Regulators review sportsbook applications

Arkansas regulators are considering applications that could open the state’s online sports betting market to two of the biggest names in US wagering: DraftKings and FanDuel.

According to the Arkansas Department of Finance and Administration, approval would allow both operators to partner with one of the state’s three licensed casino sportsbooks.

Those casinos are:

  • Oaklawn Casino (Hot Springs)
  • Saracen Casino (Pine Bluff)
  • Southland Casino (West Memphis)

If granted licences, both brands could launch immediately under co-branded arrangements with their chosen casino partners.

Proposed partnerships take shape

Local reporting suggests:

  • FanDuel is expected to align with Oaklawn
  • DraftKings is likely to partner with Southland

Under Arkansas rules, any third-party sportsbook agreement must allocate at least 51% of revenue to the in-state casino partner. Final approval rests with the Arkansas Racing Commission.

Commissioners may convene on 26 February to determine whether the applications meet regulatory requirements. A formal review timetable has not yet been confirmed.

Casinos will retain discretion over entering into agreements, meaning no partnership is automatic even if the licences are approved.

Market impact: From local to national scale

Currently, DraftKings operates Daily Fantasy Sports in Arkansas but does not offer online sports betting. Entry by both national platforms would significantly reshape the competitive landscape.

Analysts point out that Arkansas gaming revenue per adult stands at $29 — well below the US average of $125 — a gap attributed to limited digital infrastructure and brand reach.

Projected outcomes by year three include:

  • $1.9bn in betting handle
  • $210m in gross revenue
  • $25m–$30m EBITDA per operator (assuming equal market share)

Initial investment costs are estimated at $30m–$35m per operator, with marketing expected to align with major sporting events such as March Madness.

While early 2026 EBITDA could soften due to launch costs, projections suggest the market would turn accretive by the end of the year as activity stabilises.

Duopoly dynamics raise questions

Under the projected structure, Saracen Casino would remain outside partnerships with either operator, effectively creating a two-player market.

Analysts caution that such a duopoly may limit the competitive intensity seen in larger jurisdictions, potentially capping revenue upside. Policymakers now face the familiar balancing act between controlled market access and fostering broader competition.

Strategic implications

Both operators are expected to discontinue their sports prediction market products in Arkansas upon launch of regulated sportsbook offerings.

Analyst sentiment remains positive:

  • DraftKings holds a Market Outperform rating with a $38 price target
  • Flutter, parent company of FanDuel, maintains a Market Outperform rating and a $275 target

Both valuations are based on projected 2027 EBITDA and free cash flow multiples.

Summary

Arkansas regulators are weighing applications from DraftKings and FanDuel to enter the state’s online sports betting market via casino partnerships. If approved by the Arkansas Racing Commission, the move could generate nearly $2bn in handle within three years and reshape the state’s wagering ecosystem. The decision now hinges on regulatory review and final partnership agreements.