The State Gaming Commission on Wednesday issued a statement regarding the New York sports betting evaluation process, following up on Tuesday’s report that it had informed operators of the final tax rate they must meet.
In what it called “the interest of transparency,” the NYSGC formally released the tax matrix and provided the remaining process and procedure.
After its mobile sports wagering evaluation committee reviewed and gave a total score for each applicant, the highest tax rate from among those submitted was established as the final tax rate matrix, according to the statement issued Wedneday.The potential bidders have until 5 p.m. on Oct. 25 to amend their proposals if their initial plans don’t match the final tax rate levels, the letter to operators said. Any applicant declining or failing to amend its application reflecting the final tax rate matrix will be disqualified.
What is Tax Rate Matrix Based On?
The final tax rate matrix is based upon 1-25 operators and 1-15 platform providers. For example, if there are 4-5 operators with 2-15 platform providers, the tax rate would be 64% (by far the highest among states) and then decreases to the lowest tax rate of 35% with more than 13 operators and 2-15 platform providers.
The state has until Dec. 6 to make its selections (though it could do so earlier) on who receives mobile sports betting platform licenses. That could allow the licenses to be issued at the next commission meeting, though no date has been set for the meeting, according to the commission’s website.
Upon receiving matching or multiple matching pricing amendments, the committee will undertake the additional license process until there is no benefit to the state by increasing additional platform licensees.
Only after the process has been completed will the committee recommend an applicant or applicants for licensing as a platform provider or operator.
Primary NY Applicants
There are six primary applicants in New York. One of the groups — which has been called a “super group” — has sportsbooks Bally’s, BetMGM Sportsbook New York, DraftKings Sportsbook New York and FanDuel Sportsbook New York. The Seneca Nation, the Buffalo Bills, the Buffalo Sabres, Major League Soccer’s NYCFC, the New York Yankees and the YES Network are other partners in that bid.
Platform provider Kambi has put together a bid that includes Caesars Sportsbook, Resorts World Catskills, PointsBet, Rush Street Interactive (BetRivers Sportsbook New York) and WynnBET. Kambi also has a bid with Fanatics — now led by Matt King, formerly of FanDuel — along with Penn National Gaming’s Barstool Sportsbook.
The other three bids for New York online sports betting are from bet365, FOX Bet and theScore.
What Will the State Do?
The NYSGC will choose a minimum of two platform providers and four operators (according to the new matrix, this would lead to a 64% tax rate), but has the option to select more. The state is seeking at least 50% of gross gaming revenues from online sports betting, but would like to see that number go even higher.
A possible scenario is that the “super group” proposal is chosen along with one from Kambi. That would give the state seven to nine operators with a tax rate of 51% to 60%. If the state chose all 14 sportsbooks involved in bids, the tax rate would be 35%.
If a decision comes earlier than Dec. 6, the operation could be up and running before the Super Bowl on Feb. 13. That was the goal of lawmakers and seems to be a realistic one.