DraftKings and FanDuel received vendor licenses to offer sports betting in Arkansas despite pushback from one of the state’s casinos.
FanDuel is partnering with Oaklawn Casino while DraftKings is partnering with Southland Casino after their licenses were unanimously approved by the Arkansas Racing Commission Thursday.
The two will be operating as vendors supplying the sports betting tech and data to each casino with the casino remaining in control of the platform.
The change over could happen within days. Neither operator confirmed their expected launch dates when reached by LSR, but DraftKings noted the launch would be coming “soon.”
FanDuel, DraftKings will not operate the books
Both companies being licensed as casino vendors is an important distinction in Arkansas.
The rule change from February 2022 that allowed online sports betting to launch in Arkansas requires that each casino retains 51% of the partnership, and therefore control.
That was originally unworkable for both companies, but FanDuel’s Senior VP of Partnerships Jonathan Edson explained that as the scale of the business grew, so did its ability to be flexible and offer a solution that works while taking a partnership fee below 50%.
Change is not frictionless in Arkansas
Oaklawn GM Wayne Smith confirmed that the current app will no longer be used and bettors will have to download the FanDuel app to continue betting with Oaklawn.
Neither DraftKings nor Southland GM Osi Imomoh mentioned a change, but switching technology vendors typically means a new app will be required.
The risk of losing some customers from that friction is likely worth it if the growth predictions are true. Smith expects the market to grow by about five times with the addition of the national brands, and Imomoh concurred.
Saracen Casino against the change
The casino with the state’s leading sports betting platform argued why the licenses should not be approved for multiple reasons.
Saracen Casino‘s Chief Marketing Officer Carlton Saffa presented the Arkansas Racing Commission with multiple reasons to deny the licenses:
- Both DraftKings and FanDuel are actively lobbying in Wisconsin that its online sports betting bill, which was drafted using Arkansas as a model, is not something either company can work with despite making it work now in Arkansas.
- If national brands really make such a difference, why are the casinos not partnered with national brands?
- DraftKings and FanDuel handed out more than $100 million in free play in northern neighbor Missouri during its launch month of December, with neither paying taxes during that month. The Arkansas Racing Commission does not limit free play deductions, though that could be changed through the legislature.
- Simply keeping 51% of the revenue is not enough to prove control.
- FanDuel applied through a key employee license, but commission staff clarified that was at the request of the commission since Betfair is the vendor being licensed.
In the end, Chairman Alex Lieblong said the only stipulation is that the casino keep 51% of the revenue, which is what both vendor contracts say will happen. A representative from the attorney general’s office said if a vendor application meets all the requirements then it should be approved.
FanDuel, DraftKings on Arkansas licenses
Both companies issued statements about their next new state.
“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 VP and GM 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.”
FanDuel, meanwhile, kept things brief.
“We are grateful to the Arkansas Racing Commission for approving us as a vendor,” a company spokesperson said. “We look forward to next steps.”
