DraftKings, FanDuel Win Approval to Partner With Arkansas Casinos

State regulators on Thursday unanimously authorized DraftKings’ and FanDuel’s functions to develop to Arkansas, setting the stage for a dramatic shift within the state’s $655 million sports activities betting market.

The Arkansas Racing Commission’s choice permits the nation’s high sports activities betting apps to start operations in Arkansas instantly in partnership with native casinos.

Southland Casino Hotel in West Memphis partnered with DraftKings, whereas Oaklawn Hot Springs partnered with FanDuel. The casinos will stay the sportsbook licensees, with DraftKings and FanDuel working as distributors.

There was no such deal in place for Saracen Casino Resort in Pine Bluff, which is able to proceed with its GuessSaracen app. A on line casino consultant on Thursday urged fee members to reject DraftKings’ and FanDuel’s functions, elevating issues about predatory pricing, operational management and state tax income.

The state’s three casinos have operated their own branded betting apps since 2022, when the state approved mobile sports betting. Since then, cellular wagers have soared to account for about 90% of all sports activities betting in Arkansas.

Market progress is predicted to speed up considerably with DraftKings and FanDuel, supporters advised the fee. Oaklawn General Manager Wayne Smith mentioned FanDuel’s nationwide profile will add to the “best-in-class” expertise the on line casino affords bettors. A consultant for Southland, which is owned by Delaware North Companies Inc. of Buffalo, New York, mentioned the on line casino believes the partnership will even drive extra in-person enterprise.

The partnerships cowl cellular sports activities betting solely, not predicting markets that DraftKings and FanDuel provide in different states.

State guidelines require 51% of sportsbook income from exterior operators to stay with the native on line casino companion.

DraftKings and FanDuel objected to the revenue-sharing rule when sports activities betting first launched in Arkansas. The sportsbooks, sometimes which obtain 85%-95% of income, questioned the legality of the rule underneath the federal Commerce Clause.

Competitive Shift

The arrival of DraftKings and FanDuel raises the stakes for Saracen, the chief in Arkansas’ sports activities betting market.

Industry analysts rank the Pine Bluff on line casino’s cellular market share as the most important, thanks to its aggressive advertising, strong characteristic set, and powerful person adoption. Southland ranks second and Oaklawn third.

But now, Saracen will compete with nationwide platforms that dominate markets by scale, product depth, and data-driven advertising. DraftKings and FanDuel are identified to flood new markets with advertisements, sponsorships, and sign-up affords to lock in customers.

“You have no idea what the billboards in Arkansas are about to look like,” Saracen Chief Marketing Officer Carlton Saffa advised the fee Thursday.

DraftKings operates in 26 states, plus Washington, DC, and Puerto Rico. FanDuel operates in 23 states and Washington, DC

Saffa argued that a few of the nationwide operators’ promotions, like free play credit, are designed to nook markets whereas eliminating gaming tax obligations. He pointed to Missouri, the place in December, the 2 operators collectively issued greater than $100 million in free wages to customers, then wrote off the wages towards their taxable legal responsibility.

Arkansas additionally permits promotional deductions.

“This is absolutely going to expand gaming in the state of Arkansas, but what you can see from Missouri is, in the end, there’s a hell of a lot more money being gambled. Is there actually any more taxable revenue?” he mentioned.

Saffa additionally questioned whether or not the partnerships adjust to Amendment 100 to the Arkansas Constitution, which in 2020 approved full on line casino gaming at 4 particular websites. He has argued that the offers with DraftKings and FanDuel flip Saracen’s rivals into passive income recipients with core operations managed by out-of-state entities.

“Regulators license operators, not passive recipients of revenue,” Saffa mentioned. “And operational control must be real, verifiable and enforceable, not merely contractual.”

Saracen is owned by the Quapaw Nation of Oklahoma.

Rules, not Ramifications

Deputy Attorney General Doralee Chandler took a extra slender procedural view.

She advised the fee that the one query earlier than it was whether or not the functions meet the necessities set out within the modification and the fee’s guidelines, though she was cautious to notice she hadn’t reviewed the precise functions.

Commission Chair Alex Lieblong mentioned he considered the functions as merely an extension of one thing already authorized, evaluating it to casinos utilizing slot machines from a licensed vendor.

Like Chandler, he put aside broader implications raised by Saffa.

“Early on, we made the deal… you’ve got to keep 51% with the home team. Period,” Lieblong mentioned. “As far as I know, that’s the only rule that we made. If we find out there’s too much abuse going on with write-offs and the free gaming, that would have to be done by the legislature, I’m sure, and we can delve into that further.”