DraftKings and FanDuel Seek Approval To Launch Sports Betting In Arkansas

Arkansas regulators are considering applications from FanDuel and DraftKings to launch online sports betting in the state. However, the approval requires them to secure partnerships with existing casino platforms.

Scott Hardin, spokesperson for the Arkansas Department of Finance and Administration, told KNWA that the companies could align with any of the state’s three licensed casinos if granted approval. The eligible properties are Oaklawn Casino in Hot Springs, Saracen Casino in Pine Bluff, and Southland Casino in West Memphis.

Jordan Bender of Citizens has reported that FanDuel is due to partner with Oaklawn, while DraftKings is in talks with Southland. Any agreement must be approved by the Arkansas Racing Commission before operations can begin.

State Law Requires Majority Revenue Share for In State Casino Partners

Arkansas rules stipulate that third party sports betting partnerships must allocate at least 51% of revenue to the in-state casino. According to Hardin, casinos will maintain the authority to decide whether to enter into agreements with third-party operators.

If approved, casinos can co-brand mobile sports betting apps with their chosen partner, combining local licences with established digital platforms. The Commission has yet to confirm a final timetable for reviewing the applications.

Commissioners are considering a meeting on 26 February to vote on the proposals. A positive decision would permit both operators to launch without delay. DraftKings currently offers Daily Fantasy Sports in Arkansas but has no active online sportsbook in the state.

Analysts Forecast Significant Growth in Handle and Revenue

Market analysts believe the entry of these two operators could significantly influence the state’s wagering profile. Bender highlights that Arkansas gaming revenue per adult stands at $29, much less than the $125 national average. He attributes this difference to limited digital penetration.

Bender estimates that by year three, the state will generate $1.9bn in betting handle and $210m in revenue, a $57m increase from the prior year. Assuming an even market share split and existing revenue sharing agreements, each operator could generate between $25m and $30m in EBITDA.

Each brand is expected to invest between $30m and $35m at launch, with marketing is likely to coincide with major sporting events such as March Madness.

Proposed Two Operator Structure Raises Competition Questions and Investor Interest

Though there might be a dip in EBITDA for Q1 2026, Bender’s analysis alludes to Arkansas becoming accretive to full-year 2026 EBITDA, as stable performance returns. Also, he suggests the resulting framework would effectively create a duopoly, preventing Saracen from partnering with FanDuel or DraftKings. Bender notes that markets with more participants often generate higher gaming revenue.

Both companies are expected to withdraw their sports prediction market products in Arkansas if regulated betting launches. Bender maintains a Market Outperform rating on DraftKings with a $38 price target based on projected 2027 EBITDA and free cash flow. FanDuel parent Flutter Entertainment holds a Market Outperform rating and a $275 price target derived from 2027 earnings and cash flow estimates.