Did the Arkansas Attorney General approve Barry Emigh's proposed Fairdeal Holdings casino gambling constitutional amendment for the ballot?

Plain-English summary

Sponsor Barry Emigh submitted a proposed constitutional amendment that would have authorized a specific named business, "Fairdeal Holdings," to initiate "local ballot options" in any Arkansas town, city, or county for 24/7 casino gambling combined with alcohol sales. The proposal also laid out tax percentages, a repeal mechanism, and a damages scheme for repeals.

AG Leslie Rutledge rejected the proposed popular name and ballot title and described the proposal as having "fundamental problems" that prevented her from drafting any usable substitute. She did not even conduct her usual point-by-point review.

The AG flagged the following fundamental defects:

1. Wrong election date. The proposal targeted "the November 14, 2017 general ballot," but there is no general election that day. Under Ark. Code Ann. § 7-5-102, general elections fall on the Tuesday after the first Monday in November of even-numbered years.
2. Popular name was too long. The popular name read like a ballot title and was nearly as long as the ballot title itself. It failed the "useful legislative device" standard from Pafford v. Hall, 217 Ark. 734 (1950), and the "easy-to-discuss label" standard from Gaines v. McCuen, 296 Ark. 513 (1988).
3. "Local ballot option" undefined. The proposal repeatedly used the phrase "local ballot option" without defining it or describing the procedural mechanism. The phrase commonly refers to "wet-dry" elections under Ark. Code Ann. § 3-8-803, which has detailed petition procedures, but the proposal supplied none of its own.
4. "Self-executing" claim was inconsistent with the missing procedures. The proposal said it was self-executing, but it lacked the procedural detail needed to actually operate without enabling legislation.
5. Sweeping supersession clause created ambiguity. The proposal said it would supersede any conflicting law, including potentially the wet-dry local-option statutes, but did not clearly explain how.
6. "Upon passage" was ambiguous as to effective date. Combined with the self-executing claim, voters could not tell when the amendment would take effect.
7. Numerous grammatical and spelling errors throughout.
8. Unclear status of "Fairdeal Holdings." The proposal described Fairdeal Holdings as a business registered with the Garland County clerk's office (certificate number 4155), but Arkansas businesses are registered with the Secretary of State, and no business of that name appeared to be registered there. The legal status of the entity that would receive an exclusive gambling franchise was therefore in doubt.

The AG ended by encouraging Emigh to seek the help of someone experienced in drafting legislation before any future resubmission, repeating concerns her predecessors had expressed in earlier opinions about the office's resources spent on his repeated resubmissions.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Casino gambling in Arkansas is now governed by Amendment 100 (the Arkansas Casino Gaming Amendment), approved by voters in 2018 through a different ballot proposal entirely. The Emigh "Fairdeal Holdings" proposal at issue here never advanced to the ballot.

Background and statutory framework

Ark. Code Ann. § 7-9-107 requires the Arkansas AG to certify, substitute, or reject the popular name and ballot title of every proposed initiated amendment before petition circulation. The AG does not assess the policy merits. The test is whether the proposed wording fairly, impartially, and intelligibly summarizes what the measure would do.

Arkansas Supreme Court precedent (Bailey v. McCuen, Plugge v. McCuen, Roberts v. Priest, and others) holds that a ballot title must adequately inform voters of the contents, must disclose essential facts that would give voters serious ground for reflection, must avoid undefined technical terms and partisan coloring, must be free of misleading tendencies by amplification or omission, must convey an intelligible idea of the scope of the change, and must remain brief enough to be read inside the five-minute booth limit in Ark. Code Ann. § 7-5-309. Where the proposal itself is internally inconsistent, the AG cannot draft around the problems.

The "useful legislative device" standard for popular names

In Pafford v. Hall, 217 Ark. 734 (1950), the Arkansas Supreme Court treated the popular name as a "useful legislative device," and in Gaines v. McCuen, 296 Ark. 513 (1988), as a short, descriptive label meant to make the proposal easy to discuss before the election. A popular name as long as Emigh's, which essentially restated the ballot title, fails both standards.

The election-date problem

Ark. Const. art. 5, § 1 (as amended by Amendment 7) requires citizen-initiated measures to be voted on at "regular elections." Ark. Code Ann. § 7-9-104(a) implements that. Ark. Code Ann. § 7-5-102 sets the general election date as the Tuesday after the first Monday in November of even-numbered years. November 14, 2017 was neither a Tuesday after the first Monday nor an even-numbered year, so the proposal could not legally have been voted on that day.

