Mobile sports betting in New York State took a big step forward on Monday, after the state’s Gaming Commission (NYSCG) recommended issuing mobile sports wagering licenses to nine operators.
The winning bidders are all industry heavyweights, and each were included in two “super bids” by industry consortia led by FanDuel and Kambi Group.
FanDuel submitted its application to the NYSCG with Bally Bet, BetMGM and DraftKings. Meanwhile, the application by Kambi included Caesars Sportsbook, PointsBet, Resorts World, Rush Street Interactive (RSI) and WynnBET.
RSI, which owns the BetRivers and PlaySugarHouse brands, operates a retail sportsbook with Rivers Casino & Resort Schenectady, a casino owned by Rush Street Gaming, an RSI affiliate. The Kambi consortium is also aligned with two tribes: the Oneida Indian Nation and the Saint Regis Mohawk Tribe.
The operators will pay a $25 million fee for their licenses, which have 10-year terms. They will also be levied a gross revenue tax rate of 51%.
According to reports, the NYSGC plans to launch mobile sports betting in the Empire State in early 2022, before Super Bowl LVI on February 13.
The regulator had planned to award licenses to at least two platform providers and four operators. In the end, they wound up selecting eight platform providers – Resorts World uses the PointsBet platform – and nine operators.
Reaction from operators
Many of the operators who were picked Monday issued statements celebrating the news and thanking the NYSGC. They also offered insight into their specific strategies moving forward.
“We’ve been looking forward to the opportunity to bring mobile sports betting to New York,” said Caesars Entertainment CEO Tom Reeg. “With more than 19 million people, New York will be the biggest mobile sports betting market in the country, and we feel we are uniquely positioned to bring an incredible product to that market.”
Johnny Aitken, CEO of PointsBet USA, also touted the size of the New York market. “Having the potential to secure market access to New York state – expected to be one of the largest and most important markets in the United States – represents another major milestone for our company, our brand and our technology,” he said.
“We eagerly await the official opportunity to leverage our exclusive sports betting partnership with NBC Sports and introduce the nation’s premier sports betting product to the countless passionate, sports-loving New Yorkers.”
Soo Kim, Chairman of Bally’s Corporation’s Board of Directors, said the issuance of a license “advances our overall market footprint and marks the latest milestone on our journey towards becoming the leading omni-channel gaming provider in the US.
“Above all, we look forward to providing New York’s devoted fan base with engaging, best-in-class, sports betting experiences.”
Wynn Interactive CEO Craig Billings said the operator was already familiar with many of its future customers in the Empire State. “New Yorkers represent a significant portion of the Wynn Las Vegas and Encore Boston Harbor databases, and we look forward to giving those customers more ways to earn and use Wynn Rewards,” Billings said. “We also look forward to meeting and engaging with new customers in the state via WynnBET.”
Key lawmaker optimistic
Sen. Joseph Addabbo Jr. (D-Howard Beach), chairman of the Committee on Racing, Gaming and Wagering, said in an interview with Spectrum News NY1 that one of the biggest hurdles to getting mobile sports betting launched before the Super Bowl was having servers set up properly.
“We can have the best providers, but if you don’t have that server that actually accepts and validates the mobile sports bet, that’s the end of the game,” Addabbo told the network’s Capital Tonight program, according to reports.
While some in the industry are concerned that New York’s tax rate may be too high for operators at 51%, Addabbo expressed confidence – and boldly predicted that “in a year or so, I think we eclipse New Jersey.
“People see New York as one of the sports capitals, if not the sports capital of the world, and I think there is such an appetite about us entering the sports betting arena that I think the potential is there. I think the potential is there as long as we have a premiere product.”
Not every operator picked
Several operators fell short in their bid to get a license. Kambi had led a second consortium and submitted an application on behalf of Fanatics Sportsbook and Penn National Gaming, which would have deployed its Barstool Sportsbook brand.
Separate bids by Bet365, FOX Bet and theScore Bet were also rejected. Penn National announced it intended to acquire theScore for $2 billion last August.
The NYSGC may have decided to go with issuing nine mobile sports betting licenses, rather than 10, because the additional operator would have resulted in a slightly lower tax rate to the state.
According to the final tax rate matrix issued by the NYSGC, a situation where eight platform providers and nine operators are licensed called for implementation of a 51% tax rate. But if a 10th operator was added, the tax rate would have ticked down to 50%.