From the Super Mario Wiki
Banana Shot is an item in Mario Kart Arcade GP and Mario Kart Arcade GP 2. Due to the limitation of throwing items a certain direction, the Banana Shot allows users to shoot a homing banana item (as long as the shot connects) to opponents. As the Banana in this game and other games in the Mario Kart series, the banana causes the opponent to spin out of control and slow down. An aesthetic difference between the Banana and the Banana Shot is that users hold a bazooka-like weapon used for firing at opponents.