Jefferies analyst James Wheatcroft projected on Monday that since DraftKings and FanDuel entered the Arkansas sports betting market March 20, annual handle and gross gaming revenue (GGR) should increase by 4.5 times. In addition, Wheatcroft wrote that given the revenue numbers coming out of Missouri, prediction markets are having “limited cannibalization effects” in the state.
In Arkansas, Wheatcroft is projecting that annual handle will rise from $620 million to $2.8 billion and that GGR will jump from $60 million to $270 million if bettors in the state follow those in Iowa and Kansas. All three states have populations of between 2.3-2.5 million people, but Arkansas, Wheatcroft wrote, has until now generated about 20% of the handle seen in similar-sized states.
Wheatcroft’s annual estimates would top the state’s total handle and GGR since in-person wagering debuted in July 2019 and online followed in March 2022. Through February, $2 billion had been wagered and $191.6 million generated in GGR.
In the projected scenario, Wheatcroft forecasts that FanDuel would achieve 45% market share and Arkansas would ultimately represent about 2% of the company’s handle and 1% of its net revenue.
The Arkansas market has been open for online sports betting for four years, but until last month, no national operators were in the state. Operators initially passed, as the state requires that 51% of operator revenue be shared with the casino providing market access. But as market conditions have changed and contracts with back-end providers were expiring, the opportunity to enter the market became available. DraftKings is partnered with Southland Casino Racing, and FanDuel is partnered with Oaklawn.
Saracen Casino Resort, which owned more than half of the market share in Arkansas before DraftKings and FanDuel entered, opted to keep its BetSaracen platform.
Parlay popularity good for Missouri operators
Wheatcroft called Missouri “one of the strongest launches in recent years with $245 handle per adult over the first three months, ahead of North Carolina ($211) and Kentucky ($230), among others.” State regulators launched online sports betting last Dec. 1, making it the first launch since early 2024. Promotional spend in Missouri has been lower than in other state launches — think more like $200 bonuses than the $1,000-plus matches or losing first-bet offerings in states like Louisiana or New York.
Missouri is the first state to go live with online sports betting since prediction markets became a key part of the gambling landscape. The previous two launches, North Carolina in March 2024 and Vermont in January 2024, happened before companies like Kalshi offered a wide range of sports event contracts and ahead of sports betting companies like DraftKings, Fanatics Betting & Gaming, and FanDuel entering the prediction space.
“In addition to the high handle achieved with low promo spend, Missouri has recorded strong GGR margins (15.7% since regulating vs a 10.8% market average), high parlay penetration (37% in Jan vs 31% in Illinois) and a low average bet size ($23 vs $48 in Illinois),” Wheatcroft wrote. “This potentially indicates an elevated mix of recreational players and implies strong demand for richer (parlay) product from consumers that previously faced constrained betting options on prediction markets.”
