The recent addition of DraftKings and FanDuel to the sports betting market in Arkansas is having an immediate impact.
Together with BetSaracen, the three Arkansas online sports betting brands reported a combined $86.6 million in handle for March, up 40% from last year to a new state record. The two newcomers accounted for more than 60% of that total despite officially launching with just 12 days left in the month.
Reported revenue, meanwhile, dove deep into the red; online sportsbooks paid out $8.17 million more than they took in, creating a negative tax obligation to the state in the process, according to the Arkansas Racing and Gaming Commission report released Thursday.
Net losses are evidently fueled by the signup bonuses and free bets that greased the leaders’ entry into the market, but official reporting does not quantify promotional spend.
FanDuel the fastest off the line
FanDuel, the new digital sports betting partner to Oaklawn, is off to a flying start in Arkansas. It reported $35.7 million in handle to lead the market with a 41% share of volume. Payouts approached $40 million, however, and produced a net loss of $4.22 million for the month.
Southland’s new partner, DraftKings, had a comparatively sluggish start, reporting $18.2 million in handle (21% share) and a net loss of $6.10 million on the bottom line.
Both partnerships are online only, with the two host licensees keeping their own brands on their in-house sportsbooks. Oaklawn uses Kambi to power its brick-and-mortar operation, while Southland’s betly sportsbook exists through a joint venture between owner Delaware North and the Belgian operator Gaming1.
BetSaracen, meanwhile, endured a small decline in handle as compared to last March, dipping 5% to $32.6 million. Saracen’s executive leadership opposed the licensure of DraftKings and FanDuel, citing aggressive promotional spend among the objections to their inclusion.
Arkansas sports betting market slow to grow
Arkansas is now into its fourth year of regulated operations, but the particulars of the law kept the big national brands out of the local marketplace. Online operators are required to remit at least 51% of their revenue to the casino partner that bears their license in addition to the state tax payments of 13%-20%, a framework that operators said left little room for profit.
The market has lagged the rest of the U.S. as a result. Per-capita online betting handle in Arkansas was just $205 last year, ranking 30th out of 30 reporting markets by that metric. It was one better in revenue, pipping Delaware for 29th place at around $19 per person.
The exact terms of the Arkansas market-access deals that opened the door to DraftKings and FanDuel are not publicly disclosed, but improving operational margins have, over time, made it more feasible for these companies to turn a profit under burdensome tax regimes.
DraftKings is now active in 28 markets, the most of any US sports betting operator. FanDuel serves 25, though the recent rollout of prediction platforms as a workaround to state regulation gives both brands a betting presence – in one form or another – across all 50 states.