The undefined "local ballot option" problem

In Arkansas alcohol-control law, the phrase "local option" refers to a wet-dry petition and election process governed by Ark. Code Ann. § 3-8-803. The Emigh proposal borrowed the phrase but supplied none of its own procedural details. The AG flagged that this gap meant the ballot title could not honestly summarize what voters would actually be approving.

The Fairdeal Holdings business-status problem

A constitutional amendment that grants exclusive franchise authority to a specifically named business raises basic due-diligence questions: does the business legally exist, and where is it registered? The AG noted that businesses doing business in Arkansas must register with the Secretary of State, and she was unaware of any "Fairdeal Holdings" so registered. A county clerk's registration is not equivalent. The AG would not certify a ballot title that effectively asks voters to grant a constitutional franchise to a business of uncertain legal status.

Common questions

Q: Did the Fairdeal Holdings amendment ever appear on an Arkansas ballot?
A: No. After this rejection, the sponsor would have needed to fix the fundamental defects and resubmit. Casino gambling in Arkansas was ultimately authorized by Amendment 100 in 2018 through a different proposal with different sponsors.

Q: Can a sponsor name a specific private business in a constitutional amendment?
A: Nothing in the AG opinion categorically forbids it. The problem here was that the business's legal status was unclear. A measure naming a properly registered, identifiable entity is conceivable; voters and the AG just need to know who they are talking about.

Q: Why does the AG insist on a particular election date being specified?
A: Because Arkansas law (Ark. Const. art. 5, § 1, Ark. Code Ann. §§ 7-9-104(a), 7-5-102) requires citizen-initiated measures to be voted on at regular general elections, which only happen in even-numbered years on a specific Tuesday. A measure targeting a non-existent election date cannot legally make it to a vote at all.

Q: What were the AG's predecessors' "deep concerns" about repeat submissions?
A: The opinion references Op. Att'y Gen. 2004-087, Ops. 2000-312 and 2000-193, in which prior AGs had expressed concern about the office's limited resources being absorbed by repeated resubmissions of fundamentally defective proposals from the same sponsor. Rutledge reiterated those concerns and urged Emigh to seek experienced drafting help.

Q: Is rejection of a ballot title appealable?
A: A sponsor can seek review through the Arkansas Supreme Court's original jurisdiction over election disputes, but the typical path after a rejection is to redesign and resubmit.

Citations and references

Constitutional and statutory authority:

• Ark. Const. art. 5, § 1 (as amended by Amendment 7), citizen initiative power
• Ark. Code Ann. § 7-9-107, AG certification of popular names and ballot titles
• Ark. Code Ann. § 7-9-104(a), regular general election requirement
• Ark. Code Ann. § 7-5-102, dates of general elections
• Ark. Code Ann. § 7-5-309, five-minute booth limit
• Ark. Code Ann. § 3-8-803, wet-dry local option petition process

Cases:

• Pafford v. Hall, 217 Ark. 734, 233 S.W.2d 72 (1950), popular name as a "useful legislative device"
• Gaines v. McCuen, 296 Ark. 513, 758 S.W.2d 403 (1988), popular name as label for pre-election discussion
• Bailey v. McCuen, 318 Ark. 277, 884 S.W.2d 938 (1994), essential-fact disclosure standard
• Roberts v. Priest, 341 Ark. 813, 20 S.W.3d 376 (2000), internal inconsistencies in proposal text

Related AG opinions:

• Op. Att'y Gen. 2004-087, prior concerns about repeated resubmissions by this sponsor
• Op. Att'y Gen. 2000-312
• Op. Att'y Gen. 2000-193

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2016-099
October 10, 2016
Barry Emigh, Sponsor
1104 West Seventh Street
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
Hot Springs National Park, AR 71913-4225
Dear Mr. Emigh:

I am writing in response to your request for certification, pursuant to Ark. Code
Ann. § 7-9-107 (Supp. 2015), of the popular name and ballot title for a proposed
initiated measure.

At the outset, I wish to make clear to you that the decision to certify or reject
a popular name and ballot title is in no way a reflection of my view of the
merits of a particular proposal. I am not authorized to, and do not consider
the merits of the measure when making my determination to certify or reject
a popular name and ballot title.

The Attorney General is required, pursuant to Ark. Code Ann. § 7-9-107, to certify
the popular name and ballot title of all proposed initiative and referendum acts or
amendments before the petitions are circulated for signature. The law provides
that the Attorney General may, if practicable, substitute and certify a more suitable
and correct popular name and ballot title. Or, if the proposed popular name and
ballot title are sufficiently misleading, the Attorney General may reject the entire
petition.

