Following legislative momentum generated at the end of 2021, sports betting could become a real possibility for Arkansas in time for the Super Bowl in 2022. The Arkansas Racing Commission voted on December 30 to adopt new rules and regulations that would expand online sports betting offerings in the state. The rules set in place are expected to be approved by a legislative subcommittee in early 2022. Arkansas casinos have offered retail sports betting since June 2019, following the state’s approval in November 2018. To date, Arkansas has generated $104 million in total wagers and $1.9 million in total revenue.
Revenue Sharing Primary Issue
The Arkansas Racing Commission held a two-hour meeting for interested parties to voice their concerns. The main issue was related to the 51% profit share for casino partners to national sportsbooks. FanDuel Director of Government Affairs Andrew Winchell spoke to the “unprecedented” revenue sharing being problematic for national sports betting brands as other representatives suggested the proposed plan was unreasonable. Sportsbooks typically share between 5 and 15% of their revenue with casino partners and sports betting is currently taxed at a 13% rate in Arkansas.
A representative from Saracen Casino Resort cited the plan for a 51% revenue sharing model in New York and sportsbooks succumbing to those regulations. Still, FanDuel and other platforms mentioned the massive difference in population between the two states. Sportsbooks also voiced their distaste with the prospect of statewide regulations handling the profit-sharing system as negotiated on a case-by-case basis with casino partners in other states.
Sportsbooks Want More Licenses
The other issue that arose during the two-hour meeting was the limited number of licenses available in Arkansas. There are three casinos in the state, with a fourth currently in development, and each casino will be permitted to have up to two licenses with online sportsbooks. Arkansas will have up to six sports betting licenses and another two once the fourth casino is open with the current rules. BetMGM Sportsbook and DraftKings Sportsbook requested up to or more than four online skins, but that was quickly declined.
The same casino representative that cited the New York comparison also claimed that Arkansas casinos don’t need national sportsbooks to operate their own mobile sports betting market. However, a FanDuel representative spoke to the need for “incredibly technically sophisticated risk management” to offer same-game parlays and other specialized betting in order to ensure that the sportsbook remains profitable. Sportsbooks also spoke to the need for various national brands to raise the level of competition and allow customers to make more informed decisions.
2022 Will Be a Pivotal Year
With the Arkansas Racing Commission approving these new rules, mobile sports betting is expected to become a reality in the state shortly, despite national sportsbooks’ disagreement about some of the regulations. With Tennessee and Louisiana both recently approving mobile sports betting, Arkansas is under pressure to keep pace with its neighbors and not let tax dollars escape the state. Arkansas Racing Commission spokesperson Scott Hardin told a local TV station that mobile sports betting should launch in early 2022, and Arkansas residents can start to get excited about that possibility.