DraftKings and FanDuel Apply for Arkansas Mobile Betting — But the 51% Rule Changes Everything

On February 18, 2026, DraftKings and FanDuel simultaneously filed applications with the Arkansas Racing Commission to launch mobile sports betting in the state — ending a four-year standoff that made Arkansas the most conspicuous holdout in the national expansion of legal online wagering. Both operators have told regulators they can go live immediately upon approval, and a vote could come as early as the Commission’s February 26 meeting. The applications are significant not just because they bring the two dominant US sportsbook brands into a market that has operated with only three casino-run apps since mobile launched in March 2022, but because of what it took to get here. DraftKings and FanDuel avoided Arkansas since its inception for a single reason: the state’s 51% revenue-share rule, which requires casinos to retain at least 51% of net mobile sports betting revenue. In every other state, operators keep 85% to 95%. In Arkansas, they’re capped at 49%. That both companies are now willing to accept those terms — after publicly opposing them in 2021 — tells you something about where the US sports betting growth curve has landed, and it tells Arkansas bettors something important about what the experience will actually look like compared to users in other states.

The Partnerships: Who Aligned With Whom

Arkansas’s sports betting market was created by Amendment 100, approved by voters in November 2018 with 54.1% support. The amendment authorized casino gaming at four locations — three of which are now operational — and permitted sports wagering at those casinos. Retail sportsbooks opened in July 2019, and the Racing Commission approved mobile wagering rules in March 2022. Under the current framework, each casino can host up to two mobile sportsbook operators, creating a theoretical maximum of eight statewide apps. Until now, only three existed: Betly (operated by Saracen Casino in Pine Bluff), BetSaracen (also Saracen), and the Southland Casino-branded app in West Memphis.

The new applications pair national operators with existing casinos. FanDuel has partnered with Oaklawn Racing Casino Resort in Hot Springs, which has held a gaming license since Amendment 100 passed but has not yet launched a mobile sportsbook. DraftKings has partnered with Southland Casino Hotel in West Memphis, which already operates one mobile app and would add DraftKings as its second skin. Scott Hardin, spokesperson for the Arkansas Department of Finance and Administration, confirmed that the applications are legally permissible under existing regulations. DraftKings has already begun integrating Southland branding into its national app infrastructure, a signal that the company views approval as likely.

The two-skin rule means that Saracen could still partner with a national operator of its own — it has two slots filled but could theoretically restructure. However, Saracen’s public opposition to the DraftKings and FanDuel applications suggests it views the partnerships as a competitive threat rather than a template to follow.

The 51% Rule: Why National Operators Stayed Away

The single most important number in Arkansas sports betting isn’t the handle, the tax rate, or the number of licensed operators. It’s 51% — the minimum share of net mobile sports betting revenue that casinos must retain under Racing Commission regulations. This is the inverse of how the industry works everywhere else. In a typical state, an operator like DraftKings or FanDuel enters a market by paying a casino or sports team a market-access fee of 5% to 15% of revenue, keeping the vast majority for themselves to fund operations, promotions, and margin. In Arkansas, the casino keeps the majority and the operator takes home at most 49 cents of every dollar.

This isn’t a theoretical distinction. In 2021, when the Racing Commission was finalizing mobile wagering rules, BetMGM, DraftKings, and FanDuel all submitted formal letters opposing the 51% requirement. They argued the economics were unworkable — that the revenue split would prevent them from offering competitive promotions, investing in the local market, and delivering the product quality bettors in other states receive. The Commission denied their objections and implemented the rule as written. All three operators walked away. For four years, Arkansas has been the only state with legal mobile sports betting where neither DraftKings nor FanDuel operates.

The practical effect of this split flows directly to the bettor. Promotional budgets — sign-up bonuses, odds boosts, free bet offers, deposit matches — are funded from the operator’s share of revenue. When that share is cut roughly in half compared to other states, the math constrains what operators can offer. This doesn’t mean Arkansas bettors will receive nothing; DraftKings and FanDuel will almost certainly launch with introductory offers to build market share. But the long-term promotional environment will be structurally less generous than what users experience in states like Arizona, New Jersey, or Illinois, where operators keep the lion’s share and compete aggressively on promotions to differentiate.