Section 7-9-107 neither requires nor authorizes this office to make legal
determinations concerning the merits of the act or amendment, or concerning the
likelihood that it will accomplish its stated objective. In addition, consistent with
Arkansas Supreme Court precedent, unless the measure is "clearly contrary to
law," this office will not require that a measure's proponents acknowledge in the
ballot title any possible constitutional infirmities. Consequently, this review has
been limited primarily to a determination, pursuant to the guidelines that have
been set forth by the Arkansas Supreme Court, discussed below, of whether the
popular name and ballot title you have submitted accurately and impartially
summarize the provisions of your proposal.

The purpose of my review and certification is to ensure that the popular name and
ballot title honestly, intelligibly, and fairly set forth the purpose of the proposed
amendment or act.

REQUEST

You have requested certification, pursuant to Ark. Code Ann. § 7-9-107, of
the following popular name and ballot title for a proposed constitutional
amendment:

Popular Name
An amendment to the Constitution of the State of Arkansas
authorizing a business, by the name of 'Fairdeal Holdings,' to
initiate a local ballot option to contract the operation of gambling
with the sale, and service, of alcoholic beverages twenty four (24)
hours a day, seven (7) days a week, within one structure of any size
within any town, city, and or county, within the State.

Upon passage of a local ballot option the business, as
aforementioned, shall be authorized to contract the operation of
gambling with the sale, and service, of alcoholic beverages twenty
four (24) hours a day, seven (7) days a week, within one structure of
any size within that town, city, and or county.

Any part, or whole, of the business operation(s) operated by
'Fairdeal Holdings,' can be sold, and or transferred, to any person(s),
business, and or corporation.

Upon passage of a local ballot option any person(s) can initiate a
local ballot option to repeale [sic] gambling within that jurisdiction
with a penalty for all costs incurred to that gambling operator.

The gambling operator shall pay a town, or city, where gambling is
operated four (4%) of the net profit from gambling, shall pay the
county where that town, or city, is located four (4%) percent of the
net profit from gambling, and the State five (5%) percent of the net
profit from gambling annually.

The gambling operator shall pay a county where gambling is
operated in the county eight (8%) of the net profit from gambling,
and shall pay the State five (5%) of the net profit from gambling
annually.

The gambling operator shall pay an annual percentage rate base on
the Federal Reserve's bank rate on any late payment.

Unless otherwise specified within this amendment no other license,
fee, or permit shall be applied to the sale, and service, of alcoholic
beverages without a super majority of the General Assembly.

The General Assembly is authorized by a simple majority to
establish, and fund, a commision [sic] to regulate gambling, and the
sale, and service, of alcoholic beverages.

Upon passage of this amendment the voters acknowledge gambling,
and alcohol service, associated with the operation of gambling can
be, or become, addictive.

Ballot Title
An amendment to the Constitution of the State of Arkansas
authorizing a business, by the name of 'Fairdeal Holdings,' to
initiate a local ballot option to contract the operation of gambling
with the sale, and service, of alcoholic beverages twenty four (24)
hours a day, seven (7) days a week, within one structure of any size
within any town, city, and or county, within the state without license,
fee, and or permit.

Upon passage of a local ballot option the business, as
aforementioned, shall be authorized to contract the operation of
gambling with the sale, and service, of alcoholic beverages twenty
four (24) hours a day, seven (7) days a week, within one structure of
any size within that town, city, and or county without license, fee,
and or permit.

Authorizes the above aforementioned business to transfer, or sell,
any part, or whole, of the business operation(s) to any person(s),
business, and or corporation.

Authorizes the voters of that town, city, and or county, the right to
repeal such gambling operation by local ballot option with penalty
for all costs encurred [sic] to the gambling operator within that
jurisdiction.

The gambling operator shall pay the town, or city, where gambling is
operated four (4%) percent of the net profit from gambling, shall pay
the county where that town, or city, is located four (4%) percent of
the net profit from gambling, and the state five (5%) percent of the
net profit from gambling annually.

The gambling operator shall pay the county where gambling is
operated within the county eight (8%) of the net profit from
gambling, and the state five (5%) of the net profit from gambling
annually.

The gambling operator shall pay an annual percentage rate based on
the federal reserve's [sic] bank rate on any late payment.

Unless otherwise stated herein no other tax, fee, and or permits shall
be applied to the operation of gambling, not to include the sale, and
service, of alcoholic beverages without a super majority of the
General Assembly.

The General Assembly is authorized by a minority vote to establish,
and fund, a commission to regulate gambling, and the sale, and
service, of alcoholic beverages as provided in this amendment.

