An important deadline in the New York sports betting approval process came Monday as New York mobile sportsbook candidates had until 5 p.m. to re-submit bids with the newly announced tax rate.
There are six primary platform applicants in New York as the process for launching online sports betting in New York continues. One of the groups — which has been called a “super group” — has sportsbooks Bally’s, BetMGM New York, DraftKings New York and FanDuel New York. Others in the group include the Seneca Nation, the Buffalo Bills, the Buffalo Sabres, Major League Soccer’s NYCFC, the New York Yankees and the YES Network.
One of platform provider Kambi’s bids has Caesars Sportsbook, Resorts World Catskills, PointsBet New York, Rush Street Interactive (BetRivers NY) and WynnBET. A second bid by Kambi with Fanatics — now led by Matt King, formerly of FanDuel — includes Penn National Gaming’s Barstool Sportsbook.
The other three bids for New York online sports betting are from Bet365 New York, FOX Bet and theScore.
On Oct. 20, the New York State Gaming Commission (NYSGC) issued a statement regarding the New York mobile sports betting evaluation process, following up on a report the day before 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 procedures.
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 by the commission.
The potential bidders had until 5 p.m. Monday 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 would be disqualified.
How was Tax Rate Matrix Determined
The final tax rate matrix is based upon the number of operators (between 1 and 25) and platform providers (between 1 and 15).
For example, if there are four or five operators with two to 15 platform providers, the tax rate would be 64%. That rate would be the highest among states. The tax rate decreases to the lowest tax rate of 35% if more than 13 operators enter the market with two to 15 platform providers.
The state has until Dec. 6 to make its selections on who receives mobile sports betting platform licenses — though it could do so earlier. 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, the commission says.
Only after the process has been completed will the committee recommend an applicant or applicants for licensing as a platform provider or operator.
For more information about the New York Tax rate visit the tax calculator.
What Will Happen in New York?
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 could select more.
The state has been 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 at least 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%. That doesn’t seem likely because it would not maximize the amount the state would receive.
If a decision comes earlier than Dec. 6, it’s conceivable the market could be up before the Super Bowl on Feb. 13. That was the goal of lawmakers and seems to be a realistic one.