Arkansas by the Numbers: An Underperforming Market

Arkansas’s sports betting market has grown steadily since mobile launch but remains dramatically undersized relative to its population. The state handled approximately $655 million in wagers in 2025, with gross gaming revenue of $115.68 million in 2024. Tax revenue through October 2025 was up 28.1% year-over-year — a healthy growth rate but from a low base. More than 90% of all wagers are placed on mobile. The state taxes sports betting revenue at 13% on the first $150 million and 20% on revenue above that threshold.

The comparison that matters most is Iowa. Both states have populations of approximately 3 million. Iowa legalized sports betting around the same time. But Iowa’s 2025 handle reached $2.9 billion — 4.4 times Arkansas’s figure. The difference: Iowa has approximately 17 licensed sportsbook operators competing for bettors, while Arkansas has three. Iowa’s per capita sports betting revenue exceeds $65; Arkansas generates roughly $37.45. According to research from SCCG Management, adding DraftKings and FanDuel could push Arkansas’s handle to $1.9 billion within three years — nearly tripling current volume but still well below Iowa’s output.

The Opposition: Saracen’s Constitutional Argument

Saracen Casino Resort in Pine Bluff — the only one of Arkansas’s three casinos not partnering with a national operator — has been the most vocal opponent of the DraftKings and FanDuel applications. Carlton Saffa, Saracen’s chief marketing officer, has mounted a multi-front argument that the partnerships are both unconstitutional and operationally problematic.

Saffa’s constitutional argument centers on Amendment 100’s requirement that sportsbooks be “operated by” licensed casinos. He contends that a partnership model — where a national operator essentially runs the mobile product under a casino’s license — contradicts the amendment’s plain language and the intent of Arkansas voters. In January 2026, Saffa called FanDuel’s partnership with Oaklawn “gone rogue,” and has publicly questioned whether out-of-state companies should be making operational decisions about Arkansas wagering.

“This is in direct contradiction to what all three casinos unanimously believed was the correct position only about four years ago,” Saffa told the Arkansas Democrat-Gazette, referencing the 2021 period when all three casinos supported the Racing Commission’s restrictive interpretation of the rules. “I’m concerned when you have people, in the case of FanDuel, who are in New York, or DraftKings, who are in Boston, making decisions about how operations will occur.”

The analysis of Saracen’s opposition requires acknowledging both its legal substance and its business context. The constitutional argument has genuine merit — Amendment 100’s language is ambiguous enough that reasonable legal minds can disagree about whether the partnership model falls within its scope. But Saracen is also the one casino that chose not to partner with a national brand, and it currently controls two of the state’s three mobile apps. The entry of DraftKings and FanDuel would transform Saracen from a dominant incumbent to a minority player in terms of brand recognition and app quality. Business motivation and legal principle are not mutually exclusive here — they’re running on parallel tracks.

What This Means for Arkansas Bettors

The Bigger Picture

The fact that DraftKings and FanDuel are now willing to accept terms they publicly rejected in 2021 is itself a data point about the state of the US sports betting industry. Four years ago, both companies were in hypergrowth mode — new states were legalizing quarterly, and accepting a 49% revenue cap in a small market made no strategic sense when 85%-plus deals were available elsewhere. Today, the easy markets are largely claimed. DraftKings operates in 27 states; FanDuel is live in 26 states plus Puerto Rico. Together they hold approximately 72% of the US online sports betting market by gross gaming revenue. The frontier has shrunk.

DraftKings’ most recent earnings report underscored the shift. Despite posting its best quarter ever — $1.99 billion in Q4 revenue — the company issued 2026 guidance that missed Wall Street consensus by approximately $600 million, sending the stock down 14.5% in a single session. Flutter Entertainment, which acquired 100% of FanDuel at a $31 billion valuation, has seen its own shares fall more than 50% from their highs. FanDuel’s launch of FanDuel Predicts — its entry into prediction markets — reflects the same imperative: find growth wherever it exists.

Arkansas is a micro-case study in what happens when the favorable markets are exhausted and operators must accept terms they once considered unworkable. It’s not a sign of desperation — both companies will make money at 49% in a state projected to handle $1.9 billion annually. But it is a sign that the growth narrative has shifted from “which new markets will legalize?” to “how do we extract value from every available jurisdiction?” For Arkansas bettors, the practical translation is straightforward: better apps and more markets are coming, but the economics that delayed them will also shape the experience once they arrive.