New York plots expanded sports betting market
Empire State legislators table bill to expand market to 14 licensees and reduce tax rate to 25%
Legislators in New York have tabled a potential amendment to the Empire State’s sports betting regulations aimed at opening the market up to more operators and slashing the 51% GGR tax rate.
New York Assembly bill A8658A, submitted by Assemblyman J. Gary Pretlow, would see the amendment of sports wagering definitions to include “other things of value” within the scope of what is required under a New York license.
Crucially, the bill imposes a requirement to expand the New York sports betting market beyond the current nine licensed operators within the next two years.
It stipulates that the New York State Gaming Commission (NYSGC) license a maximum of 14 sportsbook operators by January 31, 2023, rising to 16 licensed operators by January 31, 2024.
The bill allows for applications for mobile sports betting licenses to be submitted from September 1, 2022 and allows those which participated in the previous licensing process to reapply.
In the case of those previously denied, the NYSGC is mandated to “give priority” to reviewing and scoring of reapplying applicants.
Platform providers that were previously unsuccessful are also able to reapply.
The bill opens the door to operators including bet365, Penn National Gaming, theScore, Fanatics, and Fox Bet, which all lost out in the initial process.
“In the event that the commission fails to approve the required number of operators by these deadlines, it shall not interfere with the ability of previously licensed platforms or operators from continuing to operate in the state,” bill A8658A states.
Under the revised framework, platform providers would be required to pay a one-time fee of $25m, rising to $50m for operators, with all fees paid within 30 days of licensure.
In addition, bettors may also make use of promotional wagering credits in placing bets.
“Promotional wagering credit may include, but is not limited to, free plays, deposit matches, and any other bonus that a mobile sports wagering operator offers or gives to a patron as an incentive,” the bill states.
Operators are also allowed to exclude promotional wagering credit-related bets from its sports betting gross gambling revenue for taxation purposes.
In respect of operator revenue, the bill allows operators to carry over negative revenue in its return to the NYSGC to the following month, subject to a maximum period of 12 months.
In line with the amended and expanded market, the bill proposes the revision of the 51% tax rate to consider the influx of new operators.
Based on a total licensed market of between 10-12 operators, the tax rate is set at 50%, dropping to 35% for a market of between 13-14 operators and as low as 25% in a market of 15 or more.
New York has been the subject of a bitter promotional battle between operators looking to recruit players, activities which have come despite the 51% tax rate, which is the highest in America for an open market model.
Operators including Caesars, Wynn Resorts, US market leader FanDuel, and DraftKings have said they would scale back their marketing spend in the Empire State over the next 12 months, while Bally’s has delayed its entry into the market due to these issues.
Speculation has been rife that the New York legislature would look to reduce the tax rate as a way of preserving taxation revenue and, conversely, funds for state education causes, the chief beneficiary of the tax in the longer term.
If successfully passed, it is likely that these activities will be significantly scaled back.
The amended bill has been passed to the New York Racing and Wagering Committee for consideration.