Key Moments
- The Arkansas Attorney General determined that companies offering sports event contracts without a sports betting license are engaging in illegal gambling.
- Only Betly, Bet Saracen, and Oaklawn Sports currently operate as licensed sportsbooks in Arkansas, with other major brands absent.
- Senator Bryan King has indicated intentions to pursue further action following the Attorney General’s opinion.
Last Thursday, Arkansas Attorney General Tim Griffin released a formal opinion clarifying the legal status of prediction markets in the state. In his statement, Griffin determined that platforms such as Kalshi, which provide contracts on sports events without holding a sports betting license, are participating in illegal gambling.
Legal Interpretation and Industry Response
This development came after Senator Bryan King requested the Attorney General’s office to assess the legality of contracts focused on sports and elections. Collaborating with state Senate Chief Legal Counsel Phillip Treat, King initiated the inquiry in August. The Attorney General’s office responded within three months.
“The acts you describe meet the Supreme Court’s definition of gambling and gaming: a participant is risking money on a chance that some future event occurs,” the AG said in his opinion prepared by Assistant AG William Olson.
Griffin added, “The fact that a company has rebranded this gambling activity as a ‘prediction market’ does not protect it from scrutiny.” He noted that conducting or transmitting information regarding sports for gaming purposes is unlawful. According to Griffin, a business model that enables wagers on sports outcomes or transmits gaming-related data without appropriate licensing constitutes illegal gambling.
Senator King agreed with the Attorney General’s position, telling SBC Americas, “This concludes what I and other gaming professionals see: that prediction markets are gambling. They should follow the same rules as traditional gambling institutions.”
Current Betting Environment in Arkansas
Since 2022, Arkansas permits online sports betting through licensed sportsbooks linked to state casinos. Notably, FanDuel and DraftKings have not entered the Arkansas market. Instead, Betly, Bet Saracen, and Oaklawn Sports are the sole operators holding active licenses.
The Arkansas Racing Commission applies a 13% tax on sportsbook revenue up to $150 million and raises the rate to 20% for revenue exceeding that amount. Fantasy sports are also available online in the state, taxed at 8%. The Attorney General has confirmed that providers of sports-related event contracts do not fall under this tax category.
| Operator | Market Access in Arkansas | Tax Rate |
|---|---|---|
| Betly | Licensed | 13%-20% (Sportsbook) |
| Bet Saracen | Licensed | 13%-20% (Sportsbook) |
| Oaklawn Sports | Licensed | 13%-20% (Sportsbook) |
| Fantasy Sports | Allowed | 8% |
Regulatory Landscape and Potential Actions
Griffin’s statement echoes actions seen in other states, such as California, where the Attorney General also issued a negative opinion regarding daily fantasy sports. Griffin’s letter is considered an opinion, not legislative or regulatory action.
This year, some states have ramped up enforcement against prediction markets like Kalshi and Crypto.com, employing cease-and-desist letters as these operators push into new sports markets. Meanwhile, Arkansas lawmakers have attempted to address ongoing developments in the sector, including two proposed bills seeking to ban sweepstakes games and legalize online casinos. Both were short-lived.
Senator King stated, “I will be following up on the next steps in the weeks to come.”
Arkansas AG’s Broader Involvement
In June, Griffin joined 33 other state attorneys general in an amicus brief related to Kalshi’s legal proceedings in New Jersey. The brief argued that federal oversight by the Commodity Futures Trading Commission could have major implications for state-level gambling rules. In addition, Griffin was one of 50 attorneys general in August pressing the Department of Justice for stricter action against unauthorized gambling activities.
- Author
Daniel Williams
