL. By the way, that was 900 likely before fees. We hadn't even talked about that. But it would have been gross 900. So 50/50 is the money goes in the pot, the pot increments as people buy half to the winner, half to the cause. That's a 50/50. And that's what I think we are best set up to run. However, a random number generator being what it is, and the technology that we have that I've already stuck my neck out and said we'd be willing to give to our competitors in Arkansas would allow us to do. One for anything. So I can tell you what we would do with CA, and I can say this because we both know Pine Bluff. We'd go see Ford Trotter. And we'd say, hey, Can you make us a deal on a pickup? Can the casino help pay for part of it. We're gonna raffle a pickup. Maybe, maybe that would work better than a fifty-fifty. But being able to do that on our technology would be no different, and our technology isn't anything crazy. It's a random number generator built into a Pam stack linked into geolocation, identity verification, compliance functionality, and the like. Oh, and by the way, it's installed on phones in every county in the state and has the ability to process 400 transactions a minute. But we could do it giving away stuff or we could give it, do it given away half a pot. We could do it either way. This bill as prescribed, shifts the burden to the colleges. To go figure it out. Sure, it's permission. And that's why the universities want it, it's permission. Cause they can't do it now. But it's also a burden. And I would describe it like this. My nine year old Charlie Saffa does not have an iPhone. His 13 year old sister Stella does. Charlie is not happy about this. This is a real life issue in my house. If I go home tonight and tell Charlie, you get an iPhone, buddy. But you got to build it. Or find someone to make it for you. I really haven't done anything for him. And that's what this bill does is it tells the colleges they can have an iPhone, but they either need to build it or figure out a way to have someone build one for them. And what I'm offering an alternative is to use the casino language, hopefully with everyone in this room on a big bill with a list of sponsors this long that can do this with an in-state company and hopefully 3 in-state companies. Singing no other questions, Mister Safa. Thank you for your testimony. You're excused. Thank you all for your patience. Uh, I believe we may still have someone from the AG's office here, uh, Representative Clowney would. like to ask a question. Please identify yourself again for the record. Alex Benton, Attorney General's office. Representative Clowney, you recognize her a question. Sure. Thank you, Mr. Chair. And, uh, Ms. Benton, I've got a few questions. It may be easiest to just ask them all and let you address them. I've got 3, And if you've got answers to them, I would love to hear them. So the first is we heard a lot about the definition of raffle, whether it counts as gambling under the Arkansas Constitution. Um, I know. You know, we talk a lot about common sense, this and that, but I know that the law is often not commonsensical, even if we think it is. Um, I would love to hear your opinion just from yours, y'all's office about what the Arkansas Constitution does in fact say about that. Um, the second thing is we heard a lot about rules that are not set out in the proposed bill. And my question to you would be, um, if, you know, y'all testified for the bill this morning if there's any reason why that is, um. And then the third question has to do with the conflict that was again pointed out. It was my understanding from General Griffin this morning that those two sections were completely different chapters of code and so weren't in conflict, but if there's anything else that you could add on that point. Um, those are my three kind of legal questions. Thank you. Yes, ma'am. Um, I will go in order of the questions posed. So the definition of a raffle under Amendment 84 of our Constitution, and I believe Representative McAlinden said this earlier, means the selling of tickets or chances to win a prize awarded through a random drawing, and that is under Amendment 84, which deals specifically with bingo games and raffles. So it is a definition, and that definition is not. Gambling under Amendment 100. Amendment 100 talks about casino gaming, and it talks, it talks about how casino gaming is defined among a litany of other things about any game that is played with an electronic device for money, uh, and the casino gaming shall also be defined to include accepting wagers on sporting events. So there are two separate definitions, I think at play here, while I, I think to your point that you were alluding to is that often. When you look at a raffle, you assume that it's gambling, um, but according to the definitions in our Constitution, Raffle is excluded from the definition of gambling. So therefore would not fall under Amendment 100 and would be squarely under Amendment 84. Um, did that answer your first question adequately? OK. Um, as to your second question about rules set out. Um You know, I think that there were, there were a lot of points made about rule promulgation. Uh, about geolocating random number generators, those are not things