New York poised to adopt New Hampshire-style online betting legislation
Budget bill details complicated competitive bidding process for two sportsbook providers with no fewer than four skins granted to prospective online operators
New York lawmakers last night finalized details of the ambiguous mobile betting bill to be included in the state’s upcoming budget.
The New York State Gaming Commission will launch a competitive bidding process for sportsbook platform providers and will select at least two to work with four operators or skins.
The two suppliers will be required to pay $25m for a 10-year license, as well as an additional $5m a year to the commercial casinos selected to house their servers.
The proposed model raises complex questions regarding the operating model of leading US operators, a number of which are powered by proprietary technology and not third-party platform providers.
One of the dominant characteristics of the revised NY mobile sports betting bill is the apparent severing of the agency relationship between the casino and mobile operator (other than paying a $5M server hosting fee). In NJ, mobile brands are commercial partners of the casinos.
— Daniel Wallach (@WALLACHLEGAL) April 7, 2021
Governor Andrew Cuomo expects mobile betting to generate $500m in tax revenue by FY 2025, although critics of his plan argue this is extremely optimistic even if deploying an open licensing model similar to that of neighbour New Jersey.
Cuomo said the program will provide $5m annually to youth sports and $6m to combat problem gambling, while the remainder of this revenue will be dedicated to education.
Although much of the legislation has yet to be determined, lawmakers did agree that operators would need to be taxed at between 50% and 55% of their mobile revenue to reach Cuomo’s budget target.
Proposals will be taken in July and the regulator will be given 150 days to score the proposals and determine the two winning providers.
The system is similar to the one utilized by New Hampshire, which selected DraftKings to operate its state-run betting monopoly in October 2019.
The Boston-based operator hands over 51% of retail GGR and 50% of online GGR to the state for the privilege of being the sole brand serving a population of 1.3 million.
Cuomo previously proposed a New Hampshire-style RFP selection process in his State of the State address in January, although industry stakeholders opposed his suggestion in favor of a more competitive model.
Senator Joe Addabbo and Assemblyman Gary Pretlow had championed for an open model with up to 14 skins, which was two each for the state’s four commercial casinos and three tribal casinos. A suggested $12m upfront license fee would have netted the state $168m.
Legal sports betting in the Empire State is currently restricted to four upstate casinos: Tioga Downs (FanDuel), Resorts World Catskills in Sullivan County (bet365), Rivers Casino in Schenectady County (Rush Street), and del Lago Resort & Casino in Seneca County (DraftKings).