Sort of, it's an attempt at Frenchification (original Arcansas, a French transliteration of the Algonquian term for the Quapaw peoples of the area) by dropping the terminal s. There was a long-running tussle over the two pronunciations that resulting the State passing a resolution that would thereafter be officially pronounced -saw and not -sas.
The possessive is a bit prickly, Arkansas' versus Arkansas's. Apparently, the State legislature prefers the latter.