that are contemplated as being required for, again, raffles under the definition of Amendment 84. So it's not something that is constitutionally required by the Arkansas Constitution, um, which is why we did not. Help assist in drafting of the bill to include any sort of promulgation of rules. Um, good on the second question, and then on number 3. About the Perceived conflict, the law currently talks about The charitable charitable bingo and Raffles enabling Act, which is found in 23114 101. You'll see that, you know, right on section one, page, page 1 line 26 of the bill. And 103C. Talks about. Pardon me. That the provisions of the charitable charitable bingo and Raffles enabling Act. are not intended and shall not be construed to allow the play of games or bingo raffles. Or of bingo or Raffles rather through any electronic device or machine. So you have a bright line rule there that says if you're going to do a raffle under Amendment 84, you may not do so electronically. So what this bill does on starting on page 1 lines 32. It then says Nobody can, it's, that's still the bright line rule, but the exception to that bright line rule is that institutions of higher education and its affiliated C3s. Can do raffles. On um using electronic means. And then that's when you go to page 2, you see the Arkansas sports Raffle Act, and that is flushing out the different guardrails for what those electronic raffles. are allowed to to look like under, under the proposed Arkansas sports Raffle Act. So they are, are not to, to my reading in conflict with one another. In fact, you, you would not be able to do page 2 through. 7 of really the meat of the bill would not be able. To occur, but for the exception on page one, which is C2. Thank you. Any other questions for the AG's office? Seeing none. Thank you. Representative Pak. You recognize the clothes for your bill. First, I gotta say I've, I've got to apologize to the committee because apparently it came off as rather loud the last time I was here. It's the, the radio in me that uh that does that, um, wow, um, testimony, you know, it's a heck of a show, you know, that's what they're they're in the business of entertaining at the casino that that's, that's what they do is entertain. You know, I'm in the, I'm, I'm in the business of trying to help. That's what we all are in in the business of trying to help our universities, our athletes to, to a succeed and be the best that they can be. You know, I, I take exception with some of the testimony that he said that this bill and myself has been misleading. This bill was filed and pre-filing. We've already done an amendment to it. There's nothing misleading about it. It's been out there for people to look at. We haven't tried to ramrod this thing through. We, we put it out there for the world to see in November or December whenever, uh, they moved the, the bill filing. But what is misleading? Is that There is no other casino that got up here and testified against this bill. We've got 3 in this state and nobody else testified against it, just one. So it makes you ask the question, what's in it for them? If it's so important for them, what's in it for them? And the answer, which he never answered your question, Representative McKenzie, was I gaming. Never once answered it. He beat around the bush and because they cannot do a raffle through their app without i gaming. He never answered your question. And so I will say this, I like Carlton Safa. I, I think he's a great guy. I think he, he means well, but I think what he's wanting to do is something completely different. I didn't wake up this morning or the morning of December the whenever the filing was and say, you know what, we need a raffle bill. This was brought to me by the universities. Our universities in the state since we filed the bill, I've had some of the some of the smallest universities in our state. Along with the biggest being the University of Arkansas, giving input on this bill and how it's going to help them. And so I, I say I ask for your support in this bill because while You know, Raffles, you may have a definition that doesn't align with what our Arkansas constitution is at the end of the day, we are, this is a fundraising bill, not a gambling bill. This is a bill to help raise money for travel expenses for uniforms, for NIL, whatever the universities deem fit for this money. This also gives your average Arkansan. That wants to get involved with the NIL or with the the building fund or with their just whatever cause they may have at their university for them to be able to give $5 or $10. They may not have the tens of thousands of dollars that some of these sponsors have and so this gives them a foot in the door to be able to help out. So I'll close by saying this, um, I would really appreciate your vote on this one, our universities would really appreciate your vote on this one and our student athletes in the state of Arkansas would appreciate your vote on this, and with that, I make a motion to pass, we have a motion to pass on this bill. Is there any discussion on the motion? Seeing none, all in favor, say I. Opposed. Sorry, uh, Representative Hawke, your bill's failed. Thank you, sir. Mhm Never mind. Seeing no further business, we are adjourned.