New York discloses controversial double-digit sports betting tax rates
The Empire State’s regulator sets out accelerated deadline of October 25 for prospective licensees to conform
The New York Gaming Commission (NYGC) has confirmed final tax rates for sports betting operators.
Prospective licensees were issued with a letter by the NYGC yesterday, in which the regulator outlined its taxation rates in a matrix form.
The new rates are based on the number of platform providers licensed by the Empire State, cross matched with the number of operators offering sports betting on an ascending basis.
Rates range from 64% of GGR based on four operators partnering with between two and 15 platform providers, falling to 35% of GGR where 25 operators enter the market with between two and 15 platform providers.
Current licensing standards contained within the NY Racing, Parimutuel Wagering and Breeding Law envision the award of licenses to at least two platform providers and no fewer than four operators.
“Such awards shall require that both winning platform providers pay the same rate, and any additional platform providers awarded licenses must also agree to pay the same rate,” the law states.
As part of this, prospective licensees are required to conditionally agree to “remit the highest percentage of GGR from mobile sports wagering contained in an applicant’s bid selected by the commission considered for licensure.”
Application amendments must be made by interested operators and sent to the NYGC no later than October 25.
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At present, there are six primary applicants to the New York state sports betting contest, including bet365, FanDuel, FoxBet, theScore, and Kambi.
Fourteen operators have been included in the applications, the most notable of which is a mega-bid involving FanDuel, BallyBet, BetMGM, and DraftKings.
In a recent interview with EGR North America, BetMGM CEO Adam Greenblatt suggested that the New York market would suffer if this mega-consortium were to miss out on a license.
“The combination of ourselves, DraftKings and FanDuel represent north of 70% market share in the US so leave us out and you’ve got a giant hole,” Greenblatt told EGR.
“By putting this consortium together, we’ve not only ensured that the consortium will participate, but we’ve also put ourselves in a position where New York has an option to approve only our consortium.
“If you look at the detail of the regulation, our proposal satisfies the minimum requirements to be fully acceptable to New York State.
“There is a scenario we would be delighted to see where just our consortium represents the total market in New York,” Greenblatt concluded.
New York regulation requires platform providers to serve as the primary applicants, which are then obliged to declare all operators they wish to host on their respective platforms.
These suppliers must fully integrate the operator wagering systems onto their platforms, provide and maintain all wagering, and submit records to state regulators.
Prospective licensees will be evaluated against several criteria, with scores assigned based on technical and pricing standards, with bonus points up for grabs if an operator partners with a tribal gaming operator in the state.
The overarching objective is to create maximum revenue contributions for New York State.
A mobile sports wagering platform licensee must pay a fee of $25m within 30 days of approval, with licenses made available to the highest-scoring platform providers.
Pricing considerations will determine license duration, with increasing taxation rates assigned based on the term of the license, up to a maximum of 10 years.