'Whole' means the initiative process and each contract to operate
gambling with the sale, and service, of alcoholic beverages within
each tow [sic], city, and or county.

'Part' means each contract within a town, city, and or county, to
operate gambing gambling [sic] with the sale, and service, of
alcoholic beverages to be separte [sic] from one another, and the
initiative process to be separate from all contracts.

'Gambling' means any game of chance to include, but not limited to
the use of cards, dice, roulette wheels, slot machines of any kind, by
any name, and para mutual [sic] wagering of any kind.

'Sale, and service, of alcoholic beverages' means the on site
consumption of alcoholic beverages within the structure where
gambling is opetated [sic].

'Fairdeal Holdings' means a business registered in Garland County,
Arkansas, for the purpose of initiating, and contracting, gambling
with the sale, and service, of alcoholic beverages.

'structure' means any building, or any kind, of any size.

'net profit' means the amount of money after all operating expenses
are paid.

Passage of this Amendment means the voters acknowledge, and
have considered, the possible risk of gambling, and alcohol,
addiction associated with the operation of gambling.

RESPONSE

The popular name is primarily a useful legislative device. It need not contain
detailed information or include exceptions that might be required of a ballot title,
but it must not be misleading or give partisan coloring to the merit of the
proposal. The popular name is to be considered together with the ballot title in
determining the ballot title's sufficiency.

The ballot title must include an impartial summary of the proposed amendment or
act that will give the voter a fair understanding of the issues presented.
According to the Court, if information omitted from the ballot title is an "essential
fact which would give the voter serious ground for reflection, it must be
disclosed." At the same time, however, a ballot title must be brief and concise;
otherwise voters could run afoul of Ark. Code Ann. § 7-5-309's five-minute limit
in voting booths when other voters are waiting in line. The ballot title is not
required to be perfect, nor is it reasonable to expect the title to cover or anticipate
every possible legal argument the proposed measure might evoke. The title,
however, must be "free of any misleading tendency whether by amplification,
omission, or fallacy, and it must not be tinged with partisan coloring." The
ballot title must be honest and impartial, and it must convey an intelligible idea
of the scope and significance of a proposed change in the law.

Furthermore, the Court has confirmed that a proposed measure cannot be approved
if the text of the proposal itself contributes to confusion and disconnect between
the language in the popular name and the ballot title and the language in the
proposed measure. The Court concluded that "internal inconsistencies would
inevitably lead to confusion in drafting a popular name and ballot title and to
confusion in the ballot title itself." Where the effects of a proposed measure on
current law are unclear or ambiguous, it is impossible for me to perform my
statutory duty to the satisfaction of the Arkansas Supreme Court without (1)
clarification or removal of the ambiguities in the text of the proposal itself, and (2)
conformance of the popular name and ballot title to the newly worded proposal.

It is my opinion, based on the above precepts, that your proposed popular name
does not satisfy the Arkansas Supreme Court's standards. A number of additions
or changes to your ballot title are also necessary in order to more fully and
correctly summarize your proposal. I cannot, however, at this time, fairly or
completely summarize the effect of your proposed measure to the electorate in a
popular name or ballot title because of several fundamental ambiguities in the text
of the measure itself. Because of these fundamental problems, I have not
conducted a thorough, point-by-point review of your proposal. Rather, I will point
out the initial problems and fundamental ambiguities.

• You have proposed this measure for inclusion on "the November 14, 2017 general ballot." There is no general election scheduled for this date. The next general election for which any new proposed constitutional amendments or initiated acts could be considered is on November 6, 2018. The Arkansas Constitution requires that measures initiated by the people be voted on at "regular elections." This requirement is reflected in Ark. Code Ann. § 7-9-104(a), which states that initiative petitions contain language ordering a vote on a proposed measure "at the regular general election . . . ." Requesting certification of a popular name and ballot title for a date on which there is no regular general election is a fundamental flaw that precludes me from being able to certify your proposed popular name and ballot title.

• Your popular name, in my opinion, is much too long to be considered a "useful legislative device." Your proposed popular name reads more like a ballot title, and in fact is only a slightly shorter version of your proposed ballot title. The popular name must be a short, descriptive reference for your proposed measure. "The popular name is designed to make it easy for voters to discuss the proposal prior to the election, by giving them a label to identify it." Your submission fails to meet this standard, and I cannot at this point substitute a more suitable and appropriate popular name.

