DraftKings, FanDuel Face Opposition in Arkansas Betting Market

^{FanDuel is partnering with Oaklawn Racing Casino Resort in Hot Springs upon approval. (Photo: Rosemarie Mosteller / Alamy)}

DraftKings and FanDuel, the market leaders for online sports betting in the United States, have applied for licenses to partner with two land-based casinos in Arkansas to offer their sports betting platforms in the state. But the move has received pushback from one casino, which says the state is better off without the gaming giants.

DraftKings is seeking to partner with Southland Casino in West Memphis, while FanDuel is trying to partner with Oaklawn Casino in Hot Springs, according to the Arkansas Department of Finance and Administration.

Arkansas Casinos Currently Operate Sports Betting Apps

Both companies will need approval from the Arkansas Racing Commission in order to get a license to operate in the state.

Online sports betting already exists in Arkansas. Three land-based casinos offer mobile apps that let bettors wager on sports without visiting the casinos. That makes the entry of FanDuel and DraftKings more about adding branding than bringing a new product to the state.

Not everyone thinks giving the national brands a piece of the gaming pie is a smart move, however. Saracen has actively opposed the introduction of DraftKings and FanDuel, arguing that the brands don’t add anything to the states they enter.

“The reason that I refer to them as a vampire is multifaceted,” Saracen Chief Market Officer Carlton Saffa told KUAF. “One, when you do business with FanDuel, the majority of the revenue gets vacuumed up to another state. With DraftKings, it’s to Boston; with FanDuel, it’s to New York. But two, you do not employ Arkansans.”

Saffa: Why Mess with Success?

Saffa argues that casinos don’t outsource other operations, like table games, to third parties in exchange for a percentage of the profits. He also points out that Arkansas's current sports betting sites have been experiencing substantial growth.

“Oaklawn Sports grew 90% year over year. They almost doubled year-over-year,” Saffa said. “So to me, it absolutely defies logic...why they would invite these vampires in. I can tell you, if our sportsbook was growing 90% year-over-year, we wouldn’t consider taking on a partner to run it for us.”

Also complicating matters is a 2022 rule that requires a minimum of 51% of all revenue from any sports betting mobile apps to stay with an Arkansas casino. At the time, FanDuel argued that such a split – which would allow an outside operator to keep a maximum of 49% of revenue – would make it “financially unfeasible” to operate in the state.

“We got a lot of pushback at the time,” said Scott Hardin, a spokesperson for the Arkansas Department of Finance and Administration. “At the time, the national brands were not big fans of it.”

Currently, licensing for DraftKings and FanDuel is not on the agenda for the Arkansas Racing Commission's next meeting, though Hardin said it could be added before the meeting next Thursday.