Arkansas gaming regulators approved licenses for FanDuel and DraftKings to enter the market. The state’s gamblers will now soon have access to the country’s two largest wagering operators.
The Arkansas Racing and Gaming Commission unanimously approved both operators, which plan to launch in the coming days. To operate, FanDuel is partnering with the Oaklawn racetrack and DraftKings with Southland Casino.
“We’re excited to team up with Southland Casino Hotel to bring DraftKings’ top-rated mobile sportsbook to Arkansas and introduce fans to our best-in-class sports betting offering,” DraftKings Executive Vice President and general manager of sports Gregory Karamitis said. “As March Madness approaches and several major sports are underway, we look forward to serving Arkansas customers with innovative features, including our No. 1 live betting experience and a continued commitment to responsible gaming.”
Avoiding High Taxes
Arkansas legalized sports betting at live casinos in 2019 and then added mobile and online betting in 2022. However a quirk in the law subjected third-party out-of-state operators to a 51% tax rate.
Thus, the state has seen gaming companies put together their own brands as national operators avoided the market. However, the new partnership agreements appear to comply with the law, as they will operate solely as platform providers. This will allow both companies to avoid that steep tax rate.
The addition of FanDuel and DraftKings could boost state revenue, which is the lowest of any mobile sports betting jurisdiction due to limited options and limited recognition of local operators. A DraftKings representative told the commission that bringing in larger operators could see betting handle increase by 400%.
Southland previously operated the Betly platform, but that will be replaced by DraftKings. Oaklawn also operated its own betting app, but FanDuel will now replace it.
Third Operator Expresses Opposition
The Saracen Casino also operates its own platform, which is currently the state leader. The company spoke out against approving the national brands. Saracen Casino Chief Marketing Officer Carlton Saffa said FandDuel and DraftKings would quickly corner the market and push out smaller competitors.
“Today we have a system that is working for Arkansas, one that other states want to replicate,” Saffa told the commission. “If you allow this, you will break this system.”
Saracen could possibly still reach a deal with a bigger national operator as well, but hasn’t made any announcement regarding that type of move.
The move comes as both companies have change on the horizon. DraftKings recently announced that the company would start accepting cryptocurrency in some states. On the other hand, there is growing speculation that PokerStars’ U.S. poker operations may be rebranded under the FanDuel banner.
The country now has 39 states, along with Washington D.C. and the American territory of Puerto Rico, now offer legalized sports betting since the virtual ban on betting outside Nevada was overturned by the Supreme Court in 2018.
