Arkansas Collective Aims to Bend Law Allowing Gambling for NIL Fundraising

The Arkansas Edge Collective and Saracen Casino Resort have created a partnership that would allow universities in the state of Arkansas to leverage 50/50 raffles to donate to fund NIL payrolls

Jul 18, 2024; Dallas, TX, USA; Arkansas head coach Sam Pittman speaking at Omni Dallas Hotel. Mandatory Credit: Brett Patzke-USA TODAY Sports / Brett Patzke-USA TODAY Sports

Calling the University of Arkansas’ NIL standing resource-poor would be an incredible mistake. It has been reported that a large part of the Razorback’s poaching of long-time Kentucky coach John Calipari was his close relationship with the Tyson Chicken family and the promise of over $5,000,000 in annual NIL funds at his disposal. However, in the current collegiate system, it appears that no amount of money is ever enough. Without the presence of a player’s union, there is no pathway to a salary cap within collegiate sports, leading to boosters continually throwing money at problems, expecting to buy their way to a national championship. 

Creative minds at the University of Arkansas’ NIL Collective, Arkansas Edge, have formed a partnership with local casino Saracen Resort to leverage existing mobile wagering technology to create a 50/50 raffle for Razorback fans to play and by extension, benefit NIL capabilities –– a 50/50 raffle is a common fundraising effort seen at many sporting events that pool raffle entries and distributes half of the total pool to the winner and the other half of the pool, often, to a charitable organization. Different state laws across the country regulate such raffles, but they often impose regulations on entry methods and what entities are allowed to engage in such an event. 

Arkansas Edge is the entity primarily responsible for paying Arkansas revenue athletes for their performance on the field in what is known as “pay-for-play” contracts. At every major university, NIL collectives exist to facilitate token NIL engagements, with the primary purpose of compensating athletes for their athletic ability. The more money at a collective’s disposal, the more likely it is to be able to keep its own athletes throughout their collegiate careers and poach athletic talent from other universities with less funding. 

For Arkansas to be able to implement such a raffle, changes in law will have to happen. A wonderful article from Evin Demirel of Best of Arkansas Sports outlines the proposed legislative amendments. One important issue of notice is that the proposed legislative changes do not fall under Arkansas raffle law but rather attempt to create a special category permitting unique NIL Raffles under casino regulations governed by the Arkansas Racing Commission.

The proposed legislative changes to casino gaming in Arkansas are tied to interactive gaming, which features mobile wagering. Directly below is the proposed amendment with relevant portions in bold:  

"Interactive gaming" means the placing of wagers through a server-based gaming system, situated in the United States, using a computer network of interoperable packet switched data networks through which a casino licensee may offer authorized interactive games to a person who has established an interactive gaming account. Interactive gaming can be used with an Android or IOS device using an application ("App") or through an internet web browser on any supported device using software such as, but not limited to, Internet Explorer, Firefox and Google Chrome. Interactive gaming includes, subject to Commission approval, a NIL drawing game conducted through an electronic device or machine in order to benefit a Name, Image, Likeness (NIL) collective consistent with the Arkansas Student-Athlete Publicity Rights Act (Act 810 of 2021), as codified. A licensee may be reimbursed its incurred expenses but shall be prohibited from contributing to any NIL agreement or NIL collective. Further, NIL collective raffles shall be subject to audit, no less than annually, by a Certified Public Accountant approved by the Commission, and retained by the NIL collective.

So why do Arkansas Edge and Saracen Casino aim to leverage gambling law? The answer is simple –– what they intend to do blatantly violates Arkansas’ Charitable Bingo and Raffles Act. In the state of Arkansas, raffles are subject to heavy scrutiny and regulation. The main hurdle is the affiliation of a charitable organization. To hold a raffle in the state of Arkansas, an entity must be recognized and operational as a charity for a minimum of five years. Arkansas Edge was founded in November 2023 and is not recognized as a 501(c)(3) charitable organization and, therefore, is not eligible to hold such an event. These regulations exist, in part, to curb entities from profiteering through the operation of games of chance at incredibly low odds without a charitable purpose. 

Beyond Arkansas Edge’s raffle’s fundamental departure from charitable purposes, raffles in the state of Arkansas cannot be entered via online ticket sales. This would significantly dampen the appeal of a raffle for Arkansas Edge, which, through the utilization of Saracen Casino’s infrastructure, can offer a mobile wagering platform. Now, not subject to the Charitable Bingo and Raffles Act, the proposed legislation would let anyone physically present in Arkansas enter the raffle through their mobile device rather than a physical entry confined to just the stadium.

While public statements have not been as carefully crafted, the legislative changes are careful not to call the Arkansas Edge raffle a raffle. Instead, the legislative changes are constructed as a “NIL drawing game” to increase separation from the aforementioned regulations. Below is an excerpt of the proposed amended legislation that enshrines the “NIL drawing game” to fall under the discretion of the Arkansas Racing Commission’s casino gaming rules and not the Charitable Bingo and Raffles Act:

"NIL drawing game" means a draw game of chance, approved by the Arkansas Racing Commission, the net proceeds of which, after incurred expenses, are equally divided between a NIL collective consistent with the Arkansas Student-Athlete Publicity Rights Act (Act 810 of 2021) and the winning participants). As operated by a licensee, such games shall be subject to casino gaming rules and therefore shall be subject to oversight and approval by the Arkansas Racing Commission.

So why does this piss me off? Good question. Arkansas Edge and Saracen Casino are utilizing gaming law to circumvent restrictions placed on raffles created to ensure this type of gambling is for charitable purposes. Carlton Saffa, Chief Marketing Officer for Saracen Casino Resort, has been on record stating that “The rule would allow Arkansas casinos to run these 50/50 drawings, and it is my sincere hope that all Arkansas casinos do run 50/50 drawings benefiting NIL.” 

This messaging perpetuates what has consistently been done by NIL collectives as long as they have been in existence. Conflate athletic compensation as a charitable purpose. A very valid point can be made that universities have exploited athletes’ labor for decades, and while I would agree that this statement is not only true but also in desperate need of remedy, it still does not make athletic compensation a charitable purpose. Leveraging fan’s bank accounts for the injustices of the NCAA system is not a charity. 

These are not 50/50 raffles nor any type of game for public benefit that the law intended to protect; these are conveniently disguised casino-backed games with poor odds that supplement the incomes of college athletes. The need to structure them under Arkansas’ casino gaming rules should leave no doubt in anyone’s mind that this is the truth and that the legislative intent of the Charitable Bingo and Raffles Act is being bastardized.