• Your proposed measure speaks of a "local ballot option," a phrase that is not defined, regarding the permitting of gambling in connection with the sale and distribution of alcoholic beverages. This phrase in this context is very unclear. The phrase "local option" is commonly understood to be connected with so-called "wet-dry elections," which currently are conducted pursuant to Arkansas statutes. In typical local option elections, putting the proposition concerning the sale of alcohol in a given area on the general election ballot is accomplished by way of a petition process. Your measure, however, simply states that a certain business would "be authorized to initiate a local ballot option within any town, city and or county . . . ." But your proposal wholly lacks any procedures regarding how that "local ballot option" would be initiated. Significant clarification regarding the process by which a "local ballot option" is to be initiated and accomplished is necessary in order for this important aspect of your proposed measure to be adequately summarized in a ballot title for the measure.

• Closely related to the above problem is the proposed measure's statement that the measure is "self executing" [sic]. A document is considered self-executing if it does not require anything additional, such as subsequent legislation, to make it binding. But because your proposal is so bereft of specificity regarding procedures and other significant details as to how it would work, its claim to be self-executing creates a considerable ambiguity that must be clarified and clearly set forth in your proposal and ballot title.

• Your proposal also states that it would supersede any law in conflict with your proposed amendment. This statement also creates a serious ambiguity, especially as it relates to local option statutes currently in place as mentioned above. If you intend for your proposal to institute a different "local option" process with respect to the combination of gambling and the providing of alcoholic beverages in what are now dry areas, this would represent a significant change in current law. This would have to be significantly clarified and conveyed in your proposal and ballot title. Without clarification, any ballot title for your proposal will fail the Court's mandate that it "convey an intelligible idea of the scope and significance of a proposed change in the law."

• Throughout your proposed measure, you use the phrase "[u]pon passage of this amendment . . ." This language is ambiguous as to exactly when your proposed amendment would become effective. This is especially true when your proposed measure states, as mentioned above, that it would be "self executing [sic]." Without more detail, it is highly doubtful voters would know or be able to determine just when your proposed amendment would take effect.

• Your proposed measure contains many grammatical errors in spelling, punctuation, capitalization, and syntax, too numerous to list here, that, if left uncorrected, would make it impossible for me to perform my statutory mandate with respect to your proposal.

• Your proposed measure speaks of a "company" by the name of "Fairdeal Holdings," that is a "business registered, [sic] and filed" with the Garland County clerk's office, "certificate number 4155." This reference is ambiguous, as businesses must register with and be certified by the Secretary of State in order to be able to do business within the State. I am unaware that the Secretary of State has certified any business named "Fairdeal Holdings." The status of this "business" will be a matter of significant concern to voters. Clarification is therefore necessary for proper inclusion in a ballot title for your proposal.

CONCLUSION

The ambiguities noted above are not all of the ambiguities contained in your
proposal, but they are sufficiently serious to require me to reject your proposed
popular name and ballot title. Without the resolution of these initial fundamental
problems and ambiguities, I cannot determine precisely what changes to the ballot
title are necessary to fully and correctly summarize your proposal. It is therefore
not appropriate, in my opinion, for me to try to substitute and certify a more
suitable and correct popular name and ballot title pursuant to Ark. Code Ann. § 7-
9-107(b). Additional ambiguities may come to light on review of any revisions of
your proposal.

My office, in the certification of popular names and ballot titles, does not address
the merits, philosophy, or ideology of proposed measures. I have no constitutional
role in the shaping or drafting of such measures. My statutory mandate is
embodied only in Ark. Code Ann. § 7-9-107, and my duty is to the electorate.
Always mindful of that duty, I am compelled to encourage you to seek the advice
or assistance of someone experienced in drafting legislation, editing legal
documents, or both, should you choose to resubmit. (In this regard, I want to reiterate my predecessors' statements to you regarding redesigns and resubmissions and their deep concerns about "commit[ting] this office's limited resources to repeatedly telling you the same thing." Op. Att'y Gen. 2004-087. See also Ops. Att'y Gen. 2000-312, 2000-193.) Amending the Arkansas
Constitution is a very serious matter, and the Arkansas Supreme Court holds
popular names and ballot titles of proposed constitutional amendments to a
standard that is commensurate with this seriousness. If you are intent upon
passing a measure that will amend the constitution in such a significant way, then
the assistance I mentioned above will be very helpful to you in avoiding wasted
time and effort in preparing a popular name and ballot title for your proposal.
Based on what has been submitted, my statutory duty is to reject your proposed
popular name and ballot title for the foregoing reasons and instruct you to redesign
the proposed measure, popular name, and ballot title. You may resubmit your
proposed amendment along with a proposed popular name and ballot title at your
convenience.

Sincerely,

LESLIE RUTLEDGE
Attorney General

Enclosure